By David Duffield of www.championpicks.com.au
There’s an old saying that ‘lotteries are a tax on people who are bad at maths’ and this holds true for punters betting into bloated markets.
While I understand a lot of people don’t enjoy or aren’t particularly good at maths, I am still surprised that many punters don’t know the basics of TAB or bookmaker percentages.
Do you know the average percentage takeout in the win betting pool by your TAB? And their takeout of other bet types such as quinellas, trifectas and quaddies? Or bookmaker’s percentages and how this number affects your likely profitability?
It’s vital to know these percentages because they represent the advantage that the bookmaker or TAB has. It is this advantage that you need to beat before you show a profit.
To help the uninitiated get their head around these percentages, I’ll use a two horse race with equal favourites as an example.
- A 100% or no commission market would have both horses priced at $2.
- A 118% market (similar to TAB win betting) would have each horse at approximately $1.70.
- A 150% market (similar to a lot of early country and pre-post betting markets) would have each horse at around $1.33.
Anyone taking $1.33 on a coin toss would have to be a money hater, but I’ve never met one of those. Yet so many punters either happily or unknowingly bet into inflated markets when they would almost always be a lot better off by either waiting for the percentage to come down closer to the start time, or by shopping around to find a better price.
Because, everything else being equal, the closer the market is to 100% the easier it is for a punter to win. Anyone betting early on most country and provincial meetings will struggle to beat the big bookie’s percentages. On the other hand betting on metro meetings is normally ultra-competitive and this plays into the punters hands.
Mark Morrissey of Betchoice says “Punters use TAB odds as their guide because they know that market is around 117% so they compare bookie prices to the TAB. When you get to these provincial meetings and they’re betting to 160% early it’s obvious to the punters that there is a lot of percentage in the book because every horse is unders. But we generally bin those 160% markets straight away and frame it to around 125%. There’s an old bookmaking saying “it’s not what’s on the board that matters but what’s in the book”. You can put up 200% markets and still make mistakes but with Betfair and the TAB’s to watch you can get a good guide as to what’s happening. I don’t think they’re doing themselves any favours in the country, I mean it should be about risk management and handling the bets as they come in. I think they need to start working a bit thinner and if the right money comes in just chop them back a bit but going up at 200% is just not a good advertisement for the bookies”.
“Bookies generally consider each other as the competition and they tend to fight amongst the ranks a bit. But really the TAB is the opposition and the tote prices are the benchmark towards which you should be working. Having said that the advent of Betfair has changed things, with the exchange prices going into the ring in Melbourne the bookie’s are seeing what’s happening on Betfair and the markets are getting skinnier and skinnier.
“The markets are coming through at 108-109% for a lot of metro races and it’s getting very very competitive, possibly even suicidally competitive. They can’t last, I mean everything levels out eventually and it will be survival of the fittest. You can’t work at 104% and make money, not with expenses the way they are. I mean it costs us $60,000 a week to run this place and it’s getting to that point now where there is just no margin left”.
While the keen weekend punter doesn’t need to be a maths whiz, it is important that you know the percentage edge that you are betting against on each bet type.
{ 7 comments… read them below or add one }
Spot on Dave, i am amazed at the spruikers that ‘get on’ the box and tout for early market bookies, you don’t have to be Einstein to observe that the majority of runners are drifters in the market towards the jump – clearly the early odds are pumped up in favour of the books.
Some may argue that you could be forgiven for getting on early if they are ‘in the know’ but after many years of punting and particularly after having a piece of several horses (mostly pretty ordinary), one of my rules of the punt is never blindly take a tip off owner/trainer, they might well have an idea of how good their animal is but can’t be sure about the ability of the opposition, take it on board but since it is my money i will make final decision.
In any case i wonder how much it takes to become a market mover in a 0-72 at Sandown mid-weeker let alone on Friday or Monday meeting. not much i would think.
Not only that Tim but betting early leaves you exposed to big deductions too so you have to pick your spots.
Agree completely about your point on owners/trainers and jockeys. It’s not like they are experienced form analysts, all they know is how their horse is going and even then sometimes emotion gets in the way.
Thanks Dave. You hear it on TVN all the time when they talk about the market being at 160% etc and to hold off till it becomes more competitive, but how does the average punter figure out what the markets at.
I see you mention that the TAB is normally around the 118% mark but is there a website that tells you these percentages or a formula to figure them out.
Cheers
Dynamic Odds is very handy for that Anthony.
Another interesting article but I am trying to figure out how relevant it is for me….as a member of CP who also enjoys dabbling a bit in my own ratings method the market % is not what I’m concerned about….if I have a horse rated at 2.00 and the market is showing 3.00 I’ll more than likely take the price whether it’s a 120% market or a 108% market….most of the winners I get are between the 1-1 and 7-2 range and from my observation there is not that much movement within this range…sometimes my 2.00 chance that is at 3.00 may blow out…sometimes it may come in to say 2.50 in which case if it wins I can feel happy with myself…it’s the horses outside my 1-1 to 7-2 range that the bookies will try to lay therefore reducing the market percentage….the early 10-1 pop (10%) may blow to 20-1 (5%) etc.etc……am I thinking wrongly about this?…
Steven the bookies can reduce their market percentage by easing the longer priced horses like you say, but also by smaller movements of favoured horses as that has the same effect in percentage terms. And bookies don’t just lay horses at 4/1 above, often they will take on favourites and that’s why when an outside gets up they say it was a ‘bookies result’.
true but just from my observation only some of the horses that ease in my golden 1-1 to 7-2 range are under the odds….e.g the bookmakers rate a horse at 2.00 but because it is gai and nash and the mum and dad punters back it to the exclusion of everything else the horse opens at say 1.50 with a stranglehold on market percentage….the bookies can afford to ease it out to say 1.95 thereby bringing down their market percentage but the horse is still under the “true rated odds” or…..they ease these horses to see what price the punters will accept…..a bookies result is when the gai/nash horse gets beat in this case…. also just because a horse is under what “we” think are the “true odds” doesn’t mean it won’t win….it just means there is no value in it for us…