If you’re like the vast majority of punters who bet on this year’s Cheltenham festival, then the answer is likely to be no. This is largely because this year there were many long-priced winners, which obviously attract significantly less money from the punters. For example, on Wednesday the winning horses were priced between 17/2 and 33/1, so it’s no surprise that a lot of people were left out of pocket from backing the more fancied horses.
However, there is a way that you can profit from trading the prices of horses during the morning of the race meetings using betting exchanges. (Betting exchanges offer upto 20% better odds than conventional bookmakers, and allow you to place bets with other punters, allowing you to lay bets if you want, therefore eliminating the need for a bookmaker).
This is an excellent way of generating relatively low-risk profits, and you don’t need to worry about whether the horse, whose price you are trading, actually wins the race or not. Because prices quoted on betting exchanges are constantly changing, and bookmakers prices largely remain quite static, you often get significant price discrepancies between the two. Using a service like Oddschecker, the leading odds comparison site, it’s very easy to identify potential trading opportunities.
Let me take a few examples from Day 2 of this year’s festival to demonstrate this point. Firstly, Denman, a red-hot favourite, was priced at between 2 and 2.1 with the bookmakers, but at one point during the morning of the race, it drifted right out to 2.4 on Betfair (the leading betting exchange). Now you can see that this price is significantly higher than the highest bookmaker price so you would therefore predict that this price would drift inwards, closer to it’s true price.
As it turned out, it’s price did indeed drift inwards to around the 2.25-2.3 level, and stayed there for most of the morning. Therefore, let’s say you backed Denman at 2.4 for £100. This would return £240, with £140 being your profit (not taking into account the small commission charged by the betting exchange). If you layed it back at 2.3, for example, for £100, this would give you a profit of £140 – £130 = £10 if Denman won, and £0 (£100 – £100) if it lost. Now you could guarantee yourself a profit whatever the outcome by laying a further £4.35 at 2.3. This would give you a guaranteed profit of £4.35 regardless of which horse won the race, so to sum up:
Back Denman £100 @ 2.4
Lay Denman £104.35 @ 2.3
Profit if Denman wins = (£100 @ 2.4 = £140) – (£104.35 @ 2.3 = £135.65) = £4.35
Profit if Denman loses = (-£100) + (£104.35) = £4.35
Onto my second horse, that presented a good trading opportunity. Again it was another strong favourite, Kauto Star. According to Oddschecker it’s price ranged between 2.63 and 3, yet it’s price on Betfair at one point was a massively overpriced 3.4. Shortly afterwards a lot of people must have backed this horse as it came in to 3.1, despite the bookmakers’ prices remaining at the same levels.
Therefore you could again have backed this horse at 3.4 for, let’s say £100 again, and layed it all back, plus a little bit of profit, at 3.1. This would have given you a guaranteed profit of about £109.68;
Back Kauto Star £100 @ 3.4
Lay Kauto Star £109.68 @ 3.1
Profit if Kauto Star wins = (£100 @ 3.4 = £240) – (£109.68 @ 3.1 = £230.33) = £9.67
Profit if Kauto Star loses = (-£100) + (£109.68) = £9.68
Both of these horses lost incidentally, but the beauty of trading is it really doesn’t matter, as long as you leave yourself an equal profit whatever the outcome of the race. I used relatively low stakes for demonstration purposes, but hopefully you can see how, by using a completely different way of betting on horses, you can generate profits. You don’t need to know anything about horse racing either, as it’s essentially just a numbers game.
Jim Buccini is a former full-time Betfair trader who has produced a website detailing proven profit-generating tips and strategies, including, but not limited to horse racing. For more information visit:
Horse Racing Trading Tips