Each Way Arbing – Avoiding Trouble

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I opened my Betfair account on 22nd April 2003. I was one of the first subscribers to Adam Todd's BetTrader and was a founding partner of JuiceStorm.com on 17th February 2007.

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WARNING – Each way arbing can be lucrative, particularly if you use the extra place offers at some bookies on certain big races. However it is full of traps and potential hazards and you should not attempt it until you have a thorough understanding of the rules regarding types of races and numbers of runners. It is easy to lose both back and lay bets on the place part if you are careless.

What is Each Way betting?

An each way bet is 2 bets, one to win and one to be placed. At a bookmaker you bet your nominated stake on each half of the bet, so that £10 each way is £10 to win and £10 to place, and costs £20. At the bookmaker there is only one price – the win price, and the place part is worked out by dividing the win odds by 4 or 5 depending on the type of race (see below). The place odds are therefore determined by the win odds. Betfair have a completely separate place market which is not in any way tied to the win market, although obviously the shortest prices in both will be on the same horses. There is absolutely no requirement for the place odds on Betfair to be 1/4 or 1/5 of the win odds on a particular horse.

From an arbing perspective you therefore have 2 bets to consider, and in order to make a profit either both parts must be arbs, or the arb on one part must be big enough to cover the loss on the other.

Rule 4

As with all horse arbing, you need to watch for non runners. Betfair has reduction factors on the place market as well as the win, and as far as I am aware most bookies simply work out the place odds from the revised win odds after rule 4. You are unlikely to lose out from a rule 4 providing both bookie and Betfair have reformed their markets or the non runner is removed after you have placed both of the back and lay bets.

Place Terms

What you get paid on the place part of the bet and how many places are paid depends on 2 factors – the type of race and the number of runners. The general rules at bookies are as follows:

2-4 Runners all on to win

5-7 Runners 1/4 odds 1st, 2nd

8 or more Runners 1/5 odds 1st, 2nd, 3rd

Handicaps

12 or more Runners 1/4 odds 1st, 2nd, 3rd

16 or more Runners 1/4 odds 1st, 2nd, 3rd, 4th

Clearly it is essential to understand the differences between handicaps and non handicaps. You need to be aware that as well as ones described as “Handicap” or “Hcap”, races with “Nursery” or “Nsry” in the title are handicaps (confined to 2 year old horses).

The Rules Difference

This rule difference applies whether the non runner comes out before or after your bet and has nothing to do with markets being reformed or rule 4.

The crucial thing to remember is that bookies alter the number of places when a non runner changes the category a race fits into, for example if an 8 runner race becomes a 7 runner race the bookies will then only pay out on 2 places, not 3. The win part of the bet behaves exactly like an ordinary bet to win.

When Betfair first open a place market there are the same number of places as in the list above, but if a non runner comes out the number of places at Betfair does not change. It is therefore dangerous to arb races which would fall into a different each way category if one or two horses were non runners, as there will then be more places at Betfair than at the bookies, and the place back and lay could both lose. Betfair always lists the number of places in the Rules tab on the right of the market. This should alert you to any anomalies, for example 7 runners but 3 places. You can also see the non runners, if any, in the rules tab.

Examples of the problems this can cause:

3.00 Lingfield 21 July: 12 runner handicap, 1/4 odds at bookies. 1 non runner meant that bookies paid out at 1/5 odds, meaning that your arb might no longer be an arb at the revised terms. Fix this by adjusting the place lay – may result in a loss.

9.00 Leicester 21 July: 8 runners declared, 3 places at Betfair. 4 non runners meant that this race was win only at the bookies, but Betfair still paid out 3 places. Fix this by trading out the place and laying more on the win, probably for a loss.

6.05 Sandown 21 July: 8 runners declared, 3 places at Betfair. 2 non runners meant that bookies paid out on only 2 places and if your horse finished 3rd the place bet and lay both lost. Nothing you can do about this except pray.

