Bookmakers Exposure

I would say they make a profit either way if they want to survive, bookies don't gamble do they?

I always laugh when I watch interviews saying how the poor old bookies will be hit hard if the fave wins lol.

they pitch the odds to maximise their long term profits, not to balance every book up

it's nearly impossible to stop the flood of money that wants to back the favourite, you have to distort the book beyond all recognition

and if you do that, you end up busting the mugs far too quickly (they still back the fav, just at a truly terrible price) and end up shipping your profits to the clever punters who pick off the longer prices at the other end of the book and occasionally land a jackpot

if you don't let anyone back the longer priced runners you can't balance your book up. but the mugs are often blind to the longer prices so it's generally all the sharps playing on those prices

Thanks Eldrick, very interesting indeed.

Excellent explanation by Eldrick.

As far as I know (some of) the most profitable gamblers ever seem to have been involved with horse racing in Hong Kong where the tote rake is 18% I believe. This is where you clearly see the effect of people backing the favourite regardless of price.

Couldn't the bookies get around this by allowing punters to lay as well as back?

having worked at one of the big firms in the UK i would suspect KS was a loser for about 400k accross all channels on average, 50 mill is pie in the sky racing post bullsh1t who are paid by the firms to maintain this illusion that they are al duckers and divers trying to make a few quid, make a book, hope they get a result and often being outwitted by the general public punter

Yes, I can see why they would have more exposure on the fav from Eldrick's points but surely not be the difference between £50 million profit/loss for the industry? It must really pay to lay whatever joe public are heavily backing if they are taking this much risk.

I mean, I know thay are producing a book but with targets to be made and overheads to pay this is surely very risky unless the fav odds really are way below what they should be, which in the case of Cheltenham seems to be the case for sure!

Is there a good book anywhere that explains exactly all the technical ins and outs of how bookies set up and manage their exposures race by race or meet by meet or year by year ?.
I mean one written by someone eally who knows.

Thinking about this some more, I really can't see bookies taking a gamble on the big favs like Kauto not winning. Yes it may be difficult for them to distort the odds so much to totally even liability across the field but they can always lay off on the exchanges too and I reckon this is what they must do.

So are they telling fibs about their liability and why is there always an article about them being over exposed on certain selections. Is it after the price has been slashed beyong reality and to encourage more bets on it!?

Would be good to get some more info from those in the know becuase this really baffles me!

The Investor 29 Mar 22:14
Excellent explanation by Eldrick.

As far as I know (some of) the most profitable gamblers ever seem to have been involved with horse racing in Hong Kong where the tote rake is 18% I believe. This is where you clearly see the effect of people backing the favourite regardless of price.


aftertiming now but i remember backing Rail link in the arc (?) but taking the pari mutual odds, as everyone knew the tote odds were completely out of line on the outsiders as the orientals on track had absolutely smashed the fav. i think i got 10/1 ish on the horse that should have been considerably shorter. stan james restricted my account not long after.

ive seen the figures, used to do odds compiling back in the day, the books will virtually always have a RED side to most markets.

a bayern v man united book might look like this

Munich 9/4
Draw 9/5
Man United 7/5

the bookies will end up with a huge -ve on man united, a huge +ve on the draw and a decent win on Munich. they will take about 70% of all the money placed on the market on the away win.

impossible to prove but it is true, a 1/3 shot on the football will likely see 95% of the money handed over the counter.

As far as bookmakers are concerned horse racing takes up little more than 5% of the entire turnover.

The bookmaker's main focus is having their 4 FOBT's played continuously throughout the day knowing they have an in built house edge of 2.5%.

it never ceases to amaze me the amount of bullsh1t on these threads that is posted as ABSOLUTE fact

This piece underlines Clacher's points about football and how the bookies need to get the big teams turned over, if they all keep winning the bookies end up doing their conkers (but to the mugs, which is money that will likely come back to them one way or another)

http://www.guardian.co.uk/business/2009/oct/08/ladbroke-profits-drop-at-start-of-footy-season

Meanwhile, in a further sign that punters are cutting back, takings from Ladbrokes' 8,000 touchscreen slot machines, which account for about a third of shop takings, fell by 1.2%

fecking hell, 1 third.

I know that several larger firms were more worried by Denman winning come the off time, than they were for Kauto Star.

a balanced book is a myth

the general public as a rule like to back favourites be it horses, football or anything else. so if the favourite wins the bookmakers generally lose.

they make their profit in the long run by charging punters a premium to back these favourites

sorry to disappoint you, all the top bookies gamble prodigiously and have hefty liabilities. a level book is a thing of the past except with the odious arber breed of back line books

If most book makers look to balance books then how come whether Kauto Star won or not meant either a £50 million win or a £50 million loss for the bookmaking industry?


Bookmaker PR people will make up any old cr@p if it's going to get them some publicity (nap)....