The Snout gives his views on Betting and the Exchanges
It is fair to say that the confidence in high-street and online bookmakers is at an all time low. It is well documented across social media that if you are a half decent bettor, and seem to indicate you know what you are doing, you will find yourself being restricted by these firms to place your bets at the size that you want. The clear strategy employed by most, if not all, bookmakers today is “if you’re winning, we don’t want your business, at least not as much as you want to give us. If you are losing, but betting properly in a way that may cause us to lose over the long term, we don’t really want your business either”.
There are plenty of sides to this strategy and the impact it has on people’s perception of bookmakers and even the long term implications it may have for sports such as Horse Racing in general, and it is almost impossible to cover all these angles in one article. However, the point of the following rambles is to attempt to figure out how we have got in this mess that we find ourselves in and how we can combat it by betting intelligently, and by utilising Betting Exchanges such as Betfair Exchange, SMarkets and others.
Restricting customers in betting is not in it’s entirety a recent short-term trend. Even the days of when on-course bookmakers would price up their races 10 minutes before the off, shrewd punters were known to the ring and often pushed back on their sizeable betting offers. But this was few and far between and there is no doubt that the last 10-15 years the problem has got worse, which really has coincided with the creation of the internet, and more specifically, internet betting. This created an environment which allows firms to easily track your betting behaviour and understand the patterns in which you bet, ultimately deciding in whether they want your business. One of the factors that I would like to bring to the attention of readers right now is Betting Concessions.
When I talk about betting concessions, I mean the following; BOG, 4 places paid at 1/4 odds in 10 runner races, money back if the favourite wins etc etc. These concessions are designed by marketing teams to draw in new and most likely profitable (profitable to the bookmakers, that is) punters. They are essentially loss-leaders that are marketed by firms to ensure they are getting the business of punters new to the game, and it is even estimated that BOG alone costs the bookmaking industry millions of pounds a year in paying out inflated prices across the UK. Now, why would bookmakers openly pay out millions of pounds more than they would do normally via a product that punters didn’t specifically ask for? It is a competitive environment, bookmaking, and BOG amongst other concessions helps to attract new punters in. Once they have their business, they can from there decide whether the punter will be profitable for them to keep, or a shrewd bettor whom they can quickly reduce the amount of concessions they receive and eventually restrict them completely.
My argument is simple; remove concessions that costs the industry millions of pounds in payouts to punters per year, and use this additional capital to lay bets to a half decent level to loyal horse racing fans.
Now, onto the subject of Betting Exchanges. Many would argue that they have been a great creation for the betting public, and in many cases that is true. However, the ability for punters to “lay” bets as well as place bets, created potential to “arb”, meaning to place bets with high street bookmakers at one price and then lay this bet off on Betfair at a slightly bigger price for a guaranteed profit. Although this is a practice that most on-course bookmakers employ now, it simply blurred the lines between punters wanting genuine value and those taking advantage of the system and causing bookmakers to restrict those that are in every sense getting “too much” value.
As I said, this topic is one that could be discussed for quite literally days on end, so let’s move on to how we can use Betting Exchanges for when restrictions are in place for those of us that are beating the bookmakers and therefore cannot place decent sums on.
The creation and building of Betting Exchanges was during a time in our history where peer-to-peer was really exploding in many areas of life. We had things such as illegal music sharing and even websites such as eBay being prime examples of how users were happy to share and interact with each other directly and anonymously on the internet. There was clearly (with obvious hindsight) a place for this in the Betting world too.
Betting Exchanges have pro’s and con’s, briefly touched on above. The key reason why it can sometimes be tough to replace betting with high-street bookmakers to Exchanges is that market liquidity can take time to form. For example, some punters try and get on with regular bookmakers as early as 5 and 6pm the evening before a race, which will eventually lead you to becoming restricted as you will probably be beating the price, which is of course the core of what bookmakers hate. At this time in the evening on Betting Exchanges, there is more often than not no market to place a bet. There is no one willing to lay therefore there is no bet that can be placed. It really is from 8pm where you are able to get more realistic bets on. I am looking at a race right now, reading at 8.21pm on Monday night, and can get £44 on a horse called Cool Bahamian in the 3.40 at Pontefract at an average odds of 7.2 (6/1), where he is 6/1 with most online firms.
Uses of Betting with the Exchange?
It takes patience with betting via Exchanges. These are my main reasons and times to use them:
- I use Betfair Exchange for placing bets on events where liquidity is high from an early stage. This will be races that are perhaps early closers or most weekend races.
- They can be used in combination with restricted betting accounts. I have some accounts with firms that are generally better known for laying a bet (albeit a small one) that I would top up with bets on the Exchange throughout the day of the race. This would of course be in line with my betting/point structure, critical for any successful bettor.
- Be particularly interested in backing bigger priced horses via Exchanges. Regularly I have been able to obtain bigger prices about, for example, 16/1 shots on the morning of the race itself. Betfair make a huge amount of noise about having “better odds” compared to industry SP. This is amplified and exaggerated by outsiders, but can in some cases be genuine.
There is also a big opportunity with Exchanges due to the fact that you can lay bets yourself. I often look for “Back to Lay” or “Lay to Back” horses, in-running, in races where the conditions are right. As an example, I may have a race whereby there is one only pace angle in the race that is a fairly big price at 10 on Betting Exchanges. I can use this information to back this horse at 10, then set a lay bet when the price hits 5 in-running, and stake it correctly so when it is matched, I am guaranteeing a profit mid-run. Although obvious, this type of movement in odds is an extremely powerful and consistent method, due to the in running odds mainly reflecting position in running and jockeys happy to sit behind front runners for 85-90% of the race. Another example would be employing the same strategy for horses that are known to be strong travellers, as the in running traders would look to back this horse down to a low price when it is the last off the bridle.
Although a little time consuming, this type of betting strategy is one that can only be employed on betting exchanges and therefore should be of interest for those who want to ensure profitability in their racing.
What lies ahead for Betting?
As mentioned above, it is tough to condense and discuss in much detail the cause, and implications of, betting restrictions, but it really is a system that needs investigating by regulatory bodies. The recent news of Bet365 being taken to court for their inability to pay out on bets just highlights the fact that everything is not as it should be in the betting world. But, by betting intelligently, consistently, and utilising Exchanges where possible, I am a firm believer and proof that you can make very handsome sums by betting on Horse Racing in the long term.
I also have a feeling that this isn’t the last article I will be writing on this subject…