29th March 2002 - issue 13

"Exchanges are already regarded by some professionals well versed in reading the market as the best guide to whether a horse is fancied or not." Racing Post 7/3

The bookie free revolution has resulted in a number of different betting markets existing side by side, with different participants with different levels of knowledge and different agendas. The result of this can often be arbitrage opportunities, whereby you can lay a selection at a lower price than you can back it elsewhere, thereby assuring you of a profit. The problem with arbitrage opportunities on bookie free sites is that where the difference is marginal, you could lose all the benefits through the commission you pay on the winning site, something that will be discussed in part 2 of our commission article which will appear in issue 14.

Where an arbitrage opportunity exists on a bookie free site it implies that someone has such a level of confidence in their selection that they are prepared to back at a level below the current p2p market price, in order to get their bet matched. This leads me to the conclusion that rather than using arbitrage between bookie free sites as an opportunity to make small assured profits, that it may be better to use them to flag up likely winners. From the numerous examples of taking advantage of arbitrage opportunities on football bets it is surprising how often it is the Betfair side of the bet that I lose. This implies that the level of expertise amongst Betfair members exceeds that of members of other sites.

The unanswered question is if someone is that knowledgeable surely they are aware of the other p2p sites, so why do they not simply place their bets on the other sites and take advantage of the superior odds available on these bets? On football bets this is not an easy question to answer, but on horse racing there could be an explanation. It is likely that many of the real betting professionals are at the race course, making markets based on the condition of the course and of the horses themselves along with the betting patterns on the course. More significantly, they could be amongst the elite inner circle who have the inside knowledge of which horses are really going to be trying to win. The key thing here is that these people will be betting by telephone, therefore they will have access to Betfair, but are unable at this time to take advantage of Betdaqracing, even if superior odds are available.

Regular readers will know that horse racing is something I generally avoid, firstly because the timings are inconvenient, but more importantly because of all the behind the scenes shenanigans. However, it is possible that close observation of the betting patterns on Betfair will enable you to tap into this insider knowledge and take advantage of it yourself. Wanting to try out Betdaqracing I was able to test this theory on the first day at Cheltenham . In the first three races that I looked at, I identified 8 horses on Betdaqracing which were available to back at higher odds than the same horses could be laid at Betfair. I ignored the arbitrage opportunities and simply backed these horses to win on Betdaqracing. Amongst these horses were, Hors La Loi III, Moscow Flyer and Frenchmans Creek, giving me the winners in all three races at excellent odds of 13.5, 9.6 and 8.0 respectively. Furthermore in the first race the three selections that this "system" produced were all in the top four. In the fourth race the arbitrage opportunities were the other way around with superior odds available on a number of horses on Betfair. Foolishly perhaps, I accepted the superior odds on Betfair, and my selections failed miserably. Could it be that the longer odds that were available on Betfair because the on course market makers who were offering these generous prices were doing so in the knowledge that these horses had little or no chance?

A word of caution, however, when I tried the same system the following day, it failed to generate any winners, and cost me a good chunk of my winnings from the first day. The closest I came was in the first race of the day where four horses were identified, and although none won, they came in 2 nd , 3 rd , 4 th and 5 th . As a system it does seem to make sense, and if my experience is anything to go by, it could also generate some good tricast selections on the regular bookies. However, bear in my mind that this system is untested and if you are going to give it a try make sure you keep you stakes low (the £10 minimum bet at Betdaqracing may be a stumbling block for some readers in this regard) until you are comfortable it is working. Let me know how you get on.