For those of you with a fleeting interest in horse racing, you may well have seen, or heard mention of the term ‘starting price’ before but not quite known what it is. Even the more avid racing fans among you might be fully aware of what it entails, but lack knowledge about how exactly starting prices are calculated.
As it is a fundamental part of horseracing betting, but not necessarily something that receives much public attention, we want to explain the full picture for you now.
What Does the Term ‘Starting Price’ Mean
Although the concept of starting prices also exists within greyhound racing, this is not what we will be discussing here. Instead, we will be looking at starting price in relation to horseracing, the sport where it is far more prevalent. The term refers to the odds a horse is available at when the race it is involved in begins.
Quite literally, it is their price at the start of the race, hence the rather apt term the industry uses. Often abbreviated as SP, it is something that has existed for many years, stretching back to the 18th century in fact. As we will see though, how the SP is calculated today bears little resemblance to how the chalk on blackboard process used to be.
How Do Starting Prices Work in Practice?
We can forgive you if you are sat there a little confused by all this talk of a ‘starting price’. After all, fixed-odds betting is very popular. With this, you simply pick your horse at the odds shown on the screen, perhaps 10/1, specify your stake and then confirm the bet. You ought to be aware though that many major bookmakers run some form of best odds guaranteed (BOG) promotion. What this promotion, increasingly standard practice with online bookies, usually means is that if you place a bet on a British horse race and the selection wins but the SP odds are higher than the odds you backed, you will be paid out at the SP price. Pretty good eh?
To give you an example, let us say you backed Horse C at 5/1 with a £10 bet a couple of hours before a race began. By the time the race starts, the odds have drifted (increased) because there is not much interest in Horse C. As a result, Horse C is actually available at 7/1 just as the betting is suspended. Horse C ends up winning the race but rather than you receiving just £60 back (5/1 winnings = £50 plus your £10 stake back) you would actually receive £80 (7/1 winnings = £70 plus your £10 stake back). If the SP ends up lower then the price you backed, then it is simply ignored and you would receive your £60 as normal.
While many bookies do operate this best odds guaranteed policy, the rules do tend to vary a little. At some sites you need to place the bet no earlier than 8am on the day of the race and they will typically only relate to win or each way bets. Some sites actually cover racing outside of UK and Ireland too, such as the UAE, so be sure to check the full terms before placing your bets. Many BOG offers only cover UK/Irish racing (and occasionally select bigger races internationally).
It is also possible to simply stake your money by selecting the ‘SP’ price. This option is primarily available in smaller races when the odds are not currently available, usually because the race is too far in the future. Sometimes this can simply mean races not taking place the same day. Should this be the case but you are eager to bet early, all you need to do is click ‘SP’ and confirm your stake. The bet is then taken care of, leaving you to relax and pay no attention to any odds fluctuations. Note that in big races, bookmakers will often have ante-post markets several days before the race begins rather than have a blank ‘SP’ betting option. Ante-post bets are typically not covered by best price guaranteed policies.
Who Is Responsible for the Starting Price?
The Starting Price Regulatory Commission is an independent body responsible for setting the starting price across British horse racing. The body, under its current name, has existed since 2004 but prior to this, there was the Starting Price Liaison Committee in 1994 which became the SP Executive in 1999. Regardless of the name, this body has been put in charge of maintaining the integrity and accuracy of starting prices. They do not hold the same amount of power as the UK Gambling Commission or British House Racing Authority but they play a pivotal role in their fairly narrow focus of determining SPs.
It is therefore not the bookmakers themselves who set starting prices. They are bound to return the prices calculated by the SPRC. So, no matter who you bet with, if you place a starting price bet and it ends up being a winner, your returns will be the same. This applies equally to wagers where you took the early price (EP) but the SP was higher and your bet was made with a betting site offering best odds guaranteed.
How Do the SPRC Calculate the SP?
For each horse race, the SPRC gathers a sample of odds offered by different bookmakers. They will then order the available odds into a list from longest to shortest before dividing the list into two equal halves. After this point they will take the shortest price to feature within the half featuring the longest odds. This guarantees that the SP is equal to, or longer than the price offered by at least half the bookmakers sampled. It essentially strikes a decent balance between giving punters fair value for money while also keeping the bookies content.
Note that the SPRC does not have any influence on bookmakers’ overrounds or margins. This is basically what we would consider to be the ‘house edge’, the profit margin the bookies factor into their odds. This is something that all bookmakers have and it is ultimately how they make money. This is not really an issue though as the market ensures that most brands are not taking too much of a large cut. With so much competition out there, bookmakers would easily lose most of their customers if they were consistently and significantly beaten on odds.
