When it comes to laying, punters fall into the trap of thinking that laying favourites offers value. They assume that because favourites have low odds, and only win about 32% of the time, that they will be correct 68% of the time and do not need to risk much of their betting bank.
But laying all favourites 'willy nilly' is dangerous. Just like backing all favourites, laying all favourites is too generic. Some are genuine favourites, some are false, some are overpriced, some are underpriced. Overall you can not profit from them.
Backing all favourites in every race makes a loss of about 6.7%. So doing the opposite, and laying them, should realise a 6.7% profit right?
No. Laying all favourites in every race makes a loss of 0.3%
Why is that? If bookies are profiting to the tune of 6.7% from favourite backers why don't we when we lay the same favourites?
It's because of commission and over pricing. If you can keep your commission low, and offer a price as close to SP as possible then you can profit from laying all favourites. But realistically you are going to have to pay the exchanges commission when you win, and you have to offer backers a price slightly higher than the SP.
Where's the Value?
If you know nothing about a horse, apart from it's price, then the shorter the price of the horse, the harder it is to find a value lay. This is because shorter priced horses win at a rate much closer to their expected win rate.
As the following table shows, the shorter the price, the more efficient that price range is.
Odds Efficiency
| Odds | Win% | Exp% | Efficiency% | | Evens | 48.2% | 50.0% | 96% | | 5-1 | 14.8% | 16.7% | 89% | | 10-1 | 7.0% | 9.1% | 77% |
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Evens shots are expected to win 50% of the time but they actually win 48.2% of the time (96% efficient). 5-1 shots should win 16.7% of the time but they win 14.8% of the time (89%) efficient. The longer the price, the less efficient that price range is. This is due to the bookies over-round having more of an effect on longer priced horses, which is in effect due to a favourite / longshot bias.
Laying favourites is the reason why most punters fail at laying. They may think their bank will not erode too quickly because they do not have to put up so much risk. But laying favourites purely based on price is as futile as backing outsiders based purely on price.
There is one exception to this rule: odds-on favourites. As will be shown later in this article you can actually profit from laying odds-on favourites. And in one particular type of race, you can make spectacular profits from laying them.
Finding False Favourites
The best way to profit from laying favourites is to find false or overbet favourites.
Over hyped horses who are continually talked about by media pundits, and by punters in message boards, are profitable for laying. But over hyped horses do not appear regularly. Only now and again do the really hyped horses such as Sixperfections appear on the scene.
Every week there are many overbet favourites. These are going to be the horses with the best form, jockey, trainer, sire, owner etc. They will be the ones which will attract the most money because they look like 'a winner'. The masses of punters out there do not understand value and are only looking for winners. With media pundits only interested in 'winners' too this creates overbet favourites.
What is needed is an approach to finding these false favourites. The only way you can do that is to know something else about the horse which the masses do not.
Using stats can help in this task, especially in maiden stakes races. In maiden stakes you can look at the sire stat to see if the horse will perform on a few key stats such as: course (or course shape, left, right, undulating etc.), distance, class, field size, days since last ran. Usually that gives enough information as to allow a fairly accurate assessment of the chance of the favourite (i.e. he has the ability or not). If the favourite does look weak, then identifying two or three others in the race who may have a better ability franks the opinion that the favourite is a good lay.
Anything from 80-90% of a price is going to be based on recent form. Currently, there is no way that is going to shift. Not even if Barry Dennis became a master statistician, or Victor Chandler spent a year in a stud farm would bookies change their pricing methodologies. They know that the mass of weight of money bet by punters is based on form in some way.
On a typical Saturday many thousands of newspaper punters are going to back horses because of the last 3 form figures. A similar figure will bet on what their favourite media pundit tells them to bet (and media pundits are mostly form based). Many other punters will be relying on tipsters and tipsters are mostly form based too.
So the task is not that hard. Seeing as a typical race will have a favourite who is going to be overbet, then all we have to do is to find chinks in it's armour and assess whether if it is worth risking a lay.
