What Is The Starting Price?

sp logo starting priceThose without a huge experience of the world of betting will doubtless have read about the Starting Price in relation to horse racing, but that doesn’t meant that they’ll necessarily know what it is. In essence, the Starting Price is the odds available on a horse just as a race is about to begin. How it is calculated is slightly confusing, but generally speaking the price is taken from a group of on-course bookmakers.

As well as not understanding what a Starting Price is, it’s also entirely fair for some people to wonder why it’s even available as an option. The answer to that comes in the form of the price available on horses moving up and down according to a number of factors. As a result, it’s just as possible for a horse’s price to go out as a race approaches as it is for it to come in, meaning that people will sometimes choose to take a risk on it.

Starting Price Explained

explainedWhen you bet on something, there are a pair of different prices offered by bookmakers that you can choose to take. The first is the price at the time that you’re looking to place your wager, whilst the second is the Starting Price. Let’s imagine that you’re thinking of betting on a horse race that gets off at 16.20 on a Tuesday afternoon. You logon to your online bookmaker of choice at 11.45 and see that you’re being offered odds of 5/1.

Your research suggests that the horse in question has a true value of 3/1, so you place your bet in the hope that the odds are as good as they’re going to be. As the day goes on, few punters agree with you on the prospects of your chosen horse and are instead betting on various other ones. As a result, the odds on the horse actually drift out to 7/1 in the moments before the race begins, meaning that you missed out on some value.

If, when you were placing your bet, you’d chosen to select the option labelled SP on your bookie’s website then you might well have been the receiving end of longer odds than you actually were. On the other hand, it’s just as possible that loads of people bet on the horse, causing the bookies to pull its price down until it actually went off at odds of 3/2, meaning taking the bet at the time you were offered it was the right thing to do.

How The Starting Price Is Calculated

Business Review CalculationsThe Starting Price of a horse is calculated according to a fixed method, decided upon in the United Kingdom by the Starting Price Regulatory Commission. In the past, the SP was calculated using the odds of on-course bookmakers, but the fact that most bets are placed off-course led the SPRC to have a rethink. They decided that using the off-course market was a fairer reflection of how bettors were experiencing the market.

In order to determine the Starting Price, a sample size of the prices offered by bookmakers is taken. The minimum sample size can only go as low as three, though a more typical minimum is six. The maximum is 24. Once the sample size has been decided upon, the prices on offer from the bookmakers are ordered into a list that runs from longest to shortest. This list is then split into two equal halves, with the shortest odds available in the half with the longest odds becoming the official Starting Price.

What Makes The Odds Shift

odds under a magnifying glassThere are any number of things that cause the odds of a horse to move in the build-up to a race. Bookmakers calculate their initial odds using a number of metrics, which essentially form their best guess at a horse’s value. Once their books are open, they’ll start to receive bets on the various horses and will use the amount of money placed on the horses in a race to decide whether they got their initial price wrong.

As information becomes available the closer a race gets, the more a bookie will need to react to said information as well as the money being bet on the horses in order to ensure that they don’t make a mistake. If thousands of bettors start to place lots of money on a horse all at the same time, that would imply that a bookmaker has got its price wrong and so they’ll shorten it in order to limit their liabilities.

Best Odds Guarantee

best priceThe invention of the Best Odds Guarantee completely changed the way in which many punters view the Starting Price. BOG as an offer essentially says that if the Starting Price is longer than the price that you take at the time that you place your bet then you’ll be paid out at the longer odds. In other words, using out example from before, if you placed your bet at odds of 5/1 and the Starting Price ended up being 7/1, you’d be paid at 7/1. If the SP is 3/1, you’ll get paid at 5/1.

The fact that the Best Odds Guarantee exists means that it’s almost pointless taking the Starting Price if you’re betting with a bookmaker that offers it. If the SP is longer than the odds you took, you’ll get paid at that longer rate, but if it’s not then you won’t. It’s win-win from a bettor’s point of view, though it’s always worth bearing in mind that not all bookies offer a Best Odds Guarantee and sometimes those that do only offer it on certain races.

It begs the question about why bookmakers still offer it, with the answer being that not all of them offer a Best Odds Guarantee and therefore some punters will prefer to do things the old fashioned way. As a bettor, your job is to keep an eye out for the promotions that work in your favour and take them, ignoring those that work against you. BOG offers are very much in the former camp rather than the latter.