Flip traditional betting on its head
Cheltenham Festival : how to flip traditional betting on its head - Peter Webb explains
The headline numbers
It goes without saying that Cheltenham is big. On Betfair last year there was over £97m in matched bets staked throughout the festival on the outright win markets before the off. The smallest race turned over £1.75m and two races achieved over £11m in matched bets.
The feature race, the Gold Cup, traded just short of £7.3m and the average race had matched bets of £3.90m in 2013.
How the book % creates the opportunity
Competition is fierce on the exchanges and this means very little money is lost to either side of the book. On a traditional sportsbook, the over-round - the theoretical margin paid to the bookmaker - can be large but on an exchange this can be tiny. If the over-round is 100% then it means that the market was ‘perfect’ and no money was won or lost (before commission) to either side of the book. The closer to 100% you get the more chance you have of winning in the long term - as the insight you require to overcome the small margin against you, is so much smaller.
In 2013 SP resolved under 100% on three races at Cheltenham, ensuring theoretical profitability for backers. Typically though, it’s the shorter priced fields that this can happen, but we did have a 23 runner race that came in at 100% last year. The ‘worst’ SP was 107% but even that was well below what you would get in a ‘normal’ sportsbook. Betfair continued to provide excellent value for money in 2013 whether you were a backer or layer.
How to flip traditional betting on its head
Picking one winner from 28 is tough, especially in a competitive handicap. But imagine being able to pick just one winner from a range of selections in a market. A process called ‘dutching’ allows you to do just that, ensuring you have a better chance of a profiting.
When placing a traditional back bet, you simply choose a stake and place a bet at the best available odds. When ‘dutching’, instead of putting £10 on something at 16’s; you nominate how much you would like to win then pick a number of selections that you think could win. Once you have made your selections, the dutching tool in Bet Angel will do some clever maths to work out how to achieve your bet and will give you the stake required to achieve your objective.
In a ten runner field, for example, you may want to win £10 by picking any five runners to win. Once you make your selections you just click the ‘place bet’ button and Bet Angel takes care of the rest.
You can go a step further on Bet Angel than traditional dutching tools by nominating your profit by runner. So it’s possible to construct a back bet that says something along the lines of, ‘I want to win £50 if the favourite wins, break even on the second favourite, lose £5 if the third comes in and I want to win £20 on the next three’. This gives you huge flexibility on finding a winner and more importantly, on your terms. Given the low over-round available on exchanges it’s a great way of picking a winner.
If you had ‘dutched’ the top ten runners at Cheltenham over the last five years at BSP you would have made money. The devil is in the detail however. Favourites have won 6,4,8,9 & 9 races at Cheltenham in the past five years. Against SP they won 27.07% of times versus the implied chance of 26.02%. In layman’s terms, they won more often than they should. But there the run ends, as you start to extend out the order of favouritism the numbers head into reverse. So backing larger prices appears to be the key to unlocking value at Cheltenham.
You can deploy these strategies with ease or even fully automatically using Bet Angel. We have a practice mode so you can test ideas or the many tools inside the software completely without risk to your account balance!