by Adrian Worton
Tomorrow is the highlight in the UK betting calendar, the Grand National. For many people this is the sole time in the year they will place a bet on anything, with little research into form. Indeed, the pinsticker method is a common idea.
Do bookmakers, therefore, take advantage of the fact that so many notice betters take a punt on the Grand National? We can find out by comparing the odds for tomorrow’s race to other betting markets.
Tomorrow is the highlight in the UK betting calendar, the Grand National. For many people this is the sole time in the year they will place a bet on anything, with little research into form. Indeed, the pinsticker method is a common idea.
Do bookmakers, therefore, take advantage of the fact that so many notice betters take a punt on the Grand National? We can find out by comparing the odds for tomorrow’s race to other betting markets.
Stake total
If odds were totally fair, such that the bookies and the punters should break even in the long run, then in order to guarantee breaking even, the amount that ought to be placed on each runner is found by using the following formula:
If odds were totally fair, such that the bookies and the punters should break even in the long run, then in order to guarantee breaking even, the amount that ought to be placed on each runner is found by using the following formula:
1/(odds+1)
If we summed these stakes, it would add to 1. An explanation as to why this formula is used is available here.
We know, however, that odds aren’t fair, and that bookies make odds shorter than they ought to be, in order to guarantee a profit. Therefore, if we sum the stakes for real odds (which we will now refer to as the stake total), we will find that it is above 1. The further away from 1 the total is, the worse the value of the odds are.
A good example of this is the odds from the Cricket World Cup, since we tracked the odds of every team winning the tournament on every day of the competition. Plotting the stake total across these days shows us the best- and worst-value days to bet on the tournament:
We know, however, that odds aren’t fair, and that bookies make odds shorter than they ought to be, in order to guarantee a profit. Therefore, if we sum the stakes for real odds (which we will now refer to as the stake total), we will find that it is above 1. The further away from 1 the total is, the worse the value of the odds are.
A good example of this is the odds from the Cricket World Cup, since we tracked the odds of every team winning the tournament on every day of the competition. Plotting the stake total across these days shows us the best- and worst-value days to bet on the tournament:
We can see that the closer the tournament got to its close, the better value the tournament became. The day before proceedings began also appears to be a good-value time to bet.
Using this measurement, we can look at a number of competitions in order to see which are the best and worst valued.
Our competing competitions
Aside from the Grand National, we will look at ten other sets of odds, including both sport and non-sport markets. These are:
Using this measurement, we can look at a number of competitions in order to see which are the best and worst valued.
Our competing competitions
Aside from the Grand National, we will look at ten other sets of odds, including both sport and non-sport markets. These are:
- The Chinese Grand Prix (Formula One)
- The Eurovision song contest
- The French Open men's singles (tennis)
- The Rugby World Cup
- The gender of the Royal baby (which, bizarrely, is not an even market - female is the current front-runner)
- The Masters (golf)
- The County Championship Division One (cricket)
- The Champions League (football)
- The Premier League (football)
- Prime Minister after the upcoming election
We can see that the Grand National is indeed one of the poorer-value competitions, although it is comfortably beaten by the Eurovision song contest. Meanwhile, the best-value options are the Royal baby gender and the Premier League.
However, those of you familiar with these competitions will know that there appears to be an effect caused by having more competitors within a competition. This effect is shown on the scatter plot below:
However, those of you familiar with these competitions will know that there appears to be an effect caused by having more competitors within a competition. This effect is shown on the scatter plot below:
The R^2 value of 0.8738 shows what a strong relationship this is. Those competitions below the line of best fit are higher-value than we would expect for a competition of its size, whereas those above are poorer-valued.
Conclusion
It is a bit of a surprise to see that the Grand National, something which we earlier speculated to be an easy target for bookmakers to under-value, below the line.
However, whilst the Grand National appears to be decent value for the number of riders within the competition, it does not make it a better value competition than, for example, the County Championship (which is above the line), as there is no clear reason for the excess stake total to be higher when there are more competitors.
Therefore, the one strong conclusion we can take from this is that smaller markets provide the best value for punters. But it should still be stressed that all markets are bad value, and that in the long term it is the bookmakers who will always win.
Sources
bet365- for odds on each event
Conclusion
It is a bit of a surprise to see that the Grand National, something which we earlier speculated to be an easy target for bookmakers to under-value, below the line.
However, whilst the Grand National appears to be decent value for the number of riders within the competition, it does not make it a better value competition than, for example, the County Championship (which is above the line), as there is no clear reason for the excess stake total to be higher when there are more competitors.
Therefore, the one strong conclusion we can take from this is that smaller markets provide the best value for punters. But it should still be stressed that all markets are bad value, and that in the long term it is the bookmakers who will always win.
Sources
bet365- for odds on each event
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