It is not without good reason that the betting exchange Betfair long ago became the most popular betting site for those looking to bet pre-race and ‘in-play’ on a vast array of sporting events, not least of which is the hugely popular sport of horse racing.
Betfair is not a bookmaker site in the traditional sense.
Betfair is essentially an agency that matches those who want to back a particular horse with those who want to lay the same horse, in other words, Betfair is a betting exchange. Once a deal is struck, and the event closes, the person who benefits from the deal – either the backer for backing a winner, or the layer for laying a loser – pays a pre-determined commission to Betfair. That’s how the betting exchange makes its money.
Exchange Betting – Laying and Backing
Backing: This means to place a bet in favor of a win for that particular horse. This is notated as odds in the blue boxes.
Example given odds below: You place a £10 back bet on Russian Reward. If Russian Reward wins the race, you will receive £16.20 back for a profit of £6.20. If Russian Reward loses, you simply lose your initial stake.
Laying: This means to place a bet against a horse. This is notated as the odds in the pink boxes.
Example given odds below: You accept a lay £10 on Russian Reward. This means you are taking action on this horse in hopes of it losing. If Russian Reward wins the race, you pay out £6.40. If Russian Reward loses, you keep the £10.
Markets on Betfair are very dynamic, meaning that odds can change rapidly, so it is one essential pre-requisite that you should be in control and available to adjust your bet at a moment’s notice.
Because the market opens some hours before the race begins, continues ‘in play’ when the race is off and running, and only closes the moment the winner crosses the finishing line, you may well be presented with the opportunity of taking a profit – generally referred to as ‘arbitrage’ – even before the race has either begun, or while it is still ‘in play’.
Betfair displays the best odds available to back and lay each horse and the amount of money offered for each transaction at that particular moment in time on one screen.
The markets are refreshed and updated a number of times each second and it is not at all unusual for â‚¬1 million or more to be bet on individual races during the course of the pre-race and ‘in play’ trading periods. At major meetings and on feature races, four or five times that amount of money on individual races are nothing out of the ordinary.
Befair trades on horse racing in Britain, Ireland, France, Australia, the U.S., and many other regions, and most major currencies are available for deposit and trading on the site.
If you are looking to bet on horse races held in India we recommend Racebets.com. They offer a traditional fixed odds system, but they are the only reputable site to offer online betting for horses held at Indian racetracks.
Hedging Your Bets – Locking in Betting Profit and Reducing Risk
As a simple example of how hedging betting opportunities might develop, you bet â‚¬10 on Fred’s Joy at Betfair odds of 8.4, meaning you stand to win â‚¬84 at the risk of losing your â‚¬10 stake. In the minutes leading up to the start of the race there is good support for Fred’s Joy and his odds fall to 4.9. You have the opportunity, should you wish to take the hedge, to then lay Fred’s Joy at 4.9 to â‚¬10, meaning that you have removed the risk of losing your original â‚¬10 stake and now stand to break even if the horse loses, or win a profit of â‚¬10 x 3.5 (the difference between 8.4 and 4.9) if Fred’ Joy wins.
Initial Back Bet on Fred’s Joy without Hedge: â‚¬10 back bet with odds of 8.4
Outcome Fred’s Joy Wins: You profit â‚¬74 (â‚¬84 – â‚¬10 initial stake)
Outcome Fred’s Joy Loses: You lose â‚¬10
Hedge with Additional Lay Bet: â‚¬10 lay bet with odds of 4.9
Outcome Fred’s Joy Wins: You win â‚¬74 on first bet, and lose â‚¬39 on lay bet. Net profit of â‚¬35
Outcome Fred’s Joy Loses: You lose â‚¬10 on back bet, and profit â‚¬10 on lay bet. Net profit of â‚¬0
You therefore attained a position of zero risk and a possible 3.5 times your original stake as clear profit.
This is the beauty of investing on betting exchanges such as Betfair, but, of course, the opportunity to take an hedge is not always available as the market will not always move in your favor and you may have to stand the full liability of the bet.
The reverse scenario is, of course, also possible should you lay a horse at particular odds and it then drifts in the betting market, allowing you to bet on it and take the differential as your ‘no lose’ hedge.
Note: This opportunity is available anytime the lay odds are less than the back odds. The greater the disparity, the greater opportunity for profit.
Betfair is by far the most successful of the Betting exchange because of the liquidity in its markets. High liquidity means that many transactions are taking place. Betfair typically has more money invested on this site by bettors than others. Since each bet requires a back bet and lay bet, high liquidity means opportunity to bet at the odds you wish for reasonable money is more often available on Betfair than on competing sites.