Betfair – The Pros and Cons of Lay Betting

When the first betting exchanges were launched in April 2000 it heralded a new dawn in gambling especially in the case of horse racing. The basic concept was that instead of betting with a bookmaker the bet was struck between two punters with the exchanges acting as “go between”.

In the UK punters also had to come to terms with using decimal odds instead of fractions. However, the big change was the fact that for the first time it was possible not only to back a horse to win or be placed but also to lay it to lose. This was a totally new concept and one that has become increasingly popular during the last decade.

It is often pointed out that it is far easier to select a loser than to find a winner. Consider in a fourteen runner race only one horse can win but there will be thirteen losers. So one assumes that a great number of gamblers have made huge sums backing horses to lose. But strangely enough that does not appear to be the case as Betfair report only a very small percentage of its millions of users make more than £15,000 per annum from their betting activities.

The drawback with laying horse to lose is that if your horse does win you will have incurred a liability. For instance if you lay a horse for £10 that is price at 3.0 (2/1) and it wins you have to pay out £20. In the event of the horse had being priced at 11.0 (10/1) you would then have to pay £100. In either case if the selection did lose you would win just £10 (£9.50 after paying Betfair commission). You could of course restrict yourself to laying just short priced horses but they statistically tend to win more often. If you concentrate on higher priced horses they may win less often but when they do your liability is considerably higher. It is also worth noting that for the outsiders the Betfair odds are usually considerably larger than the bookies starting price odds.

On Betfair the prices tend to be around 20% above those offered by the bookmakers. Of course you also have to take into consideration the 5% commission charged by the exchanges. If you are thinking of trying lay betting another point to consider is that you will have to lodge enough money with the exchange to cover any liability that you might incur. For instance if you laid £10 on a horse to lose priced at 11.0 you would have to have at least £100 in your exchange bank to cover the bet in the event of the horse winning.

If you think the risk of possibly losing £100 just to try and make £9.50 then lay betting may not be for you.

In Football Betting – Are the Punters Betting Against the Bookmakers?

Most punters believe they are betting against the bookmakers. In fact, they are betting against their fellow bettors. This is represented by the fluctuations of the odds.

Why do odds change? Odds constantly change on an outcome in a particular game in response to:

* number of bets and

* amount of money staked

This is why you can see odds around 2.10 in the morning and get only 1.90 later in the day. For example, if $1000 is staked on Home win, the price for Away win will then go up to make the Away team more attractive for the punters to bet. Through the adjustment of the odds according to the market conditions, the bookmakers’ objective is to balance their books for that event.

Bookmakers do not gamble. They charge a certain percentage of margin for each bet and as long as their books are balanced, they win irrespective of the match outcome. The bookmakers set the odds according to demand and supply to balance the action from all sides and because of the margin, they always win.

In the event a bookmaker could not balance his books through odds fluctuations, he will then reduce his risk by transferring some amount of the bets wagered to other bookmakers that have odds better than his own. This is known in the industry as ‘farming out’. Thus, besides the punters, sometimes the bookmakers also trade on the betting exchanges to balance their books.

If the imbalance of money staked in an event is too great, for example, due to rumor of fixed matches, etc, the bookmakers may remove the event altogether.

So the punters are betting against each other. This means when punter Mr A wins in an event, his win is actually paid for by losing punter Mr B.

This cast the bookmaker in the role of a broker who takes commission on the market and funds the winners from the losing bets.

Understanding Horse Betting Systems – The Types of Bets

Horse betting can be a fast and fun way to make extra cash. However, it’s not as simple as it may look and there are a lot of considerations to take into account when looking into horse betting systems.

First of all, don’t always bet on the favourite. The favourite may be the safe bet but it’s not the best bet.

Second of all, decide what type of bet you want to place. There are straight up bets which include bets to win, place or show. A bet to win means that the horse wins; a bet to place means that the horse gets first or second; and a bet to show means that the horse gets first, second or third.

There are also exotic bets which can be a little more confusing. An exacta bet means that you predict the horses finish first or second in that order. A quintella bet means that you predict which two horse place first and second, no matter what the order. A trifecta bet predicts the first three finishes in the right order while a superfecta bet means you predict the first four in the right order.

Of course, exotic bets pay out more than straight up bets because they are harder to predict.

Furthermore, the best way to choose a horse is to pick a horse in the middle with odds such as 8/1. This will ensure that you make good money if they win (or you bet right) but do not lose a huge amount if you choose the wrong horse.

In any case, horse betting systems are a gamble so before you place a bet, you need to understand the system and the consequences of a loss.

Matched Betting for Absolute Beginners

Matched Betting Guide

Matched betting is the term given to the process of extracting guaranteed profit from the bonuses offered by online bookmakers. For example, at the time of writing this article, Skybet are offering £20 if you sign up and stake £5. The ‘qualifying bet’ of £5 is then followed up by placing the ‘free bet’ of £20. By ‘matching’ both of these bets at a betting exchange (Betfair), we can guarantee to extract a profit. At the time of writing this article, there are over £715 worth of offers from UK Bookmakers.

The matching process is simply placing two separate bets. The first one is what is known as a ‘back’ bet. This is placed at Skybet. The second is known as a ‘lay’ bet. This is placed at Betfair. This process involves no gambling because we are covering all outcomes.

Both the ‘back’ and the ‘lay’ are placed on the same game and on the same outcome. For example, the ‘back’ is placed on Southampton to win at odds of 2.1 (only use decimal odds, not fractional odds). The ‘lay’ is also placed on Southampton. By backing Southampton, we are betting that they will ‘win’. By ‘laying’ Southampton, we are betting that they will ‘not win’. The ‘back’ and the ‘lay’ cancel each other out.

