Laying Long Odds

(Newbie Note: "Laying" is the opposite of backing in betting; i.e. if I lay you $100 at 14.0 that NZ will win the Cricket World Cup I'll get your $100 if the Blackcaps crap out but will have to pay you $1400 if the unthinkable happens. In other words I'm being the bookmaker.)

A particular post on the Betfair forum got me thinking on this subject - a rather unfortunate chap bemoaning his luck in laying France at 10.5 with a couple of minutes to go in their Six Nations rugby clash against Ireland. To recap on what happened, the Irish kicked a penalty with 2 minutes to go which extended their lead to 17-13, only to botch the resulting kick-off, France getting their hands on the pill and waltzing in for the match-winning try with a minute to go.

So, an expensive lesson (we call them tuition fees in this business) and nothing to do with luck. Another example recently was England's rise from the ashes in the recent ODI tri-series. After their 2 humiliating defeats at Adelaide, only the incredibly insane would back them to win the thing as the following backs in the winner's market show:

100.00 - £21
110.00 - £8
120.00 - £27
130.00 - £17
140.00 - £11
150.00 - £30
160.00 - £4
170.00 - £12
190.00 - £1
200.00 - £9
220.00 - £3

OK the amounts aren't huge but I think 99.9% of us don't mind risking e.g. 9 quid to win 1800, which should mean there's only 0.1% of us silly/brave/insert your own opinion here willing to risk 1800 quid to win 9 - even if they think the result is a "certainty" (and we all should know by now there is no such thing as a certainty in sport). Unfortunately (or not, depending on what side of the bet you are on), the amount of people willing to lay at long odds is probably much larger than 0.1%.

I've fallen into the trap recently myself laying 50/1 that Australia would win the Ashes 5-0 during the third test at Adelaide which had "Draw" written all over it. I don't mind if you laugh at me - I'm well over the pain and fortunately the tuition fees paid in this case came after the tuition fees paid for the lesson on overbetting, so the damage wasn't too terminal.

But what that lesson forced me to do was set some concrete rules on laying at long odds, which in a two-horse race is really the same as backing the other side at short odds. I've never been a taker of short odds-on prices - for some time I've had a rule that unless there is a very, very good reason to do so (and there aren't many), never back below 1.1. Well, if it's a two-horse race that's the same as laying the other side at 10/1 - so in theory I should never lay above that price. In a three-horse race, it would be 20/1 etc.

In test cricket where three results are possible, a habitual layer (odds offerer) like me usually ends up in a situation with a large result on the least likely outcome, and it can be so tempting to lay off that position at 30/1 or 40/1 to squeeze out an extra 50 or 100 quid profit. So rewind back to a certain test six months ago where England were 30/1 on Betfair and in reality should have been closer to 100/1. Thanks to a couple of Umpires and a petulant Pakistani captain, they ended up winning.

Laying long odds - fast road to the poorhouse in my opinion. It's the same as backing short odds-on favourites where no matter how "certain" you think a result is, thanks to the glorious unpredictability of sport the value just cannot be there.