The Odds Compilers Odds Compiler

Tue, Apr 13, 2010

Betting People, Betting Theory

The Odds Compilers Odds Compiler

You might not know him from Adam. You may not have heard of him but his view on a horserace has an impact that is felt throughout the world of betting. If you’ve placed bets on racing any time in the last few decades, you will have taken some of his prices. His opinion is sought by an enormous range of bookmakers, including the majority of the biggest players in the market. He is without doubt the odds compilers’ odds compiler of choice.

He is Peter Michael and he’s the founding partner of Michael and Simmons, an odds compiling service that is so widely used that it can be considered the cornerstone on which most racing markets are built. He greets me at the door of his home in a quiet suburb to the North West of London. If there are no airs and graces about the man that may be because for him odds compiling is as much a vocation as it is a trade.

‘Grandad was a street bookie. When I was ten I started looking at races like the Grand National and realised that I really liked racing and then I started to teach myself to settle, so really I’ve liked it since I was a young kid. It was the maths, the technical side, the whole thing interested me. I just loved looking at races and once I started looking at a race I thought “well I’m going to price it and see how far out I am”.

‘So what I used to do is get a race the day before, and I was only about thirteen, fourteen then and I’d see how far away I was and I was a long way out but I kept on doing one race every day, every single day until I joined Ladbrokes at 16.’

If Peter’s passion was unusual amongst his schoolmates he was to find a spiritual home at Ladbrokes head office and the young Skywalker of odds compiling was also to meet his Obi-Wan Kenobi there in the form of legendary ante post guru John Thompson.

‘I’ve learned everything from him. Everything. Discipline. Not to get down when you make an error, forget that and get on with the next race. I learned massive respect, everything. He drummed it into me at a young age ‘whenever anyone tells you the going is the same for everyone, don’t ever listen to them’. He taught me ground and breeding is absolutely paramount ahead of everything else.’

The impact that Thompson had on the young Peter Michael reaches beyond a near obsessive attention to going preferences. Like his mentor, Peter speaks with a calm detached tone. He learned not just the methods of Thompson but his values. The worth of hard work, of dedication, discipline and rigour and most importantly the Zen like ability to leave the ego at the door when making a market.

‘You’ve got to be unbiased, I worked with a lad in Ireland (Peter spent two years in Dublin having been head hunted by the Sean Graham business when still a very young man), he was a bright guy but he couldn’t see beyond the Irish horses in a big race. You can’t do that. You must be unbiased. You must be independent.’

So, aged sixteen Michael entered the Ladbrokes training academy and was fast tracked into the trading and odds compiling department. Within a few years he was lured across the Irish Sea to Dublin but only a couple of years later, with his wife missing her home and family, he returned to London and to Ladbrokes but he couldn’t settle.

‘It was always what I wanted to do. I loved pricing races.’

It was at this point, still a young man, but with the responsibilities of a wife and young family that Peter Michael took the biggest gamble of his life. He struck out on his own. He offered his prices, his take on races, on the open market and luckily for him there was no shortage of takers.

‘I got fantastic feedback. Hills, Coral so many firms. It was a huge risk but I was confident. There was a niche in the market and pricing races was what I wanted to do. I hit a market that was needed and as soon as firms realised that other people had access to my prices they’d want them too. That’s how I got them in the end.’

Business was so good that he soon recruited business partner Steve Simmons to join him and since that time a piece of A4 headed Michael and Simmons, carrying the prices for every horse in every race, has been a familiar sight in the odds compiling and trading departments of bookmakers up and down the land.

So, how does he do it? What’s his methodology?

‘I get the race, I do the ground on every runner that’s the very first thing I do. Then I do the trip for every runner’. By ‘do’ Peter means assess the aptitude of the horse for ground and trip and if there’s one recurring theme in our conversation it’s ground. The ground is my biggest thing. If I think a horse really won’t go on the ground I have to be the biggest price.’

‘I have Timeform ratings to hand too. I know what percentage I have to bet to for every race, usually I’ll bet to 2% per runner. If it’s a very big field though , it’s never more than 35% so the percentage per runner comes down. If it’s a very big meeting like Cheltenham my customers will ask me to be even more competitive. Hills will ask me to bring the margin down as tight as I can. At Cheltenham I might bet to 12% on a ten runner race, for example.’

