Before we get to the, let's be honest potentially tedious, examination of our last 3 months' books I see the Twittersphere has kind of exploded in the last couple of days with all sorts of chat about taking bets on course, standing bets on course, arbing etc so I wanted to set out, again, our thinking when we take a bet.
Laying a bet
Generally speaking we'll lay a bet to lose £10,000 in the ring. This does not mean that we will stand a horse for £10,000 (more on this later) but it does mean we will lay a horse to lose this amount. We think this is a decent amount and, outside of Cheltenham, we might get a request for this sort of bet once a year so, generally, speaking we very, very rarely restrict what we'll take so if you want £2000 at 5/1 with us you'll almost certainly get it. We will take a bet to lose more than this figure at Cheltenham due to the unique betting nature (for us anyway) of the meeting. Most on course bookmakers are small firms maybe with up to 3 or 4 interested parties, often however, on course bookmakers are 1 man enterprises. Most of the time the maximum amount for bookmakers to lay in a bet, in my experience, is more governed by logistics not risk.
Standing a horse
Much talk on Twitter that most on course bookmakers take your bet and shove it straight back onto Betfair and, maybe, stand a horse for 50 quid. And, in fairness, some do but I don't think that applies to most. As has been discussed by me many, many times our ideal situation is to stand a horse for as much as we can realistically afford to in order to minimise hedging but with the realisation that we don't have unlimited cash reserves. The other factor which has to be taken into account is turnover per betting heat. The major off course firms are taking such colossal amounts per betting event that it is reasonable for them to have enormous liabilities as the swings will meet the roundabouts and, all things being equal, a big loss in one event can immediately be offset by a big win in the next. On course bookmakers don't have that luxury by and large. Realistically a normal on course bookmaker in an everyday single pitch will not field enormous sums on a race- potentially as little as £300 and maybe towards £2000 at the higher end with the odd exception for a lumpy bet. And, assuming you lay every horse, you won't be able to win everything you take. So if you lay £500 at 10/1, stand it and lose, it simply then wouldn't be possible to win at the meeting.
We've looked at our liabilities in depth as you know and taking the above factors into account we're looking at standing horses for around half of what we take on a race up to a usual maximum of £750 in the win book with the option to go to £1000 if we feel it's right to do so. Adding in a place liability and it's usually possible to lose around £1000 per race. Again, I was reluctant to post this figure, especially as we have spent the last 3 months looking at several different liability amounts before only settling on this figure this weekend. But I felt it was more important to give some context to what we take which will govern what we can stand that still gives us a reasonable chance of being profitable overall.
I won't get into specifics of our colleagues regarding Twitter assumptions of the on course industry but, yep, a handful of books will never stand a horse or will stand them for such low levels as makes no difference. Everyone has a different model and that's fine. The majority of small on course bookmakers, in my opinion, will have liabilities which are commensurate to their size and turnover and will probably be similar to ours. The main difference to us being that most on course bookmakers will generally have the top of the market in liability whereas we could have anything. Some small firms have significantly higher liabilities than us and all power to them.
Analysis
Goodness, that rambled on longer than I expected and if you thought that was boring, wait for this...
Our biggest concern when adopting the "standing what we lay" model was the possibility of being caught out too regularly by laying live ones that may not be at the head of the market. So my Easter Sunday morning was taking up with analysing horses who have won and we have lost over a certain amount on to see if, indeed, we were at risk of getting caught out;
Bear in mind we haven't done a lot of meetings yet as the season is only starting to come into full swing so it's not a massive sample but here is the approximate SP of everything we have lost on for a relatively chunky amount along with the position of the horse in the betting market and the field size;
11/4 (1st in market in field of 7 runners)
7/2 (2 of 10)
7/4 (1 of 4)
11/4 (1 of 11)
3/1 (1 of 7)
6/4 (1 of 6)
5/2 (1 of 7)
5/2 (1 of 9)
3/1 (1 of 9)
9/4 (1 of 9)
11/8 (1 of 5)
13/2 (2 of 24)
9/2 (3 of 10)
5/1 (4 of 9)
3/1 (3 of 3)
7/4 (1 of 11)
6/4 (1 of 10)
11/1 (7 of 12)
5/2 (1 of 12)
I have not included Kelso or Cheltenham in these figures, more on this later, but we were pleasantly surprised to see that with 1 or 2 exceptions our bigger losers are the ones you would expect at the head of the market and there is nothing in there that makes us think we should be betting back outsiders to avoid losing on them. Another look at end of June I think and we may see something different but for now it's all good.
I didn't include Cheltenham as we just didn't feel that meeting was representative of normal day to day betting patterns (and it didn't throw up anything that stuck out anyway)
Kelso. As you probably know we win when hedging at Kelso so we have significantly lower liabilities there. First calculation I did was if we'd put the full liability in there since 1 Jan (which is only 3 meetings) and, if we had, we'd be £3000 worse off. Not a great start to looking at increasing risk there. Next thing I did was look at winning horses who lost us a certain amount (or would have done without hedging) in the same fashion as above I went back to September this time to get a decent sample. The sample size is still a lot lower than the "all other meetings" sample above but the results were rather different;
2/1 (1 of 6)
5/1 (4 of 4)
7/4 (1 of 5)
3/1 (3 of 5)
2/1 (1 of 11)
9/4 (1 of 7)
9/4 (1 of 7)
4/1 (4 of 5)
11/1 (4 of 7)
11/2 (3 of 8)
9/4 (1 of 11)
13/2 (2 of 12)
11/2 (3 of 12)
5/1 (2 of 10)
7/2 (4 of 4)
13/8 (1 of 6)
The first thing that leaps out is we have more losers per meeting than the norm. A lot more. This isn't a surprise based on our hedging figures. Whilst a lot of favourites still lost for us at Kelso as you would expect they only represented 44% of our losers whilst everywhere else favourites were 68% of our losers. Not an enormous sample and will continue to monitor but huge congratulations to Kelso punters for their outstanding performance so far!
Anyway that's it. Hope it was of interest and, if not, hope you have a good lunch lined up. Perth in the week. Until then...
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