A horse race can be over and done with in little more than a minute but the betting market for said race takes much longer to unfold, over 24 hours in most cases, writes Tony Keenan. It may be heresy to true fans of the sport, but most punters spend more time watching markets than races, with knowing when and how to execute bets an important skill. During this article I’m going to try to look at the evolution of a standard market on an average Irish race from start to finish, considering some of the factors that influence it and suggest what punters might bear in mind when timing their bets.

Overnight Prices

The starting point for most Irish betting markets now is the first batch of overnight prices between 4pm and 6pm the evening before the race; in most cases, Paddy Power Betfair are first up, followed by Bet365, Sky Bet, BetFred and Ladbrokes Coral in that broad order with the smaller firms coming in afterwards. A striking feature here is the timing; these prices are going up roughly six hours after declarations came through at 10.30am which is a really narrow window and certainly a massive difference to the age when prices went up the morning of the race.

Compilers working to produce odds in this timeframe are under pressure, some having to price up on a hundred horses for the following day, with simple math revealing that is little more than three minutes per horse. How many replays can you realistically watch in this time? Many will be skilled practitioners who watch tons of racing but the modern odds compiling environment means they are doing more with less and it is not unreas0nable to ask how deeply they get to study each horse or race; unlike punters who can pick their battles, they have to put a number to every horse that they will lay to at least some degree.

That degree is a major issue for many but let’s get real here: no one, unless you have access to a whale account, can get at these prices to any scale. And it is hard to see why it would be any other way; the limits in almost every sport are low when odds are initially posted and when punters talk about restrictions at this time, it could be that they are referring to limits which have be reduced across the industry for overnight prices. Even the very act of looking to bet the night before could be enough to get your account factored.

Not that I have any problem with someone looking to place a bet overnight: the reality in punting is that if you can get on, you will, and if you can’t, you have to sit and suffer. It would be punting utopia were everyone to wait until a set time the following day before striking a bet but this can be an inherently selfish game and there will always be someone looking to front-run your bet. A better question to ask might be how cheaply you are going to reveal your opinion, provided that opinion is of some value, and if you are playing overnight it is not unreasonable to think it might be, recreational punters rarely bothering at this stage of the market.

Taken as an entire group, the bets struck overnight are negative expected value for the firms; over time, they lose on overnights. The loss-leading aspect of this might be surprising for some but they are not in it for any real liabilities and the aim to get the prices right for the next morning when a great volume of bets and turnover comes in, particularly if said company has a retail estate. It is not unreasonable to think that every bet of size at this point, with size being relative, ticks the market one way or another.

A couple of points to finish up this section: overrounds are higher at this juncture so the question can be asked why laying bets overnight isn’t profitable? I suspect this is because they will only be laying the one, two or three horses that are wrong and the field book will be anything but balanced; the idea of a balanced book is more fantasy than reality in most cases but at this stage it can be particularly lop-sided.

There is also the issue of possible price manipulation which is something I’ll return to throughout this article. Most readers will know that bookmaking firms are heavily influenced by what happens on the exchanges but in most cases, the markets for the following day have next to no volume in them at this point. One could post up a bet that is under the available price that might cause a series of cuts but perhaps a better way to manipulate a price at this stage is to bet a horse in the race on a few marked accounts in the hope that your real selection may be pushed out so it can be backed at a more advantageous price. Plenty of firms will have an auto-cut approach to some accounts that are betting at this time.

The Next Morning

The theory for some of the firms with the overnights, as well as offering a service to their customers, is that any creases in their prices will be ironed out by morning. The point at which these prices become profitable to lay is open to question; it certainly won’t be very early on but the hope would be that by mid-morning they will have a set of prices that can be laid to some degree of confidence. It is worthwhile reminding ourselves of how little volume of the total betting turnover is actually done up to this point with the final figure of what is bet on the show never ceasing to amaze. In terms of singles only, the figures are likely to be about 5% overnight, 10% morning up to midday, 20% rest of the day through to fifteen minutes before the off, and as much as 65% on the show. This will vary depending on the make-up of each company but the importance of having things right for the time of the race is clear.

