How are horse racing odds determined?
When you first start betting, getting used to the odds can be confusing and difficult to grasp. But it can also be difficult to understand how those odds are calculated in the first place. The odds are calculated and controlled by the bookmaker and they can change as the race in question gets closer.
In this guide, we’ll show you how racing odds are determined and the different factors that are considered, as well as why it pays to shop around when you’re choosing where to place your bets.
The Factors Which Affect Odds
There are many factors which can impact the odds on a horse race, as well as the odds compilers spend time putting together from the different information available before setting the early price. This price can go up or down leading up to the start of the race, after which the starting price becomes fixed. Form experts, private handicappers and gallop watchers are usually consulted by odds compilers, as well as the amount of support a particular selection has which will also be taken into account. Perhaps a certain horse has a well-known trainer, or an experienced jockey will be riding the horse in the race – these factors can also influence the odds.
Once this information has been collected, the bookmaker determines the profit margin they want to work to, which is known as over-rounding. This margin is built into the odds by shortening some or even all of the prices, based on the chances of the runner, so that bookmakers make a profit. However, competition from other bookmakers limits them from over-rounding too much as punters will go elsewhere if a bookie consistently has much higher prices.
How Do Events Alter the Setting of Odds?
Depending on how much information a bookmaker can get will determine how the odds are set. For example, if the horses are well-known in a particular race, the form of the horses can be judged more easily and so the bookmakers can be confident that they’ve set their prices correctly. However, if there are horses or jockeys which are relatively unknown, it can be difficult to gauge how they will perform on race day. In these situations, even a few decent bets prior to the race wouldn’t affect the price and over-rounding would be considerably smaller compared to a race of the same size and length where the horses racing are unknown. In these circumstances, over-rounding percentages will be set much higher so as the bookmaker doesn’t risk as much of their profit, as any substantial bets with longer odds will impact the prices.
However you choose to place your bets, whether in person, at the track or using sites online, such as Timeform, it definitely pays to shop around as odds will differ from business to business. Even if the odds only differ slightly, one will still pay out more than the other if you’re successful, so it’s worth the prior research in order to get more for your bet.