Most people treat an each-way bet as one thing. Half the money goes on the win, half on the place, and that is that.
But an each-way bet is really two bets stapled together, and the two halves are priced in different ways. The win half reflects the bookmaker’s view of a horse’s chance of winning. The place half is, in most cases, a fixed fraction of the win odds.
Where a price comes from a formula and not from someone assessing the horse, there can be a gap between that price and the true chance. In short: compare the bookmaker’s place price with the exchange’s place price, and keep the place bet only when the bookmaker’s is bigger. This guide shows how.
It will not make you a fortune overnight, and it takes some effort. It also comes with real limits, which we cover below. Everything here is an idea to check for yourself, not a tested system, and nothing in it promises profit.
What is each-way value betting?
It means backing the place part of an each-way bet only when the bookmaker’s place odds are bigger than the price you can get for the same place bet on the Betfair exchange (the betting exchange where you bet against other people, not against a bookmaker). We call that the exchange place price. You lay off the win portion on the exchange. “Laying” is betting that a horse will lose. That leaves a place bet standing on its own.
The edge, if there is one, is the gap between the two prices. It is not the result of any single race.
Why the place half is where value might hide
The win odds get all the attention. They are sharpened constantly by bettors, steamers and drifters (horses whose prices shorten or lengthen).
The place odds, by contrast, are just a fraction of the win odds, set by a fixed rule. Standard each-way terms usually apply a fixed fraction to the win odds, rather than quoting a separate price built for that runner finishing in the first two or three.
Sometimes the rule gives a place price that is too short, and you leave it alone. Sometimes it gives one that looks generous compared with the horse’s real chance of placing, and that is the bet worth a look. The skill is not picking winners. It is noticing when the formula price and the exchange place price disagree, and acting only when the disagreement is in your favour.
In an earlier analysis of more than 1.5 million UK runners, a horse sent off between 3.50 and 6.00 on the exchange (roughly 5/2 to 5/1) finished in the first three 57.9% of the time, from over 200,000 such runs. In the 6.00 to 11.00 band (around 5/1 to 10/1) it was 41.5%. Those figures describe that stretch of racing and will not repeat exactly.
How a bookmaker prices the place part
Once you have the formula, you can work out a place price in your head. The bookmaker takes the win odds and applies the each-way fraction, often a quarter or a fifth depending on the race.
Say a horse is 3.50 to win (decimal odds, which include your stake back) and the place terms are a quarter the odds:
- Take off your stake: 3.50 minus 1 is 2.5.
- Take a quarter: 2.5 divided by 4 is about 0.63.
- Add your stake back: the place part is about 1.63.
Now you have a number to compare with the exchange. The number of places paid also matters, and it changes with field size. The terms differ by bookmaker and race, so always check the actual terms before working anything out.
We have not measured how the gap between bookmaker and exchange place prices varies by field size, so we do not claim any particular field size is better. If you want to test that, log the prices you see over a few weeks.
The sandwich: back each-way, lay the win, keep the place bet
The idea is to keep the half of the bet you think is value and cancel out the half you do not. You do that by laying the win on Betfair.
Take the 3.50 horse. You put 10 pounds each-way with the bookmaker, so 10 on the win at 3.50 and 10 on the place at about 1.63. Then you lay the same horse for about 10 pounds on the exchange, only if the lay price is 3.50 or shorter.
- If the horse wins, you collect on the bookmaker’s win bet and pay out on your lay. The two roughly cancel.
- If it loses, you lose the win stake at the bookmaker and win the lay on the exchange. Again they roughly cancel.
Exchange commission (the cut Betfair takes from winning bets) means the cancellation is never perfect, so the lay stake usually needs a small adjustment. What is left is the place bet, standing alone at a price you judged to be better than the exchange’s place price. The win bet is the bread you throw away, and the place bet is the filling you keep.
The win leg may be cheap to lay off because short prices have historically matched the horses’ real chances fairly closely. In the same earlier analysis, horses sent off under 2.00 on the exchange won 61.3% of the time at an A/E of 1.00, across more than 23,000 runners, and the 2.00 to 3.50 band came in at 0.99. (A/E is actual wins divided by the wins the odds implied, so 1.00 means the odds were about right. Our guide to the A/E ratio explains it.) For more on the two sides of the market, see backing versus laying.
The easier version: extra-place markets
Some bookmakers offer place betting on races that would not normally have an each-way market at all. The exchange often has a place market on these too, and early in the day the two prices can sit a long way apart.
When the gap is wide, you may not need much analysis to see it. These prices tend to be corrected as the day goes on, so checking early matters. We have not tested how often these gaps appear or how long they last. Treat this as something to watch, not a promise.
The catch: account restrictions
None of this is free of friction. Take value off a bookmaker often enough and your stakes may be cut or your account restricted. That is a cost to accept, not something to outsmart.
It is one idea among several, not a replacement for your whole approach. Our guide to what to do when bookmakers restrict your account covers the practical side, and bookmakers versus Betfair explains why the two behave differently. It also fits within a portfolio of betting systems, where no single method has to carry everything.
Let the data keep you honest
Everything above rests on one claim: that a bookmaker’s formula place price is sometimes more generous than a horse’s true place chance. You can measure that instead of taking it on faith.
In an earlier analysis, backing every horse to place at Betfair Place SP (the starting price of the exchange place market, the last price before the off) gave an A/E of 0.96 across more than 1.5 million runners, between 0.95 and 0.98 across the price range. That suggests the exchange place market was close to fair, and slightly tight once commission is allowed for. It also looks at starting prices, not the live prices you would actually be matched at, so it does not show that a gap between bookmaker and exchange survives commission, timing and how much money is available to match.
So treat a bookmaker price above the displayed exchange price as a comparison worth recording, not as proof of value. For each bet, note the bookmaker terms, the exchange place price you could actually get, the commission and the matched result. A short run of results mainly checks whether you followed the process, not whether there is an edge. Plenty of enjoyable racing days involve no bet at all.
If you want to try the comparison, open today’s race cards and look at a few place prices next to the exchange place market.