‘On a day to day basis it depends on the status of the meeting. Some meetings you need to be much more defensive’.

The percentages we’re discussing seem to me tighter than when I was last involved in the industry and Peter confirms how much times have changed, post exchanges. ‘You could bet on a fifteen runner race at Catterick and bet to 135% and not even worry. That was before exchanges. Now you have to get it to maybe 25% because you’d just look stupid. You have to be competitive’.

So, we know what margin we’re aiming for, we know what the going and trip preferences of the horses are and what their official form rating and Timeform marks are. But how do we then convert that into odds?

‘I always say it’s like a jigsaw. I’ll know about a horse but also about a horses breeding and whether it hasn’t had it’s ground or it’s trip previously. I’ll have seen most horses run. If I spot something I’ll write it down and if I miss it Steve will see it. But it’s like a jigsaw and when you’re finalising a horse race it’s gut feeling. It’s amazing. You’ll look at a horse and you’ll think “this is it, they’ve got to go for it today”. Sometimes you’re wrong but a part of it is gut feeling.’

This is crushing news for anyone who is hopeful of replicating this process with some fancy software. The ‘gut feeling’ Peter’s talking about is a distillation of years of experience, knowledge of sires and dams, knowledge of trainers habits, a decent supply of good information, and also a kind of sixth sense that pulls these pieces of the thread together and correctly quantifies their significance.

‘There was a horse the other day. It was 25/1 in the Racing Post. I know how the yard works, I put it 10/1 with a star ( the star is the asterisk next to some prices which is an alert to bookmaker clients to be very careful of a particular runner). The horse opened up 25/1. One firm rang me and said you’ve got an error here on your prices, I said no be very careful of this horse it’s got it’s ground now for the first time in ages. They backed it down to 6/1 and then they pulled it out 50 minutes before the race but I’ve got that horse written down and I won’t miss it when it has it’s ground again.’

So armed with his sixth sense, how does he go about pricing?

‘Believe it or not when I look at a race I always know what’s favourite in my mind. Almost straight away I know what’s favourite I just don’t know what price it is. I tend to work from the outsiders inwards. When I’ve got total crosses on the ground, I’ll put those horses absolutely as big as I can. Then I’ll work my way in. Sometimes though I’ll spot something that will send me off at a tangent and I’ll go after that for a while and come back. There’s no formula that’s the same in every race.’

In the absence of any form to go on Peter focuses on breeding, trainers current form and trainers patterns of behaviour.

So, there it is. Assessment of going, assessment of trip, cross referencing with official form figures and Timeform ratings all mixed together with the magical x factor ingredient that is gut feeling, results in a mathematical march from the outsiders to the favourites producing a finished book with the right overround for the bookmaker clientele.

There is one other stop en route though and that’s the betting exchanges.

‘My very last thing before I go out with my prices, I go through every race on Betfair to check for any funny moves. You have to. I do it and Steve does it too, it’s just something you have to do. It’s a guide.’

Once again though, it’s not a guide that can be interpreted completely literally. And our old friend gut feeling is involved even here.

‘I’ve got a list of trainers I take absolutely no notice of Betfair whatsoever. None at all. If I see a Barny Curley runner, a David Barron runner, a Richard Fahey runner I take no notice at all. I’ve got a whole list of trainers where I pay no notice at all. There are firms now that only take their tissue off Betfair and I think they’re stupid. ‘

‘Stuart Williams horses are very rarely a single figure price in the morning on Betfair. It doesn’t matter. If you’re going to see money for one of those horses you won’t see it till the afternoon and then the price will go through the floor.’

These are the kind of horses that a Michael and Simmons customer may well be forewarned about but those firms who shadow the exchange price are sitting targets. Especially for those operators sophisticated enough to manipulate the lightly traded early exchange markets before pouncing later on.

Peter gives me a recent example of a horse where one trainer had both the favourite and a 12/1 shot. The Michael and Simmons tissue had an alert on the 12/1 shot but in the early trading of the race the outsider was friendless whilst the favourite was apparently all the rage. Many bookmakers fell for the move.

