I've been re-reading Peter May's In Search of the Winning System and just read an interesting demonstration of why blindly betting at the exchanges just because the over-round is smaller may not be the best approach.
Bookmaker or Exchange Which is Best?
Peter argues that just looking at the typical bookies over-round of for example 108% on an 8 runner race and comparing it to the Betfair over-round of say 101.5% doesnt automatically mean that betting at Betfair is the best option.
Anybody who follows popular tipsters who bet at big prices, like Value Backing or Racing Consultants, knows that if you have usable bookmaker accounts that the most profitable way to bet is at early prices with best odds guaranteed.
And I guess most savvy bettors, know that if they are backing towards the shorter end of the market that if the bookies are offering even money and Betfair are offering 2.04 then the 5% commission means that your return will be better with the bookie!
Peter makes a nice demonstration of a hypothetical situation where it is better to bet with a 108% over-round than a 102% and makes the point that the best place to bet depends on the prices offered on the winner.
The question Peter poses is as follows, he has ten coins and he is going to flip each one, how many heads will he turn up.
So there will be between zero and ten heads turned, here is two sets of prices for the outcome, which do you think offer the best value.
|Number of Heads||Price Set A||Price Set B|
I guess given what I've already written above it's obvious that the answer is Price Set A.
The reason is that the most likely outcome is that there will be four, five or six heads and Price Set A is best price on that outcome!
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