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Dunleavy: Early thoughts on exchange wagering
For the past several weeks, I have been playing on the beta version of the exchange-wagering platform that Monmouth Park and Betfair launched Tuesday. I am intrigued by the possibilities this style of gambling represents and think it will really catch on with players if rolled out to a wider audience.
Unfortunately, New Jersey and California are the only two states to legalize exchange wagering, and California is still working out its regulatory policies. For the moment, you can only participate if you are a New Jersey resident and are physically within state’s boundaries.
In exchange wagering, bettors can back or lay odds on horses in a particular race. If I lay, or bet against, a horse, I might put up $100 at odds of 5.5-1 (which is really 4.5-1 plus your money back). Anyone wishing to back, or bet, the horse at that price can take, or match, a piece or all of my offer.
But if someone thinks 5.5-1 is too short a price, they can post an offer to back that horse at say 7-1. If anyone wishes to give them that price, with a few simple clicks of their mouse, they can match part or all of the bet. Exchange wagering is all done via computer or tablet.
Horseplayers are always looking for value, but in parimutuel betting that basically comes down to betting a horse at a price you think is fair, or more than fair. Since exchange wagering is fixed-price betting – the price you get is set once you wager – players in some instances can create their own value.
Here is a example of how I played Wednesday’s fourth race at Louisiana Downs, on which I ended up losing $1.67.
I quickly handicapped the nine-horse field of restricted $5,000 claiming sprinters. I had never seen any of them race before.
When I compared what I thought the odds on the top choices would be at post time to the exchange prices being offered, they looked pretty much in line. But I noticed that someone was offering 30-1 on the No. 5, First Prize Dixie. I thought those odds were too high and that he would be shorter at post time, so I matched the $11 that was being offered at 30-1.
Because the Betfair software always gives you the best available price, I actually got 30.51-1 and stood to make a profit of $324.64 if First Prize Dixie won the race.
As the betting went on in the run up to the race, First Prize Dixie’s parimutuel odds dropped at Louisiana Downs and his exchange prices followed. I laid $10 against First Prize Dixie at 18-1, and somebody matched $9.33 of it. (I’m not sure if the odd number has to do with currency exchange rates, as players from overseas can bet into these pools, or if I was playing against a bot, or computer.)
Anyway, I stood to lose $158.61 to this player if First Prize Dixie won.
Overall if First Prize Dixie won, I stood to make $166.03 ($324.64 minus $158.61). If he didn’t win, I would lose $1.67 ($11 minus the $9.33 from my buddy the bot). That means I was getting 98-1 on First Prize Dixie, who eventually went off at 18-1 at Louisiana Downs.
As it turns out, he got to within about four lengths of the lead in upper stretch and then tired to finish eighth.
Here is what I have learned on the exchange site so far. Handicapping is still important, but not as much as in a parimutuel environment. Betting, strategy, and being able to estimate a horse’s closing odds play a much more significant role than in parimutuel wagering.
Quickly, another play I have been using with some success involves backing one horse in a race to win and laying another to lose.
It’s possible you can win both of those bets, or win one and lose one and hedge your losses. You also can lose both, however, if the horse you backed loses and the horse you laid odds on wins, so be careful.
I also have been able to get a number of overlays in the exchange pools, 6-1 or 8-1 on horses that are 9-2 shots at the track, for example.
* I have not yet seen or participated in any in-race betting, which is expected to be possibly the most popular part of exchange wagering. I believe Mountaineer offers in-race play, but it is not yet being offered on any of the tracks I have bet so far. In-race betting will be available at Monmouth.
* Exchange wagering is only available in win, place, and show pools.
Http://www.njbetfair.com is the best way to signup for the exchange. I got a $200 bonus when I did a deposit of $200. I have only bet horses to lose and seems to me this is very easy! Give it a try if you are in New Jersey, you will not regret it!
I'm an NJ guy and a math guy and a horse guy so I'm interested.
I did a little experimentation and more watching and this Betfair thing strikes me as a giant fraud. (i hope I'm wrong.) I also watched the DRF hour long video and several Betfair videos.
Let's look at the Monmouth second on Sunday, May 22 (nothing special about it, really), as the horses were entering the starting gate.
No ToteOdds BetOn BetAgainst
1 3 7.6/13 7.8/18
2 34 50/6 65/8
3 15 42/4 45/11
4 3/5 1.75/98 1.76/63
5 6 9.8/21 10/16
6 5 6.6/25 7/7
The BetOn and BetAgainst numbers are Betfair's. 7.6/13 means you can immediately bet and lock in odds of 6.6-1 to win up to a $13 bet. And you can bet against the #1 if you want to give 6.8-1 to someone on up to an $18 bet. (You decide on the amount, rather than the mysterious guy with the $18.)
Some of this is intentionally confusing. The tote odds figure in the "take.: The Betfair BetOn odds are payoff odds BEFORE their 12% "commission" on winnings. The Betfair BetAgainst odds are also payoff odds so if you bet $2 against #1, you lose $15.80. If you win you get $1.84 ($2 less 12%).
I don't really care about the confusion.
Betfair represents all this as a MATCHING of betters.So why are the BetOn and BetAgainst odds and amounts different? If someone is willing to lay 64-1 on the #2, why can I only get 49-1 if I want to bet on the #2.
It looks to me as if Betfair is booking bets, not matching bettors. Someone please correct me if I am wrong.
Another nail in the coffin for horse racing. It's bad enough that pools are being diluted by all the impossible to hit gimmicks like superfectas and hi 5 ,rainbow b.s. Pick 6. Etc. but now you get this nonsense .in England all its done is cause racing to be more crooked by allowing jockeys to bet on loosing. There was a huge scandal involving Kieran Fallon and other English jockeys as soon as this became available there. And it's going to be a lot worse here . With our lax ethics enforcement watch Monmouth this summer . Everybody would be a lot better of if they restricted betting to win, place ,exacta,trifecta,pick 5 ,double. That way pools would have money in them and payouts would be decent.
"That means I was getting 98-1 on First Prize Dixie"
that's pretty twisted math.
BTW, you didn't mention takeout (commission). Isn't it about 12%? Those prices you quote are without takeout.
I have been following the betfair exchange for 15 years. I had an account with an exchange until they had to pull out of the American market in 2004. This is the future of Horse Racing. I was a young 20 something then I have since then held my major betting action back from the Tote system and high takeouts. I LOVE this sport and have waited patiently for the day this would be made legal and excepted. England has all forms of wagering from Exchange to Tote and Bookmakers offering fixed odds. Watching the IN_PLAY wagering from England shows the true value of the Exchange system to any professional or semi-pro horseplayer. Im 35 years old and finally can see the light at the end of the tunnel for our beloved sport. The exchange will be a bastion of hope for the hard core whale who can now bet virtually unlimited amounts without worry of last minute odds shifts. Markets in England regularly match over $1 million per race every day of the week at every track they have. They also do not over saturate the game like american racing but thats another story.