Once the outsider of the pair had drifted sufficiently, in came the money. A little later on the favourite was pulled out as a non runner. ‘They had the rule four but they still had a fantastic price. They were unlucky the horse was beaten into second. That’s why people who just trust the early exchange prices are mad. You’ll always come unstuck.’

Nonetheless, the availability of the ‘exchange tissue’ has had in impact on the business. ‘We’ve lost probably half a dozen of the much smaller firms. The big firms, I don’t think it will ever happen but some of the small firms think they can just go on exchange prices now.’

Despite learning his craft in a different era Peter Michael is well aware how much the landscape has changed and has had to move with the times. The days of only a few early price races a day are gone and the appetite for markets on everything means that he and Steve work long hours to meet the demand.

Many of the changes we’ve seen are positive ones though and the advent of satellite TV coverage and computer access to huge amounts of form and information mean that in Peter Michael’s view ‘punters have never had it so good. The TV coverage is a massive thing, absolutely massive.’

It makes me wonder how this guy relaxes. His mind is a constant whirr of form, figures, prices and percentages. What does he do to switch off?

‘I love tennis’.

I’m somewhat relieved to find that he has an interest outside of racing and betting but the relief is short lived as Peter goes on to explain that he likes to make his own ‘outright tissue and also I do match odds. I love watching tennis and following the season and I’ll price up all the matches at the big events’.

Like I said at the beginning. For some it’s a trade. For this man it’s clearly a vocation. The truth is his betting brain never switches off. And why should it, when it makes him feel so good?

‘There’s nothing like the feeling. When you’ve worked a race out without any help from outside, the feeling is fantastic. If you can just dig out one on the Friday for the Saturday for a big race and get it right the feeling is great. And that’s the buzz for me. I just love the buzz of it all.’

  • Share/Bookmark
, ,

4 Responses to “The Odds Compilers Odds Compiler”

  1. Graeme Says:

    So he’s the guy we have to beat. I wonder if the bookies tell him what size of book they want, or vice versa ?

    If you are reading this Adam, you need to cut us all a bit of slack mate. Some of these prices are way too tight, especially for horses with the bigger stables. Smaller punters like me are getting shafted.

    Speaking of odds Boycie, what odds would you give me on that 45 rated horse being withdrawn in that 8 horse sprint at Newmarket tomorrow at 3pm. He’s 60 pounds behind the rest of the field, and it will be yet another act of robbery if it doesn’t run.

    Interesting article, and Stuart Williams is in the note pad. :-)

  2. TheBluesBrother Says:

    What an excellent article Boycie, i have been looking for a book on the subect of making up your own tissue’s, but as yet I haven’t come across one.

  3. seanboyce Says:

    Hi Graeme,
    I don’t know that you have to beat him but he’s certainly part of the first line of most bookies’ defences. What they do with his prices is up to them. Only a few of his clients take his odds and go with them as they are, most will add in their own views and judgements.
    As for what he bets to, that’s very much down to his bookie clients. They do indeed ask for the margins they want.
    Welcome aboard Blues Brother, I suppose if I were to say to you, ‘I’m Boycie and this is my place’, you’d reply ‘well, it’s a beautiful place Boycie!’ I love that movie.
    The thing about making a book is that there is always this element of gut feeling involved that is very hard to quantify. Peter reckons he always thinks as a bookie rather than a punter so he’s looking to find the price he thinks a good bookie should be happy to lay.
    I think when many punters price up they are looking for the prices at which they would bet but I reckon pricing what you are happy to lay is always a good test of how strongly you really feel. What price would you be willing to take any one horse on at? Sometimes you find big discrepancies between your own view and the market, and in my experience, that’s when you’re onto something!

  4. hayden Says:

    Hi all only just found the site and am enjoying the read.Fascinated by the above as i was always under the impression that individual bookmakers employed thier own form readers and odds makers,and often wondered about the often small variances in thier early prices in even a big field handicap.

    As you say maybe they do but use Adams prices as a common starting point which would explain this.

    I wonder if anyone has views or knowledge concerning the above and press betting forecasts ? If we take the Racing post is thiers compiled by thier own staff or do they subscribe to Adams service or simular as a starting point ?.

    With the above i would also be interested to know if the compilers are pricing a horse based on its chance or what they feel the returned SP will be as arguably these could be different.

Leave a Reply

You must be logged in to post a comment.