Members of my service will be aware that I do not tip too many favourites. There is a good reason for this. Blindly backing favourites will lead to losses. 100% guaranteed. One good measure for this is that, in general, you will not find much difference between bookmaker SP and Betfair SP on race favourites.
It is widely acknowledged, and I subscribe to the view, that the Betfair market at the off time is the most accurate representation that you will find of the actual chances of each horse in a race. This is because with most race markets being bet to about 101% after a lengthy period of time for market fluctuations to settle to final SP’s, the ‘wisdom of the market’ does indeed predict each horse’s actual chance reasonably accurately.
So, what can we learn from comparing bookmaker SP to Betfair SP? Well, the most obvious observation is that at the front end of the market, there is generally little divergence between the two different SP’s. A horse going off at a bookmaker SP of 3/1 (4.0 as a decimal price) will probably be returned at a similar Betfair SP; perhaps 4.1 or 4.2, but quite often at a lower price. That is not good news for favourite backers on the exchanges, as there is also the commission factor to take into account. Given the bookmaker over-round in every race which guarantees the bookies long-term profits, a higher premium is required at Betfair SP on favourites to make favourite-backing on the exchange a viable long-term strategy.
At the other end of the market, you will see striking variances between bookmaker and exchange SP’s. This variance helps to reduce the effect of what is known as the Favourite-Longshot Bias which has been much written about over the years. This bias states that you will lose much less backing horses at the front end of the market than you will lose backing outsiders. The chance of a favourite at bookmaker odds is much closer to its actual chance than it is at the other end of the market.
For example, the actual chance of a horse at SP 3/1 may generally be about 7/2 to 4/1. But the actual chance of a horse returned at a bookmaker SP of 33/1 is probably more like 66/1, 80/1 or 100/1. Or higher! Going back to the theory of the Betfair SP being a reasonably accurate representation of a horse’s actual chance, and bearing in mind the lack of any large divergence between bookmaker and exchange SP’s for favourites, it is clear to see that outsiders are more reasonably priced on the exchanges than in the on-course / betting shop market. Let’s look at examples from one race yesterday, the 2yo Novice Stakes at 2.00 at Newbury. Some of the longer priced horses in that race went off at (SP v BSP) in decimal odds of (21 v 32), (34 v 46), (34 v 54), (67 v 96), (81 v 206), (126 v 600) and (151 v 411).
So, if you ever find a horse that you fancy which is priced at 125/1 (126), you might well get 599/1 (600) as in the example above if you put your bet on at Betfair SP. Backing such horses at bookmaker odds is just mad. You will virtually always get much, much better odds on outsiders on the exchanges.
All that said, I do not wish to knock those who back favourites. I do so myself even if only occasionally, but I always look for an angle that has shown favourites in certain circumstances to be actually under-bet. Following are some such circumstances…
Back 2yo favourites who were declared a non-runner in the preceding four days. In the last 10 years on the turf these are 41 wins from 95 runs for £29.74 BSP profit after 5% commission (31.3% ROI).
Back the progeny of the sire Champs Elysees on the all-weather. To date, they have won 46 races from 84 for a BSP profit of £46.48 (55.3% ROI).
Back horses which are favourites for the first time on the all-weather when ridden by Nicky Mackay. Such horses are 33 from 58 for BSP profit £20.27 (34.9% ROI). Note: The majority of these (25 from 38 = 65.8%) were for trainer John Gosden.
Back Aidan O’Brien favourites at Chester. In the last 10 years, they have won 18 from 31 (51.8%) for a BSP profit of £15.71 (50.7% ROI).
There are many, many other angles to be found for backing favourites. It’s really just a case of researching and digging deep for profitable angles, but the work can be very rewarding. It can also serve as a method of giving some respite during a poor run for those, such as me, who generally play at longer prices.