Bookmakers require a profit to make a living and to make sure this can happen they frame their bookmaker percentages based on the probability that they will win more often than they lose. A bookmaker will try to ensure they have a big enough margin on every framed betting market to enable the bookie to come out in front over time.
A bookmaker will adjust his market after taking bets on a race to gain an edge over the punter. Horses will either firm or ease depending on the amount of bets a bookie takes for each horse in a particular race. Over time the bookmaker's edge will work in his favour.
Horse Racing Info will explain below how a bookmaker might frame a market for a race.
For the purposes of this exercise we will frame a market for a mythical race where we have five competing horses of equal ability, equal weight, in a race run over their favourite distance, assuming it will be a truly run race. All horses would have an equal chance of winning and a bookmaker might fram a market such as the following.
|Total Market Percentage||100%|
A bookmaker requires a betting market to be above 100% if he plans to make a long term profit. The bookie will tweak the odds and frame a market with horses under and over there true odds to shift the percentages in his favour.
The below market has been framed by the bookmaker to change the percentage from 100% to 120% which allows him to theoretically return $120 for every $100 outlaid, ensuring a profit in the long run no matter who wins.
|Total Market Percentage||120%|
The bookmaker has now framed his market to 120%, which is also known as 20% overround, and ensures he can return a 20% profit on all bets regardless of who wins, assuming everything goes to plan.
Our initial bookmaker market assessed the true odds of each horse at $5.00 or 4/1 because they all had the same equal chance of winning therefore would all be the same odds. Once the bookmaker adjusted the market to 120% we find the following has occurred.
After adjusdting the market we can now assess which horse are under the odds and which ones are value.
The market above has Black Road at $2.00 and Down Under at $3.00 which is well below their true odds of $5.00 and they represent poor value.
My Dagger at $6.00, Fall Road at $10.00 and Dashaway at $15.00 are all above their true odds of $5.00 and therefore representing good value considering we have determined all horses have an equal chance of winning.
Punters who frame their own markets will look to continually back horses such as My Dagger, Fall Road and Dashaway who are over their true assessed odds and considered an "Overlay" bet. The punter's long term profit will depend on how well the market is framed compared to each horse's chances of winning.
See our Framing Your Own Market section to learn how you can create your own prices and back overlay horses at value odds
When placing a bet you should always be looking for value, and online bookmakers give you the luxury of comparing multiple markets to make sure you always receive the best odds available for your selection. If you can manage to get the best price on a regular basis then you'll be doing better than the average punter at the TAB who regularly accepts poor value odds.
We basically frame an imaginary market in our mind when checking the odds of a horse we plan to back in a race. The horse's displayed odds will dictate if we put money on the horse or not. If it is too short then we will pass, and if we think the price is right or good value then we will place the bet.
Of course some punters will take any price regardless, and they are the punters that put a smile on bookmaker's faces.
Below you will find the most common bookmaker's percentages.
Visit our Betting Guide to learn more about online betting including racing bet types, form guides, betting glossary and more.