Lay the Favourite in Horse Racing

Published on Oct. 19, 2020, 5:58 p.m. - Sports: Horse Racing

How profitable is it to bet against favourites in horse races? This strategy is about laying favourites in horse racing markets on a betting exchange.

You might already have seen our strategy where we analysed how profitable it is to back the favourite in horse racing. Since the backtest was not very successful, we will now investigate the exact opposite approach which is betting against (laying) the favourite in horse races.

How to Determine the Favourite

With favourite I refer to the horse with the highest probability of winning according to the starting price odds. This means that the favourite is the runner with the lowest odds. In the backtest it is rather simple to select the favourite in a horse race: A subquery is used to select the runner with the lowest starting price. However in reality it is way more complex: You do not know the favourite before the starting price is calculated but then it is too late to place a starting price bet. For a first analysis this look-ahead bias is neglected.

Laying All Favourites in UK Horse Races

The strategy of laying favourites is tested against Betfair Starting Price (BSP). Data is taken from promo.betfair.com and imported into a SQL database. I will start with a similar SQL query as in the Back the Favourite strategy: A subquery is used to select the horse with lowest BSP in a horse racing market. Instead of backing the favourite, a lay bet is placed on the favourite.

SELECT 
   *, 
   CASE WHEN win_lose THEN -1 ELSE 1/(round(bsp, 2) - 1.0) END as profit
FROM data
WHERE bsp = (SELECT min(bsp) FROM data as d WHERE d.event_id=data.event_id) 

Please note that the result here is not exactly the opposite of the "Back the Favourite Strategy" as different staking is used: If the favourite wins, the laying approach would lose one unit whilst the backing approach would have a profit of starting price minus one times the stake.

Taking into Account Exchange Commission

To obtain a more realistic  backtest result the SQL query is adjusted for an exchange commission of 2%:

SELECT 
   *, 
   CASE WHEN win_lose THEN -1 ELSE 1/(round(bsp, 2) - 1.0)*(1-0.02) END as profit
FROM data
WHERE bsp = (SELECT min(bsp) FROM data as d WHERE d.event_id=data.event_id) 

As expected the backtest results get worse and it does not seem to be profitable to blindly lay favourites.

Analysing Different Horse Racing Types

The starting price data that Betfair publishes contain a field called "event_name" which has information about the type of the race and the distance which I simply separate once the data is loaded into a Pandas dataframe:

df["distance"] = df.apply(lambda x: x["event_name"].split(" ")[0], axis=1)
df["type"] = df.apply(lambda x: " ".join(x["event_name"].split(" ")[1:]), axis=1)

I can then group the selections by type of race and calculate statistics on the profit figures. A simple table with some selected racing types shows some results:

  Profit
  sum mean count
type      
Hcap -49.005584 -0.001615 30348
Hcap Hrd -82.418840 -0.010911 7554
Mdn Stks 144.129834 0.021651 6657
Hcap Chs 25.315083 0.003907 6479
Nov Stks 68.955337 0.018004 3830
Nov Hrd 49.835951 0.013995 3561
Nursery -15.998237 -0.008776 1823
NHF 68.217487 0.037565 1816
Nov Hcap Chs 0.921085 0.000550 1675
Mdn Hrd -4.639082 -0.002780 1669

It is also possible to plot the statistics but it doesn't seem that there is a significant variation with racing type.

Influence of Racing Distance

Next, let's have a look at the racing distance. Again I group the profit by distance and calculate simple statistics such as mean value and total profit (sum):

  Profit
  sum mean count
distance      
6f 30.087115 0.003290 9145
1m 68.178890 0.007627 8939
7f 13.944294 0.001563 8919
2m -91.951056 -0.010602 8673
5f 61.021319 0.009483 6435
1m2f -69.297947 -0.013222 5241
2m4f 12.329365 0.002644 4663
1m4f 33.610690 0.007980 4212
3m -55.782149 -0.018170 3070
2m5f -9.078419 -0.004228 2147

Again, not much variation in profitability of laying favourites for different racing distances.

Additional Ideas for Analysis

Obviously there are plenty of possibilities to analyse when you intend to lay the favourite in horse racing. One option would be to look at the starting price. It might well be that there are odds levels which are significant more profitable than others. You could also check previous results of the favourite, time without racing or odds differences between selections.

Are you following a lay the favourite strategy in horse racing? Please let us know about filters or analysis ideas in the comments.

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