The biggest horse race of the year
The Aintree Grand National. The biggest horse race of them all – every year – without fail. While the Cheltenham Gold Cup, the Melbourne Cup in Australia, and, increasingly, the Kentucky Derby in the US come close, the National remains the highest staking racing event for the betting industry and for Flutter.
Just take last year’s race; an epic victory for Derek Fox atop 8/1 favourite Corach Rambler. Amidst all the hype and excitement, our main UK and Irish brands – Paddy Power, Betfair and Sky Bet – successfully processed over 10 million online bets on the day of the flagship steeplechase, equating to around £50 million in overall stakes. For those like me who are responsible for firstly compiling the odds of the 34 runners and then ensuring Flutter’s liabilities are managed profitably regardless of the outcome, this presents incredibly complex challenges. Here’s how we do it.
Sports that matter
As one of the main ‘sports that matter’, being a horseracing trader is an important job within a betting company like Flutter. The role is multifaceted, and no two days are the same given every individual race has its own unique composition and circumstances. It is highly analytical and requires a blend of sporting knowledge, mathematical skills and an understanding of psychology. A passion for racing helps too! Traders must be able to make quick decisions and work under pressure, especially when dealing with live events.
And few are like the Grand National. Ranging from odds compilation to risk management, the racing team and I spend the period ahead of the race monitoring the markets to keep an eye on betting patterns and market movers, before adjusting prices in real-time as the runners negotiate the 30 fences over four miles around Aintree, and thereafter working with other teams to ensure bets are settled accurately and promptly once the race has finished.
The market lifecycle
For us, the Grand National‘s ‘market lifecycle’ is basically all year round, with the antepost market going live for the following year directly after the finish of the current year, with the expectation that the odds will be better the further you are from race day. Ahead of the race, declarations come through 48 hours before, leading to some price changes. We ensure to have no down time, with the race back onsite seconds after final declarations.
From the 48-hour stage we generally react to bets and any early market trends to ensure we’re happy with prices. Betting interest tends to ramp up the day before the event, allowing my team of odds compilers to price the race in more detail, ready for those prices to go live that afternoon. These odds are offered when we believe we’ve converted the ratings of each horse, while factoring in conditions on the day, to its probability of winning the race but, crucially, before further external elements are factored in. Such prices are usually based on what we call hard news– the set of historical statistics that are built up over many decades of company experience in setting and offering prices.
The next morning trading period – right before the big race begins - is driven instead by soft news and market activity. Our traders spend their time understanding and adapting to overnight developments and refining race odds with the goal of being as accurate as possible in the hours and minutes leading up to the race. We factor in a whole host of new information, such as overnight weather patterns, as well as market intelligence drawn from our bet streams.
Leading expertise
Thanks to Flutter’s leading expertise in risk and trading, sharpened every day by 30 specialists focused specifically on racing, we are able to price and offer the most accurate odds in the market. This is also supported by additional insights gained from the Betfair Exchange the most prominent peer-to-peer betting platform in our industry, which we own but is managed separately from the trading team to ensure a competitive and fair market.
As the market's lifecycle unfolds and more information becomes available, traders continuously integrate it into their strategies. Skilled traders excel at recognising the need for significant pricing adjustments early on by analysing various sources and models, such as customer bets, field books, activity on the Exchange, and previous personal experience. The trading team collaborates closely with technology teams to develop new products and advancements, ensuring customers get the best possible experience.
In comparison to trading on football or tennis, racing is unique, meaning Flutter’s teams have to be at the top of their game. As well as having to try and solve the puzzle of who will be the most likely winner, the frequency of races means traders must react to several different events starting just minutes apart, studying the variables that go into each horse’s form rating.
With backgrounds ranging from data analysis to accounting and finance and everything in between, the best trading teams look to employ traders with the most diverse experience to ensure we can bring unique and varied insight to our work and help balance each other’s skills. Despite the extensive models and technology used, racing trading and racing’s complexity means it will always require human interaction. The beauty lies in its subjective nature; form study is nuanced, and each race is like solving a unique puzzle.
The atmosphere is electric
The atmosphere in a trading room during an event like the Grand National is electric. Many of us will be in the office to oversee millions of recreational customers coming together to place numerous bets on all runners across the race. It will be a mixture of excitement and nerves for all of us involved this Saturday, with plenty of unanswered questions remaining!
Can Corach Rambler, the current favourite and leading hope for the British, return to the scene of his victory last year after a valiant third in the Cheltenham Gold Cup? Or will it be an Irish challenger, which includes nine runners from the stable of trainer Gordon Elliott? Whoever wins Saturday’s centre piece, our traders will be ready, ensuring punters are armed with the most accurate prices to try and find the winner.
