Grand National percentages

[Fella]

From a post on the BF forum, these are the industry overrounds for the Grand National since 2000.

2000 - 138%
2001 - 142%
2002 - 143%
2003 - 143%
2004 - 133%
2005 - 139%
2006 - 147%
2007 - 152%
2008 - 146%
2009 - 146%
2010 - 155%

A truly scandalous set of figures. The Grand National is the only bet of the year for the majority of the British public. And the bookies reward them for their custom by ensuring the Grand National is the worst-value punt of the year. Systematically slashing the odds on every runner as the race approaches until you're left with a truly eye-watering 155% book.


Pop quiz: Lets say the Grand National suffered a lot of late withdrawals & became a two-runner race. Furthermore, lets say that those two horses started at the same price. If the bookies bet to a 155% book as they did yesterday, what price would each horse be?



Answer: Both horses would be 2/7 favourite.

Or if you prefer decimal odds, both horses would be 1.29.



Of course none of this matters to the advantage player, but it's a disgusting display of cynicism from the major bookmakers. They know full well that betting percentages mean nothing to Joe Public. Furthermore, they know they can get away with it because the large number of runners effectively hides the maths. The average non-punter thinks that 25/1 is a big price & doesn't understand that if the horse is a true 200/1 chance then 25/1 is daylight robbery. (And yes, there were horses yesterday that started at 25/1 that you could back at 200+ on Betfair the day before, for example Beat The Boys....)


That thinking is compounded by the low-brow coverage from the BBC, with "experts" like John Parrot squawking about what a good bet such-and-such a horse is simply because it's double-figures etc. If the BBC actually wanted to provide a service, a 2-minute primer on bookie percentages would be substantially more useful.



It's practises like the above that ensure I sleep very soundly after a day spent earning money through advantage play.

[wndllll]

That thinking is compounded by the low-brow coverage from the BBC, with "experts" like John Parrot squawking about what a good bet such-and-such a horse is simply because it's double-figures etc. If the BBC actually wanted to provide a service, a 2-minute primer on bookie percentages would be substantially more useful.

Couldn't agree more but there was ONE small moment when that big fat laaaandan man seemed to be getting a bit worked up about the prices. Right, found it... go to 2hrs:58mins into this: BBC iPlayer - The Grand National: 2010

At least he tried!

And jeez...£5000 on Dont Push It! Someone had a good night I reckon.

[Fella]

Interesting link, shows the mass-shortening of every horse's price in action!

Extremely shoddy behaviour IMO. Gaming is a billion-pound industry & should not be allowed to continue with back-alley practises like this. A direct analogy would be if supermarkets increased the price of turkeys by 500% every Christmas. Needless to say that would cause instant public outrage & would not be allowed. But bookies increasing their profit margin by 500% goes without a murmer....

155%......I'm still struggling with that figure. If you had a roulette table where Red paid out at evens & black paid out at 100/1 ON - that would be a BETTER deal than punters were getting yesterday (it would be an approx 150% book). That's the extent of what the bookies got away with yesterday.


Want to know the bookie quotes from yesterday? Here they are:

Hills:

"It is a black armband day for the betting industry. Time and time again McCoy heaps misery on the bookmakers and this time he has done it on the biggest stage. The payouts will continue long into the night."

Ladbrokes:

"McCoy's victory has cost us millions. We've feared this day for 15 years and our worst nightmares have been realised. Twelve months ago we were on the champagne and now we're reduced to bread and water."


Some fine doublespeak there:

"Time and time again McCoy heaps misery on the bookmakers ".

Um no, actually if you bet all his mounts to a level stake this season (& every season) you would lose heavily:

Sporting Life - Racing | Jockey Profile



"McCoy's victory has cost us millions".

Yes, but the money you took on the 39 horses that lost has made you millions more.



As convincing as a casino whining about all the money they have to payout on even whilst ignoring the money they won on odd. But bookies like nothing better than to perpertuate the myth that they're barely scraping by.



And on that note - going running!

[Fella]

Plenty more weasel words on this topic:

Chaos in ring blamed for huge National overround - Horse Racing News | Racing Post


Gary Wiltshire

"I think the bookies were so busy, they just didn't have time to react to the market. I have never seen anything like it in 20-odd years of going to the meeting."

Utter rubbish. Time to shorten the price of half the field but no time to lengthen the price of the other half? Bookmakers are used to dealing with frantic amounts of bets, it happens countless times a year. Besides which, you can only take one bet at a time whether your queue of punters has 10 people or 100 people in it. Pitiful effort from Wiltshire.


National Association of Bookmakers president Keith Johnson
"I'm at a loss to explain the big overround"

More lies. The stats in the OP illustrate that a staggeringly large overround is the norm every year. It is intentional.


"There were so many outsiders bookmakers couldn't lay. There were probably 12 I didn't see a penny for, so while you are obviously going to contract the prices of those you are laying, the ones that are 50-1-plus, it does not really matter if they are 50-1 or 100-1 because nobody would back them."

Bookies often trot out this argument & once again it is pure hokum. If something is 50/1 & no-one is backing it then it's because it's too short a price! The same applies to any horse at any price as the NAB president knows full well. And if it actually "does not really matter if they are 50-1 or 100-1" then there is even LESS reason not to lengthen them.


Lets be under no possible misunderstanding here. Every year tons of once a year punters will walk into a betting shop & write out their only betting slip of the year. For many of those this will be their first betting slip ever. Because these punters have no experience, it simply will not occur to many of them to "ask for a price". They don't even know what that concept means. Hence there are hundreds of thousands of SP bets.

