Forums
There is currently 1 person viewing this thread.
FelipeMassa
01 Oct 15 06:18
Joined:
Date Joined: 12 Nov 08
| Topic/replies: 75 | Blogger: FelipeMassa's blog
Would anyone mind to explain how this is calculated? It can't be 1/average price matched nor 1/last price matched. This week a horse that was matched mostly at 4s had a reduction factor of 33%, how is that possible?
I tried google and forum search...
thank you

Post your reply

Text Format: Table: Smilies:
Forum does not support HTML
Insert Photo
Cancel
sort by:
Show
per page
Replies: 13
By:
sparrow
When: 01 Oct 15 07:22
For our horseracing markets we guard against possible non-runners with a system of reduction factors (similar to Rule 4 with traditional bookmakers).

Each horse is allocated a reduction factor, based on its likely chance of winning the race. Should a horse be declared a non-runner, the reduction factor will be applied to the prices of all matched bets, for both backers and layers. This is to ensure that layers are not unfairly treated and exposed to large liabilities when the chances of other horses winning have improved. The reduction factors are designed to be fair to both backers and layers.

How is the reduction factor applied?

When a bet is struck, the price that it was matched at will be recorded on the system. If there is a subsequent withdrawal (non-runner), we will reduce the matched price by the reduction factor of the withdrawn horse.

If you want to calculate the new price once a reduction factor has been applied, this is how:

(Decimal odds / 100) x reduction factor of non-runner =  amount to reduce original price by

Subtract this amount from the original price to calculate the new price.

    Example Backer:
    - You matched a back bet on the horse 'Diamond Night' for £10 @ 8.6.
    - Your liability is £10.
    - A horse in the same race is now withdrawn with a reduction factor of 16.2%
    (8.6 / 100 ) x 16.2 = 1.39 (this gives the amount to be reduced from the original price)
    8.6 - 1.39 = 7.21 (this is the new price that you will be paid out if the horse wins.)
    Your new possible profit will be £62.10 (instead of £76 originally)

    Example Layer:
    - You matched a lay bet on the horse 'Diamond Night' for £10 @ 8.6.
    - Your liability is £76.
    - A horse in the same race is now withdrawn with a reduction factor of 16.2%
    (8.6 / 100 ) x 16.2 = 1.39 (this gives the amount to be reduced from the original price)
    8.6 - 1.39 = 7.21 (this is the new price to calculate your liability.)
    Your liability is reduced to £62.10 (instead of £76 originally).


Please note the following:

    If the reduction factor for a withdrawn horse is less than 2.5%, then the price reduction is not applied, as the horse was not really a material runner and if withdrawn, the difference to the betting would be negligible.
    The reduction factor work slightly different on 'Place' markets
By:
FelipeMassa
When: 01 Oct 15 07:48
thank you but this shows how the reduction factor is applied not how it is calculated.

I need to know how they get to the 16.2% as in this example.
By:
sparrow
When: 01 Oct 15 08:15
https://en-betfair.custhelp.com/app/contact_us
By:
RADGEPOT
When: 01 Oct 15 09:05
Might be wrong, but have got a feeling it's 'classified'.
'A secret recipe'... (Bit like a master butcher's recipe for black pudding etc.)
By:
Smar Tarse
When: 01 Oct 15 09:47
Isn't it as simple as turning Betfair's Projected Betfair Starting Price into a percentage ?

(100 / Projected Betfair Starting Price) = Reduction factor
By:
RADGEPOT
When: 01 Oct 15 10:11
Doesn't appear so:

Reduction Factor      6.67%
Betting summary - Volume:      £195
Last price matched:      15.00
Projected Betfair Starting Price:      12.978715
By:
RADGEPOT
When: 01 Oct 15 10:14
Reduction Factor      6.67%
Betting summary - Volume:      £199
Last price matched:      15.50
Projected Betfair Starting Price:      14.759091
By:
Smar Tarse
When: 01 Oct 15 11:42
So the two variables there are Last price matched and book %
By:
RADGEPOT
When: 01 Oct 15 11:52
... and Betting Volume.
By:
dave1357
When: 01 Oct 15 12:15
It is calculated roughly by 1/odds (eg in a 100% book of 3, 3, 3, when one is withdrawn the deduction factor is 1/3 so the remaining runners are priced 2 and 2 - there might be some averaging, but its irrelevant to the flaw in the system which is that it is calculated well before the off time (15 minutes?) and that means that a horse's price can be 3 when the deduction factor is set but the vast majority of trades are made after that and its average price might be much higher. 

Disclaimer: This might be bollocks but it accords with what I have read and observed
By:
RADGEPOT
When: 01 Oct 15 12:20
Or, indeed, might be much lower Dave.
By:
dave1357
When: 01 Oct 15 12:37
yes that as well.  At least it's transparent the way it is, although they could be a lot quicker removing withdrawn horses.  I often wonder if the betfair bot is up to something sinister in these scenarios.
By:
RADGEPOT
When: 01 Oct 15 12:38
As if. Shocked
sort by:
Show
per page

Post your reply

Text Format: Table: Smilies:
Forum does not support HTML
Insert Photo
Cancel
‹ back to topics
www.betfair.com