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Betting with Betfair
This article on Betfair Betting by Paul Segar and brought to you by Pureform covers one of the most popular horse racing websites: Betfair and looks at how it differs from other more traditional establishments.
10+ Major Betfair Betting Differences
3. Betfair Bookie or Punter Options
7. Betfair markets to simplify form study
Introduction
Betfair has been in business for quite some time but in some ways is still the
most exciting way of gambling on horse racing, harness racing, greyhound racing and
other sports.
This article previously gave you a baker's dozen, that's right, 13 ways Betfair differs from more traditional gambling houses but updating adds a few more differences.
The focus is horse racing but the comments also apply to other sports.
So what are some of the fundamental differences between a TAB, bookmaker and a Betfair market?
The next few paragraphs outline these differences with the obvious ones considered first.
1. Market Percent
First off, the TAB or reasonable bookmaker market when the prices are converted to percentages adds to somewhere around 115% to 120%.
In simple terms, you bet each runner according to its percentage and you 
will outlay $115 or $120 to collect $100. You can't make a profit betting all the runners and at best will lose $15.
The same applies for place markets, 360% or thereabouts for TAB/bookie.
A competitive Betfair market on the other hand will sum closer to parity, or 100%. Support each runner at its percent and return will be close to $100, approaching $300 for an active Betfair place market.
So difference number one is tighter pricing of which most people are fully aware.
This percentage difference between the various markets can be a real bonus especially for longer priced runners.Markets and percentages are covered in another article.
2. Betfair Commissions
The normal bookmaker or TAB has their advantage already built into the price on offer.
Betfair takes its percentage or commission only from profit gained on an event, obviously after it has run.
I haven't visited Britain for some time but previously, the VAT or Value Added Tax when concerned with punting was either added to the initial wager, or paid on the winning amount.
At that time the VAT was 10% and so most people paid the VAT, like with the Betfair commission, on the winning amount (if any). You bet £10 on a horse, there was no point adding an extra 10% (or higher as it is today), an extra £1 onto the stake for an end result of losses. Sure, the horse wins and returns £40 then the VAT would be £4 but better to pay after winning than before.
Betfair follows the same approach but only on the net profit on any particular race.
So if you support one horse to win and lay another for the same amount and have a net zero result, then no commission will be paid.
Previously in Australia, the base take was around 6% which was not far short of the old "don't forget the10%" rule.
Today the takeout from profits is around 10%, a great example of inflation. As the ad goes, 'you win some, you lose more' and inflation is a losing result every time.
3. Betfair Bookmaker or Punter Options
The third difference is the ability to wager for or against any particular runner
or combination thereof.
So you like a runner to win, you can put a bet to win.
You fancy a runner will lose, you can bet, that is lay that runner to lose.
You can mix and match your win and lay bets.
Again, most people that have used Betfair are already aware of this difference and this is one of the major benefits of using Betfair – you can either play punter, bookie or a combination of both.
Versatility with a capital B (for Betfair).
4. Betfair Mode of Market
A forth and less discussed difference is the mode of market.
A TAB totalisator market consists of money already invested.
Some TAB market prices are produced simply on the amounts wagered on each runner (minus the TAB commission).
For example, 10 people bet $10 on 10 horses with one horse winning. The dividend is $8.50 returning $85 to the lucky punter and zero to the other nine bet takers.
$15 goes to the TAB regardless of which horse wins. Easy money if you can get it!
In simple terms, this is a historical market.
Another bookmaker will vary the prices somewhat based on their opinion, on course information, etc but for most runners will have final odds similar to the TAB fixed prices with perhaps their opinion slightly adding / subtracting to those price estimations.
It is a very rare situation for a bookmaker to price a runner at $6 when the TAB fixed odds are showng $2.
In most cases betting prices approaching race start time are based on money already held to produce a ‘book’. This approach represents a traditional punting model which is aimed at making a profit for the bookmaker from every race.
The Betfair market or model is quite different. It is an instantaneous market – a ‘snapshot’ of the current situation. Nothing to do with money already wagered. In fact money already bet is totally irrelevant from a punting view. The market as shown is simply the figures at that current state of play (to use different sporting jargon).