You can see that I have not had to look very far for these examples – non runners are common. The most usual reasons for non runners are the horse being ill or injured and a significant change in the ground conditions. You should always be prepared for non runners when there has been significant recent rain. Forecast rain which does not arrive can be equally destructive. Sometimes this can really work against you, and for this reason I would advise against arbing each way until a couple of hours before the race, except on very big races with large fields.

Identifying Each Way Arbs

This is not easy because of the 2 separate markets involved and the fact that odds comparison sites don’t do each way. You really need to do it manually, and frankly except for big races and certain others (see below) it probably isn’t worth either the time or the risk. There are 2 scenarios – the easy one, where both win and place are arbs (treat both parts as separate arbs) and the more tricky one where one part is an arb and the other is not. For this you need a spreadsheet:

Although this looks terribly complicated, it isn’t really. All you have to do is fill in your commission in the 2 boxes (win and place), and then fill in the 5 boxes at the bottom left for the stake, odds at the bookie, win and place lay odds and the place terms (4 for 1/4 odds and 5 for 1/5) and let the spreadsheet work it out for you. The crucial result is the Net P&L on the bottom right in blue – if that is +ve its an arb, if it is -ve it is not. The example shown would win you £1.65 for a £10 e/w stake, regardless of where the horse finished in the race. The 2 lay stakes you need to place are on the top row, £8.98 on the win and £13.81 on the place. In this example the win is not an arb, but the place is a big enough arb to cover the loss on the win.

You can download this Spreadsheet here: Each-Way-juicestorm.com_ It has also been added to the Library.

Each Way “Stealers”

There are some races which almost always produce each way arbs. These are called “stealers” and the bookies hate them. WARNING – if you bet on each way stealers the bookies will quickly close your accounts. They are “worse” than arbs.

The principle behind each way stealers is value, and is caused by the fact that the win and place parts of an each way bet are tied together by a rigid formula. The classic stealer race involves a very short priced favourite and only one other horse with a realistic chance of winning. If there are more than 7 runners there are 3 places up for grabs, and the 2nd favourite is almost certain to be placed. The bookie then has a dilemma – does he offer very bad odds on the horse to win, and therefore attract no money to balance his bets on the favourite, or does he offer place odds (1/5 of the win odds) which are huge compared to the chance of that horse finishing 2nd or 3rd? Most will offer something in between – the odds on the 2nd favourite in this sort of race are usually poor, but the place part is usually a big arb with Betfair. You will find that limits on these horses, particularly each way, are much smaller than your usual limits. Use small limits as a warning – if you bet on this the bookie will not like you. Stealers occur in any race where the chances of a horse being placed are much bigger than 1/4 or 1/5 of the chances of it winning.

The most tempting each way stealers occur in races where there are a large number of places relative to runners. These are precisely the most dangerous to bet in each way because of the risk of non runners.

To take advantage of each way stealers you need a big supply of accounts. Personally I don’t think it is worth the hassle or the risk.

Extra place offers

Just occasionally you get a situation where the tables are turned and you can win both bets on the place part of an each way arb if your horse finishes in the right place. These are usually on big handicaps with large numbers of runners, which effectively removes most of the risk from non runners. I would tend to avoid these if the number of runners was within 3 of the change point (eg less than 19 in a handicap) in case the bookie decided not to honour the offer in the reduced field size.

Basically all you do is look for arbs in these races and arb them each way, with a big payout for 5th place or whatever the offer is. Watch out for additional factors such as reserves, particularly in Irish races.

Other sports

Each way betting is not confined to horses, and the spreadsheet will work on other sports too. You can bet each way on various outright markets, and occasionally there are offers on these, the most common being extra places on golf. I do not know a great deal about each way betting on other sports than racing. If you are going to attempt this you need to be sure of the rules on the place part of the bet, and of the division factor, which will very probably differ between bookies as well as between sports. Each way betting on golf in play has different place terms from each way on the outright before the tournament starts, so check and double check if you are going to attempt this.