Punter57

I'm glad I am not the only person in the world who would like to know exactly how bookmakers arrive at their prices.

Speaking from a UK perspective, the early prices offered by different Bookmakers are almost identical, which makes me believe they are all getting them from the same source or they are all using the same method to price up.

It seems like a secret black art that no is willing to divulge, probably with good reason. I asked our national racing paper , no answer. When bookmakers advertised postions for odds compilers I replied saying I was interested but, how do you become an odds compiler. They seem to have a stock answer, that you have to start at the bottom and work your way up.

You would have thought that someone somewhere would have written a book about it. I have heard that in times past you could go to evening classes and attend bookmakers school.

Dolus. I'm tending to the view that the bookies association is something like the freemasons, ililuminati, or some bunch like that as there NEVER appears to be someone with the straightforward answer, willing to go public ANYWHERE. Good to read you.

Guitar Jim. Thanks for your reply. I 100% agree that the bookies are putting up prices they think we'll fall for, and always in their favour, but that is begging the question of what makes them so sure IT IS IN THEIR FAVOUR. This is why I'd like to know how they do it. So many punters have extremely complex formulas for arriving at their own "prices needed" for each race, that I'm wondering why these punters can't simply wipe the bookies out. ie the bookies think it's 10-1, Kerry Packer thinks 2-1(and is more correct than the bagmen) and puts 20,000,000 on it!! Maybe he loses twice but when he's right it's 200 million!!
As far as I understand the bookie biz today, it is no longer a case of making an "over-round" balanced unbeatable "book" anymore. If not, then they are "gambling". How come so successfully?? Cheers, and hoping for help.

Punter57 (and others),

When you make a best fluc bet at Centre racing they state that:

Best Fluctuation is guaranteed to be paid at the top Official on-course bookmakers’ fluctuation as determined by the Bookmakers Pricing Service (BPS).

Maybe this Bookmakers Pricing Service is the holy grail we are after.

KV

No I don't have any stats. Just an observation from the post I was replying to, I didn't really see the point.

As far as laying favourites goes. Betting on the tote purely on favourites, a punter will return ~90% of their money. Therefore if you lay every favourite within 10% of the tote price, you must win in the long run.

?

http://justracing.com.au/thoroughbreds.php?catid=28 This webpage explains bookies percentages. This is why bookies must win.
They know how to work the percentages.
If a bookie frames his market to a high percentage, and the mug punters fall for it, then that bookie would have a smile on his face from ear to ear.

I reckon the bookmakers could put up any price they liked about a race with regards to the majority of punters. They need prices to protect themselves against the few clever dicks who know the score.

Nobody really knows what the odds are about a horse winning, and that includes the bookmakers. They just aim to take a percentage of the book. Having seen bookmakers interviewed on the TV they don't seem to care whether a horse is percieved to have a chance or not. They just want to take as much money as possible and when they have enough they shorten it and push another out to get some cash on that. Lets face it if they aim to make 10% on the book then 10% of $25,000 is better than 10% of $10,000.

There was the ridiculous situation earlier this summer at a meeting where the bookies were losing hand over fist as all the favourites were winning. It was the last race and they wanted to get the favourite beat and were pushing the price out.

On the other side of the coin there were the big four bookies who operate chains of shops on a national scale and they had huge liabilies on the last race with lots of combination bets running onto the favourite. They were sending money to the track to shorten the price by backing other runners. As soon as the price shortened the course bookies were pushing it out again. It was constantly see-sawing between 2/1 & 9/4.

I also have a feeling (no proof) that each race priced up includes a bogey horse. That is one that is a lot shorter than it should be. This would have two effects. A lot of Punters rely heavily on the price to make their choice and it would allow the bookie to make the prices on some of the outsiders appear more generous.

Dolus and Guitar Jim. We all know the bookies make an over-round book and then let the odds fluctuate as demand waxes and wanes, hoping to end up with a situation where any result is a winner for them. However (please think about this Jim), as Dolus noted the bookies were getting a caning in the first seven races in his example. They were NOT succeeding despite the over-round. The reason is simple: they were making mistakes vis-a-vis the punters.
For example, Jim, they may have had a $3 fav (ie33%) and seven other runners in the first race at $7 (ie 7 x 14% =98% ) which means a "book" of 131%. What they want is only 25% of the money on the fav so that IF it wins their liability will be only 75% of the money bet and they'll have 25% profit. Of course they also want about 11% of the money on each of the others so that on each of them it's only 77% liability. Unfortunately a large amount of well-informed money (ie you or me) thought the fav was really an even money shot AND BET THE LOT. The bookies were now left with 50% of the money on the fav (ie 150% liability), furiously shortening the price, but all too late. Race after race it goes something like this. Comes the last race and the very same situation EXCEPT one of the $7 pops gets up (Horse H) and finally the bookies cheer!! UNTIL the bookies clerk leans across and says "we didn't get 11% for each of the seven non-favs, we only got 5% on B,C,D,E,F and G but someone plonked 47% on H =77% (now it's a massive and total annihilation). This is a result of we, the punters being as well informed as the bookies, framing our own(better) market and awaiting the right time to move (ie not necessarily betting BIG unless we are "sure" we have an edge).
Of course,this rarely happens but IT COULD. Why doesn't it? Any ideas? Or, even if the "mass" of punters are not smart enough to see the 2-1 fav as being dramatic overs (ie it should be evens) and then there is no 50% of the money landing on it, why can't you or I be perennially on the "right ones"?
Let me know further. Cheers.

