I have mentioned before about the fact that Betfair SP’s seem to produce a race overround or should I say underround, below 100% on a good number of races. A possible explanation for this was put forward by a member of the Smartersig email forum


The member stated the following which I have to admit I had overlooked.

I assume that I’m not alone in using Betfair SPs as the benchmark to assess the profitability of a potential new system.  Of course there’s an argument that this isn’t entirely accurate as your own theoretical bets might have altered the BFSP but nothing is perfect.

However, I recently noticed that Betfair SPs are NOT recalculated to allow for Rule 4 deductions after a late withdrawal.  I know that Betfair apply their own deduction to any bets (whether a price was taken or BFSP) but had assumed that SPs would be re-normalised after the race to account for this.  Unfortunately it seems they are not, and the historical BFSPs that are released by Betfair in CSV format (or on the Timeform website) do not account for withdrawals.  As far as I know there’s no easy way to get this information, so it means that the profit/loss of any system researched using Betfair SPs is flawed because of this.

The other thing to watch is dead-heats as this will also affect the bottom line.  It’s relatively straightforward to calculate in Win markets but it becomes more complex in place markets.  For instance if there’s a 6-runner race with 2-places paid out in the place market and your horse dead-heats for first place then the dead heat is irrelevant.  It will be treated as a full-stake bet.  However if another horse wins and your horse dead-heats for second in the place market then your return will be calculated to a half stake.  In other words there’s no ‘one size fits all’ solution for dealing with dead-heats.

The main point is about the Rule 4’s though.  Just wondering if anyone else has dealt with this issue before?  it’s hard to assess how much it might actually affect the ‘true’ bottom line of a researched sequence of 1000s of bets.

Clearly a pinch of salt is needed when assessing any betting approach to Betfair SP which these days is the common method used. There is probably less of a problem with NH racing as the bulk of late withdrawels will be stll problems on the flat.
One possible simple solution would be to readjust all prices so that a book which comes out at sub 100 is normalised to around 101 or 102% which is more likely to reflect the true BFSP after R4’s. If there is any interest in this topic I could look into it further. If the writer of the above is correct then there should be some whopping underrounds when an even money shot gets withdrawn at the stalls.