Clearly the bookies have the edge over the punters, and so it is very tempting to think that laying on the exchanges will allow us all to take a share of the action. Of course it is not that easy, market forces ensure that the bookies margin is eroded right down to 1 or 2% and in fact betters and layers end up being pretty evenly matched.
The tightest bookie margins are always for the lowest price horses and so favourites enjoy the lowest margins of all. The last 2500 flat and All Weather favourites have yielded a mere 5.40% profit to the impoverished SP book maker.
So why concentrate on weak favourites? I guess the answer is that we don't find it practical to be able to spend the time or effort required to lay every single weak runner. Concentrating on the lower price end of the scale means that it should be a psychologically a little easy on the nerves and bank. The margins may be lower but at least there will be few lays where the bank is seriously challenged.
We have an extensive database stretching back several years. It has been extensively used to identify the winners so why not put it to use to identify losers?
Our first line of attack is to correlate the profitability of lays against every conceivable parameter. 7 of these parameters seemed to be statistically significant:
1) The best races for laying have 9 to 15 runners
2) The most
profitable lays are odds against
3) Horses at the wrong trip make good
lays
4) Top handicap ratings make poor lays
5) Top speed ratings
make poor lays
5) Badly drawn horses make good lays
6) The class
horses in the race make poor lays
Of course some of these parameters are hard to quantify but much of the work has been done in the process of generating the UK Horse Racing ratings.
We simply add up how many of these parameters indicate that the favourite may win the race. The more negative indicator then the more likely it is that the horse is justifiably favourite and the less likely it is that we will lay that horse.
We then ran this filter through our database and estimated the bookies margin.
| Positive Indicators |
No of favourites |
Bookies Margin (at SP) |
Estimated Margin on Exchanges |
| 0 | 317 | 32.0% | 22% |
| 1 | 639 | 22.7% | 13% |
| 2 | 666 | 12.6% | 3% |
| 3+ | ~800 | Loss | Loss |
Now we are not race course layers and SP margins are simply not available on the exchanges. Firstly there is a 5% commission and secondly the theoretical average 5.4% margin appears to get whittled away down to, say, 1%.
As the estimated return with 2 positive indicators is marginal then it is suggested that lays are only made where the favourite has 0 or 1 positive indicators. This is the policy that will be maintained in records on this site.
Of course all of this is the easy part, the hardest part is down to you... to get a good price on the exchanges.
Dave Taylor, June 27th, 2004.