Every flat season, the same each way Betfair arbitrage idea does the rounds. Bookmakers pay the place part of an each-way bet at a fixed fraction of the win odds. Betfair prices the place chance of each runner separately. Find a horse where the bookmaker’s place price is clearly higher than Betfair’s, bet each way, lay the win part on the exchange, and keep the place premium, which is the extra you get from the bookmaker’s place price being higher than the exchange’s. (Arbitrage here means trying to lock in a price gap between two markets. To lay is to bet against a horse, which you can only do on an exchange.)
On the surface it looks like free money. In an earlier analysis of nearly 1.4 million UK runners from 2013 to 2026, the gap between the two place prices was real. The popular version of the strategy still lost money at level stakes (the same stake on every bet). The edge sat in a narrow slice of races, and the most attractive-looking setups in small fields were the worst of it.
In short: the setup that looked best on paper was in 5 to 7 runner races, and it lost about 23 percent of stakes. The better results came from races with 8 or more runners, where more places are paid. The figures describe that stretch of racing and a different run of fixtures would land somewhere else.
What Is Each Way Betfair Arbitrage In Horse Racing?
It is a way of trying to profit from the difference between a bookmaker’s each-way place terms and the separate Betfair place market. An each-way bet is two equal bets: one on the horse to win, one on it to place. The place half is paid at a fixed fraction of the win odds. When that fraction prices the place chance higher than the exchange does, the place half is a value bet.
There are three steps:
- Place an each-way bet at the bookmaker.
- Lay the win part on the Betfair win market.
- Keep the bookmaker’s place part as the value side.
The win side ends up roughly hedged, meaning covered. The place part is where the idea works or fails.
How The Bookmaker Place Fraction Creates A Gap
The common each-way terms in the UK are these, though they vary by bookmaker and race:
- Handicaps of 16 or more runners: 1/4 the odds, four places.
- Handicaps of 12 to 15 runners: 1/4 the odds, three places.
- Other races of 8 or more runners: 1/5 the odds, three places.
- Races of 5, 6 or 7 runners: 1/4 the odds, two places.
- Fewer than 5 runners: no place market.
These fractions are blunt. They take the win price and divide it. The Betfair place market looks at each runner on its own, driven by what people are willing to back and lay. The two methods can disagree, and when they do the difference can be used.
When The Bookmaker Place Price Beats Betfair
Most of the time the bookmaker is the worse price. Across 1,392,754 UK runners with both prices, from 2013 to 2026, the bookmaker’s theoretical place price averaged around 85 percent of the Betfair Place SP. (SP is starting price, the price at the off.) The bookmaker was higher only 19.3 percent of the time.
The popular strategy asks for a gap of 50 percent or more. That showed up in 0.72 percent of runners, roughly one in every 138.
At race level it is thinner still. Only 3.3 percent of races in that sample had even one runner meeting the 50 percent test, fewer than 5,100 races out of 152,343. This is not a daily strategy. Patience is part of it.
The Catch: What The Win Lay-Off Costs
It is easy to look only at the place gap and treat the win lay-off as free. It is not. When a horse wins, the bookmaker pays at their price while the Betfair lay is settled at Betfair SP. Among winners in that sample, Betfair SP was higher than the bookmaker SP 95.3 percent of the time.
That difference is a cost. Each time the horse wins, you pay more on the exchange lay than you collect on the bookmaker’s win part. The place premium has to cover it over the long run.
Across 10,096 runners that met the 50 percent test, the win part was laid at Betfair SP with 2 percent commission applied. The result at level stakes was a return of negative 8.66 percent. Looked at on its own, the place part returned positive 18.68 percent. Once the lay is included, the full picture is different.
Where The Edge Survived: Field Size
Splitting the same 10,096 runners by field size shows the strategy is really several different bets under one label. The two largest groups were:
- 5 to 7 runner races (1/4 odds, two places): 6,424 runners, return of negative 22.79 percent. Most of the candidates sit here, and most of them lost.
- 8 to 11 runner races (1/5 odds, three places): 2,226 runners, return of positive 15.80 percent.
The smaller groups of larger fields (12 runners and up) are too thin to quote on their own. Taken together, though, all candidates in races of 8 or more runners numbered 3,612 bets, and at £2 unit stakes they came out roughly £1,200 ahead over the 13 years.
One reading of this is that when only two places are paid, the place chance is too low to cover the cost of the win lay-off, and the exchange has already priced that risk. With three or more places, the premium had more room. That is an interpretation of the pattern, not something the data proves.
One important limit: this test used starting prices, which are only known at the off. When you place the bookmaker bet earlier in the day, you are working from the prices showing then, and those can move before the off. This analysis did not test that earlier-price version, so it describes what the rule produced after the fact. It does not show that you could spot the same runners in advance. What it does suggest is that small fields deserve the most suspicion, however attractive the place price looks.
The Mechanics: Placing The Bet, Laying The Win
Suppose a horse is 8/1 in a 14-runner handicap, with the bookmaker paying 1/4 odds each way. The bookmaker’s place price works out at 1 + (8 ÷ 4) = 3.00 in decimal odds. If the Betfair place price is 1.90 or shorter, the gap is above 50 percent. (In the analysis that price was the final Betfair Place SP. Earlier in the day you only see the price on offer at that moment.)
You stake £25 each way, so £50 in total. Then you lay £25 of the win on Betfair at the current win price. The three outcomes look like this:
- The horse wins: the bookmaker pays on both parts, and the Betfair lay loses.
- The horse places but does not win: the bookmaker pays the place part, and the Betfair lay wins.
- The horse misses the places: both bookmaker stakes lose, and the Betfair lay wins.
Whether the combined result is worth it depends on the size of the gap and the price you can get on the lay.
What To Watch Before You Place It
Prices move. A gap of 50 percent at the moment you spot it can shrink to nothing by the off, especially in big-field handicaps, where more money (liquidity, in exchange terms) can arrive in the place market late on. If you take a price with a best odds guaranteed (BOG) offer, which pays the bigger of the early price and the starting price, the bookmaker side is protected a little. The exchange side still moves. Place the bookmaker bet first, then lay the win as quickly as you can.
Account restrictions are real. Bookmakers can spot consistent each-way arbing quickly, so this approach has a shelf life on any single account. Our guide on stopping bookmakers restricting your account covers the wider picture, and bookies vs Betfair explains why the two kinds of price differ in the first place.
It is also a small, slow edge at best, so it suits someone who is comfortable with the risk of a restricted account and the time spent watching prices. The £1,200 over 13 years came from 3,612 bets, and the noisier short-field setups will keep tempting you throughout.
Putting It Together
The bookmaker’s fixed each-way fractions do create gaps against the Betfair place market. The gaps are rare, the win lay-off costs real money, and most of the candidates that looked good in isolation lost once the exchange side was included. In that earlier analysis, the better results came from races of 8 or more runners. Treat it as one tactic among several rather than the centre of a betting approach, and check the terms each time, because they differ between bookmakers.
If you want to compare prices on the day, you can open today’s race cards and look at the win and place prices side by side.
