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Does anyone understand how Betfair calculate the reduction factors?
I have just spent 20 minutes on the phone to them and they don’t seem to know either but they have promised to e mail me ‘a report’ whatever that is!
The lady on the phone said the only way I could check it out was to go on to the graph to the left of the horses name and check the reduction factor myself that is of course up until the market is settled.
With the on course rule 4 it is easy to calclaute more or less what the deductions will cost.
Yesterday I backed Here Now And Why in te first race at Thirsk I had £1,000 on at 1.24 (just under 1/4) at the time I placed the bet 1.52 p.m. Villinus was down as non runner but there was a second horse withdrawn after my bet was struck.
The official s.p. reduction for betting shops and on course was 10p in the £.
I wold have made far more money having the dosh on at s.p. and having the 10p in the £ reduction
Betfair reduced my odds from 1.24 to 1.01! .
Now while the horse won it was in my mind that Matt Williams in yesterdays R.P. put it up as a possible horse to lay and if I knew I was only to be getting 1.01 and then pay them commision there is no way I would have risked a grand.Later in the day I had a monkey on Infiraad at Newmarket again the bet was struck before the race and I had obtained the odds of 2.00 (evens) to back.
Another non runner which the industry settled at 10p in the £.Yet betfair settled me up at 1.727 (8/11).
So in the shops or on course I would have got the evens won £500 had £50 deducted for the rule 4 and come out winning £450.00
Betfair settled at 1.727 so they paid me £363.50 + stake and then charged me the commission!
So in the case of non runners where the fav is odds on is it best then just to lay the fav knowing that after the massive betfair reductions that if it still won the damage would be light?
I found myself in a similar situation a couple of years ago, resulting in one of the most frustrating phonecalls of my life. Nobody seemed to understand how ridiculous it was to have the reduction factor take the odds down to 1.01, when the horse was trading at 1.3 in the market after the NRs were taken out.
I don’t understand why they can’t manually override whatever software they use to determine reduction factors in these instances. It’s surely very simple to calculate the correct number which would reduce the odds to what would be expected after the market is reopened, to make the system as fair as possible.
So in the case of non runners where the fav is odds on is it best then just to lay the fav knowing that after the massive betfair reductions that if it still won the damage would be light?
That’s the way it seems to me. When the situation stays the same, and betfair aren’t showing any willingness to correct such an obviously stupid methodology, it makes sense to take advantage of it. A while back I managed to lay ~7k at 1.55 on a favourite where the third fav was due to be withdrawn, and ended up with adjusted odds of 1.18, when the market reopened the fav was a 1.35 chance.
Just keep an eye on the reduction factors in the pop-up screen when selecting a horse’s price history.
Betfair calculate the reduction factor on the price plus the stake while the high street calculates the reduction factor on the price only (if that makes sense).
In the case with Here Now And Why, in order for a bet to go from 1.24 to 1.01 would mean a reduction factor of ~ 0.195 which is about 20% which means that the withdrawn runner would have to have been approx 4/1 at the time of the withdrawal.
There is quite a big difference between the 4/1 on BF and the 13/2 on the High Street but maybe layers can manipulate the BF market by heavily backing the probable NR thereby reducing it’s price and artifically increasing the reduction factor for that horse.
The issue with Betfair (I think) is that they assume that the market has 0% overround so any reduction factors are based on a perfect book when this may not be the case, especially where a second horse is withdrawn shortly after a first and the market may not have properly reformed.
I backed Bronze Cannon yesterday and the Rule 4 deduction for Spanish Moon was pretty much what I expected.
The Dice Man and David Brady seem to know how Betfair operate better than Betfair themselves do!
The lady who I spoke to did not seem to understand my arguments. She did not seem to understand that no one would back a horse whilst still in the stalls at 1.01!
Betfair state on the T@C that the reduction factor they operate is simillar to the rule 4 betting shops and on course layers use well it is nothing of the sort.
I think that David Brady may well be correct in his assumption that layers know when a second fav is about to be withdrawn at the start the high reduction factor beffair take from the backers will favour the layers and they will back the horse knowing it is going to be a non runner to increase the deductions on the favourite.
So in a way its a bit like on course layers getting stuck into any horse that looks like it is about to be declared a non runner to be able to charge a higher Rule 4 take out.
I am awaiting the ‘report’ they have promised to send me but still very upset.
Anyway we all learn something every day and next time I now know it is overall best simply to be a layer of the fav when a similar situation next time occurs.
So in a way its a bit like on course layers getting stuck into any horse that looks like it is about to be declared a non runner to be able to charge a higher Rule 4 take out.
.. isn’t that the way it works??
Betfair don’t like you knowing what price you getting, I think they need to state that in their T&C’s.
Falasteen was trading about 10 or 11 when they decided to go without him. There was not time to hammer the price in as when he was withdrawn after refusing to load the others were let go immediately.
The reduction factor seems wrong in this case
Surely the problem here is that the percentage deduction for any runner on BF is based on it’s price well before the market gets really active. So the reduction factor for the non runner probably reflected a price of around 4/1 half an hour before the race.
When the horse then drifts markedly in the last two or three minutes before the off, the reduction factor doesn’t change accordingly – but of course, neither does it on a horse like the winner that has been backed down to a shorter price.
It’s as if the Rule 4 deductions imposed by bookmakers were always based on the price at the time of the first show, rather than at the point of withdrawal.
If you have the time, you can write a piece of code that will tell you what the adjusted prices will be after any non runner is taken out of the market, but the general rule, as suggested above, is that laying the favourite when a horse has bolted or obviously isn’t going to enter the stalls will almost always prove the ‘value’ bet.
Backing any horse at under 1.5 is very risky given the way the reduction factor works, especially in small fields and the bookmaker is invariably a better option in those circumstances.
There was another example on Saturday with Casual Conquest, although he still managed to get beaten even with Spanish Moon out of the race.
To understand Betfairs’ reductions you have to take into account the amounts matched,and that Betfairs book would look very different to a bookies.
In this case Betfair would have taken a far higher percentage of the book on the favourite than a bookie would have,and also the average price matched would have been higher than the bookies.
With the favourite and only 2 non-hopers going the bookies at the course would not have offered any odds at all after the withdrawal of the 2nd favourite,hence why 1.01 was returned as that is the lowest Betfair can go.To understand Betfairs’ reductions you have to take into account the amounts matched,and that Betfairs book would look very different to a bookies.
In this case Betfair would have taken a far higher percentage of the book on the favourite than a bookie would have,and also the average price matched would have been higher than the bookies.
With the favourite and only 2 non-hopers going the bookies at the course would not have offered any odds at all after the withdrawal of the 2nd favourite,hence why 1.01 was returned as that is the lowest Betfair can go.I can’t see any logic in that statement. Why does the amount bookies on course take after a withdrawal have any bearing whatsoever in a fair reduction factor?
From Betfair’s rules & regs:
When the market is loaded each horse is given a ‘reduction factor’,
based on a forecast price
, which is expressed as a percentage. These reduction factors may be updated periodically
at the discretion of Betfair
based on trading in the market, but after approximately 15 minutes from scheduled ‘off’ time of a given race, they will be updated only in exceptional circumstances. The current reduction factor percentage for each horse can be viewed on the ‘info’ page on the Betfair website or by asking the Helpdesk.
so basically Betfair decide what the reduction factor is on each and every horse,
and if a horse gets smashed off the boards in the 15 mins before the off before being declared a NR, there is no guarantee that the reduction factor will reflect the actual price on offer at the time of withdrawal
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