The Betfair Prof: "You can win backing the longest of longshots!"

The Betfair Prof / Leighton Vaughan Williams / 19 January 2009 / Leave a Comment

The amazing case of the horse called Topless that lost the man on top, and how it won one Betfair trader £111,000!

One of the perks of my day job is that it gives me ample excuse to amass an extensive library of books, new, old and antiquarian, on the subject of betting on horses and sport more generally.

Wading through one of these last Thursday morning (the Ladbrokes Pocket Companion to the Flat, 1990) revealed an interesting chapter starting on page 242, headlined 'Odds Backing.' The theme of the chapter was a five-year study of the returns you would have made over a five-year period of British flat racing, starting in 1985, if you staked level amounts on horses starting at each of a range of odds.

The results are striking and are reproduced here. First, level stakes bets on every horse starting at odds from 25 to 1 to 100 to 1 would have yielded a loss of 67.76%. This was generated from 441 winners out of 43,426 starters. Between 8 and 1 and 20 to 1 the loss was reduced to 36.89% (2,566 winners out of 53,741 starters). Come down a notch to an odds range of between 7 to 2 and 6 to 1 and the losses were reduced yet further (to 10.32%; 3,464 winners from 21,681 runners).

You've guessed it. Restricting bets to horses starting at between 6 to 4 and 3 to 1 and your losses are whittled down again, this time to 8.09% (2,187 winners out of 7,774 chances). By the time we enter territory around even money (4 to 7 to 5 to 4) the losses are down to just 4.64 % (881 winners from 1,780), and at odds between 1 to 5 and 1 to 2, we start to turn a marginal profit, of 0.52% of amounts staked (249 wins from 344 runs).

In other words, the shorter the starting price, the better (on average) the relative value. Indeed, the shortest of hot favourites (1 to 5 to 1 to 25) won 88 out of their 96 outings (for a profit of 6.5% on level stakes) and not one of the 35 favourites sent off at 1 to 8 or shorter lost.

So what was happening at Taunton that very same Thursday, minutes after the 3.50 off in the Carlsberg UK Handicap Chase. "5 lengths up and well in command" was the verdict of the Racing Post analyst about the Neil Mulholland-trained Topless , with just 20 yards of the home straight left. Surely this was the hottest of hot favourites, putting those 1 to 8 certainties of yesteryear well in the shade? Apparently so, as one trader on Betfair found himself staring at 'in-running' odds of 999 to 1 about the 'sure' runner-up Pangbourne. So was it worth staking £111 to win a potential £111,000 or so? Not if you'd read the Ladbrokes Pocket Companion that morning it wasn't! But fortunately for the trader who had confidence in the mount of Jack Doyle, the longest of longshots sometimes do seem to offer value. Over £100,000 worth of value! In fact, the 999s was laid for a grand total of £260.90.

As for the rest of us, it's a case of maybe next time! Or then again, maybe not!

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