The amount you can potentially win on any bet is based on two factors – the stake and the odds. The size of the stake is up to you, and as any winnings you get are multiplied by your stake you stand to win more the higher the amount bet. The odds, however, are controlled by the bookmaker and can change as a particular race gets closer.
But how are odds calculated? There are a number of factors that get taken into consideration when bookmakers compile odds for a horse race and each bookmaker or betting shop will usually have a team of odds compilers working to set the right prices.
What factors affect odds?
There are a wide variety of factors that can affect the odds on a horse race, and the odds compilers spend time gathering all the available information before setting the early price. This price may then fluctuate up to the start of the race, when the ‘starting price’ becomes fixed.
Odds compilers will generally get feedback or help from a number of other people such as form experts, private handicappers and gallop watchers situated at the various stables. They will also take into account factors which might affect the amount of support a particular selection, such as whether the jockey or trainer is particularly popular or successful at present.
Once all this data has been compiled, the bookmaker decides what profit margin they want to operate to. This is also known as over-rounding. This is built into the odds by shortening some or all of the prices, worked out based on the determined chances of the runner in order to help ensure the bookmakers make a profit.
Competition keeps bookies from over-rounding too much – those who continually have higher prices than their contemporaries soon find that the bettors are heading elsewhere.
How different events affect setting the odds
The amount of information a bookmaker can gather has an effect on how the odds are set. For example, in a race where the horses are all well known, form can be effectively judged so even in a race that is likely to attract lots of bets and some substantial ones the bookmakers can be fairly confident that they have correctly set the prices.
In this circumstance even a few substantial bets prior to the race would not have a drastic effect on price, and therefore the over-rounding will be relatively small. However, in a race of the same size and length but featuring relatively unknown horses – such as a maiden – things are different.
Not only does the bookie have little or no form to go on, but they can’t even judge how people are likely to bet. In this case the over-round percentage will likely be set much higher, as any substantial bets on horses with longer odds will affect the pricing.
Whether betting at the racetrack, online or in the betting shop, it pays to shop around and get the best odds for your bet. They won’t vary dramatically from bookie to bookie, but 10-1 still pays out more than 9-1.