The Betfair Prof: "Sink or swim? What can the prediction markets tell us about the Boat Race?"

The Betfair Prof / Leighton Vaughan Williams / 26 March 2008 / 1 Comments

The Betfair Prof, expert on all things prediction market-related, likes the favourite in the Boat Race. Unfortunately for him, the Betfair market has both the Dark and Light Blues at even money!

The last (and only) time that the Oxford & Cambridge Boat Race ended in a dead-heat was in 1877, when the finish judge called it a "dead-heat to Oxford ... by five feet!" Technology and the standard of judging have hopefully moved on and if so I estimate the likelihood of a dead-heat this Saturday to be vanishingly small. It is more likely that one of the boats will sink, matching the fate of the Cambridge team in 1859 and 1978 and the Dark Blues in 1925 and 1951. In 1912 both boats sank, along (spooky coincidence!) with the Titanic.

In reality we can, then, be quite sure that this Saturday one or other of the teams will win the 154th Boat Race since 1829, each seeking to emulate the dogged victory eked out last year by the Light Blues over a course almost exactly the length of the Aintree Grand National.

This is a race with a lot of variables, everything from the outcome of the toss to the effect of the tailwind to the motivation provided by the cheers (and jeers?) from the banks and following launches. Not least among the factors determining victory is the skill of the cox in coaxing and cajoling the last bits of strength, stamina and skill out of the big beasts wielding the oars.

We might expect, therefore, that predicting the outcome would be a difficult matter for the markets to gauge and it might well be a fascinating exercise one day to investigate this. Indeed, if someone could identify the betting odds available about every race since the first outing at Henley on Thames, it is a relatively simple matter to ascertain the winners and from that to work out the expected return to a level-stakes bet on the favourite. It hasn't been done yet, though, which means that I can use my intuition as a follower of the Boat Race markets informally over the last few years to provide an informed guess.

My guess is that the favourite on the traditional markets usually wins and wins rather more often (after allowing for the bookmakers' margin) than even their shorter odds would imply. Rather more confidently, I would estimate that backing the favourite is a better strategy over time than backing the longshot, just as it is in most countries on the horses or the dogs. The research paper I contributed last week at the Royal Economic Society conference at Warwick University casts doubt, however, on whether this also applies to the betting exchanges, and Betfair has not been around long enough to test the theory with reference to the Blue Riband of University rowing, at least to any degree of statistical confidence.

It's a pity, therefore, that there's so little interest in betting on the host of races which make up the Henley Royal Regatta, held every year in the first week of July. If and when that day comes we will have a betting bonanza bedecked in style and colour and a data set to dazzle. And as for the marginal favourites on that day? Well, I predict that on average they will win - but only marginally!

Professor Leighton Vaughan Williams is the Director of the Political Forecasting Unit and Betting Research Unit of Nottingham Business School, Nottingham Trent University, and Editor of the Journal of Prediction Markets

Betfair Politics Zone

Comments (1)

1. Jed Christiansen | 31 March 2008

   Hi, Leighton.

   I think that prediction markets on some of the Henley Rowing events could be reasonably successful. I've run play-money markets on Henley events with good success the last two summers. The results of one were published in the Journal of Prediction markets, and the other I discuss a bit here:

   http://blog.mercury-rac.com/2007/07/16/quick-note-on-some-research/

   The most difficult think about markets at Henley is that there is no past culture of betting on rowing. Though given the opportunity, I think there's a fair number of people who would have a go!

   Jed