Qualifier

Let’s have a look at a practical example of a qualifying bet (from here referred to as a ‘Qualifier’. We will take the Southampton v Swansea game in the English Premier League:

Back:

  • Back Southampton with a stake of £5
  • Odds of 2.1

Lay:

  • Lay Southampton with a stake of £5.02
  • Odds of 2.14

The reason why we stake a little bit more on the ‘lay’ side is because Betfair charges a commission of 5% on any winnings, so that has to be taken into account. Don’t worry too much about the maths just now.

Result of the Qualifier:

If Southampton win:

  • We would win £10.50 at Skybet
  • We would lose £5.73 at Betfair

Because £5 of the Skybet winnings was our initial stake, our profit at Skybet is £5.50, so:

  • £5.50 – £5.73 = – £0.23

If Southampton draw:

  • We would lose £5 at Skybet
  • We would win £4.77 at Betfair

So again, we’ve lost 23 pence:

  • £4.77 – £5 = – £0.23

If Southampton lose:

  • We would lose £5 at Skybet
  • We would win £4.77 at Betfair

So again, we’ve lost 23 pence:

  • £4.77 – £5 = – £0.23

So whatever happens in the Southampton game, regardless of the result, we’ve lost 23 pence on the Qualifier. However, we have unlocked a £20 bonus.

Free Bet

We now have a £20 in our Skybet account as a bonus. This part is slightly more tricky. Here is an example of how we would use the matching process to extract the profit:

Let’s take Southport v Grimsby

Back:

  • Back Southport to win with your £20
  • Odds of 6.5

Lay:

  • Lay Southport with a stake of £19.26
  • Odds of 6.8

Result of the Free Bet:

If Southport win:

  • We would win £130 at Skybet
  • We would lose £111.70 at Betfair

Because it was a free bonus, £130 is pure profit, so:

  • £130 – £111.70 = £18.30

If Southport draw:

  • We would lose £0 at Skybet (because it was a free bonus)
  • We would win £18.30 at Betfair

So again, we’ve won £18.30

If Southport lose:

  • We would lose £0 at Skybet (because it was a free bonus)
  • We would win £18.30 at Betfair

So again, we’ve won £18.30

So whatever happens in the Southport game, regardless of the result, we’ve won £18.30 by covering all possible outcomes of the game.

Here are the results of both our ‘Qualifier’ and our ‘Free Bet’:

  • Qualifier = – £0.23
  • Free bet = £18.30
  • Total profit: £18.30 -£0.23 = £18.07

That means you have made a profit of £18.07 without risking a penny.

Sports Betting Revolution – Unlock the Spread Monopoly and Collusion

What If the betting line or spread was established by four sports advisory companies without collusion or previous knowledge of each others numbers!

Lets face some facts about this number or point spread that usually comes from one Sports Advisory Group. This number is sold or distributed to the sports betting outlets online and the legal Sports Books in Nevada. These outlets put their little tweak on the line by 1/2 point or 1 point or an extra $5 on the money odds. However, everybody will post their number which is the same or within a point of each other. This is the equivalent of price fixing and collusion in any other industry.

How come the Sports Betting Industry has the same price or spread on their betting board? WHY – because nobody wants to rock the boat!

What if this process of establishing a betting line was not a monopoly but was provided by at least four sports consulting groups that were independent of each other. Each group would then post their calculated number for the worldwide sports betting outlets to buy and use for their operation.

This new mode of operation would unlock the monopoly that exists when the line is established. Now what happens? Would some books dare to post numbers that are different from others by 4 or 5 points either way. I doubt it since nobody wants to rock that boat. Is this collusion by the sports books so they can keep their share of the market and not create a price or point spread war.

The process of constructing the point spread number is probably done through a software program with all the statistics and other information to get a base number. Then the actual number is refined to include public perception as to where the public will place their money. It is no secret that Sports Books speculate or predict at what number the public will be evenly divided.

There are a number of times when the line is not even close to the final score. They do come close about 65% of the time. However, when the spread is minus 7 and the favorite wins by 21 points or the underdog wins outright, their number is way off.

If that minus 7 point favorite is listed at minus 11 points at another outlet would there be a Revolution among Sports Book operators. Would this difference of opinion cause a lot of anxiety with casino management. I am sure they would question each others actions after doing the same thing together all these years.

For a true and balanced market to emerge in any industry, there should be some options and competition among the players involved. A Betting Exchange is very close to a more balanced betting market since the competition is against other bettors. The spread is the same but the money odds are much better with more options.

If the Sports Books in Nevada and online books decide to re-arrange their Sports Book operations to include some alternatives to the spread, they will increase their handle and be more competitive. I would install some form of Spread Betting that is big in Europe. Allow more options with alternative lines and charge a little more vigorish. Some online books have alternative run lines on baseball. They post the run line at minus 1.5 runs on the favorite and underdog in the same game.

The Sports Betting outlets need to become more innovative to maintain a market share. We know they probably will not “rock that boat” unless one or more sports betting venues develops a rogue or maverick mentality. This would be a big gamble that could payoff and increase market share. However, it is ironical that sports books do not want to be in the gambling business. They just want to collect their commission and avoid too much risk. They are more concerned about the heavy hitters than the small average recreational bettors who lose more often.

Promoting or seeing changes in any financial markets is similar to getting people to stop smoking or obese people to lose weight. Change is difficult for a lot of people and businesses. As they say “talk is cheap”. However, I feel technology is becoming more prevalent in Sport Betting industry. Hopefully, it will create a more vibrant market with better options and more competition within the sports betting community.