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Exchange Wagering 101
HRN Original Blog:
Exchange Wagering 101

Laying Horses Is Not As Easy As It Appears

Based on my own reaction when I first learned about playing on a betting exchange, the reactions of people who I have spoken with personally over the years, and from the responses to my previous blog post...it is quite clear many folks are looking forward to the opportunity of laying horses.
 
However, be careful what you wish for.  It is not that easy and is actually a very difficult skill-set to learn, being able to lay horses in a profitable way long-term.
 
Whenever you hear someone talking about a tepid favorite in a race and wishing he/she could bet against a particular animal, most times that horse is in the range of 2-1 to 3-1.  Now keep in mind, the odds shown on North American tote boards reflect about a 15% takeout rate.  When playing on the betting exchange, there is no rake calculated in the odds as commission is only taken from those players who win on a race (2%-5%, depending on handle).
 
So alot more often than not, to lay a horse on the betting exchange, one must offer odds slightly higher than what the horse is going off at in the tote because of the difference in takeout. 
 
And when one lays a 5-2 shot at 3-1, that horse must lose 75% of the time just to break even.  For it to be profitable long-term laying a 3-1 shot, one must be correct more than 75% of the time. 
 
That's just the sheer math of it.  The finances of laying and losing are no fun as when one lays a horse at 3-1 and that horse wins, you lose three times the amount you can win.  And it is those sort of inverse odds as to why I don't bet on short-priced favorites.
 
The damage pysch-wise is difficult to deal with as well.  Usually, when one is laying a horse, that individual has reasons for it...racing against bias, negative pace scenario, cold trainer and/or jockey, or just too slow just to name a few...and when the horse you've layed wins, it isn't just the money loss which hurts but the mental anguish which comes losing when laying. 
 
It is much, much easier to just move onto the next race when a horse you've backed loses but when a horse you have layed wins, there is all kinds of self-doubt created asking yourself how this animal which you thought wouldn't win did indeed get the victory.
 
I will admit laying short-priced favorites is a completely different deal in some ways but when you bet against what appears to be obvious to John Q. Public and the bandwagon horses roll in like Jamie Ness' runners at Tampa and Richard Dutrow, Jr.'s animals in New York do on a regular basis, while easier to stomach, it still hurts.
 
Please don't let what you've read above discourage you from getting involved with attempting to lay horses when the 'land of the free' finally sorts things out regarding a betting exchange but just this blog entry is just a warning that laying horses, like many things in life, isn't as easy as it appears.
 
Remember, when playing on the exchange, it is all about price!
- Dave G.
 

 

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Older Comments about Laying Horses Is Not As Easy As It Appears...

A friend who uses Bet Fair swears by it
ONLY because we are not used to doing it
Thank you Dave G. Your blog really hit the spot and put a smile on my face.
Laying Horses lol
Or when in doubt you can write the numbers of the horses down on a piece of paper, cut them into nice neat little squares, fold them up and throw them into a hat and have a friend pick for you. Works for me!
Thanks for reminding me to bounce up the price a bit due to the tracks take out, slipped my mind.
No matter what your betting on it's essential that you have the odds coming your way and knowing what the minimum acceptable odds are in each. For example in horse racing the minimum acceptable odds for any bet in a race with 3 or more entries is 5/2. Consistantly laying odds is suicide in the long term.
I am ready to look for those maidens who constantly run second or third and keep getting bet to 9/5 or less. They are the ones I want to lay a bet against.
Very cool. I'm ready to lay some of those bad favorites we see every day, but I agree, you've almost got to wait for 2-1 or under otherwise there's some big exposure.

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Exchange Wagering 101

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Exchange Wagering was passed by the state of California in 2010 and could be implemented there as soon as May 2012.  

The advent of exchange wagering opens a whole new world of opportunities to US horseplayers and market traders. HorseRacingNation's Dave Gutfreund, who successfully played on Betfair's exchange for over 2 years while covering the races at Racing World TV in London, will blog each week to help prepare US players on what to expect as the exchange comes to town.  

Betfair is the world's leading exchange wagering provider, handling more than 7 million transactions per day.  Betfair is also the parent company of TVG.