Cheltenham Extra Places

I can't really call myself a gambling blog if I dont put some content out there for Cheltenham. 

The major offer that most bookies put out these days on the horse racing is the extra place offers.  There is much speculation on twitter on which bookies will offer the most places on the major races.  There is definitely tons of EV being given away by the bookies here as they compete for customers looking for the best offer.  

But what is the best way to play it?

Some people (recs) will just back the horse they fancy.  This is fine, its a bit of fun, you cheer your horse on and the extra place offer is just a bit of a bonus for you.

Others (arbers/matched bettors) will back and lay to lock in a profit no matter the result.  They have two options - lay on the standard place market or lay on the extra place market.  The difference is they either lock in guaranteed profit or take a small qualifying loss gambling on winning both the place part of the back and the place lay when the horses finishes specifically in one of the extra places.

Then there are others (advantage bettors) who will prove the value by comparing to the lay markets (or their own models), but they wont take the lays.  Much like the recs they will just back.  They will ride the variance that the arbers/matched bettors fear.  What they fear is the negative EV bets on the exchange.

Then there are the pros.

When the aim is to maximise your bank roll growth, what matters is the Kelly Criteria and not just the Kelly Criteria but the REAL Kelly Criteria.  The pro bettors decision is not just how much to back, he can also decide to lay some too giving away some EV in order to reduce the cost of variance.

For example one of the horses is available to back 8.5 in the 14:50 tomorrow. 1/5 odds means the place is paying 2.5 on the place part down to 7 places.  Suppose the true probabilities are 10.21% he wins, 31.65% he finishes Top 4 and 50% he finishes Top 7. Say we can lay him 10.0 to win and lay him 3.3 to place 4 (note that these lay bets are -EV compared to actual probabilities).

This is all we need to know to calculate optimal stakes.

I've spent some time re-arranging PlusEVAnalytics Real Kelly spreadsheets to apply to extra places. And the results are below.

Solver recommends hedging the win part and place part, this allows you to increase your stakes relative to your bank roll on the +EV offer.  Maximising the offer, and maxmising your expected growth.

If you refuse to allow solver to hedge, it will insist you lower your stakes.  As risky as Kelly is, it will still balk at putting 10% of your bank roll on a 15/2 shot - so you can see it recommends to significantly reduce your stakes.

So my advice:  Hedge.  When hedging you will have a choice of several markets 4tbp, 5tbp, 6tbp and 7tbp.  My advice ... although I havent run all the options through the Real Kelly Criteria s/s ... so my hunch is to hedge on the most efficient of these markets.  This is usually the standard 4tbp market.

My advice is really do what you like as long as you bet within your means.  I am not going to judge anyone.  I do find it interesting though, the matched bettors looking down on the recs because they are not locking in profit, then the advantage bettors looking down on the matched bettors because they are not maximising EV, then the hedgers looking down on them because they are not maximising EG.  It's quite confusing as you climb the ladder of "enlightenment" that you flip from not laying to laying to not laying and back to laying again!