Horse racing is more risky for matched betting than some other sports, but it can be done relatively safely providing you are aware of the potential pitfalls.
IMPORTANT - except for a very few big races, there are no fixed odds for foreign racing and you should stick to British/Irish racing only. Attempting to do matched betting on day-to-day foreign racing can cost you a large amount of money.
Advantages of horseracing:
Often lots of runners, fairly high probability of losing at the bookie.
Arbs often available in the mid-price ranges are useful for snr freebies.
Prices fluctuate much more than some other sports meaning bookies have to be much more awake and arbs can be found.
The actual race is over fairly quickly so your money can be recycled rather faster.
Disadvantages:
The risk of rule 4.
Prices at many bookies not available until 10am on the day of the race.
Low liquidity on many events especially midweek.
Fast changing odds mean an arb may vanish in seconds.
Human error/stalls failure/false starts can cause havoc.
There are sometimes differences in rules if there is a disqualification.
Please be aware that bookmakers can change their rules and that any references to particular bookmakers applying a specific rule should not be taken on trust, but checked for yourself. I do not have the time to check and update this guide on more than a very occasional basis.
If you are not absolutely confident that you understand matched betting and that you can use the calculator, back and lay a bet quickly and correctly then I would advise you not to touch it with a bargepole. If you want to find good matching odds and arbs on a regular basis to smallish bets or to work through the betbaskets at Bet365 or Boylesports, then it can be very useful. There are also some free bets from time to time which are specific to horse racing.
Rule 4
To me this is not the biggest problem, but it seems to cause the most anxiety. Most of the time it can be factored in to the calculations. It is designed to protect the bookie from a lobsided market if one of the favourites is withdrawn.
Rule 4 will not apply if the horse which was withdrawn was at odds of above about 14-1. Many bookmakers do not apply rule 4 above odds of 9-1 (10.0).
Rule 4 will only affect you if your horse wins the race. If it loses the bet behaves normally.
The size of the rule 4 deduction depends on the odds of the horse which was withdrawn at the time of its withdrawal. The following scale is copied from Sean Graham’s T&Cs:
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Late Withdrawals
Where a horse is withdrawn before coming under Starter’s orders, or is officially deemed by the Starter to have taken no part in the race, stakes will be returned on the withdrawn horse and winning bets will be subject to deductions in accordance with Tattersalls’ Rule 4(c). The rate of deduction will be based on the following scale:- Current price at withdrawal Deductions in the pound.
3/10 or lower £0.75
3/0 to 2/5 £0.70
2/5 to 8/15 £0.65
8/15 to 8/13 £0.60
8/13 to 4/5 £0.55
4/5 to 20/21 £0.50
20/21 to 6/5 £0.45
6/5 to 6/4 £0.40
6/4 to 7/4 £0.35
7/4 to 9/4 £0.30
9/4 to 3/1 £0.25
3/1 to 4/1 £0.20
4/1 to 11/2 £0.15
11/2 to 9/1 £0.10
9/1 to 14/1 £0.05
15/1 and higher no deductions made
In the event of two or more horses being withdrawn before coming under Starter’s orders, the total deductions shall not exceed £0.75 in £.
Should a horse be withdrawn and a new market formed, then any bets laid at ‘Show’ prices prior to the new show will be subject to the above deductions. In the event of a further withdrawal after the market has been re-formed, bets placed at ‘Show’ prices in the original market will be subject to a further deduction based on the price of the withdrawn horse in the original market. Bets placed in the new market will be subject to a deduction based on the current price.
Many bookmakers leave their early price odds unchanged after a withdrawal and apply rule 4. Once the market starts to move in earnest nearer the “off” the prices will have been adjusted and rule 4 will probably not apply. (I would not advise attempting to bet within 1/2 an hour of the start of a race unless you are very experienced.)
Betfair do not use the same scale, but give each horse a “deduction factor”. If there is a non-runner the time of withdrawal and the deduction factor are listed under the “rules” tab on the right hand side. The market is suspended on the announcement of a non-runner and re-formed straight away. Any bets placed after this are not subject to a deduction.
DANGER - if you find a race which appears to contain more than one arb, check very carefully that you are not comparing bookies prices before rule 4 with the re-formed market at Betfair. Matching under these circumstances can be VERY expensive if your horse wins. If in doubt, don’t bet.
