You don’t have to be a keen follower of European politics to have heard about Brexit, and it seems concerns about the “post-Brexit world” have reached the UK’s racing industry.
Brexit – by its very nature – will make it more difficult for anything to move between Britain and wider Europe. That applies to people, goods and indeed, animals.
The concerns of some were outlined in the Financial Times where Peter Jackson, CEO of Flutter Entertainment Peter Jackson (which owns bookmaker Paddy Power as well as Sportsbet in Australia) admitted that he does have “some concern about horses being able to travel backwards between UK and Ireland — it is a real risk to the horse racing industry.”
Any reduction in horses coming into the UK would of course lead to smaller race fields. Greg Johnson, an analyst at investment firm Shore Capital, added: “If it’s harder for horses to come over you are going to have smaller horse racing fields so the favourite will win more often.”
So we thought we’d test his statement… is that really the case with smaller fields?
We took a large sample of races to test whether this was the case. Our sample includes all Australian flat races run between the 2015 and 2018 calendar years – 66,325 races all up.
Of the 66,325 races, favourites won 22,359, or 33.7%.
We broke this down by field size to see if the statement holds true.
So yes, favourites do win more often in smaller fields.
Now of course, this is fairly obvious. The total probability for all horses winning any race is 100%, and when there’s less horses to share that around, each individual horse’s probability is higher… and that impacts the favourite more.
But of course, the market just adjusts for it… doesn’t it?
A high probability just means a lower price. So while your favourite is more likely to win in a small field, you’ll just get a lower price anyway.
So, let’s test that.
Again, the logic proves out. Favourites in small fields are shorter.
This is where it gets interesting. More favourites win in smaller fields, but they pay less. So for the punter, the overall returns aren’t affected, right?
We ran the numbers on backing every favourite, and the results were got were as follows…
This is based on betting to collect 5 units at the SP on every favourite.
Overall, you’ll lose around 10% on turnover doing this.
But you’ll actually lose less in small fields than you will in bigger fields.
There’s not a lot in it, but the trend is very clear.
The overall impact would appear to be a result of market percentages. Market percentages are demonstrably lower on smaller fields, which means less of a hurdle to clear if you wish to make money. Or, if you simply bet in line with the market (as this example does), the bookies make less and you lose less.
So the investment analyst who thought a drop in field sizes might cause a drop in bookie margins? He may well be right, though perhaps not for the reason he thinks. The issue for bookmakers would be trying get enough percentage into their markets without driving punters away… a tricky balance to strike, without doubt.