Betting exchanges claim that you will get 20% better prices in horse betting. Better prices to the horse player, simply means making more money from winners!  Great, everyone would want that…if the claim is true.

I decided to put the claim to the test! I created a scenario of betting the horses…at the track, online with a traditional online race book and at a betting exchange, www.ehorsex.com, to see which method is most profitable and by how much.  I looked at the results for all stakes races in 2007, starting on January 1st until June 30th, a total of 260 races.  In the end, I found that by betting at ehorseX, net profits were 23.9 to 32.4% better than if you were to bet the same amount, on the same horses, getting tracks odds. Now if you have already become an exchange player, better prices are what you have come to expect.  However, if you have yet to experience exchange betting, you may be unfamiliar with the value that they bring to the horse player.  You may also need more convincing as to the validity of these percentages.  Here is a detailed look at how this comparison was conducted.

In today’s world of horse betting there are three major ways a person can bet on a horse.  We’ve defined today’s horse bettor in the following ways.

Traditional Bettor – This player bets the horses at a teller window at the track.  He receives track odds based on the pari-mutuel pools, which are subject to the track’s “take”.

Off-Track Bettor – This player bets the horses online or over the phone with a horse book or bookie.  He also receives track odds and generally qualifies for a rebate on wagers of 3 to 7%.

Exchange Bettor – This player bets online on a betting exchange, such as ehorseX.  He bets person to person, matching prices being offered by fellow players.   He can also offer prices of his own and has the ability to bet a horse to lose.

To determine if exchange betting really does result in 20% better profits, I applied the following betting scenario to the three different ways of betting on horses. I assumed a $10 “win” wager was placed on each of the 260 stakes winners of 2007 ($2,600 in total risked).  I also assumed our players made 300 $10 losing wagers ($3,000 in losses).  The losing wagers are accounted for to be fair to off-track bettors, who receive up to a 7% rebate on all wagers, not just his winners. I charged our Exchange Bettor a 3.5% commission, which only applies to his winning wagers. Commissions at ehorseX range from 1.75% to 5% depending on volume wagered…higher volumes result in lower commissions.

The 260 stakes races took place at the 22 most popular tracks across North America…including Chruchill Downs, Belmont Park and Gulfstream Park.

Here is a detailed look at the results… 

Betting Exchange vs. Track’s Odds (with Rebate)

                                    Risk                 Gross               Rebate/            Net                  %         $

                                    Amount           Profit               Commission    Profit               Better  Better

           

Track’s Odds              $5,600             $24,061           $0                    $24,061           0%       $0       

 

Track (plus Rebate)     $5,600             $24,061           $384                $24,445           1.6%    $384

 

Average

Exchange Odds          $5,600             $31,006           $(1,190)           $29,816           23.9%  $5,755

 

Best

Exchange Odds          $5,600             $33,113           $(1,264)           $31.849           32.4%  $7,788

 

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As you can see, betting the horses on a betting exchange versus traditional methods resulted in more than 20% better profits on average and over 30% more if you shop for the highest prices available. All stakes races from 2007 (1/1/2007 to 6/30/2007) with available data were selected for this comparison.  No races were excluded to unfairly bias one betting method over another.

For a look at my spreadsheet that includes all the data used for this study, click here.

Please feel free to email me with questions and concerns. 

Toby Martin

Toby@BeteHorse.com