Cheltenham Champion Hurdle: Digging for Value

With Cheltenham fast approaching, we launch a series of posts that look to shine a spotlight on the ill-lit corners of the betting market in the search for value. Warning: this piece will get occasionally mildly mathematical…

The Champion Hurdle market is dominated by reigning champ Buveur D’Air, and rightly so. He looks on current form hard to beat and is priced broadly as a 1/2 favourite.

First instincts are to look for each way value, and to illustrate this we will use a horse we like, the Nicky Henderson-trained mare Verdana Blue. She works like God at home, and looks likely to leave her current form miles behind should the ground dry out (as it often does) for the big day.

Verdana is a 50/1 shot outright, with best place terms of 1/4 for a top 3 place. Is she a good each way bet. No – not in this market.

The dominance of Buveur has spawned a widely quoted “betting without” market in which he is ignored for betting purposes (you win if you come second to Buveur, you get paid each way to 4th place if Buveur occupies one of the top 3 places).  Given Buveur is 1/2 (and for simplicity ignoring the bookies margin), then he wins 2 out of 3 runnings, with the rest competing to win 1 out of 3 runnings.  Remove Buveur, and everyone else’s chances of winning should treble.

Verdana’s chance in the outright market is around 2% (derived from 50/1), treble that for removing the fav and we have a roughly 6% chance – that’s broadly an expectation of 16/1. Well, we can get 33/1.

Statistically that starts to appeal – then we need to validate that appeal with a more intuitive review. The betting without market is headed by 7/4 Faugheen. That looks an awful price, mathematically it is treble the chance of his 7/1 outright odds, but even Faugheen fans would say that the 7/1 reflects an uneven distribution of outcomes – i.e. if he rediscovers his best then he can beat Buveur, if he doesn’t he is as likely to pull up as he is to place.

My Tent Or Yours, a super consistent performer, looks about right at 3/1. And then the value starts to kick in with Elgar at 8s (mathematically should be 6s) and Wicklow Brave, John Constable etc all looking reasonable value.

Why is this the case? It has probably less to do with inaccuracies in the “without” market and more to do with bookies protecting the potential each way obligations in the much more heavily used outright market. Verdana for example, if we reverse engineered the other way – from “without” to “outright”, assuming 33/1 is right in the without, should be 100/1 outright – but bookies don’t want to be giving away 20/1 place fractions and hence trim the win odds accordingly to protect the each way book.

Our conclusion:

If you want to search for each way value against an odds-on shot, you will not find it in the outright market where bookies are defending their each way book by trimming outsiders.

The betting without market is purged of that adjustment, and offers true value for punts on outsiders, even more so if you think the outright favourite will win, and even more so if can find reason to oppose the head of the betting without market (in this case Faugheen).

We’re going with Verdana Blue and John Constable ew without Buveur, but when the wheel spins you can pick your own number, just make sure you’re betting at the right wheel.

Don’t forget to subscribe or stay tuned for our annual Cheltenham Festival Guide, and if you are in or near Dublin, then come to our inaugural Cheltenham Preview Night on Monday 5 March, ticket details are here.

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