Some bookmakers warn you that a rule 4 deduction may apply. If so, it doesn’t necessarily mean you can’t bet on the race. First check what the odds of the withdrawn horse were. If it was say 20 then you can safely ignore it.
How to calculate the revised odds after rule 4
Rule 4 applies only to the winnings, not to the stake. Suppose your horse is quoted at 4.0 and the rule 4 deduction is 20%. The revised odds are:
4 minus 1 (to remove the stake) = 3 minus 20% of 3 (0.6) = 2.4 plus 1 (to return it to proper decimal odds including the stake) = 3.4.
Therefore if you found an arb at the bookies which was 4.0/2.8 it would still be an arb, but 4.0/3.4 would not.
The difficulty with rule 4 is that as the odds of the withdrawn horse are likely to be different at Betfair than at the bookies there can be quite a difference in the size of the deduction. It is likely to be smaller at Betfair because the odds are likely to be longer, so your lay risk will shrink less than your winnings. This can play havoc with the matching process and cost you money. However, in practise I find this effect is rare as your horse has to win first. The danger of betting on different markets as outlined above is potentially much more costly.
The rule 4 scale was due to be revised in June 2008. At present there is considerable doubt as to when or even if the new scale will be deployed, but I will leave it here for the moment. The new scale of deductions is as follows:
fractional decimal deduction
1-9 or less 90p
2-17 1.117 89p
1-8 1.125 89p
2-15 1.133 88p
1-7 1.143 87p
2-13 1.154 86p
1-6 1.167 85p
2-11 1.182 84p
1-5 1.2 83p
2-9 1.222 81p
1-4 1.25 80p
2-7 1.285 78p
30-100 1.3 76p
1-3 1.333 75p
4-11 1.363 73p
2-5 1.4 71p
4-9 1.444 69p
1-2 1.5 66p
8-15 1.533 65p
4-7 1.571 63p
8-13 1.615 61p
4-6 1.667 60p
8-11 1.727 57p
4-5 1.8 55p
5-6 1.833 53p
10-11 1.909 51p
evs 2 50p
11-10 2.1 48p
6-5 2.2 46p
5-4 2.25 44p
11-8 2.375 42p
6-4 2.5 40p
13-8 2.625 38p
7-4 2.75 36p
15-8 2.875 34p
2-1 3 33p
9-4 3.25 31p
5-2 3.5 28p
11-4 3.75 26p
3-1 4 25p
100-30 4.333 23p
7-2 4.5 22p
4-1 5 20p
9-2 5.5 18p
5-1 6 16p
11-2 6.5 15p
6-1 7 14p
13-2 7.5 13p
7-1 8 12p
15-2 8.5 12p
8-1 9 11p
17-2 9.5 11p
9-1 10 10p
10-1 11 9p
11-1 12 8p
12-1 13 7p
14-1 15 6p
16-1 17 5p
over 16-1 over 17 0p
Note that in every single case the deduction for a rule 4 is at least as big as it was before, and in most cases bigger. Note also that 16-1 now incurs a 5p rule 4.
There is a confusing selection of odds available at the bookies and Betfair.
At the bookies you will be confronted with Early Price, Starting Price, Each Way and possibly Best Odds Guaranteed and without the favourite.
At Betfair there is TBP (to be placed), NTF(name the favourite), and occasionally some others. There is also ante-post at both.
Note that Early Prices are often not available until about 10am (depends a bit on the bookie), and some races do not have early prices at some bookies. For big races they sometimes appear earlier.
The best advice is to stick to plain simple win only odds. In the case of the bookies this means Early Price and on Betfair it is the list with the track and time and nothing else. Trying to bet each way is not advisable beacuse at Betfair the win and place markets are separate while at the bookies the place part is 1/5 or 1/4 of the win odds.
Best odds guaranteed simply means that for that particular race if you win the bookmaker will pay out at the bigger of the early price and the starting price. If you take the early price you can’t lose out, and there is a slight possibility that you will get a nice bonus if you win. Unfortunately the bookies tend to put up shortish prices for such races and arbs are not easy to find.
