Trade Secrets

Mar 6, 2019 by

Trade Secrets

The Eurovision betting odds are referenced a lot these days on ESC forums but there still seems to be some misunderstanding out there regarding how exactly the Betfair Exchange works and the prices quoted.

Essentially, you have 2 options on Betfair – Back or Lay – the current best available price of which appears in the blue box on the left (Back) and pink box on the right (Lay) respectively.

As a Backer you want to be seeking the biggest possible odds on your selection; as a Layer you are seeking the shortest possible odds on your selection.

Being the Backer on the Betfair Exchange is the equivalent of walking into a high street betting shop in the UK, say, Betfred or Coral, writing down your selection on the betting slip, taking it to the counter, placing your bet and handing over your money.

Being the Layer on the Betfair Exchange is where a lot of misunderstanding seems to commence but it is, in fact, very simple. In that UK betting shop scenario, it is the betting shop that acts as the Layer. So on the Betfair Exchange, being the Layer puts you in the shoes of the betting shop taking people’s bets.

This might beg the question, why would you want to be a Layer on the Betfair Exchange with the risk of a sizeable pay out if the bet comes in? At first glance, being the Backer looks a safer option, whereas laying appears to come with a much greater financial risk attached.

Say, for instance, you want to back Sweden to win ESC 2019 at a price of 9 on the Betfair Exchange. For a £10 Back at 9, you have the chance of winning £80 (minus Betfair’s commission), and you face a potential loss of only £10. But to Lay that £10 bet at 9, you have the chance to only win £10 (if Sweden doesn’t win ESC 2019) with a potential loss of £80 (if Sweden does win ESC 2019).

The truth is, it is a lot easier to find successful Lays on the Eurovision Outright market, compared to a successful Back. After all, there are 41 competing countries now which means 40 of those countries will lose, ie, 40 chances of finding successful Lays.

The skill of being a successful Layer on the Eurovision Outright market also lies in spreading your liability across a number of countries you believe are unlikely to win ESC 2019 and laying those countries at the shortest possible prices.

It is a lot easier to find successful Lays on the Eurovision Outright market, compared to a successful Back. After all, there are 41 competing countries now which means 40 of those countries will lose

This allows you to manage your Betfair bankroll and not become over-exposed on certain outcomes. The most money you can potentially lose on the Outright market at any one time, ie, the biggest liability you have on a country winning ESC 2019, is taken from your Betfair bank balance. In other words, you have to cover your potential biggest loss before the result becomes known on May 18, and that money is tied up until then.

Eurovision odds are incredibly volatile and if you take a trading approach to the Outright market a key skill in being a successful layer is judging when the odds, in your opinion, have become too short on a certain country winning. And being a successful backer on the Eurovision Outright market is judging when the odds, in your opinion, are too big on a certain country winning.

In other words, you want to be the backer when you think the market is under-rating an entry and the odds are too big; you want to be the layer when you think the market is over-rating an entry and the odds are too short.

You want to be the backer when you think the market is under-rating an entry and the odds are too big; you want to be the layer when you think the market is over-rating an entry and the odds are too short

In essence, it is not dissimilar to how the stock market works. If you buy shares in a company quoted on the FTSE 100, you are hoping to buy at a low price and sell at a high price, thus locking in a profit. Fundamentally, Betfair traders are aiming to Back ESC countries at high prices and Lay them at lower prices.

ESC traders are not clairvoyant but part of the trading game lies in trying to predict the future price trajectory of countries. If you can Back countries at high odds and Lay them at much lower odds consistently across the entire field you can even create an all-green book for yourself which means you will end up making a profit regardless of which country ends up winning ESC 2019.

Some may be confused regarding Ukraine’s withdrawal by the way and what happens to the money traded on Ukraine in the Outright market. In the Outright market under ‘Rules’ it states ****ALL BETS STAND RUN OR NOT****.

Before placing a bet on the Betfair Exchange always read the market rules. This means whether you were a backer or a layer of Ukraine, the bets stand regardless of Ukraine not taking part and you do not get a refund. So already there was a chance for the shrewd trader to Back Ukraine at big odds and Lay Ukraine at lower odds before it withdrew, which would benefit the trader’s overall book.

It is a myth, often expressed on the ESC forums, that the bookmakers ‘know’ what is likely to happen at Eurovision and set the odds accordingly. The prices quoted by the bookmakers are mistakenly interpreted by some ESC fans as the bookmakers having some kind of special inside knowledge.

In truth, the Eurovision odds bookmakers offer that you see quoted on oddschecker.com are merely a reflection of the odds being offered on the Betfair Exchange.

It is, in fact, the serious Betfair Exchange traders who are setting the odds across all the Eurovision markets issued. The current Betfair Exchange odds you see on a liquid ESC market are the ‘consensus’ view at any one time.

