Exchange: Why Betfair Starting Price?
SP is an abbreviation for ‘Starting Price’ and until now has been more widely associated with traditional bookmaking. The method by which SPs are set for each runner varies in different countries. Traditionally in the UK the Starting Price for any horse in any race has been determined by the on-course bookies who determine an aggregate price or odds. Not surprisingly, their Starting Price is edged towards them making a profit.
There has recently been a lot of debate across the industry as to whether this is a fair way of calculating the SP. Many people argue that the SP should account for bets placed on the selection off-course (in betting shops and online) as well.
Betfair’s Starting Price is different. It’s based on bets placed by both backers and layers in any market – there is no margin for profit built in - and that’s why we think it will give you much better odds.
Unlike other bookmakers' Starting Price, the Betfair Starting Price will be determined by balancing bets from customers who want to back and lay, so because it's other customers placing the bets and because there is no margin for profit built in, you are far more likely to have better odds than the bookies' SP.
The Betfair Starting Price will be calculated exactly to ensure the fairest and most transparent odds possible for both backers and layers. The Betfair Starting Price does not need to account for a profit margin but instead is calculated at the start of an event by looking at the relationship between the amounts of money requested at SP by opposing customers and by looking at unmatched Exchange bets.