Betfair horse racing system bears a strong similarity to the systems often found on the stock exchange market, with the back and lay options comparing to the buying and selling of derivatives. For those well familiar with the horse racing market, it is easy to spot that the horse prices tend to increase or decrease dramatically several hours prior to the race start. There’s no rational explanation for that except for crowd effect. Punters change horse prices under the influence of tipping services, horse racing news, friendly advice and many other crowd-oriented factors.

We tend to think it’s impossible to profit from betting on horse racing markets. However, sometimes the most unexpected person will give you an advice that is worth gold. Max Lucado, a preacher at Oak Hills Church, once said: “A man who wants to lead the orchestra must turn his back on the crowd.” Betfair is a profit-oriented betting exchange platform whose revenues exceed $100M each quarter. Remember, Betfair earns only when you earn, and its revenues constitute only about 5% of the money that is earned by professional Betfair traders. Who are those traders? We may never know. But one thing we know for sure – they are those who stand with their back to the crowd.

As we mentioned earlier, gradual increase or decrease of horse racing odds prior to the race can be attributed to the crowd effect. The crowd mass is huge and it doesn’t change its opinion that fast. Actually, you can be sure that a price trend started 5 minutes prior to the race will be stable until the last seconds before the race, and we’re going to exploit that simple fact to our own benefit.

Further down the article, we’ll use terminology closely related to betting exchanges in general and to Betfair in particular. If you have no previous experience in this area, consider reading about Betfair trading basics before starting on this article.

Scan the Horse Races

Scan the horse races 10 to 5 minutes prior to the race (not earlier!) and choose horses whose odds fall between 3.0 and 4.0. The advice above is based on years of experience. We’re looking for odds with a high potential to either increase or decrease. Odds that are too low will correspond to favorites and odds that are too high – to underdogs. Those odds aren’t likely to increase or decrease significantly, especially if the turnover is high.

Monitor the Betfair Odds

As can be seen on the graph below, 5 – 10 minutes prior to the race the odds are within the 3.0 – 4.0 price range. Monitor the odds starting from 5 minutes prior to the race – they will start to increase or decrease gradually.

2.5 minutes before the race begins is your money time. From that time on, the trend is highly unlikely to change its direction, because the crowd simply has no time to react.

Place your First Bet

Place your first bet 2.5 minutes before the beginning of the race. Depending on the price trend, choose either a back or lay strategy.

• If the odds are decreasing 5 – 2.5 minutes prior to the race, place a back bet .
• If the odds are increasing 5 – 2.5 minutes prior to the race, place a lay bet.

In the example above, the odds have decreased from 4.0 at 7 minutes to 3.9 at 2.5 minutes prior to the race. In this case, we’d place a back bet at 3.9. The size of the wager will depend on your betting bankroll. Generally, it is advised that a single stake is less than or equal to 10% of your bankroll. E.g. if you have a bankroll of £1000, you shouldn’t wager more than £100.

Place your Second Bet

As for the second bet, you can either place it just before the race or right after it started. Note that the second bet is the opposite of the first. I.e. if you’ve backed the horse previously – place a lay bet, and if you laid the horse – place a back bet.

• Before the race starts: Place a lay/back bet 30 seconds before the race starts. The odds must change in at least 0.2 points compared to the previous bet. In that case, if the horse wins you’ll receive 20% profit.
• After the race started: Place a lay/back bet 30 seconds after the race started. This strategy is a bit more risky, but the expected profits are higher and the bet is usually matched much faster as compared to that before the race.

In the example above, the odds decreased from 3.9 at 2 minutes prior to the race to 3.7 at 30 seconds prior to the race. Therefore, we’re going to place a lay bet at 3.7. The wager will be the same as in the first bet.

Trading Profits

Continuing with the example from above, you can be either in a winning or neutral betting position. Assuming £100 stakes, the profits are as follows:

If the horse wins the race, your profit will be £19:

profit = ( £100∙(3.9 - 1) - £100∙(3.7 - 1) ) ∙ 0.95 commissions = £19

If the horse loses, your profit/loss will be zero:

profit = (£100 (lay) - £100 (back) ) = £0

Horse Racing Strategy Summary

The horse racing Betfair strategy is one of the simplest and easy to understand Betfair systems out there. It is applicable not only to horse racing, and when slightly modified can be used in other markets as well. There are 5 simple steps to implement it:

• Find the horses whose odds fall between 3.0 and 4.0.
• Monitor the odds 5 minutes prior to the race.
• Place a back or lay bet 2.5 min before the race begins.
• Place a second bet as soon as the odds change in at least 0.2 points.
• Rinse and repeat.

In the end, we would like to add that the horse racing system presented above is not the only system out there. Unlike other markets, the horse racing market boasts a rich variety of relevant strategies. Every once in a while, some of those strategies leak out of the hands of those who invented them and become available to a wider public. A good example would be Kristian Jackman’s Horse Racing System.

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