The SP is the most accurate measure of a horse’s chance of winning the race. If it goes off at evens then it has a fifty-fifty chance of winning and so on. This is the case 90% of the time but what of the other? The other 10% is what is called smashing the SP and the bookies are behind it.
The SP or starting price is effectively the result of people’s opinions expressed from their betting throughout the day and then finally at the course. The bookies have an opinion in the morning and they might think that a certain horse has a 10% chance of winning therefore it becomes a 9/1 shot. Remember that is just the opinion of one odds compiler and a pre-constructed odds line (or tissue in the trade) which is compiled the night before by another odds compiler. There are so many variables in horse racing he can’t possibly account for everything and as the day progresses new factors come into it, like the changing of the ground or a jockey change on another horse, etc etc. The money starts to come as 1000’s of different opinions,angles come for that horse and it becomes apparent that the horses chances are a lot higher than first thought and then they have to shorten their odds.
There is a bit of a myth that when a gamble is going down it’s informed money going down therefore the horse is likely to win. Don’t get me wrong this does happen but a lot of the time it’s just a change in circumstances and with the age of the internet there are so many well informed punters out there it doesn’t take long for the market to collapse. Anyway that’s the SP what of this smashing it?
On the course the SP is determined by between four to six on course bookies just before the off. An official will collate the average price available from these bookies just as the horses are set to go. Once the winner has been declared this is officially stamped by an official and then sent to all the shops, bookies head offices etc. Now what the big bookies do is when there is a large liability going down on a certain horse, for example a multiple bet like the lucky 15 or a treble, they will need to lower the SP before the off so that they don’t have to pay out as much money.
I’ll use an example. A punter in a shop has put a £10 treble on. First horse wins at 9/1. He’s got £100 going onto the next one which wins at 9/1 also. He’s now got a grand rolling onto the next horse. The punter hasn’t taken a price but the money’s rolling onto the favourite in the next. That favourite opens at 4/1 so at that price the punter will stand to win £5000. That’s a £4990 loss to the bookie but of course there is something they can do! They smash the SP. The on course rep for the bookie in question will now go round to all the main bookies in the ring having £200 bets (if it’s a weak market or maybe £500 in a strong market). These £200 bets over several bookies means the price will now go into 7/2, 3/1, 11/4. The horses leave the stalls or jump away and the bookies now only stand to lose £3750 to that punter if the jolly wins. Of course if it does they are collecting the money from the other bookies to go towards the punters winnings but if it losses they’ve only lost the money that other punters were having on the horse anyway.
The moral of the above story is the bookies are clever in how they reduce their liabilities and you can’t beat the SP if you don’t take a price!!!
Always take a price on your bets especially around favourites so as not to fall into the trap of having the SP smashed.