Odds Man Out: How To Price Up A Horse Race

Every now and then, the railside bookies get their odds wrong and punters go in for the kill. But surely pricing up a horse race can’t be that difficult, can it?

Author: Stephen McDowell

’Oh yes?’ says Samantha. ‘You reckon, do you?’ Hmmm.Note to self: might have overcooked that one a bit. Samantha had accepted my challenge.Without hesitation. Now I’m committed. It’s not just a hand of cards I’ve bluffed on here, or a mere football wager. I’ve bet the press officer from Ladbrokes that I can price up a Classic horse race and run the book. And she didn’t even blink.

Perhaps she heard my faint whimper, perhaps it was the involuntary twitching of the bottom lip or maybe she spied the pools of panic gathering in the corners of my eyes, because then she offered me a lifeline. So it is that I find myself on a train heading for the Watford Hilton to attend the very same market-making training session through which Ladbrokes put their own staff. I’m late and the name of the game is catch-up. Actually, the game was cards, which I find a bit peculiar.

PLAYING THE PERCENTAGES

Trainer and all-round natural maths genius Richard Retter has the horseshoe-shaped table in the palm of his hand. He’s explaining to the eclectic collection of Ladbrokes employees – some from the shops, most from headquarters – that in order to price up any event correctly, one first needs to build in the profit. As such, assuming a margin, say, of 15%, you begin to price the race at 115% of the natural odds. This, he explains, is the figure that must be gauged correctly in order to remain competitive.

The bookmaking business in the UK is probably the most populated in the world and in order to stay in touch, that margin figure has been eroded. So, with a deck of cards, Retter simulates a horse race for the room – now divided into two separate bookmakers – and prices it up.

Try it, it’s a good game. Lay out the four Aces, each suit being one of the four runners in the stalls. Then shuffle the pack and up one side deal eight cards face up. These represent the furlongs of the ‘race’.Next, deal one at a time from the top of the pack to represent the unfolding drama of the race. When a heart is turned over the Ace of hearts advances one ‘furlong’, a club sees the Ace of clubs go forward and so on till one of the Aces reaches the eighth furlong to win.
In this case, Retter’s eight ‘furlong’ cards are made up of three diamonds, two clubs, two spades and one a heart. So with 11 hearts left in the deck, hearts are the favourite and diamonds, with only nine, the outsider. ‘Remember,’ he says, ‘67%of all winners are first- and second-favourites.’

Everyone is working out their prices. Calculations go something like this: 12 cards out of 40 already dealt, so 12 divided by 40, times 115 (%) equals 34.5 (%), which in fractional terms means odds of 15/8.Whoa, too big, make hearts 5/4, build in value elsewhere on the card. Got that? Good.

Hunched over their boards, the two teams have got their prices, one competing with the other, one side short-pricing the favourite and balancing the book by offering come-on odds on the middle-priced horses – in this case, clubs and spades.

We’re betting with chocolate money. The other team, comprising two ladies from the finance department, offer a tasty 7/4 on hearts. I lump on. Hearts win. I’m owed enough chocolate to send my three-year-old to the dentist for a month.

‘I hope you took it all in, Steve,’ says Samantha over lunch, ‘Because next week you’re going to be doing it at the 2,000 Guineas.’

Cut to Newmarket. It’s 9am. The excitement is palpable. It’s the first Classic of the season and the early markets have the long-fancied Aidan O’Brien horse George Washington at around 2/1. There’s a whiff of rumour in the air. Kieren Fallon is carrying an injured foot, torn by his exit from the stalls the previous day.

TAKING A STAND

Ciaran O’Brien, head of keeping a close eye on journalists, talks me through the form. Normally, he says, the prices for the race are settled at around 4pm the previous day by a team of five or so odds compilers, one working on each race on the card. These odds are then delivered to the trading team and we’re all set.

It’s noon and there are a few punters milling about the rain-soaked tarmac of the bookies’ ring. George Washington is yet to move. The betting is solid and the bookies say they can take another £100k or so on him before the price will swing. Fallon will ride him, but the foot injury rumour persists, and the pundits are increasingly mentioning the name of the second-favourite, the Martin Dwyer ride, Sir Percy, whose price has started to come in from the ante-post 6/1.
Out on the rails, I’m introduced to the two men whose stand I’ll be running for a brief moment of horse racing history. I don’t know whether to be relieved or terrified when it’s revealed to me that Tom Munt and Keith Wilks have notched up almost 70 years between them on the rails. Tom views me with obvious suspicion. ‘You’re going to need your beans in a row,’ he says, more darkly than the sky above West Suffolk. He unpacks a mini-disk player, which he puts in a prominent spot on top of the satchel. ‘It’s just a bit of insurance against disputes. You don’t get many, but sometimes a punter’s had a few scoops and forgets his lines. When you’re taking 1,500 bets in a day, it pays for itself many times over.’ 1,500! Blimey.

We’re going to put up the 2,000 Guineas prices early, give me a bit of a chance. I’m running the numbers in my head. ‘Tissue’ prices for the first- and second-favourites. I’ll stick a bit of value in further down, I think to myself. There’s a couple of decent horses in mid-table being touted at 8s and 9s.HoratioNelson and Asset, I’ll stick them up at 10s, see what happens. Jesus.

Tom boots up, presses the button and the Ladbrokes’ electronic odds board floods into life.

Instantly, smartly dressed punters appear like a scouting party for a swarm of locusts. ‘£50 each way, Asset,’ says one, holding out a wad of folding. ‘Thank you, sir’ I reply, confidently, ‘£550 the win and £150 the place’. ‘£175,’ growls Tom, tapping the big message at the bottom of the board, ‘Technically, we should give a fifth of the odds and you should only get 1/4 on a stakes race, but it’s a Classic, so we like to give better value.’

Oops. More punters lumping on Horatio Nelson, er, bring it in, bring it in, I’ve got screaming in my head. I hear the words Asset again and again. Well, at least at 10/1, it’s easy maths. It’s all going smoothly until I get thrown an easy jump. ‘£30 each way, Horatio Nelson at 7/1,’ says one smiling punter holding out three Faradays. I take his money. ‘That’s £240 the win and erm, ahhh. ’Mind’s a blank. Richard, where are you, and erm, a quarter of the odds of 7/1 is, er…

‘7/4,’ says Tom as he takes the money, I hold my own for a bit longer but then the swarm of punters gets bigger. I’m moved aside by the team as they rapidly scoop another few hundred quid into the satchel, all the while singing out the odds and bets.

Rats. But since I’m here, might as well place a few bets. Seems some mug’s overpriced Asset, so I take 10s.Only, it turns out to be the SP and it gets stuffed as Fallon, foot or no foot, brings in a majestic ride on George Washington at 6/4 to win the 2,000 Guineas.

I’m happy with my performance. Okay, so maybe I wasn’t quite sharp enough for the pace of a Classic , but my bookmaking efforts haven’t disgraced the mag. I do know now, though, that I’m no Freddie Williams – and I certainly won’t be making wagers with press officers again.

Source: http://www.inside-edge-mag.co.uk