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 Greg Wood |
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| Racing's
authorities are standing back while the starting-price system starts to break
down Plenty of punters in this online age simply glaze over at any mention of starting prices. They see them as so last century. These days, it's all about forming your own tissue, finding the value and then taking a price, or trading in and out on Betfair. Why would anyone with any sense place a bet without knowing what they stand to get back? In the wider world, though, starting prices are still the odds that matter most. The majority of bets in off-course betting shops are settled at SP, and if the Bank of England's base rate is the cost of money, then the over-round on the SPs is as close as you will get to the cost of betting. When a favourite has been backed all day and wins in a canter, the difference between an SP of 7-4 and one of 13-8 could be measured in many tens of thousands of pounds. The details of the system by which SPs are set have changed a little over the half-century or so since betting shops were legalised, but the essentials remain the same. It is an attempt to represent the average price of a horse in the on-course market at the moment a race begins, and therefore - in theory at least -its actual chance of success. If it works properly – there is enough money in the market and it is operating efficiently – then the flow of money should aggregate hundreds, perhaps thousands, of opinions into a single price that will be a better estimate of a horse's chance than any individual could produce, for at least 7,000-plus races each year. Some bookies have always whined about the SP system, and complain that, unlike any "normal" business, it means that the pricing structure is out of their hands. More thoughtful operators – including many senior figures at the big chains – share that frustration but feel that, on balance, a system that has some independence is preferable to one of their own making that could be dismissed as a stitch-up. The bookies, of course, have never been afraid to "blow" money back to the course where necessary to shorten up a price and reduce their liabilities. But one of the benefits of the SP system when it is working properly is that as the market gets stronger, it takes more and more money to shift a price. At the better meetings, where the turnover is highest, the effect will be marginal at best. The arrival of Betfair, though, has changed everything. Even at many of the bigger meetings – perhaps everywhere bar Royal Ascot and Cheltenham – the pre-race market on Betfair is many times bigger and more active than the one on the course. The market at the track is now so weak that it is much more easily influenced by a few hundred pounds, particularly in the minute or so before the off. Evidence seems to be increasing that the system is already breaking down at the margins – that is, at the smallest tracks and on the last races of the night when half of the on-course bookies are already heading home. Consider, for instance, the SP of King Of Defence in the last race at Kempton on 18 November. On Betfair, bets were settled at 3-1. In the shops, it was 13-8, and, perhaps significantly, the five on-course bets large enough to be recorded were all for an identical sum of £400. It has always been easy to leap to conclusions when an SP is significantly shorter than the last show, but Betfair's own, increasingly robust, starting price is pointing up so many anomalies – like the 1.91 chance at Wolverhampton last month that paid out at 1.57 in the shops – that what might once have been dismissed as blips are beginning to form a pattern. Where this will lead is another matter. Like many punters, I have no wish to see the bookies in control of prices, but at the same time it is hard to imagine them ever submitting to a version of Betfair's product either. While this is of pivotal significance to the racing and betting industries, the racing authorities seem to take no interest in what they see as the minutiae of betting practice. For some reason, this industry always seems to take the James Bond approach to problems: wait until the countdown clock on the H-bomb is down to one second and then decide to sort things out. It would be good if, just for once, it dealt with something well in advance, but as the SP system starts to wither in front of our eyes, there is no sign that this problem will be any different. |
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