Consider the following scenario highlighting another Betfair difference: (This article focuses on racing however a little tennis doesn’t hurt now and then).
Tenisu Sutaru (English name Tennis Star) is cruising to an easy win in the third set of a 3 set match against Toppy Spin-Lobb. The in-play odds for Tenisu are a firm $1.03 on the Betfair market screen with huge money represented on either side of the Bet/Lay margin. The punters are all relaxed with a cruisy finish almost assured. Everyone is watching the match with most punters certain of the event’s result. But as I often say in horse race after backing a roughie against the ‘unbeatable’ favourite, if horse racing was easy, everyone would win. But I digress. Back to the tennis.
Suddenly Tenisu goes down hard and appears to sprain her ankle, bad. Can’t finish the match is touted – by everyone, in the know. Disaster for those punters already counting the cash...
Now if the TAB or bookmakers were still offering odds, the odds would still show $1.03 and perhaps gradually ease. On Betfair, the price for Tenisu suddenly jumps from $1.03 to a massive $2.40 before drifting slowly back to $2. The players, and I don’t mean those on-court, are in a panic and their heads are spinning.
Money from the Betfair fraternity is wagered at a frenetic pace as opinions vacillate around the new predicament.
Will Tenisu finish the match? Will Toppy get back into it? The possibilities are many.
Sure enough Tenisu recovers after some therapy and limps around the court to another win. But no longer at the skinny $1.03. The current ‘snapshot’ price includes the possibility of a relapse and would show a premium, perhaps right to the last point.
Normal horse racing is a little different. A horse is scratched if injured before race start and so money back is the worse case scenario for a pre-race injury. Other rules apply if during the run a horse falls or is pulled up, loses its jockey, jumps the running rail or some other irregularity. Simply money lost. Again everyone knows this, especially when betting on jumps racing. So what’s the difference?
The difference is that quite often horses present badly in the mounting yard, some other information may come to light late or some other factor. A horse is running late for the race, totally flustered, throws its jockey in the mounting yard, needs an escort to the start or generally in a foul mood. Odds could be offered about the horse missing the start and you could bet on the margin. Or even being scratched at the barrier.
The horse is a firm $4.50 TAB second favourite.
The Betfair market prices its chance at an easing $8.
The result? In most cases, the horse fails, often quite miserably.
Yes its TAB price also eases but with the solid early backing it may only ease to $5 or $6. And many people will still continue to support the horse as the odds increase to a more juicy level, the price now representing "value", even though from the Betfair market something is amiss.
So another major difference is the Betfair market can be used as not only a bet/lay tool but also as a ‘snapshot’ of the latest information.
Delivered to you straight from all the professionals involved at the track.
It is quite different to a TAB or bookie market where they really aren’t interested in the real chance of a runner but more so simply pricing the runners to produce a profit.Does this mean no long shot winners? Not at all, as everyone knows. There are probably more long shot winners in modern day racing that at any time. Also more odds-on winners compared with racing from yesteryear.
A Betfair market as already suggested is a ‘snapshot’ of the current situation. The TAB $4.50 runner showing $8 indicates a possible problem. The $20 horse on the TAB showing $25 on Betfair does not. It is simply a long priced runner showing slightly longer on Betfair. The same horse showing $80 on Betfair may indicate a problem but longer priced runners are not as well scrutinized as the shorter ones. In most cases, a TAB short priced runner showing much longer odds on Betfair may indicate a failure.
As always there are no guarantees in racing. A huge price discrepancy is no guarantee the runner will fail, simply an indicator. That horse starting $2 favorite that eases to $4.50 doesn't know the price is easing and still can jump to the front and lead throughout.
This leads to difference number 5.
5. Betfair Selection Assist
So what can you do with this information?
Not much opportunity to pot the discussed 
runner. Who wants to pot a horse at $8 on Betfair when $4.50 is wagered with
books/TAB? There is no absolute guarantee that the $8 Betfair horse will lose
and you would certainly feel like a total goose if you laid the runner and it
won.
Once again long-run probabilities apply. Generally the horse runs badly in this type of situation.