Overrounds will go down a little at this stage – if you take an Oddschecker screen grab of the typical race at 7pm the previous night and 9am the next morning there will be more pink [i.e. horses drifting] in the latter. The overall pricing is less defensive now with the obvious ricks generally being quickly ironed out, and this is also the time when some liquidity comes into the exchanges with Matchbook being a notably bigger player in this regard over the last few months; how long this will last, one never knows, but it does offer some volume now at the front end of the market at least.

It is also now that the prominent tipsters start to influence the market and for Irish racing that means Andy Holding on Oddschecker and Gary O’Brien on AtTheRaces. Both are excellent judges though I’m sure most punters can emphasise with that sinking feeling when they have put up something you fancied and you are forced to take shorter than you wanted. Holding tends to use times and sectionals a lot and I have noticed that his column has been going up a little later over the past few months, around 9.30am rather than around 9.00am. That may seem like a relatively meaningless difference but if you can get into a shop in that half an hour period you may be able to bet your selection before he puts it up though finding an office that opens before 10am in Ireland remains a challenge with Saturday the only exception. As an aside, I sometimes think that Saturday might be the best day to bet on Irish racing and not only because of the earlier shop opening. Saturday is the main racing day of the week in the UK and the Irish racing may not be getting quite the attention that it should from odds compilers and traders with prices lasting longer than they typically might.

The shops will all be open at this time and again many of the bets struck here will be negative expected value; bigger operations will be looking to get runners out and about and market moves now by definition are probably more meaningful as they can simply get more money on as the limits are raised and there are more avenues to place a bet. Plenty of the money staked on Irish racing is actually bet in UK shops and this is simply a numbers game with the UK having vastly more shops and related opportunity to get on.

Gary O’Brien can be all over the grid in terms of when his tips are posted on the AtTheRaces website but more often than not it is after shop opening. He is an example to all punters that you don’t need the early earlies to win as he proves very profitable despite many of the prices having been picked over. The prices about his selections invariably shorten but it tends to take more time than those from Andy Holding, likely because they are put up later in the day when the markets are slightly more robust. O’Brien’s selections tend to be form-based and he simply has an excellent knowledge of the Irish formbook, price conscious but not obsessed with the odds. Often he will put up an 8/1 shot that was 12/1 at one point but goes off 9/2 and we all should probably try to avoid the psychological anchoring that prevents us from taking the shorter price because we have missed top price as it can still be value.

Minimum Bet Liability

The latest wrinkle to be thrown in the morning trading is the minimum bet liability (MBL); at this point Paddy Power/Betfair, BetVictor and Sky Bet are guaranteeing online customers bets that can win up to £500 from various times across mid-morning and applied to different race grades. BetVictor’s conditions are about the best as it is across all races and includes an each-way option, and it may be reasonable to expect other firms to come on board with similar MBLs sooner rather than later: this is a copycat industry where approaches like cash-out and extra places have become available generally across different companies. An interesting facet of the BetVictor guarantee is that it applies to Irish racing as well as UK racing with Paddy Power Betfair doing similar on some but not all Irish meetings. This is somewhat surprising as Irish racing is traditionally viewed as toxic within the betting industry, something that is probably more perception than reality. Nevertheless, the perception is sufficiently widespread that it needs to be acknowledged.

The reasons for bookmakers adopting MBL are unclear. Certainly it has created a degree of good PR at a time when the whole sector has been getting a kicking from regulators though it may also be an admission that they were over-zealous in their restrictions, shutting down people they shouldn’t have. The Horseracing Bettors Forum deserves credit for their role too and, for all their efforts in other areas, it is likely that their achievements in addressing restrictions by which they will be judged. As to the sum of £500 or euro equivalent, one can only hope it’s a start rather than an end-point. A liability of £500 when having £200 on a 5/2 shot seems fine but it’s only a pony on a 20/1 rag and in reality punters have no issue walking into an Irish shop and getting that bet laid in the morning unless you are a Barney Curley lookalike. Punters do have the advantage of using MBL across a range of companies and a total liability that gets into the thousands is more respectable.

