This is a guest post from sports betting expert and successful punter Bradley Gibbs. This is all about the concept of reverse dutching and is actually less confusing then it sounds. So take it away Bradley!
What is Dutching?
Hi guys, well before we consider reverse dutching, let’s first take a look at dutching itself. Dutching is the name given to a particular betting method where the punter backs more than one selection in a race/event in order to both increase the chances of winning and to ensure the same amount is won should either selection win. Put simply, dutching is a staking method where the financial risk is split across multiple selections.
Dutching is commonly used in events where there are a large number of outcomes, such as a 10 runner horse race. For instance in such an event the punter may feel they have narrowed the field down into three of four likely winners. Dutching can be used to best effect in events where you feel, for logical reasons, that a number of the more fancied/shorter priced entrants don’t actually have a great chance of winning. In these instances, dutching the remainder of the outcomes, at what should be reasonably sizeable odds, can be hugely rewarding.
What is Reverse Dutching?
Reverse Dutching might sound slightly complicated; however, it is very simple, in fact all it is, is the opposite of regular dutching and thus is once again a staking system that minimises risk. Instead of backing a number of selections in the same event, the punter will aim to lay more than one selection (using a betting exchange such as betfair) in order to increase the likelihood of winning/minimising risk.
Why Reverse Dutching?
In sports betting, particularly horse racing, it is often far easier to say that something won’t win, rather than to say something will win. On this notion there are times where with some confidence punters are able to rule out a number of the runners without coming to any clear cut view of what the winner will be. When coming to these conclusions, because the option to lay multiple horses is now readily available thanks to the prominence of betfair, punters are able to lay each of the horses they think can easily be dismissed.
Reverse dutching is also for those punters who are really striving to minimise risk. The punters who are looking to spread their liabilities in order to achieve a greater number of smaller percentage wins.
There are also several punters – focussing their betting attentions on laying – who only tend to lay the shorter priced favourites, but shy away from laying bigger priced selections for fear of having to pay out larger sums. On the one hand this is more than understandable, as from a liability point of view it’s better to lay a selection at 2.5 then 8.0. However, using the reverse dutching method punters can considerably lower their risk by laying more than one selection.
Reverse dutching: How?
How do we go about carrying out the reverse dutching method? The first thing to know is that planning is important. Reverse dutching works best when it is your intention to lay multiple selections in the same race from the outset. For example if you’re looking to lay a number of runners in a horse race, make sure you have researched the race, ensuring you have a solid grasp of the form and any other important information. If you have put the work in here you should have come to a clear decision on which horses to lay.
Let’s look at an example.
Say in a big field handicap horse race you have decided that the first and second favourites are worth laying, and at odds of 6.0 & 7.0 (5/1 & 6/1) you are willing to do so.
Let’s then say that the max pay-out you’re looking for is £50. The first thing you need to do here is to calculate the implied probability. This can be done by dividing 1 by the odds of each selection.
Of course this is a simple example so the calculations for staking are fairly simple. If your max pay-out is £50, and the favourites are available are odds of 6.0 and 7.0 each, you need to do the following calculations in order to calculate both implied probability and staking.
Implied probability horse 1 = 1/6 x 100 = 16.6
Implied probability horse 2 = 1/7 x 100 = 14.2
In order to calculate the correct staking, take the numbers from above and use them in the following calculation.
Stake = selections Implied probability / total selections implied probability x pay-out
So for the race above you would do the following:
(16.6/(16.6 + 14.2)) x 50 = 26.94
(14.2/(16.6 + 14.2)) x 50 = 23.05
Let’s now assume that your thoughts were confirmed and both of the front two in the market failed to affect the race in the way their pricing suggested and thus failed to come home In front. In laying the pair you have won £50 (minus commission – usually 5%).
Now you may be thinking that if the aim is to reach a £50 pay-out by getting both the horses beat, then why does is it important to split the stake in the way shown above? Well, it is important to go through the above calculation in order to work out how much you will lay each horse for simply because by doing so each horse you lay will result in the same liability.
Therefore if you get it wrong and one of the horses wins, regardless of which one it is you will be liable for the same amount.
Reverse dutching is usually done with more than two horses, in fact it is often better to lay more than two horses because not only does this minimise risk further, it can also result in greater pay-outs providing you have called the race correctly.
Regardless of whether you are laying 4, 5, 6, or even more horses in an event, you should determine beforehand the maximum pay-out you’re are looking for and then go through the same calculations as above for each horse.
The main advantage of using the reverse dutching method as an exchange layer is that it of course reduces risk and therefore increases the punters chance of winning. Realistically, particularly once you’re are experienced in reverse dutching, this should result in both more frequent winning bets and more frequent returns.
Aside from these financial benefits, reverse dutching can also, at times, make it easier for punters to assess a race/event. Since, as mentioned previously, it is often much easier to conclusively determining what will lose or at least what has very little chance of winning as opposed to determining the winner of an event.
Unlike regular dutching there aren’t really any glaring drawbacks to reverse dutching. Perhaps the only real drawback to regular dutching, is the lack of sizeable returns, or more – the dilution of profit. Naturally as you increase the number of selections you dutching in order to minimise risk you’re also minimising the amount of profit that will be made. If you are dutching the key here is to find the right balance, look for a balance in the event where by backing a certain number in relation to the number of market entrants you’re minimising the risk to a degree but are also seeking a reasonable profit.
As we are concerned with reverse dutching this isn’t really an issue. The more selections you lay, the greater the potential profit can be. Likewise the more selections you lay, the more you minimise the risk, as even if one does win you will be collecting on those who did not. However, this is not to say that blindly laying any selection in a race/event is a good idea. Be thorough in your research and put the work in order to get a good understanding of the event you’re betting on.