Ante post betting is not particularly useful as it just ties up Betfair cash. It can be good if bookies are offering free bets on a specific race, or if they offer non-runner no bet. Normally ante post bets are lost if the horse is withdrawn, but for some big races some bookies offer non-runner no bet, while Betfair does not. It is hard to predict non-runners, but if the bet is properly matched this is another no lose possible big gain situation.
Each way betting on horses is not recommended because it is far from risk free. Non runners can cause absolute havoc in certain cases and it is very possible to lose both your stake at the bookmaker and your lay risk. This occurs because Betfair determine the number of places on the runners declared overnight, and the bookies on the number of starters. So if enough horses are withdrawn for the race to fall into the next band of places (eg 4 places down to 3) at the bookie, and your horse finishes in that position, you do not win at the bookie and you lose at Betfair. Non runners are far too common to risk this sort of thing - it is not impossible for as many as half the field to withdraw in some circumstances. In addition bookies do not like each way arbers and will quickly limit accounts where this takes place. In fact I cannot think of a quicker way to completely zero an account than to bet each way on horses. It is also worth noting that the t&cs of many free bet offers, both for qualifiers and free bets, specifically state “win singles” which means that each way bets will not count and may disqualify you from getting your free bet.
Horse racing is open to cheating because of the large sums of money involved, both from betting and from prize money/stud value of the horse. The races are therefore very carefully monitored, with cameras recording the action from every conceivable angle. A panel of stewards watches the race and if anything untoward happens (which may not be anyone’s fault - a horse can swerve suddenly and cause interference) they hold an enquiry. This will usually be announced very quickly. Bets will not be settled until the result of the enquiry is known, and in difficult cases this can be upto 1/2 an hour. (Occasionally Betfair will credit your account if your horse loses, then remove the credit if there is an enquiry - I once assumed I had enough money for another lay then found I hadn’t and had to deposit more in a hurry!)
There are rigid rules for disqualification, which nowadays are much more sensible and result in far fewer disqualifications than used to be the case. In essence the stewards have to be satisfied that the winner improved its own position by interfering with another horse - in other words that the other horse would rightfully have won. If so it is placed behind the horse it interfered with.
Betfair’s rules state that all bets will be settled on the official result on the day of the race. This means that if your horse wins but is disqualified your lay wins and you win your lay stake. If your horse finishes 2nd and the winner is disqualified your lay loses and you lose your lay risk.
Bookmakers differ. There are 3 possibilities:
1. They pay out on the official result (the same as Betfair). Obviously this is easiest to understand, but very few bookies now appear to do this.
Sunderlands, possibly Sportingbet, some of the smaller telephone firms.
2. They pay out on “first past the post”. This is potentially dangerous if you finish 2nd to a disqualified horse, because you lose your lay risk, but you do not win your bet.
I am not aware of any bookies that currently operate first past the post only.
3. They pay “double result” ie they pay on both the official winner and the disqualified horse. this is safe, and possibly lucrative as you could in theory win both the bet and the lay.
All the major firms now operate double result as far as I am aware.
The above list is not comprehensive and is subject to change from time to time - always check the T&Cs! Note also that double result only applies to British and Irish races - the frequency of disqualifications abroad is much higher and if you bet on a race in any other country you will not get double result with any bookmaker.
Other potential problems
False starts - sometimes the starting stalls malfunction or the runners charge the tape and a false start is called. This may result in the race being declared void in which case all bets are void, or they may be able to start again. If a horse completes the course it must be withdrawn, and I think this also applies if a horse jumps a fence, so there is potential for rule 4 here. Some of the jockeys are out of control in these circumstances so it can happen.
Human error - if a horse takes the wrong course it will be disqualified. If all the horses take the wrong course the race and all bets are declared void. This can cause immense confusion particularly if some of the jockeys have realized their mistake and gone back and done it right. Similarly the judge can make an error and call the wrong result (this happened quite recently). This has a similar effect to a disqualification with different bookies paying out on different results.
Weighing in - All horses carry a set weight and jockey and saddle must be weighed before and after the race. No bets will be settled until after the official “weighed in” has been announced. Occasionally the weight is not correct - the weight cloth may have fallen off during the race. The horse will then be disqualified. Very occasionally a jockey may forget to weigh in and again the horse is disqualified. This is very rare, but if it happens, first past the post and double result bets on the disqualified horse are lost.
