Tote, SP or Exchange
Back in 1996 I wrote my first two racing books, Flat Racing For Profit and Jumps Racing For Profit, both of which are now available as free downloads from my site. This article was supposed to cover an analysis of the systems presented in those books to see if they had any value today, twenty years after their first publication.
However, whilst looking through the flat book my attention was drawn to a section titled Win Betting on the Tote. In summary, I had analysed over 2,000 races and compared the win returns for the two betting options and concluded that the Tote is a viable alternative to conventional Bookmakers’ starting price. The final paragraph states:
“This is important information for punters who are unable to take an early price or early show… If you are betting at starting price, and your selection is likely to start longer than 11/2, it would be sensible to bet on the Tote.”
There have been many changes to horse racing since 1996, some for the better, some not. One key change was Betfred winning the right to run the Tote in 2011. Consequently, I thought it may be interesting to see whether the findings of 1996 are still valid and if there are any times when betting with the Tote is the best option.
Unfortunately, I could not find a downloadable source of Tote win prices, so I had to manually input these returns for all flat races run in Great Britain from 1 January 2017 to 30 June 2017. In order to simplify the analysis, I did omit races with dead-heats and those for which a rule 4a was applied to the starting price, leaving just over 2,800 races in the sample.
In 1996 I analysed the difference between the Tote win price and the starting price; a positive difference meant that the Tote price was superior. For non-handicaps I found that, on average, there was a 0.51 advantage to the Tote. Essentially a bet on every winner analysed would have resulted in a gain to Tote punters of 0.51 points per bet. For example, turning a even money shot into a 6/4 chance.
For the 2017 data the 0.51 points had slipped to -0.19 meaning that the Tote returns were showing a loss compared to starting price. For the 2017 prices of 11/2 or higher the Tote maintains the advantage it held over starting price in the original analysis.
However, for prices less than 11/2 it is performing worse than 20 years ago with the differences of -0.09 for odds on shots, -0.13 for those priced between evens and 2/1, and -0.07 for the 85/40 to 5/1 range.
Handicap races were the source of the greatest margin between the two betting systems in 1996. The advantage the Tote enjoyed over starting price was an impressive 1.51. For the 2017 data this had dropped to a negligible 0.03, slightly better than starting price but in no way significant.
The price analysis for handicaps was similar to that produce by non-handicaps in that the Tote performed poorly for the first three price bands but improved as the price of the winner lengthened.
But what does this mean to punters in money terms? Well, starting price beat the Tote price in 60% of races, and a punter who had staked £1 on all 2,800 winners at starting price would have made a profit of £16,489.00; the equivalent return for the Tote was £16,384.00, lower by £114.00.
Such a small difference means that there may be scope to win more by betting with the Tote. The price analysis also suggests this, but is there a more telling correlation? Analysing by previous race position is informative.
The return for unraced horses is much poorer on the Tote, which surprised me, and this is also the case for horses which finished first down to fourth last time out. All five classifications returned heavy negative figures in the difference column, but then for the remaining finishing positions the figures were positive meaning that the Tote prices were, on average, higher than starting price.
The Tote take-out is based on a fixed percentage, 16.5% for the period of this analysis, and that means the results should be heavily skewed by field size given that the Bookmakers tend to work on a percentage per runner basis.
An analysis of the results proves this to be the case. For non-handicaps with ten or fewer runners the Tote is far worse that the starting price, but for races with fields exceeding this threshold the Tote holds the edge.
For handicap races this threshold is eleven runners. So, for longer priced horses in bigger fields the Tote should offer the best option, though that will not provide any consolation to those who backed 100/1 winner Hammer Gun on the Tote back in March and received a win return of just over £55!
Don’t forget that we have been comparing the Tote with the starting price, the worst possible betting alternative, an option we should never consider using. Since the time of the original analysis, the betting options have increased with more early prices available and, more significantly, the introduction of exchanges.
For bets placed near to the off time on the exchanges the average price in the sample was 7.39/1 for non-handicap races, the equivalent figure for the tote was 4.68/1. For handicaps the two comparative prices were 8.19/1 for the exchanges and 6.34/1 for the Tote.
In money terms the £16,384 returned to a punter backing all 2800 winners at Tote prices is eclipsed by a figure of £22,342 at exchange prices, although this will be reduced by commission. With respect to field size the Tote figure was inferior for every category except for a field size of 27, though that is purely due to the sample size and will not be maintained in the long term.
In June 2017 Betfred increased the take-out for Tote win bets from 16.5% to 19%; this worsens the return to punters and makes it an even less attractive betting option.
Consequently, if you are betting near to off time then neither the Bookmakers’ starting price nor the Tote offer viable options, and even though the commission rate is high for most bettors the exchanges offer a better chance of long term success.