What this knowledge does allow is the opportunity to re-assess the selection process. Consider the following:
| Horse | Your price | TAB Price | Betfair Price |
| A | $3 | $4 | $8 |
| B | $3.5 | $6 | $6 |
| C | $6 | $8 | $20 |
Horse A is your top pick based on whatever method currently used (darts, Ouija board, favourite numbers) and priced at $3. The TAB has the horse at a slight over at $4 and based on your assessment and this betting information alone your top pick looks like a healthy chance of winning the race. You check the Betfair market and whoa!! Betfair has it at $8. Clearly something amiss.
Move it from top pick to perhaps a saver.
So you move to the second pick.
$3.5 showing $6 on the TAB, another strong well-fancied runner. But at $6 on Betfair the evidence is there to support a strong performance. A definite chance.
Horse C is priced at $6 showing a slight over on TAB but way over on Betfair. Again, most likely a problem with the horse but given the healthy price, a minor save will not greatly dent the bank .
The race runs: Horse B wins from Horse E with Horse A getting up for 3rd. You were right to alter your picks and although Betfair got it part wrong (A ran 3rd instead of as suggested, unplaced), you only fully supported horse B for a nice result.
It is easy to write an almost perfect example to highlight the general benefits of using a Betfair market.
Problems occur when the genuine $7 or $8 chance is showing $10 or $12 on Betfair. Does the horse have a problem or is it simply a price variation from having a 115% market compared with a 103% market?
Again, if winning on horses was easy, everyone would do it. And there would be no horse racing.
When in doubt save (unless you are betting very small amounts in which case some decision needs to be made).
6. More Pressure
It's not all gravy...
For many events, a Betfair market is only useful just prior to race start.
This adds considerable pressure to the punting situation and last minute decisions are often poorly planned and badly executed.
This is when rigidity is a major plus.
Devise a set of rules to follow when betting on Betfair. Have a set of firm prices ready to compare with the Betfair market.
These prices may simply be a TAB market, your own figures or a hybrid combination. I would suggest to avoid backing any runner significantly longer or shorter priced than your figures. Much better to have a losing bet when backing a horse at $6 than at $2.
Betfair does have a few options allowing you to put your bet on at a price and if not matched, select take SP which sets your price at the starting price when the race starts.
7. Using a Betfair Market to Simplify Form Study
Many races have only one or two real chances. Look to Betfair to simplify the task and hence difference number 7.
Often the two top chances will be short in the market with the remainder priced at over $10. Focus your efforts on those two runners and if one stands out as a better chance then back it and maybe lay the other for the same amount.
If another runner wins, then you break square on the race. Your horse wins, congratulations. The ‘donkey’ wins, bad luck.
You can use a bookmaker or TAB market to also ‘study’ the form but the Betfair market is a more accurate assessment given the earlier considerations.
8. Betfair for Re-Assessment
Another difference between the markets is that Betfair allows you to (re) -assess each horse’s chance.
This often happens when a factor, whatever that might be, has been overlooked and then noticed, perhaps at the last minute.
One recent completely incorrect wager than I made was backing a late 2yo against older horses in a maiden event.
Generally, ordinary 2yo’s don’t perform well against older horses and so basically the majority are a lay bet in ‘open’ (age) company.
Sometimes, for again whatever reason you missed the horse’s age and based on many other factors, the horse first appeared a top chance.
Shebang, you notice the age and the horse goes from a top pick to a near certain failure.
But you’ve already placed the wager. If a TAB or bookie bet, the punter would be stuck with the bet (although you might be able to talk your way out of the bet with a bookmaker).
Betfair allows a complete reversal of opinion.
In the old days of futures trading, for example when trading gold you would buy one gold contract and then when you were confident of a downturn in the price, you would sell two, completely reversing your position (one to cancel out the initial trade, the second to go short gold, or in racing terms go from backing the horse to laying it).
Mistakes do happen, so having a reverse option is a real bonus.
And as just suggested, it is often a great idea to reverse the position completely – that is go from backing to potting or vise versa.
9. Trading with Betfair
This leads to yet another difference.
A Betfair market allows you to trade and in the end quite often take a completely neutral but profitable stance.
Most punters are familiar with the notion of trading on Betfair.
