Variable Bet Profit - Stakes
When comparing results of different tipsters it's not easy to assess which has achieved the best performance. Selections given out by the tipsters, who proof to Racing-Index, range from short priced favourite, to big priced outsiders, with all sorts of combinations in between.
When you setup a betting bank, to follow a tipsters selections, it's pretty likely you'd bet much smaller amounts if you were backing 50/1 outsiders, than if you were backing evens favourites. We therefore adopt this principle to rank tipsters within the comparison tables. This is done by calculating the profit that would have been achieved by each tipster, using variable bet stakes. We call this basis, Variable Bet Profit (VBP).
VBP will use stake amounts of up to 50 points, with the lower the odds of the selection, the bigger the stake. The table below shows example bet stakes for different odds.
You'll see the basis differs slightly for backing and laying, but both follow along the same basic principles.
For back bets the stake will be calculated using the horse's SP, this will be used for both win and place bets. It is necessary to use the SP for place bets so that Each-way bets are treated the same as separate win and place bets.
For lay bets Betfair SPs will be used to determine their stake amount, with the Betfair place SP being used for place only bets.
For both Back and Lay bets the profit for each bet will be based on the Betfair SP.
For example let's say the SP of Horse was 6/1 and it's Betfair SP was 7.6.
If the horse won the race:
- For a back bet the VBP stake would be 10 points, which would produce a VBP of 66 points (10 x 6.6) minus commission
- For a lay bet the VBP stake would be 7 points, which would produce a VBP of -46.2 points (7 x 6.6)
If the horse was beaten
- For a back bet the VBP would be -10 points
- For a lay bet the VBP would be +7 points (minus commission)
Negative Betfair SP Profit but Positive Variable Bet Profit
When looking at the Top 10 comparison tables you may see sites listed that have a negative BSP Profit figure, but a Positive VBP.
This will happen when a service made a loss if backing all their selections to level stakes, but made a profit if using variable stakes.
If we take Systemlays as an example (although they are called systemlays it's their back bets we'll looking at) you'll see from the image of the 12 month table that at the end April 2010 they'd made a BSP loss of 48.6 points to 1 point level stakes, but a profit of 301 points using the VBP method.
To see how this comes about we need to delve deeper into their results.
By setting price filters on the Systemlays proofed results page, we can break the results down into various odds ranges. Min and Max SPs are entered as decimal odds, so the Max SP of 3.0 is 2/1.
From the above we can see selections returned at odds of 2/1 or less made a profit of 20.08 points during the previous 12 months. This goes some way to explain why backing their selections using variable stakes would have made a profit (as bigger bets would have been placed on the lower priced selections). To get the full picture we can check the performance for additional odds ranges as follows:
|SP (decimal odds)|
Backing all selections to 1 point level stakes would have produced a loss of 48.6 points, but from the above table you'll see selections with odds of 5/1 or less made a profit of 66.1 points. As the VBP method applies proportionately bigger stakes to these lower priced selections, than it does to the bigger priced (loss making) ones, it explains why they achieved an overall profit using the VBP method.