Betting Market

When the news broke in 2007 that Betfair was in the race to sponsor Channel 4 racing, it was reported that the company would be keen to have Betfair "starting prices" included in the coverage in addition to the SPs used by traditional bookmakers, and real-time betting information during races to publicise the exchange's in-running markets. The contract went to the boys from Dubai..

It was subsequently also reported that representatives of Betfair had made a submission to the Starting Price Regulatory Commission suggesting that the prices available on their betting exchange should form part of the overall calculation of the Starting Price. This offer was rejected by the Commission. Jack Houghton, a spokesperson for Betfair, was quoted as saying; "Betfair offered to provide data from its audit trail to assist in returning an SP that was more equitable, transparent and fair than the incumbent system....Betfair's concern is that the new approach, regrettably, does not prioritise the interests of punters."

Two years ago, on December 12 2007, Betfair launched its own starting price service, and at the Southwell meeting that day the average over-round per runner on Betfair was 0.54 compared with an official over-round per runner of 1.52.

Academic research supports the notion that Betfair's odds are more informationally efficient than the odds posted by the traditional bookmakers. "The empirical results confirm our expectation that nominal betting exchange odds have more predictive value than bookmaker odds, due to the lower degree of favourite-longshot bias in the former. After adjustment for bias the exchange odds continue to hold more information concerning race outcomes than bookmaker odds, particularly for horses exhibiting low levels of price divergence. The fact that such horses are disproportionately found in high liquidity races adds weight to this result". ("Do Bookmakers Predict Outcomes Better than Betters?" - Smith, Paton and Vaughan Williams (2009).

Two years after it was launched, the Betfair SP remains out in the cold, and punters remain out of pocket. It is an issue that Consumer Rights groups should be made aware off; it is time that Betfair ensured that they were. It is also time that Betfair engaged with a national newspaper such as the Guardian and asked them to break rank and to include the Betfair SP in their horse racing results.

In the immortal words of The Stranglers - Something Better Change ...