The New SPRC Method
The overarching principle to how the SPRC calculates SP for races has remained unchanged. There has however been a recent change in their sampling method. In the past they would simply take the prices offered by on-course bookmakers. The minimum number of different bookies used would be usually be six with the maximum amount 24. In quiet winter meetings though they have sometimes only been able to gather a sample from three bookmakers, which is the absolute minimum.
2020 Sparked a Change
In 2020, the SPRC were forced to change their ways, however, when the global health crisis forced racing to take place behind closed doors. With no punters in attendance from April 2020 onwards, this meant no on-course bookies either. As such, the SPRC quickly devised a new way of sampling using off-course bookmakers.
It ought to be mentioned that similar plans were already being discussed prior to the national lockdown. This is because Gambling Commission statistics highlighted that on course bookies were responsible for just 1.4% of horserace bets (down from 15% in 2015). It therefore seemed outdated to use this as a guide for SP calculations when punters were increasingly turning to larger online bookmakers, usually via their smartphones. The bizarre goings on of 2020 and 2021 merely accelerated the speed of the change slightly.
Odds from Major Bookmakers
Back to the point though and the SPRC began requesting odds from the following major bookmakers: William Hill, Bet365, Ladbrokes, Coral, Betfair, Paddy Power, Unibet, Betfred, SkyBet and Boylesports. It is the prices these names provided that have now become part of their SP sample. Some of these brands are part of the same company but there is still a satisfactory mix of different and popular names to provide a reliable and fair mix of odds.
It is not necessary to use odds from all these bookmakers when creating the sample. If there is a suspicion one bookmaker has provided inaccurate data (or delayed data) they can simply be removed or replaced. Additionally, the system will prioritise bookmakers offering bets at standard each-way terms over those that offer enhanced terms such as additional places (as where enhanced each way terms are offered the odds are often lowered). At all times the odds coming into the system are monitored by racing data staff and a starting price validator.
The odds available should, as stated by SPRC’s own criteria, be available to good money. By this, they mean the bookies need to stand to lose at least £500. There is no good a bookmaker offering very generous odds (for example via an enhanced odds promotion or price boost), if they refuse any substantial stake. This is not something SPRC is able to strictly monitor but the bookmakers they have chosen are ones known to consistently take bets with high liabilities, whilst the SPRC use standard odds rather than any specials. If certain bets are refused, this is more likely to be due to the individual themselves (someone who wins a lot) rather than a blanket refusal.
The SPRC do hope to eventually reintegrate some on course element to their calculations once punters and on-course bookmakers are back in their numbers. Their initial plan according to their March 2021 press release was for the on-course price to act as a single contributor to the sample, therefore accounting for 10-12.5%. This would be a generous reflection given that they account for so little in terms of the overall bets placed on horseracing.
New v Old
There were initially some fears that punters might end up worse off of when the SPRC announced the new system. While this has not proven to be the case on the whole, it does depend on what type of gambler you are. Those of you who like to bet on long-shots, priced at 12/1 an above, should find that the new off-course SP calculation is of benefit to you. Between 4/1 and 9/1, punters are a little worse off but not by much at all.
It is only those drawn to short-priced favourites who have ended up seeing a worse SP on average. For horses trading at an odds-on price, or close to it, the old system produced a significantly better SP on average. This subsequently means that in general terms on-course bookies give you better value for money on short-priced favourites than the big names (but less so on unfancied outsiders).
The Betfair Starting Price
The Betfair exchange operates its own starting price system. Although it serves a similar purpose, it is a completely different system and uses a completely different calculation. Instead of taking a range of bookmaker odds, the Betfair SP (BSP) is based on bets placed by both backers and layers in any market on their site. Subsequently, there is no profit margin built into the system so in theory, you are more likely to have access to better odds. As with any bet on the exchange though, Betfair do charge commission so superior odds are not necessarily a guarantee.
Players place their bets on the exchange just as they would usually. They just need to select the ‘Betfair SP’ button to reveal the SP option as it does not appear as default. They can then choose to back or lay a particular horse at the SP. The exact odds of the SP will be revealed very soon after the race gets underway. As is normally the case with the exchange, SP backers are matched against SP layers as well as exchange layers. The minimum bet amount for this if backing is £2 and the minimum liability if laying is £10.
If you are fairly new to the world of betting we would probably recommend sticking with a traditional bookmaker for now rather than dabbling in the exchanges. While it is possible to benefit from better odds at times, the system does take more time to learn. Additionally, you will pay a larger rate of commission as a new player (as you build up a larger discount over time).