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How Do Prices Compare These Days?

Please note that this article was written in 1998, so the phone numbers are no longer valid.

Readers would be aware of our Winform Winners service. The question most often asked by new members of the service is this. "Am I better off betting with bookmakers or the TAB?" and it’s a good question.

Recently I aired this proposition on the Internet through the ausrace discussion group. One member of that group in particular was certain that when comparing prices on horses that were under say 4/1 that the bookmakers prices would be superior. As this falls in the average price range of Winform Winner selections, I thought we would look at the total dividend returned by both methods for the past two months.

Here’s the result. TAB DIVIDENDS $202. Bookmakers Starting Price dividends $201.60. Isn't that amazing! Now why is this. To investigate further let’s look at a typical non-metropolitan midweek meeting at Broadmeadow.

It is a freezing cold day with a heavy track and lots of scratchings and a hastily altered track layout to ensure the meeting could go ahead. In the bars it is cosy and there are plenty of seats. In the betting ring there are probably no more than a few dozen punters watching the bookies boards of maybe four or five bookmakers.

By law the TAB takes out about 14.5% of the betting pool before returning the rest to winning punters. After dividends are rounded down the take averages a total market percentage of 117.5% . (It is not the purpose of this article to explain market percentages, simply to make comparisons. That article may be available another day)

On one particular race with seven starters the bookmakers had a 6/4 favourite, two other horses at 5/2, one at 11.4 and the others at longer odds. The betting steward takes the average price of the bookmakers and enters the odds electronically. The total of these odds comes to over 145%.

Is it any surprise to see that the favourite pays $3.30 on the TAB but was never better than 6/4 with the bookmakers?

The story is repeated at the "away" meeting at Echucha in Victoria, but in reverse, well sort of. A 9/4 favourite paid only $2.50 on our TAB. The difference is 80 cents the other way.

At Broadmeadow the punters who backed the winner at short odds with bookmakers wanted to get set at fixed odds. The problem with the TAB is that the more money you put on the less you end up with as a series of big bets will affect your own odds. When bookmakers have to accept large bets on a "goer" they realise that the other members of the betting public are not going to be able to bet enough to allow them to balance their books and this is why their books are set "over round". The TAB never loses. It can’t . The percentages are always fixed in their favour. Individually the bookmaker can and quite often does , lose. This is why they are often less likely to take the risk of offering better odds.

A character who goes by the non de plume of "Gunsynd" feels that the situation is different on Saturdays, our main betting day in Australia. I disagree. The market is set differently of a Saturday as there is a far bigger market. But there is also a much larger "army" of weekend warriors who devote a great chunk of their time in finding the winners. When you add to this the weight of opinion unleashed over the radio by the "experts", you will often find that a horse is severely under the odds when bookmaker betting opens.

The bookmaker can see this heavy support and most times will offer only a slightly better price than the TAB boards are showing. The oncourse "heavies" may well refuse to bet and this causes both the bookmakers price and the TAB price to ease, although the TAB price never catches up in this situation.

The end result it that the bookmaker’s price may be better a lot of the time. It sometimes catches up in other price brackets. Last weekend for example. Prime Address wins narrowly at 13/2 ($7.50) the TAB price is only $7.1o. In other states the dividend is as high as $8.60.

Most bookmakers offer Starting Price plus 5%. On our figures as stated previously, the 201.6 return becomes 211 (near enough) which is now significantly better than the $202 return from the TAB. In most states you can legally place a bet with bookmakers before the race meeting starts, for any amount of money (each bookmaker has his own rules here) instead of the midweek $100 minimum or weekend $200 minimum demanded by State law for on course phone bets.

This is not the end of the story, though. Bookmakers are continuing to bet worse and worse odds. The end may well be coming, and quicker than we think. The inability of the individual to finance the liability that today’s betting trends demands has led to the mooted introduction of fixed odds betting by the TAB. This has started in the shape of Sports betting. The TAB has virtually unlimited resources compared to the individual bookmaker and it may now be time to allow bookmaking partnerships or companies to form for the good of competition.

Your comments are welcome. Please email to garry.r@hunterlink.net.au

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