Last time we looked at a range of bookmaker concessions, and when they offered positive expected value, writes Russell Clarke. This week the focus is very much on each way betting and, specifically, 'extra place' races.
The mathematics surrounding each-way betting and extra place concessions is complicated and many factors have to be taken into account including the price of the horses concerned and the pricing make up/shape of the betting market on individual races. So, I will deliberately simplify, as follows:
Current e/w terms are typically
Non-handicaps: 5-7 runners, ¼ odds (2 places)
Non-handicaps: 8+ runners, 1/5 odds (3 places)
Handicaps: 5-7 runners, ¼ odds (2 places)
Handicaps: 8-11 runners, 1/5 odds (3 places)
Handicaps: 12-15 runners, ¼ odds (3 places)
Handicaps: 16+ runners, ¼ odds (4 places)
On these terms, we can mathematically calculate which races may favour the punter over the bookmaker in place terms. There are only two!
Let us look at the place part of the bet only... For ease of mathematics in a 9-runner race the true odds of a place are 6/3 (6 unplaced and 3 places in a 9 runner race) or 2-1 (3.0), but the place odds paid are 8-5 (2.6, assuming all runners have an equal 8/1 chance of winning and place odds are 1/5).
That is poor value, even if the assumption of all runners being equal is simplistic/unrealistic. Using the “all runners are equal” assumption, the only races where the place terms are in the punters' favour are 16+ runner handicaps. In a 16-runner race the true place odds are 12/4 (12 unplaced and 4 placed in a 16-runner race) or 3/1 (4.0), and the place odds paid are 15/4 (4.75, assuming all runners have an equal 15/1 chance of winning and place odds are ¼). The same equation can be used to calculate races with a different number of runners. Remember, there is no profit margin built into the bookmaker prices in these examples which is also, of course, unrealistic.
On a more practical level, an empirical analysis was undertaken for all of the races during the Flat 2018 season that calculated, from the starting prices, the overrounds (profit margins) that the bookmakers enjoyed in all races (win and place). Obviously, there was a positive overround for all win bets in all races. However, the place market (because bookmakers were arbitrarily offering 2, 3 or 4 places and 1/4 or 1/5 odds) tells a different story:
Non Handicaps: place overround by number of runners
In non-handicaps, in every race there was a positive place overround in favour of the bookmakers. However, in 8-runner races this was only 2.1% (compared with 18.3% for the win market). In 9-runner races it was 5.2% (compared with 18.7% for the win market). In these instances, you are better splitting your stake into an each-way bet than betting win only (this was also true, albeit to a lesser extent, in 10-, 11-, 12- and 13-runner non-handicaps). For reference, betting in a 16-runner non-handicap the place overround is an eye-watering 34.8% and this gets worse still as the number of runners increase. Playing each-way in such races is betting suicide.
Handicaps: place overround by number of runners
In handicaps, the story is a little different, because of the better place terms. In 16- and 17-runner handicaps there is actually a negative overround - an underround - of -3.5% and -1.5% respectively. This means that the place element in an each-way bet in 16- and 17-runner handicaps is actually in the punters' favour!
Overall, the place overround is below the win overround in 8-, 9-, and 12-plus runner races. So, in these races, splitting stakes for each-way betting is optimal over win only betting. In races of 5, 6, 7, 10 and 11 runners the reverse is true and you should bet win only.
Here are some tables that tell you the optimal bet (win or each-way) and the % advantage win/each-way bet has over the alternative win/each-way bet.
Non Handicaps: Win or each way? By number of runners
Handicaps: Win or each way? By number or runners
At this stage, bear in mind all of these numbers are at starting price. You can, therefore move these percentages more into your favour by taking the best prices available and simultaneously utilising Best Odds Guaranteed.
It should also be borne in mind that these are strictly comparison figures. Some of the WIN advantage percentages are only as high as they are (for example 7-runner handicaps at 13%) because the each-way alternative is so poor.
Key win vs each way points
The salient points from these tables are:
- The sweet-spots for each way betting are 16- and 17- runner handicaps.
- Each way betting is particularly advantageous (relatively) over win only betting in 8-10 runner non-handicaps.
This, in all probability, is a function of the reality that such races will be less competitive and have ‘lopsided’ markets dominated by a short-priced favourite; or, there is a big spread in prices (which is less likely in a handicap). In these instances, the mathematics make each-way betting more favourable.
Extra Place Each Way Betting
But what happens when the bookmakers offer extra places? And what effect does the tactic of reducing the fraction from 1/4 to 1/5 have on such offers?
The maths is not easy, so you may have to trust me here! I have restricted this analysis to handicaps (which is where the offers generally occur anyway).
Handicap extra place: 5 places instead of 4
If the offer is five places instead of four but odds are reduced to 1/5:
This makes the overround negative for bookmakers on the place part of the bet in races with 16, 17, 18, 19 and 20 runners (rather than just 16 and 17 runner races under the normal terms). In 16 runner races the negative overround increases to about -10%, which is a huge boost for punters!
Handicap extra place: 4 places instead of 3
If the offer is four places instead of three but odds are reduced to 1/5;
This makes the overround negative for the bookmakers on the place part of the bet in races of 12 and 13 runners. It also makes the place overround less than the win overround in all races from 12-15 runners. This means that all bets should be each-way rather than win bets when this concession is offered.
Handicap extra place: 3 places instead of 2
Finally, if the offer is three places rather than two (a rare bird):
This makes the overround negative for the bookmakers in 5- and 6- runner races (11% and 2% respectively) and still makes the place overround (although now in the bookmakers favour) less than the win overround in 7-runner races.
Again, these numbers assume starting price overrounds and you can reduce these substantially by taking the best available prices and simultaneously utilising best odds guaranteed.
Extra Place Concessions: Summary
Extra place concessions are highly favourable to punters and make each-way betting (in the majority of cases) mathematically optimal. You should therefore take advantage.
Of course, in certain big races, bookmakers get even more 'generous' and offer 6, 7, and occasionally 8 places, and on these occasions they should be viewed as “loss leaders” from the “soft” bookmakers that you can take full advantage of until they won't let you any more!
A final, important, caveat is that you must not accept enhanced place terms at the expense of ‘skinny’ win prices, and so some judgement is required.
Concessions are generally utilised by bookmakers to gain new clients or to gain client share from rivals. They invariably offer a degree of value and that degree can be calculated via the techniques shown in this article. Some are generous enough that they reward blanket support! Most will add to your bottom line if used judiciously.