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Why bet on favourites?
By Matt | July 16, 2009
BETTING ON favourites can often seem a frustrating experience. The triumph of the underdog is always a joy, as long as you haven’t got a bet on the jolly, and fav backers are generally seen to be a bookie’s best friend, splurging money at short odds on apparent “good things” that inevitably aren’t.
So why bet on favourites? And how do these apparent losers get to this exalted position in the market in the first place?
Wise crowds bet on favourites
Firstly, it should be said that favourites generally head the betting market for very good reasons. James Surowiecki’s The Wisdom of Crowds has been mentioned before in these pages, and its precepts generally hold true for betting markets.
To summarise Surowiecki’s argument, a large, varied crowd of people have a greater collective intelligence than a single expert. The crowd brings to the table a range of prejudices, preconceived beliefs, specialised areas of knowledge and localised views. This gives them greater combined insight than a single person can’t have.
This translates into odds making in a reasonably obvious way. An expert, like Channel 4 Racing’s Jim McGrath, for example, may think a certain horse will win a race (he tipped Tartan Bearer to win the 2008 Derby).
But the ‘crowd’ – all the punters in the rest of the world, whose collective opinion, expressed in wagers from as little as 10p each-way to hundreds of thousands of pounds – thought differently. Their 10p each-ways, their fivers, tenners, monkeys and five grands went on Casual Conquest. The bookies consequently stood to lose the most money if Casual Conquest won and correspondingly offered the shortest odds in the field on Dermot Weld’s colt.
That’s how a favourite is decided; the bookie himself (or herself) won’t generally have an opinion one way or another. Their betting odds just reflect the liabilities they have on one horse or another. And the favourite is the one which stands to lose them the most money.
In that sense, the ‘favourite’ isn’t always going to be the horse with the best chance of winning. When Frankie Dettori rode all seven winners at Ascot in 1996, his last horse went off at a ridiculously short price compared to its chance of winning – purely because the world and his wife had come out to join in on the Italian’s winning streak and the bookies stood to lose a bundle.
Emotion, then, can spoil the crowd’s wisdom. But in races where sentiment can be stripped out of the equation, Surowiecki’s argument holds true: the crowd, with all their different opinions and pockets of knowledge, is going to have the best idea of which horse will win the race.
The statistical evidence
Looking back at the performance of favourites over the last ten years shows just how wrong the market can be.
To take a random example, two-year-olds running in non-handicaps at Kempton Park have a strike rate of 70 wins in 174 races over the last 10 years, or 40 per cent. If you’d put a quid on all 174 favourites you’d be £3.43, or two per cent, down.
The same figures for three-year-olds and upwards are 114 wins from 360 races, or 32 per cent. For four-year-olds and upwards the stats are 38 winning favourites from 128 races, or 30 per cent – and in three-year-old and upward handicaps the jollies have a strike rate of 25 per cent, winning just one race in four. (See all the stats for favourites at Race-Courses.co.uk.)
Clearly, backing favourites isn’t a licence to print money. But within these stats there lies the glimmer of a rough idea of how to use favourites in betting on horses.
When not to bet on favourites
There are several situations where all available trends tell us not to back favourites. For starters I have a rule of never backing the favourite in a handicap – no matter how good a thing it appears to be.
The whole point of a handicap is to give all horses an equal chance of winning – and if the favourite can only win two races in five at best in other races, the market isn’t going to have much of a chance of picking the winner when the better horses are carrying extra weights.
The second rule of when not to bet on favourites is when the odds outweigh the risk. If all favourites have a less than fifty-fifty chance of winning, it makes sense to ignore races where the odds say it’s more than fifty-fifty – ie, when the betting market makes it odds-on.
Following these rules inevitably means you’ll miss out on a few winners. But you’ll save a lot more in the long run.
The role of favourites in successful betting
The converse of this is that favourites represent far better value when the bookies are offering odds-against about them, and in non-handicaps.
Even then, though, a horse’s favouritism shouldn’t be taken for granted and other things – like sensible staking plans, and a judicious weighing up of a favourite’s principal opponents in a race – should be taken into consideration.
Short-priced favourites also have a use, because if a bookie is trying to discourage us from backing the jolly they’ll generally bump up the prices of its opponents – and that’s where you can often find true value.
We may look at these things another day. But it’s worth keeping an eye on the fate of favourites in a day’s racing – and seeing whether they would have been worth betting on.
Topics: Betting and culture 1 Comment »
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November 16th, 2009 at 10:33 am
Anyone looking for statistics about backing favourites should check out our new sub-page via the “fate of the favourite” link on the menu above or via the url http://www.fate-of-the-favourite.co.uk. It’s still under construction but check it out now for a course-by-course breakdown of how favourites get on!