Let’s Compare Bets has investigated various Betfair betting strategies. During an investigation into horse betting strategies on Betfair our researchers noticed that horse odds on Betfair sometimes drop suddenly. In fact odds on lots of sporting events show similar changes. Dropping odds on Betfair makes betting exchange and bookmaker arbitrage possible. A strategy that exploits the differences between the bookmaker odds and betting exchange odds. Arbitrage betting can be repeated over and over which is what makes it attractive.
Specifically this type of betting is called back lay betting. A back bet is made with a bookmaker with a corresponding lay bet being made at a betting exchange like Betfair (Betfair FAQ). The rule is back high and lay at lower odds.
Bookmaker odds compared to Betfair odds
There is always a difference between bookmaker odds and Betfair odds. The reason for this is that Betfair odds are set by the market and not by a bookmaker who needs to protect profit margins. In general the odds on Betfair are always better than those at the bookmaker. Some bookmaker’s are very competitive, like Pinacle Sports, who try to compete with Betfair. Pinacle Sports are an online only bookmaker, as such they have low overheads, and are able to compete on price. Normally the difference between bookmaker odds and Betfair odds is not large enough to generate arbitrage opportunities, in part, due to the commission that Betfair charges on profits. Betfiar commission is normally 5%.
So, when do Betfair back lay arbitrage betting opportunities occur?
Whilst investigating horse lay betting strategies on Betfair something our researchers observed was that the odds on certain horses tend to shorten suddenly by quite large amounts. Horses who’s odds do this are called steamers. If the odds shorten it creates an opportunity to back the horse with a bookmaker and lay the same horse at lower odds on Betfair, which produces a win win bet.
Horse race odds are not the only sports odds that tend to change suddenly. Many sports exhibit this phenomenon.
What causes a sports odds to shorten?
Odds on Betfair shorten when there is more demand for backing the sport and market than there is for laying it (betting that an event won’t happen). Demand changes depending on tipsters (especially with horses), players getting injured, or individuals making large bets. Bookmakers are also actively use Betfair in order to balance sports books. For instance, if a horse receive large amounts of money backing it to when the bookmaker may lay the horse on Betfair as a quick and easy way to reduces loses if the horse wins.
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What type of bookmaker is best for Betfair back lay arbitrage?
In order to profit from this strategy there must be sufficient time between when the odds shorten and when the bookmaker reacts to this. It is advisable to place the lay bet on Betfair first followed by a corresponding bet at the bookmaker straight way. Bookmakers may be slow to change the odds on horses if they normally specialise in the other sports like football or cricket. For instance Bet365 specialise in football betting and tend to change horse racing odds more slowly, however, arbitrage occurs with many bookmakers.
How to calculate a Betfair bookmaker arbitrage bet.
These easiest way is to use a back lay arbitrage betting calculator, but, it can be very time consuming finding the best bookmaker and bet events to bet on.
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Risk warning. Don’t forget to check the bookmaker and Betfair rules for void bets. Be wary of using any one bookmaker account if you have generated a series of winning bets.
In summary for people new to the idea of back lay betting it’s as simple as back high and lay low. Wait for the Betfair odds to shorten. Make the back bet and then lay the correct stake to guarantee a risk free bet. Betfair back lay betting requires software to detect which horse’s odds are shortening and a back lay betting calculator to ‘work out’ the stakes. With a service it’s all done for you, take a look.
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