Once you’ve read this article you should check out this one I wrote about how often odds-on favourites lose. It was the great comments, and in particular two, that spurred me to write this post.
I was asked these questions:
- What about focusing on the very short losing runs?
- What about laying?
- What about using a progressive staking plan?
The truth is that I didn’t know the answer to these questions. Because I’ve never investigated them.
Well, today it’s time to investigate.
As in the previous article I’m going to use data from 2013 to investigate.
We start with with knowledge that odds-on horses win a lot of their races. 59% to be precise.
In 2013 the longest losing run was 9. That’s pretty long considering how much profit you’re making back. This shows that the short losing runs aren’t as short as we may think.
Instantly that tells me that we’re very unlikely to find any kind of progressive staking plan that will allow you to make your profit back at odds of less than evens when you can hit nine losers in a row.
At least one that doesn’t require a huge bankroll and a bookie who’ll take your bets.
That means we need to narrow down the selections. And I’m going to do it differently to the way I did it last week.
This time I’m going to focus on the individual horses as opposed to the race conditions.
Amazingly there are horses which go off at odds-on but have never won a race. Would you want to bet a horse odds-on that has never won a race?
But maybe I’m being unfair. It could be the horses first time out.
Although, to be honest, I still wouldn’t want to bet it at odds-on.
However, I will remove any horse from the sample that hasn’t had at least ten previous races.
This significantly reduces the sample down to 589 runners. But… there are still horses that have never won a race being bet odds-on!
The average strike rate for these horses is 24%. So what happens if we look at runners who have won 30% or higher of their races AND had at least ten runs:
|6||Max Losing Run|
The above results are to Betfair SP and take account of commission. We’re still making a loss, but the Max Losing Run is now just six instead of nine.
A big difference.
Of course, we’ve sacrificed a lot of bets and now down to just less than one bet every two days on average.
What happens if we decrease the minimum race threshold to three:
|4||Max Losing Run|
Interestingly the maximum losing runs decreases to four. This could be a data anomaly but could also be due to the fact that there are now more bets and more chances for the losing streaks to be broken up.
So, is it possible to use a progressive staking plan now?
At this point it is important to say that I am very anti staking progression. It’s dangerous, and usually does more harm than good. However in the interests of a fair test I will go ahead with the investigation.
The average odds of these horses is 1.63, with the lowest being 1.07 and the highest being 1.99.
Let’s use the average odds of 1.63, which after commission is actually 1.60, and losing streak of four to look at progressive staking where we just want to make our profit back. If you were to:
Bet £1 on first runner and lose you would be -£1
Bet £1.67 on second runner and lose you would be -£2.67
Bet £4.45 on third runner and lose you would be -£7.12
Bet £11.87 on fourth runner and lose you would be -£18.99
Bet £31.65 on fifth runner and win you would be £0.00
You have risked £50.64 to break even.
Imagine if you just wanted to come out with a £0.50p profit. Then you would have risked £73.69 to make £0.50p.
Does that sound like a suitable risk?
It doesn’t to me. And so I can conclude that you would not want to bet on these runners using progressive staking.
So… what about laying…
If we lay every horse at odds-on then we get:
|14||Max Losing Run|
Not looking great.
What about if we look at those horses that have never won a race?
|17||Max Losing Run|
We’ve made a profit for the first time. The ROI isn’t great but we have just over a selection a day on average and have come out with 13.74 units profit at the end of the year.
Although it’s not going to make us rich, considering it takes a few seconds to find these selections that’s not bad.
Let’s change our criteria and look to only lay those horses who are racing for the first time:
|5||Max Losing Run|
A better ROI but a smaller profit due to the quantity of selections. If we add them both together it gives us:
|18||Max Losing Run|
Last week Joe pointed out that we should be testing these results on out of sample data. This is data that hasn’t been used to build our theories on.
And he’s right. This could just be a lucky year, or things could have changed.
So what has happened in 2014 so far is:
|10||Max Losing Run|
A very different story. And the key is in the different strike rates. The strike rate in 2013 for laying these runners was 4% higher than it has been in 2014.
Why has this happened?
Well there are a few possibilities:
- The market has adjusted to become more efficient on these selections
- 2013 was a lucky year for these lays
- It will even out over the last three months of the year
The most likely of this possibilities is the first one. The betting exchange markets adapt very quickly to inefficiencies. In 2013 the odds were too low on odds-on runners that had never won a race or were running for the first time. In 2014 the market has adapted and that is no longer the case.
In summary it’s very difficult to make long-term profits from odds-on runners.
Can it be done? Yes.
But you will spend a lot of time building your strategy for very little reward that could disappear very quickly.
So the question you should be asking is… Is it worth it?
For me the answer is definitely no. I prefer to focus on horses with higher odds and learn that I will have to cope with losing streaks. That’s a small price to make a lot more profit.