The bookies then effectively rob these people by systematically shortening the SP of every runner that has more than 3 legs. Hence on Saturday, people who mugged a win on 39 out of the 40 runners lost their money. And those SP punters who actually managed to find the winner, received precisely half the payout they should have becuase the bookmakers halved the price on-course from 20/1 to 10/1 just before the race started. (See the comment above "the off-course firms probably backed six or seven horses.")


A wholesale consumer rip-off that simply would not be allowed to happen in any other industry.

[PeterGriffin]

i dont fully understand all the figures but what does this bit mean?

He added: "It is all right saying the winner paid more on the exchanges but don't forget Betfair's market is win-only, and on the Grand National most punters want to play each-way."

was BF's EW market not available for the GN?

[Fella]

It's a chewbacca defence (with thanks to Musicbox!)

The fact that BFs market is win only only becomes relevant at certain times -for instance if you have an odds-on fav in an 8 horse race, the bookie win prices on the 2nd & 3rd fav will usually be much shorter than on the BF win market. Similarly, the BF win odds on an extreme longshot (say a 100/1 type) will almost always be longer than the bookie odds & that's partly because the bookies have to take EW bets.

However the EW element has no meaningful effect whatsoever on the price of a horse that's say, 25/1 or less for the Grand National & similarly priced at Betfair (i.e. most of the top 15 horses in GN betting up until shortly before the race....).

[doomed]

Do these racing industry "commentators" think their readers are stupid?

"There were so many outsiders bookmakers couldn't lay. There were probably 12 I didn't see a penny for, so while you are obviously going to contract the prices of those you are laying, the ones that are 50-1-plus, it does not really matter if they are 50-1 or 100-1 because nobody would back them."

There were in fact 13 priced at 50-1 or more. Even if they had offered 1000-1 on all of those, the market overround as a whole would still be a derisory 138%.

He added: "It is all right saying the winner paid more on the exchanges but don't forget Betfair's market is win-only, and on the Grand National most punters want to play each-way."

True, each way is better value than win-only at the bookies for the GN but it is still atrocious. The overround on the place part of each-way bets for bookies paying 4 places was 134% compared with about 104% on betfair's place market. (Alright it's 108% for the books that pay on 5 but the each-way system still forces them to put half the stake on win-only with its 155% overround.)

[Diamondgeezer]

Good posts Fella.

I wonder if I could broaden it out as a wider debrief because knowing little about horses I decided to take a MB day off and I just watched the GN for fun. So I don't know what happened to the exchange prices.

I can't say I agree with all your analysis though Fella. My take on it is they got bloody murdered in the shops and the on course contraction was an attempt to stem the flow. I have read the Patrick Veitch book and people like him have an army of agents that all get the bets at the same time. And they always go EW which is the trick of it really as a big price contraction will make it hugely +EV for them.

So it seems there was this orchastrated gamble that created huge liabilities and the SP manipulation was an attempt to mitigate the potential losses. Not saying it is right just what may have happened. I can see a situation where they are on a 155 book and also looking at huge losses on a single horse. It was bound to have been highly orchastrated.

I agree the BBC analysis is pathetic and blatant lies. Gary Wiltshire is a big bookie himself so he clearly understood what was happening. I wouldn't take seriously a word of what he says. And the double act with Parrot is no more than a bookies advert. Mind you C4 give Betfair huge free publicity too.

If the BBC had been unbiased they would have advised punters to back the unfancied selections on the Tote. Interestingly the Tote returned 15.7 for Don't Push It. What was he trading at on BF?

I do agree SP seems nothing more than a stitch up for the poor old punter. Some time ago Tim_L explained how SP is formed but I have forgotten what he said now.

But I do think the horiffic overround can be explained by the fact they let people put a lot more on than normal in the shops and online. I am sure the losses were genuine and that it was a very bad national for them.

[goroovy]

wow, an amazing read fella.....

What does it mean about bookies backing horses, etc of-course .. so, bookies were offerring crap odds but were backing them themselves? Dont really understand something there.

I think it was the lack of competition amongst firms, like in any industry, which creates this scenario. No bookie felt any need to be competitive.

As for the BBC ... they are supposed to be independent (not like C4 which have bookie advertisers) ... they have no excuse for not being on top of this other than being lazy and "safe".

[Diamondgeezer]

It's a chewbacca defence (with thanks to Musicbox!)

The fact that BFs market is win only only becomes relevant at certain times -for instance if you have an odds-on fav in an 8 horse race, the bookie win prices on the 2nd & 3rd fav will usually be much shorter than on the BF win market. Similarly, the BF win odds on an extreme longshot (say a 100/1 type) will almost always be longer than the bookie odds & that's partly because the bookies have to take EW bets.

However the EW element has no meaningful effect whatsoever on the price of a horse that's say, 25/1 or less for the Grand National & similarly priced at Betfair (i.e. most of the top 15 horses in GN betting up until shortly before the race....).

I don't think EW comes into it. I think bookies just take a lot more profit on long odds selections simply because they can. In other words longshots are not very price sensitive. Probably because most punters don't convert prices into probabilities when betting longshots. There is a lot more price sensitivity at low odds because punters will be more aware that prices are 'wrong'.

This was the explanation for the favourite/longshot bias that Professor Vaughn Williams studied. He found that punters did much better backing short odds selections as the prices were much closer to the true probabilities. This was before Betfair ofcourse. If there was no Betfair how many people would really know a 100/1 horse should really be 260? It's hard to evaluate longshot prices.