Bet Exchange News - Aug 2004

This award is for the best British album of the year. An Independent panel of judges has selected what it considers to be the 12 'Albums of the Year' and will meet on the night of September 7 th where the overall winner will be chosen. The best album is purely the opinion of the judges, they are seemingly not influenced by commercial success, critical acclaim, and certainly not by hype.

Last year this event was covered by Betfair and Sportingoptions and brought some great opportunities for betting enthusiasts. I started offering bets on this event straight after the end of Big Brother 4, but there was very little interest until the final week, and the last two days in particular. The first movement of any significance occurred the day before when an article appeared in www.nme.com saying that Ladbrokes had reporting "hundreds" of punters in the West of London trying to back Lowestoft rock band The Darkness to win. As a result the odds tumbled from a previous maximum of 9.0 to odds on.

This prompted some interesting debate on the Betfair Chatback forum, from posters who were incredulous that the Darkness could be odds on. It was pointed out that the decision of the panel is not made until the last minute, therefore insider knowledge could not be a factor. It is a committee meeting, so public opinion and polls would be of no value. Reference was made to an article in the Guardian where a former member of the committee gave an interesting insight into the process by which the winner is selected. The article is essential reading for anyone who is interested in betting on this event. It can be viewed here,

I found the following passage to be of particular interest picking up the story from the point at which the judges have chosen the 12 finalists from an original selection of 200 albums:

"The judges now have six weeks to live with the 12 nominated records before they reconvene in September to choose the winner. But if you want an inside tip, it is this: don't believe any inside tips. In my time on the panel, I called it right only once (Badly Drawn Boy). The front-runners in July seldom look that way three months later, although it's an indication of the music industry's prevailing cynicism that few seem to believe this.

Two years ago, a story went around the internet like wildfire that Zero 7 had won. It convinced everybody and the bookies stopped taking bets days before the judges even met. When we did, Zero 7 were one of the first to be eliminated. Two years ago, 10 minutes before the winner was due to be announced live on TV, the judges were still deadlocked between Elbow and PJ Harvey."

The only genuine information that appeared to be available last year was that a judge who had been interviewed by a BBC correspondent who had said that the contest appeared to be between The Darkness, and an 18 year old rap artist called Dizzee Rascal. This perhaps went some way towards justifying the low price of the Darkness, but not their odds on status. It was also reflected in the betting with Dizzee Rascal typically being second favourite on both sites.

After a long period without activity the market got very busy on the last two days, and I was able to back and lay at favourable odds between the two sites very successfully. There was generally a pretty wide spread with the back market rarely going below 160% . I was offering odds to back and lay on each of the selections on both sites and managed to get incredibly long odds to back most selections, whilst at the same time managing to lay the same selections very cheaply. Some of my matched bets included the following:

Coldplay backed 30 layed 8.2

Radiohead backed 11 layed 6.2

Lemon Jelly backed 32 layed 13

The Thrills backed 22 layed 12

Dizzee Rascal backed 9.2 layed 4.3

The value of the bets weren't huge but they all mounted up to enable me to set up a no lose situation which meant a risk free profit of between £55 and £356 depending on who won.

At around 6.30pm on the night of the awards, Sportingoptions suspended their market. As I knew that Betfair were trading right up to the announcement at 10.15pm, this took me by surprise and underlines the importance of checking the market information. As I had been trading between the two sites so effectively, this was a bit of a blow, but I still had the opportunity to back and lay on Betfair. At this stage, my smallest return was on the Darkness, which I was keen to increase, as I felt they had a great chance. Whilst wanting to build up my green on the Darkness, I didn't want to significantly reduce my profits on the other selections, therefore, I decided to try to build up my profits by working the margins of the spread, backing high and laying low . Around about 7.00 the market still seemed pretty active and when I placed a substantial bet on the Darkness I was confident that I would be able to lay it at favourable odds. The worst case scenario I felt was that I would have to take a small hit and lay it slightly higher odds than I had bet at. What I hadn't expected with the announcement still three hours away was for the market to dry up.

Suddenly hardly anyone was betting. I found myself staring at a static market screen for what seemed like an age. When it did change it was a small adjustment in odds on one of the outsiders, with no activity on the Darkness at all. I had been well and truly caught out. The situation got worse still when the programme started and the in running kicked in. I have been caught out in the past when I hoped to balance my book in running, but couldn't because of lack of liquidity, and here it was happening again. No-one was betting at all, there was only one other layer, possibly two, but they were only offering joke odds, 1.03 on an outsider who had previously been available at 80 was an example. My offer to lay the Darkness remained unmatched and all my hard earned paper profits in this event were now invested in the Darkness. If they won I was looking at a profit of over £300, but if Coldplay or Radiohead had won, I would have lost £150, not what I intended at all. Having watched the programme in full the Darkness looked awful, about the least likely act to win, and as Ms Dynamite announced the winner my hope had all but gone. When she called out the name of Dizzee Rascal I had mixed feelings. Relief because this was one of the acts which enabled me to break even, but at the same time I was kicking myself black and blue as my earlier risk free paper profits on Dizzee, had been in excess of £400.

With the benefit of hindsight it was all so obvious. Of course the committee were not going to fall for the hype and choose the Darkness. If anything, the committee would be more likely to be turned off by the hype, and particularly by the bookies rumours. This was summed up by a forumite called Roach who posted the following message:

" the Mercury Music Prize is for special albums - ones that are innovative, different, and have not had the critical acclaim or column inches or units sold that they perhaps deserved. None of which criteria the Darkness meet. I could not for the life of me understand people actually backing them at odds on!! Absolutely mad. Anyway, I will gloat now about this victory both for British music and for my Betfair account balance which has just swelled by £236. Thank you."