Simply support a horse at a longer price and lay it off at a shorter one. Alternatively lay it first at a shorter price and back it at a longer price. The term is generally known as Arbing from the business term, arbitrage.
A profit can be locked in by taking a further wager or a one way profit or break even can be achieved.
A very desirable position to be in with a profit available whether the runner wins or not.
Betfair makes that position a real possibility.
A whole book could be written about Betfair trading, this article simply overviews the possibilities.
10. Betfair In-Running
Betfair also offers in running betting on some sporting events.
For horse racng, a race begins and a punter can take a "stand" about a runner (for or against) during the event.
This is a great option for a punter with some inside information on the likely racing style(s) to be displayed in a race.
You like a runner if it gets a soft lead – often this becomes clear after 200 or 300m.
You want to pot the favourite from an outside gate if it gets back from the jump. Sometimes the favourite instead of getting back jumps on the pace and romps in.
In running betting is great when you have some feature to check as just outlined or some other factor becomes clear after the race has started.
Often the odds are as useful and sometimes better than during pre-race betting.
This betting approach is not for the faint hearted with price movements often moving at a frantic rate.
Remember also that the race is won on the finish line not 600m from home and so be wary when betting in-running.
Harness racing is better for in running betting as the race usually takes at least 2 minutes, has times for each quarter and a few laps.
11. Place Betting
Betfair has the usual approach to place betting and pays three dividends in fields of 8 or more runners, two place dividends for fields between 5 and 7 runners and no place pool in races with 4 or less runners. The usual deal.
However, these rules only apply to races with these nominated number of starters.
So a race with only 4 acceptors will typically have win only betting.
However if there were 5 or 6 runners and scratchings reduced the field to only 4 runners, Betfair still pays 2 place dividends.So to get a place bet collect, all you have to do is beat 2 runners. Much easier to write than to actually do.
This makes place betting far more interesting as there are often very short priced place bets, some of which run in the money, and some that don't.
The same rule applies to races with 8 or more runners. If scratchings reduce the field to 7 or less runners, Betfair will still field the race with 3 place paying positions (depending on scratching times for some events).
12. A versus B
Still another option provided to the punter in some races is the good old Horse A versus Horse B scenario.
Betfair selects two horses which are basically close together in their abilities with perhaps differing racing styles and gives the punter the chance to wager on these runners.
Basically there are four bets
Either back A to finish in front of horse B or lay B,
or bet B to beat A, or lay A.
Basically you can take either horse A or B to beat the other performer; their finish position is irrelevant except that one horse or runner will finish in front of the other.
This is another great option that can be taken on these selected events. Some races produce runners that are certain to perform badly. You know that horse A is much better than horse B and so will beat that runner, you are not sure if it will win or not, or even place.
The A versus B scenario may be a better approach for this wager.
13. Four Place Betting
Betfair on selected races gives the punter a chance to bet or lay a runner to finish or not finish in the first four placings.
This is a great option for supporting that long shot or betting a favorite to be well beaten.The options are many and only limited by your imagination and betting know how.
14. Other Novelty Bets
During major race days and popular racing carnivals, Betfair apart from the A versus B option offers a number of other wagers including:
Winner Excluding the Favourite
Quinella Betting
Runner finishing top 5 or top 10
Winning margin
Odd versus even numbers
Track record and
quite likely many others.
These options are fairly self explanatory and can be played as a novel way of having a fun wager or potentially making money.
15. Which One is Better?
Betfair and the more traditional approach are both useful in their own way.
For short priced favorites, a traditional bookmaker can often offer the same price as given on Betfair when betting for the runner to be successful.
If the bet wins, then a commission needs to be paid from the Betfair bet making the bookmaker bet more profitable.
Bookmaker prices are set for a longer time before each race making betting slightly more flexible.
Betfair allows you to bet a runner to lose which is not available with a normal bookmaker.
Betfair matches bets rather than taking only one side of the bet and as such is less likely to warn you off, that is not accept your bets if you get on a long winning streak.
Betfair overall is probably an overall better proposition when doing win or place betting. The various TAB's are the place to go for multiple betting.
ooo000ooo
So there you have it. 14 major areas in which Betfair is different
from the traditional wagering model and why the betting exchange approach
is such a popular betting platform.