Should You Never Back A Horse That Is Odds On?

Sep 10th, 2012 - Posted by Stephen_Harris in Betting Theory, Horse Racing

Racing Editor for bettingexpert. Always searching for winners "against the crowd" and trying to find the value.

Many punters believe in the old maxim that you should never bet at odds-on. But what is the logic behind this assertion? Today on the blog, Stephen discusses this long held theory.

HorsesRacing

Some wise old faces in the game proudly boast that they have a golden rule of never betting odds-on, recalling stories of the "bridge-jumpers" who have come unstuck by a brief losing run of lumping-onto so called "certainties", dramatically losing their entire betting tanks and falling rapidly out of the game.

Certainly there are many punters who are drawn like moths to a light into betting odds-on chances, believing the shortness of the price implies the victory is almost certain and playing far bigger than common sense would dictate.

The Problem

I have seen several punters come and go with this method. Most notably a team who used to follow the open-race greyhound circuit in the 1980's and 1990's. They would only appear when a long odds-on shot was on the card, caked up with cash (no-one ever asked where it all came from!), and piling it all on at often huge long odds on rates. They enjoyed many months of success, but when they hit a losing run of two or three, were immediately back to square one or losing.

The main problem was not that their selections were wrong, but the bookmakers at the track knew exactly what they had turned up for and that they would take almost any price down about the "good thing", and cut their cloth accordingly (i.e make the dog in question a much shorter price than previously simply because of the expected cash the odds-on gang were about to pile on).

This principle stands firm today in all sports, where bookmakers can predict accurately that a large proportion of their customer base are going to fancy Man Utd to defeat QPR and can formulate their prices in accordance with the demand assured, (helped now of course by the brutally accurate perfect market supplied by the betting exchanges).

This is essentially the rub for those who like to play at short odds. The view they hold is already in the prices. There is no secret, they have found the most likely winner but are hardly in an exclusive club. The chance of their choice is already widely known and established, and because of the mentality of the crowd forcing down and down on this pick, they are unlikely to make a profit long term from backing these selections.

Statistically Speaking

The following table (supplied by flat-stats.co.uk) shows all the odds on horses running since 1993 on the turf and all weather.

BettingOddsOnStats

Clearly there is little sign of profit here over a very long period of analysis. Clearly if betting at odds-on regularly, you need to significantly beat the SP (starting price) to turn that near 6pc loss around.

The Golden Age

Pre-exchanges things were a little different. In the world of horse racing the prices used by all the main bookmakers were basically a copy of the industry tissue supplied mainly by odds compilers such as Michael and Simmons or Barry Beasley. These individuals faxed (yes it really was a while ago now and I'm showing my age) their "tissue" to the firms with the odd view here and there every morning. The companies then put up prices on the main races of the day at around 11am and laid decent bets off the back of them. Not every race was priced up and the more astute punters could wait until a "show" came through from the courses around ten minutes before each race.

The on-course layers used the prices provided in the trade newspaper (Sporting Life and Racing Post latterly) to form a market on the other smaller races i.e maidens and novice hurdles, and this provided a huge chance for the more astute players, particularly at the front end of the market. Those who knew the form inside out and had formed their own tissue prices were able to find some fantastic value. The bookmakers obviously had far bigger margins to play behind than is the case today, but the fact is there was some amazing value available for those with an educated opinion.

For example, if the industry paper went Evens about something our astute pro-punter made 1-2, he could be reasonably confident in the pre-Betfair age that he would achieve something like Evens or 4-5 to his money. Clearly taking 4-5 about something you make 1-2 into a 100 per cent book, will lead to decent long term profits being made if it can be achieved.

An edge is needed to avoid the cliff-edge

The truth is therefore that odds on betting should never be ruled out. Indeed having fixed rules when it comes to betting is never a good idea, particularly given the rapidly changing game. However, the punter who plays principally at short prices needs an extremely strong mind and to be very disciplined.

He must not seek out odds on chances or be lured in. Instead he must find a price discrepancy between his view and the price offered, and only play when that is the case. He must never chase his losses and try to recoup what he has just lost when it goes wrong. This is the key if one is to avoid becoming the dreaded "chalk-eater" or "bridge-jumper" that bookmakers disparagingly refer to players at very short prices as.