There are however some potential consequences to this. The whole idea of a guarantee is that it is open to all and that includes all sorts of arbers, robotic and human. I used to believe the arber argument was a bookmaker smokescreen to deflect from restricting winning customers, but I have spoken to enough people at this stage to realise that it is a real problem. Arbers bring nothing to the table but take out plenty; some will be content to trade out of a small profit on the exchanges while others have now twigged that holding the bets they make at prices over the exchange lay side [so called ‘line trackers’] offer positive expected value and will prove profitable over time. Betting companies are constantly closing robotic arbers though they face their share of human ones too, online and in shops, which are more difficult to regulate. It is reasonable to ask yourself where you stand morally on this; I think they don’t put in any work and, while it is easy to always see the bookmakers as villains, arbers are hardly innocents and allowing them free access to MBL makes little sense. As ever, differentiating them from genuine, opinion-based customers is the challenge.

Another potential game-changing aspect to MBL is how the bigger punting operations will use (and perhaps abuse) it. These groups are looking to take out large sums for their bets and perhaps MBL will mean they will hold their money until mid-morning and then try to smash a price. The logistics of how they would do this are not public knowledge but it is not unreasonable to suggest they could get access to 50 accounts with a bookmaker which, times £500, quickly becomes at £25,000 liability. Can the bookmaker refuse the guarantee if all the bets are co-ordinated to land at the same time? Again, the issue of possible price manipulation comes into play; would pre-MBL bets on marked accounts be used to push the price of the real fancy when mid-morning comes or could the exchanges be used to achieve a similar end?

How the bookmakers deal with this is a fascinating aspect. Perhaps some will be brave enough to ‘create an arb’ and lay their MBL prices when they are over the odds on the machine. They would need to have some confidence in their traders and compilers to do so and it would be much more likely on good racing than bad racing; Irish racing, sadly, probably falls more into the latter category. That’s a much more traditional model than we’ve seen in recent years and there are plenty in the industry who would simply tell you that if you’re over something on the exchanges, you’re just wrong. All of this leads to worries about what this will mean for the ordinary decent punter, price sensitive and likely winning a few quid but who has been restricted. They are the target market of MBL or at least should be but will they merely have access to a set of prices they don’t want?

When asked about some of these issues, Matt Scarrott, Director of Sportsbook at BetVictor, said ‘BetVictor acknowledged that the perception amongst some punters was that bookmakers are too quick to reduce stakes to a tiny amount or refuse all horse racing bets from certain customers. We entered into dialogue with Matt Bisogno of the HBF earlier this year, to see if any common ground could be found on that subject. We were keen to offer a guaranteed bet across all UK and Irish Racing regardless of the grade of the race and we were also keen to give closed customers the right to participate in this Guaranteed Bet market. At the time of writing several hundred previously closed accounts have been ‘reopened’ so that they can bet on this market. We are reviewing the market’s on-going performance as you would expect. Whilst in the vast majority of races we offer identical prices in the main book and the Guaranteed Bet book, we reserve the right to price certain selections differently, dependent mainly on the shape of the race. We also reserve the right to close (or re-close) customers for trading reasons, although currently we have not rejected any requests to reopen and have not reclosed any accounts.’

On The Show

As we have seen, the show is still when the bulk of betting turnover comes, though prices here can again be manipulated for relatively small sums. Exchange trading – unless said exchange is seeding their markets – will be relatively light for all but the better racing until 15 minutes before the off so it is not particularly hard for someone that way inclined to knock a horse from say 11/8 to 2/1 in the run-up to the show with the idea that the horse can then be bet back with the firms when prices come through and limits are their highest. That 0.625 of a point makes a massive difference if you are having a large bet and this does reveal a weakness in the approach that tracks the exchanges too much; yes they can be a useful guide but they can also be used to leave a false trail.

Despite the markets having been open for over 24 hours, there are still big swings in prices near the off, not least because this is the only time some major players can get on. It is generally accepted that the exchange prices at the off are efficient and over time a true reflection of actual win probability. I would tend to that view in the main but remember that the initial show is not as accurate and there are opportunities in this window for an edge. Furthermore, an important point is that they are generally efficient over time; they will not be correct in every case.

There are still cases when they are not accurate and as many different reasons why: maybe the connections of one horses just don’t punt to the same degree as another, perhaps a major punter who has travelled in for the race is planning a big bet but the ground changes making his horse vulnerable but can’t help himself and plays anyway. Beating the Betfair SP is well-known as a good way to judge your punting beyond simply overall profit and loss but it is not the only way and it can pay to be open to horses that the market just doesn’t fancy. They can and do win.

- Tony Keenan