Another misunderstanding arises when the Eurovision markets on Betfair have very low liquidity and people start quoting the odds as they are shown on the Betfair screen.

An example of this would be to start quoting the Betfair Exchange odds, as they currently appear, on the winner of semi-final 1. In truth, this is an exercise in futility with only £172 traded. This is an ‘illiquid’ market which means there is nowhere near enough money that has been traded to get a clear indication of the odds.

The 7 appearing alongside Cyprus’ name on the Lay side does not mean this is an accurate indication of the Cyprus price. It merely tells us a Backer or Backers are requesting £85 at 7 on Cyprus to win semi-final 1.

The biggest price available to Back Cyprus currently is a very miserly looking 2.12. If you think Cyprus is going to win semi-final 1 you have to decide as the backer what price you would be happy to take – what you think represents a value Back price – and request it on the Betfair Exchange. But this doesn’t mean you will get this price matched, as those traders requesting £85 on Cyprus at 7 are discovering at this point in time.

Eurovision markets are only fully liquid once thousands of pounds have been traded and the difference between the Back and Lay price is very narrow with vast volumes of money lined up to invest on both sides of the trading equation – where we are getting close to now with the Outright market.

All ESC markets are a product of all the information known at any one time. So it is understandable the ESC markets on the Betfair Exchange only reach a fully liquid state during rehearsal fortnight and as we close in on the 2 semi-finals and the grand final.

Eurovision markets are only fully liquid once thousands of pounds have been traded and the difference between the Back and Lay price is very narrow with vast volumes of money lined up to invest on both sides of the trading equation

On Eurovision markets on the Betfair Exchange, your options are far and wide. And the beauty of trading these markets is you do not have to find winners to make a profit.

While it goes against the grain for a lot of fans to want to see countries do badly at Eurovision and invest money in songs doing badly, the serious Betfair traders are as keen, if not keener, to identify those countries it believes will fail, or under-perform, as much as those countries they believe will succeed, or over-perform.

Why? Because it can be highly lucrative to lay countries at short prices in markets such as the semi-final ’To Qualify’ markets and the Top 10 market in particular, where countries might be trading odds-on (below 2), which also means your liability as a layer is much less, and the potential profit as a layer is much bigger.

In terms of the two ESC semi-finals, you can make profit by finding countries you do not think are going to qualify. And unlike the Outright where a small £10 Lay of a country priced at, say, 30 will result in a liability of £290 for you, with a potential profit of only £10, you might spot a country trading around 1.3 to qualify from a semi-final you believe is more likely not to qualify and therefore represents a value lay. And if you lay £30 at 1.3, you have the chance of winning £30 while only risking a £10 loss.

While it goes against the grain for a lot of fans to want to see countries do badly at Eurovision and invest money in songs doing badly, the serious Betfair traders are as keen, if not keener, to identify those countries it believes will fail, or under-perform

Eurovision trading is enormous fun and for serious traders a 5-month long jigsaw puzzle they love trying to piece together. So get involved, back your judgement on the Betfair Exchange because regardless of the negative image of gambling largely portrayed by the media, it is actually life-affirming and exciting to put something on the line and to use your skill in trying to predict what will happen in the Contest we all love. But never invest more than you can afford to potentially lose.

One final myth buster. The term ‘fanwank’, which is now widely cited on ESC forum sites, and seems to get a few people worked up, was a term originally coined by the Eurovision betting community. There is now a vast glossary of terms and abbreviations that were either founded in the tv betting world or have become widely used as a way to concisely describe the various elements at play.

‘Pimp slot’ (last in the running order), ‘coffin slot’ (first in the running order), TPTB (the powers that be), USP (unique selling point), MOR (middle-of-the-road), RBF… that one will avoid full disclosure for now.

‘Fanwank’ has been around for at least 8 years and if anyone requires an explanation of what the expression means, credit should be given for its first use to my dear departed friend, Daniel Gould at sofabet.

Eurovision 2012: Will viewers ‘La La Love’ Cyprus’s Ivi Adamou?
Posted by Daniel
In the fan poll on top Eurovision stats site Kolumbus.fi, Cyprus currently stands fifth behind only Sweden, Spain, Iceland and Serbia. So Ivi Adamou’s ‘La La Love’ is one of the favourites of Eurovision fans with a fabulous video to match. Unfortunately, it also looks like it might be a classic fanwank.
What’s a fanwank? It’s an entry that fans take to before the contest, as indicated in polls, but fails badly with the wider voting public in the event itself.

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2 Comments

  1. Montell

    Great article, Rob. Wish I had read this a few years ago.

  2. PeterNL

    Nice article. I shared it with a lot of people already. And the Duncan hype in The Netherlands does the rest I guess 🙂

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