Punter57, when those bookies were "behind" because of all those favs. winning *they were really NOT behind at all*, that's worth repeating a hundred times * they were really NOT behind at all*. The reason why is because of the laws of mathematics regarding the situation.
A bookie knows, because of the applied maths, that those *seemingly* successful bets WILL NOT continue to be successful, and there's a 100% guarantee on that. Those punters would have falsely thought they beat the bookies with those bets on the winning favs. The next week they would have re-invested some of those winnings , then the week after, then the week after etc etc etc. All the money the bookie seemingly lost on his so called bad day, he will re-coup, he MUST..... because the odds and percentages are in his favour. It's completely irrelevent whether those punters re-invest those winnings over 1 week or 10 years..... the exact same laws of mathematics and averages apply. The ONLY way those punters who won on that day can keep their profits is to NEVER bet again on the horses... they must lose long term, because the odds and percentages are NOT in their favour.
This is also the reason why people believe they have winning methods or systems...... they check both past and present results and they think it wins; after all the results are there to see. They then start operating it in the real world and sure enough, after the first few months, or even years, they are in front; whoopie! A "winning system" they believe.
Little do they know that at some point they will begin to lose, they'll still be confident though and expect to re-coup the inevitable losses. Eventually the system will fall behind and the poor punter will be dumfounded, completely mystified as to what's happened. Well, I'll tell you what's happened....... the bookies have gladly accepted this punter's bets fully safe in the knowledge that the percentages are on the bookies side and they know that eventually the bookies must win.
That's the reality of the cruel world.

At the end of your post you mention the punters getting the better of the bookies on a fav. bet and being better informed than the bookies (at least regarding this one fav.): And you ask why this can't happen more often. Well, I'm afraid those punters were definitely NOT better informed, just as the bookies are not better informed when the bookies win. Because of the very, very, simple law of averages the punters MUST back favourites that win races .. that's obvious. When a Fav. romps in the punter *thinks* he beat the bookies with logic and insight....... the law of averages dictates that a certain number of favs. MUST win...... they MUST win regardless of whether the punter has greater or lesser knowledge than the bookies.
And like I sad, the punters will eventually re-invest the money they *think* they won.... they will eventually end up back at square one and wonder how it happened.
It's all about percentages... it's not about picking winners.
The only chance for probably 99.9% of punters to win is this.......... firstly make sure you are not behind with your punting to date (this refers to your entire history of betting over your entire life to date..... this of course disqualifies nearly everyone), now start betting using any method whatsoever you desire; set a profit goal and as soon as you reach that goal....... quit betting for life. For close to all of us, there's no other way to make a *permanent and genuine* profit on the punt.

Morning Guitar Jim. We are kind of going round in circles here. The question is: how do the bookies arrive at the odds BEFORE they load them up.We punters arrive at our "prices" through a process which may be the same or similar or radically different to the bookies and it is very possible we COULD be better. Everything you said is correct for mechanical devices etc (ieRoulette/Keno/Craps etc etc) as the "edge" is a direct calculation plus "house advantage". Any person with even the most basic maths ability could estimate that a dice has six faces and each has 1 chance in six of coming (ie5-1). Put the dice up at 4-1 per face and the dice owner couldn't lose long term ( as you've made a "correct" book of 120%). Then go back to Dolus' example in his most recent post.Dolus' dice was set to about 160% but he was too smart to take any of the unders (#1-4) nor the "correct" odds (#5) though plenty of others DID. He only took "overs", on #6. This can only work for BOTH sides (ie setting a CERTAIN book of "unders" or recognising a CERTAIN over) if the CERTAIN, correct, underlying odds are known.
It would be pointless a bagman putting Sunline at 20-1 plus 25% and some hopeless maiden at evens plus 25%, then announcing his book was 125%!! The bookie STILL has to get the underlying (set to 100%) odds right. Any ideas how they do THIS better than punters??
This also shows the flaw in saying punters MUST bet favs. If the fav (ie the one the bookies put as the shortest priced) is obviously unders, only a small percentage would bet it. This will definitely wipe a bookie out (over time) as the rest of the money goes elsewhere in the race. Offer Sunline at 20s and NO-ONE will bet on the so-called fav just because it's evens. The bookies odds have to be close to reality BUT better (for them) than reality too. How to arrive at THIS reality Jim?? Cheers

Hi Punter57

How bookies arrive at their opening prices. As no one on here seems to know including myself i have a few suggestions.

You could try emailing the following

Warren Block of Superform
Gary Crispe of Racing and Sports or
How about bookmakers themselves such as Mark Read.

You may not get your answer but its worth a try as these 3 people would definately know how opening bookmakers prices are derived

Hope this helps

Joe