Paddy Power money back on the horses
Edit: Read the terms and conditions very carefully on Paddypower. They can change the terms of this promotion, sometimes only offering money back if you're horse is 2nd to the SP favourite. This makes it much less likely that you will win a free bet - and more than likely means that this promotion is not worth playing.
Paddy Power's new offer is money back as a free bet if your horse finishes 2nd. They are offering this on one selected meeting per day.
Is this offer profitable for the punter?
The Strategy
The Theory
Let's make some assumptions. We will assume that the bookie has a 10% edge, i.e. on our real money bets we expect to win back just 90% in the long run. We will assume that a horses chance of placing (finishing first, second or third) is 5 times more likely than finishing first. This is based on the each way payout which is usually 1/5 odds. We will also assume for simplicity that the chances of finishing second is equal to the chances of finishing third. Finally we will assume that a €1 free bet is worth €0.80 in real money (to understand the real money value of a free bet click here).
From those assumptions we can calculate the probability our horse will win, and the probability that he will come second - based on just his SP price. With these probabilities we can work out the expected return per €1 wagered from our real money bets and the expected return from our free bets.
P[win] = (stake / (payout + stake)) / (1 + edge)
P[2nd] = (((stake / (payout + stake) * 5) / (1 + edge)) - P[win]) / 2
See table below:
Based on those theorised probabilities and expectations it looks like this is a good deal. You could be making 1%-2% by limitting your bets to anything 3/1 and under. You could even be making money on 7/2 and 4/1 chances, but I'm not confident that our estimate of 10% for the bookie's edge holds true as the odds increase.
The assumptions are quite conservative, on favourites the bookie operates a smaller edge, usually making the most profits on the underdogs. Also a good horse with a good chance of being 1st should really have a better chance of 2nd than 3rd - meaning we have underestimated your chance of winning a free bet. So you can expect to make maybe more than 2% in practice.
The Data
Paddy Power's new offer is money back as a free bet if your horse finishes 2nd. They are offering this on one selected meeting per day.
Is this offer profitable for the punter?
The Strategy
1. Back all horses 3/1 and shorter - winning cash if your horse wins and a free bet if your horse is 2nd.
2. Back horses at around 9/2 with your free bets earned - this maximises your profits off your free bets.
2. Back horses at around 9/2 with your free bets earned - this maximises your profits off your free bets.
The Theory
Let's make some assumptions. We will assume that the bookie has a 10% edge, i.e. on our real money bets we expect to win back just 90% in the long run. We will assume that a horses chance of placing (finishing first, second or third) is 5 times more likely than finishing first. This is based on the each way payout which is usually 1/5 odds. We will also assume for simplicity that the chances of finishing second is equal to the chances of finishing third. Finally we will assume that a €1 free bet is worth €0.80 in real money (to understand the real money value of a free bet click here).
From those assumptions we can calculate the probability our horse will win, and the probability that he will come second - based on just his SP price. With these probabilities we can work out the expected return per €1 wagered from our real money bets and the expected return from our free bets.
