- How have market percentages shifted?
- Why is it happening?
Yesterday we took a good look at market percentages across the major Spring Carnival race days… we wanted to dig a little deeper into that.
Market Percentages: What?
Wagering on racing has been growing extremely strongly for years on end. That seems to have suddenly come to a halt, with Racing Victoria reporting at their AGM this week that turnover since the start of the new season is down 6.7 per cent on last year.
It’s been put down to many factors, but the lack of value available in the markets would appear to be a major one.
That’s all captured in the market percentages, which we looked at for the major carnival days.
Market Percentages: How?
As we said, a 1.6 per cent increase across the board doesn’t seem that bad, all things considered. So how has value been taken out of the market if the overall percentage hasn’t moved significantly?
The answer is “the race within the race”.
While a total market percentage looks at the entire field, any punter – whatever their method – will usually put a line through one or more horses in a race. They’re in the barriers, but they’re not a factor… they can’t and won’t win, especially in the high-quality races like those at the height of the Spring Carnival.
So take out these runners – those that nobody is really interested in – and you have what we’ll call The Race Within The Race.
So to try to illustrate this, we looked at the market percentages for only the Top 4 chances in the market for each race. Yes, there’s more than four chances in each race, but we’re just trying to illustrate how value has shifted within the market.
This is what we found…
What does it mean? Value has been shifted in the market. Extra market percentage is being pumped into the main chances – the real contenders, that punters want to back – and it’s offset, to a large degree, by winding out the long shots that attract little money anyway.
It’s hard to see how this wouldn’t have a considerable effect on turnover. Many punters who can’t get a price they want simply walk away. While some may transfer their action to the longshots in the hope of finding value, logic says it won’t result in the same amount being turned over… who invests the same stake on 50-1 shot that they do on a $4 chance?
Market Percentages: Why?
So why is this happening? Why the shift in markets? There’s undoubtedly a few factors at play…
The cost of betting
This is the major factor that can’t be ignored. The costs imposed by government and racing bodies on bookies and punters are high, and somebody has to pay. Invariably, that’s the punter.
Point-Of-Consumption (POC) taxes have been introduced by state and territory governments around the country, which is a new levy all gross profits that bookies make. It’s a major cost – between 8 per cent and 15 per cent of gross profit – and it has to be recouped by bookies. So percentages go up, dividends go down, and punters get less back on their winners.
Agree many factors contributed, including:
* market %
* lower average field sizes
* smaller # of favourites winning
* reduction in WSP generosities
* poor weather
* point of consumption tax
* animal welfare concerns
* Syd v Melb cannibalisation https://t.co/oSJexjKDLP
— Michael Browell (@777MJB) November 20, 2019
On top of that, racing is one of the most expensive products to bet on. Race field fees, charged by state racing bodies on bets taken on their races, are considerable. Again, bookies need to recoup this cost… so they charge the punter more.
If you want to hear more about the costs incurred, have a listen to Tristen Merlehan – Director of corporate bookmaker TopSport – on the Betting 360 Podcast. Tristan stated months ago that the charges they wear on Victorian races far outweigh any profits they make. Victorian racing runs at a loss for them.
So while they still offer it to punters – they have to, being such a popular product – they have taken steps to actively reduce their betting turnover on Victorian racing.
Fast forward a couple of months, and perhaps it’s not surprise that turnover is down on Victorian racing. Offering considerably less value on Victorian racing is clearly something bookies have to do, and to do it, they’ve shifted percentages around.
The smarter market
Another factor to consider is that the ever-evolving racing market is simply getting smarter, better at identifying the true chances in each race, and only wanting to bet accordingly.
Use the term “punters” and the traditional image conjured up might’ve been those at the pub having a beer and throwing some money over the TAB counter.
Things have changed. Punters are more informed than ever… they have access to better form, information, ratings, tips and education than they ever have. And they’re betting accordingly.
(Everybody still enjoys a beer though, of course!)
Market Percentages: The Professional View
We had a chat to Champion Bets Victorian racing analyst Trevor Lawson about the issue.
“My turnover has definitely dropped,” said Trev.
“It’s just harder to get on at the price you want to get value. We don’t bet for the sake of it… we bet to win and if the price isn’t there to allow that, we don’t bet.
“It’s still about the same things: finding winners and getting the price you need. What’s changed is you just need to be better at it. Perhaps in the past, where you had fatter margins, you could afford to be wrong slightly more often because the winners covered it.
“They don’t any more. You really have to pick your targets, make sure your assessed prices are spot-on, and then strike only when you can get what you need.”
“You’ve just gotta be better. If you don’t have the right information, you’re no chance.”
A look at Trevor’s betting results confirms this. Where the shift in market percentages was most savage – during the Flemington Carnival – Trevor’s turnover was a long way down on last year.
However, his strike rate was very good – he found winners when he had a bet. They just weren’t available as often.