All this sounds fairly horrific, but most races are run perfectly normally and in practise if you stick to bookies who pay on the official result (or double result) it is very likely that if anything untoward happens you will get the same reaction from the bookie and betfair, which is all that matters.
Betting on horse racing is all very well in theory, but betting on fast changing odds with only a little money available can be daunting. There are also circumstances when there appears to be an arb but actually there isn’t. You have to make a decision as to whether to try and bag the £20 under a set of odds at Betfair or not. This is very different from choosing odds at the bookie to match with £3000 available at Betfair on football.
The first thing is to leave plenty of time. A couple of hours before the race is ideal, upto half an hour beforehand is ok. Once the early odds at the bookies disappear you are taking a bigger risk as the odds move a lot faster. First the early prices will be replaced by just SP, and then they will start to change noticably as you watch. Some bookies leave previous “shows” there so you can see what is happening. I regard this last half hour as too risky to start to match a bet.
I always bet at the bookie first. Once you get into the sort of odds that most horses will be at, the bookies odds change in quite large chunks. eg 6.0 will shorten to 5.5, not 5.8 as at Betfair. You are therefore much more likely to find odds not too different at Betfair if the odds change than you are at the bookie. Also sometimes the bookie will limit your bet amount and this can be very awkward if you have placed your lay. I had one of my £10 bets limited to £8 this morning on a horse at 11.0. Add to this the fact that once a bookie has shortened his odds he is unlikely to lengthen them again, whereas Betfair will go up and down like a yo-yo, and you’ll see why I do this.
Before you start it is a good idea to have in your mind precisely what you are looking for. If you want an arb, don’t forget to take commission into account. 11.0/10.5 looks great, but at 5% commission this is a zero return bet (you win back what you staked at the bookie, so your profit/loss is zero). On the other hand it would be perfectly respectable for a free nsr bet. The higher the odds the bigger difference is needed before it becomes an arb after commission.
It is important to look at the whole picture at Betfair. This afternoon I was looking at a horse which was 9.0 at Sean Graham and 6.6 at Betfair. BUT there was £5 under 6.6 and the next set of lay odds was 7.0 with £2 under it. After that it was 9.0 to rather more money. Predictably a moment later the lay odds were reading 9.0. This happens quite a lot with smaller races particularly if the market has just been reformed after a non-runner has been announced. You can get really silly odds for a few minutes but you have to be very lucky to catch them. This is gambling and is NOT advised.
For matched betting you are looking for a safer scenario, which means some stability in the market. In general the more money there is under the odds the less likely they are to disappear (although nothing is certain). I like to see figures approaching £100 in the lay boxes, maybe not the purple one, but at least one other low enough to be worth taking if necessary. Low numbers in the blue boxes are also helpful as this indicates people are taking the money on the bet side. I also like to click on the horse’s name, which brings up a graph of what has happened to the odds in the past and how much has been matched on that horse. The best picture is a graph which is dropping and has plenty of money matched (hundreds or thousands). Sometimes taking the time to look costs you the odds at the bookie, but I would rather do that and abandon the arb than bet on something then find nobody wants to match my lay.
Sometimes a horse is shortening fast and there is a gap between the lay odds and the back odds. PROVIDING there is an escape route if things go wrong, I see nothing wrong with offering odds in the gap. For example if the available back odds are 4.6 and the lay odds are 5.0 with £200 under them, and you have taken 5.5 at the bookie, you could lay at 4.8 for a better arb. If it isn’t taken or the 5 starts to disappear you can always cancel and lay at 5. (Don’t do what I did this afternoon and lay again before you cancel, then find both lays get matched!)
Remember, because Betfair takes back bets as well as lay ones, most mistakes are repairable to at least some degree. If you lay too much or the odds change, or you suddenly realize there is an unbalanced rule 4 situation you can always adjust things at Betfair to limit the damage providing you have left yourself a bit of time. In the example I gave where both lays were taken before I had time to cancel, I managed to get a back bet on for the same amount at the same price, and because the commission cancelled out it didn’t cost a penny.
Original post by cornerclose in July 2006 (but updated and valid)
As with everything – always check the terms and conditions before you bet. These are some possible pitfalls but I personally have never had any problems as described here, nor do I know of anyone who has. Just take care. bigjas
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