P[win] = (stake / (payout + stake)) / (1 + edge)
P[2nd] = (((stake / (payout + stake) * 5) / (1 + edge)) - P[win]) / 2
See table below:
| odds | payout | stake | P[win] | P[2nd] | E[Real] | E[Free] | E[Total] |
| 1/2 | 1 | 2 | 60.00% | 10.00% | €0.90 | €0.08 | €0.98 |
| 4/6 | 4 | 6 | 54.00% | 11.57% | €0.90 | €0.09 | €0.99 |
| 1/1 | 1 | 1 | 45.00% | 13.50% | €0.90 | €0.11 | €1.01 |
| 11/8 | 11 | 8 | 37.89% | 14.54% | €0.90 | €0.12 | €1.02 |
| 6/4 | 6 | 4 | 36.00% | 14.73% | €0.90 | €0.12 | €1.02 |
| 2/1 | 2 | 1 | 30.00% | 15.00% | €0.90 | €0.12 | €1.02 |
| 5/2 | 5 | 2 | 25.71% | 14.84% | €0.90 | €0.12 | €1.02 |
| 11/4 | 11 | 4 | 24.00% | 14.67% | €0.90 | €0.12 | €1.02 |
| 3/1 | 3 | 1 | 22.50% | 14.46% | €0.90 | €0.12 | €1.02 |
| 7/2 | 7 | 2 | 20.00% | 14.00% | €0.90 | €0.11 | €1.01 |
| 4/1 | 4 | 1 | 18.00% | 13.50% | €0.90 | €0.11 | €1.01 |
| 9/2 | 9 | 2 | 16.36% | 12.99% | €0.90 | €0.10 | €1.00 |
| 5/1 | 5 | 1 | 15.00% | 12.50% | €0.90 | €0.10 | €1.00 |
| 11/2 | 11 | 2 | 13.85% | 12.02% | €0.90 | €0.10 | €1.00 |
| 6/1 | 6 | 1 | 12.86% | 11.57% | €0.90 | €0.09 | €0.99 |
| 7/1 | 7 | 1 | 11.25% | 10.74% | €0.90 | €0.09 | €0.99 |
| 8/1 | 8 | 1 | 10.00% | 10.00% | €0.90 | €0.08 | €0.98 |
| 9/1 | 9 | 1 | 9.00% | 9.35% | €0.90 | €0.07 | €0.97 |
| 10/1 | 10 | 1 | 8.18% | 8.77% | €0.90 | €0.07 | €0.97 |
| 20/1 | 20 | 1 | 4.29% | 5.36% | €0.90 | €0.04 | €0.94 |
Based on those theorised probabilities and expectations it looks like this is a good deal. You could be making 1%-2% by limitting your bets to anything 3/1 and under. You could even be making money on 7/2 and 4/1 chances, but I'm not confident that our estimate of 10% for the bookie's edge holds true as the odds increase.
The assumptions are quite conservative, on favourites the bookie operates a smaller edge, usually making the most profits on the underdogs. Also a good horse with a good chance of being 1st should really have a better chance of 2nd than 3rd - meaning we have underestimated your chance of winning a free bet. So you can expect to make maybe more than 2% in practice.
The Data
We can analyse past results. The following analysis is based on the return from 20,000+ horses over the past year. Based on placing €1 on all horses rated 3/1 or less by the bookies, we would have won back €92 (for a loss of €8) per €100 staked (100 races). Our horse would have finished 2nd (giving us our stake back as a free bet) 22 times in the 100 races, giving us our €1 stake back as a free bet. With those 22 free €1 bets you should be aiming to win 70% back in real money - so €15.40. This gives a total of €107.40 back for each €100 staked.
So the data backs up the theory - and emphasises that the assumptions were indeed conservative, the real return will likely be more than the theorised 1%-2%.
With up to 8 races per day, seven days per week and a limit of €20 per horse you could be staking 8 * 7 * 20 per week, which is a whopping €1120 per week. With a return based on the conservative estimate of 2% per week, that would give us a weekly profit of at least €22.40. In reality you will be backing more than one horse per race (anything under 3/1) so you could see your balance grow even faster.
Of course there are no guarantees. The only guarantee is that some days you will lose significantly - the theory and data shows that the good days will outweigh the bad days to make an average of at least a 1%-2% profit overall. You should always be wary of the dangers of gambling and to make any money takes strict discipline.
So the data backs up the theory - and emphasises that the assumptions were indeed conservative, the real return will likely be more than the theorised 1%-2%.
With up to 8 races per day, seven days per week and a limit of €20 per horse you could be staking 8 * 7 * 20 per week, which is a whopping €1120 per week. With a return based on the conservative estimate of 2% per week, that would give us a weekly profit of at least €22.40. In reality you will be backing more than one horse per race (anything under 3/1) so you could see your balance grow even faster.
Of course there are no guarantees. The only guarantee is that some days you will lose significantly - the theory and data shows that the good days will outweigh the bad days to make an average of at least a 1%-2% profit overall. You should always be wary of the dangers of gambling and to make any money takes strict discipline.
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