This One Flaw Breaks Every Betting System

[00:00] term SP or starting price, it's the set of odds that you get before If you are bet on BET fair, then you will be familiar with SP as well,

[00:14] Sp, and a lot of people use this to design systems, look at how efficient the But did you know that the BET fair SP is completely flawed?

[00:28] systems that are based upon BSP. And if you want to learn why that's the case, just watch the rest of this video.

[00:44] So for a very long period of time, um, sp the starting price was the sort of price that you would likely get if you placed a bet on a horse race. And the SP was formed by all of the activity on the race course.

[00:59] They'd be trying to firm up what the price on each individual horse would be. But even back then, the price of SP wasn't exactly what you would expect.

[01:12] Seven two in short, without the OnCourse bookies make the market the big three try to manipulate. He's well known at this and other race courses we're gonna watch him

[01:26] work but last with only minutes to go before the official off. No mention of 20 or 14 to one at LAD Brooks. 10 to one, seven Willie, or one.

[01:42] It's 20 to one bar six. What it takes so long I bet has been taken, but only at whatever the starting price of the course turns out to be as the moment for the off years.

[01:59] Harry Boy White's mobile phone is again in use, in spite of the crowds around the bookies and the shove to get bets on Harry's All it takes is a word from him and the prices tumble.

[02:14] This manipulating of the odds downwards pays huge dividends to the big three. The odds on Willie or WTI are now far cry from the opening 20 to one.

[02:26] Or even the overnight 16 to one forecast F Harry, the off means a job well done. Others can watch the race.

[02:44] If you go up to somebody and say, I'd like 10 pound on the favorite. You don't need to worry about the odds, and yet the odds in a horse race can

[02:57] But if you wanted to bet seriously, you would tend to bet at a particular price. If you can get the price that you want on a horse, then you would tend to But as a consequence, a lot of people do better at SP just because it's simple.

[03:14] And also the advantage of betting at SP is you can place a bet at 10 whatever it is in the afternoon.

[03:26] mechanism, which was Betfair sp, which would allow you to do the same you could turn up in the morning, where typically the volumes on exchanges were pretty low. You could place a hundred pound bet at SP and then BET FAIR would

[03:41] resolve that bet for you as the race was about to go in play. So this was sort of BET fair's response to people being able to place, uh, You could also do it on the exchange, and that is why the BET FAIR SP was born.

[03:56] The industry starting price is the average price of the last odds offered by on-course bookies at the start of every UK horse race. However, Betfair calculates their own starting price known as the

[04:09] Over 90% of the time, you'll obtain a better starting price on Betfair compared So for example, if we were to lay Roderick O'Connor at sp, we would

[04:25] This means if Roderick O'Connor was to lose this race. With an SP of 11.71, we would win four pound 67 before commission,

[04:40] We can also set limits on our odds. This gives us more control when placing SP bets, as we can specify acceptable odd. To do this, we click the set SP odds limit option, then enter the maximum

[04:57] odds for lay bets or minimum odds for back bets that we are prepared to accept. Then after clicking place bets, our bets will be placed in the system Should these odds not be reached, the bet will be canceled.

[05:13] The ability to specify maximum and minimum SP odds is a great way to This allows you to confidently place bets at SP knowing you'll always

[05:27] So be fair. SP was launched in December, 2007 and it eventually rolled out to cross horse racing and it's made its way into other sports as well, and it

[05:39] is a much better mechanism because you're no longer under the influence From the major bookmakers, the spread on Betfair is much, much tighter. And also, um, the other mechanisms that you've got in place, being able

[05:55] to back at sp being able to lead, sp being able to set, uh, target odds, um, are all things that will significantly benefit you as a punter. understand exactly what you're looking at because there is a little flaw in

[06:12] the way that it's calculated that will significantly influence the outcome of Fair sp. is a little flaw in place, especially when you're looking at historical data.

[06:29] that they never start on time. especially if you're at sand down. So this presents a bit of a dilemma because.

[06:45] course, betting dies down as we reach post time, and they can generate But when we look at a betting exchange, the betting exchange doesn't

[06:57] have a a, a cutoff at post time. Um, the bet fair sp is actually resolved, um, when the race goes in What is the problem with that?

[07:10] market, and then the race turns in play. Well, this is where things begin to go a little bit wrong and to demonstrate to you where this goes wrong, uh, just watch this video of a race actually going in.

[07:29] On the bottom left here, you're looking at a realtime tracking map, uh, from total This is showing you the position of the horses on the course.

[07:42] On the right hand side, we have a feed of, uh, sky Sports Racing, and then obviously of the live data from Total Performance data and giving you information about

[07:54] what's actually going on within the race. a look at what we can see. We can see that they're off.

[08:08] They're off again, We actually have three different points at which the race starts.

[08:20] Well, uh, I've sort of tried to make the point here that the race The first time that it started was when we got the data from total performance That is the most accurate because that's coming from the course a

[08:35] So in the blink of an eye, we can actually see the horses jiggle and move and actually get out from that particular gate. Then we have a little bit of a gap until Betfair actually turned the race in play.

[08:51] is when they resolve the sp. And we can see from this video, and this is actually, uh, quite a favorable, uh, You know, the amount of time here is actually relatively small.

[09:06] Big lags, but the gap between those two uh, allows the horses to And therefore, when you look at SP the bet fair sp it actually contains

[09:20] It isn't the last traded price before the race started. So it contains information about how quickly the horse is broke, how quickly somebody turned the race in play, all of that sort of, uh, information.

[09:35] Sky Sports, which it will always be behind both of those things, whenever you're looking at TV pictures, they will always be the last thing

[09:47] The race effectively go in play three times when it actually went in play when Bedford turned it in play and when we actually saw the pictures on Sky.

[09:59] We've got the stage where the race actually starts, then we actually see the race get turned in play, and then eventually we see the gates open on the TV pictures.

[10:17] Am I saying don't use sp Well, no, actually you should be using SP 'cause I mean, it depends what you're doing, obviously. Um, but if you just wanna place a bet on a favorite at some point

[10:29] over the course of a day, then SP can be surprisingly effective. the over round, um, on, um, sp uh, over the course of a month, and indeed some

[10:41] That basically means you could have backed anything at SP and you would've made money in theory over the course of that particular month. It's an incredibly effective and efficient way of placing a bet, but if you're

[10:54] Build a system based upon something derived, uh, from BET fair. Sp then that data actually contains not only what price the horse was information about the race as well.

[11:08] start and stuff like that. And unless, if you can map that to the data, then the data loses its effect. You are overfitting and you are creating something, um, or a system

[11:20] data or you can map that data onto it. system where you're trying to do something is get stuck in. you had down the pub last week.

[11:35] You go into the market, you test it on small stakes. I was thinking, or, no, that's completely different from what I was thinking. market participation much, much better than using historical data.

[11:53] And I do look at data, but you know, I use that to come up with ideas or thoughts, but I actively test it as quickly as I possibly can. come to horse racing is everybody's focused on that post time.

[12:09] terms of the chance of a horse winning a race is gonna be actually at post Um, there, there is information to be discounted into the market.

[12:21] Uh, but at that exact point, everybody has sort of made their decision Uh, that starts to break down a bit. traded price within the market, uh, which is why I produced this video.

[12:37] Uh, but yeah, those are my thoughts on, um, sp it's an interesting concept. Just be careful how you choose to use. It varies by course and distance.

[12:53] Obviously shorter distances it's gonna have more impact, uh, on sp, but also bigger races tend to have more liquidity and more money being better at SP and therefore the effect isn't as great, especially over big jumps meetings.