Dividends: When Good is Bad

I won a slice of the jackpot yesterday. About five hundred pounds. Which was nice. But… it wasn’t quite as nice as it maybe first appeared. Here’s why.

First of all, this was a jackpot rollover which got up to a pool of £129,305 after a few days of not being won. I had been involved the previous day at Uttoxeter for a hundred quid or so when it turned out to be near inscrutable. That stake needs to be factored into the ROI here: I was trying to win my own money back as well as other people’s!

The seven day jackpot stake/return looks good, but less good…

And I also did some management through the sequence yesterday, laying and backing a few horses on Betfair to cover bad outcomes (click on the image to view full size).

Total stakes here of £143. So let’s add that to stakes and deduct it from P&L:

Stakes £482, Profit £255.

A fully managed situation where I was never risking more than £100 ended up with a profit of just north of £250. Not bad at all.

Except…

The jackpot dividend paid £1,847.50.

The Tix 5% enhanced dividend paid £1,939.87.

But the SP accumulator for these six races paid £3,788.22.

Double the divvy. Shit. So what happened, and was this a bad value bet?

I was at Huntingdon yesterday and pondered this on the rattler back into Smokey. My answer, perhaps surprisingly, is that it wasn’t bad value.

Before you think I’m completely nuts, let me explain.

The first thing to say is that I had a large number of tickets (which I’ll share at the bottom of the post) covering a vast array of different outcomes to different stakes. I, like many others – especially Tix players, was spreading out in search of a juicy result or two. I went especially deep on A in a couple of legs where it ultimately didn’t pay to do so, and in the finish I was pretty happy to take a profit from the sequence.

So how did the dividend pay only half of the starting price accumulator?

The answer is that there was a trio of horses that were short in the morning but drifted markedly on track before winning. Such runners carry a disproportionate amount of pool money in relation to their SP’s and deflate dividends accordingly. They don’t normally all win.

And, naturally, when one previously fancied horse drifts, one (or more) theretofore lesser fancied horses contract. Those ‘springers’ were all beaten which, again, doesn’t normally happen.

Specifically, there was solid support against Mill Green (6/4 out to 15/8), Will Carver (4/1 out to 11/1), and Willewonga (6/4 out to 9/4). The SP accumulator at those early prices with the other three winners returned just £1,055.80.

And here’s the thing: had Will Carver been 11/1 in the morning, with recent form of PP, he’d not have been on my A tickets – likewise for a lot of other players. Willewonga’s weakness was harder to fathom but in a race like his – a maiden hunter chase – most people outside of the point to point experts (that’s not me!) were guessing and would have spread out more widely.

What I mean to say is that, if those drifters were their final prices in the morning, I’d have had a smaller piece of the final dividend – though it would have undoubtedly paid a lot more, and potentially returned more in absolute terms.

The market is a key consideration in how I structure my tickets. The ‘springers’ – Punitive and Welsh Saint against Mill Green, Cardamon Hill against Will Carver, and Unexpected Edge against Willewonga – were all (bar Welsh Saint) bad results for me. I didn’t fancy any of them. Unexpected Edge looked to go wrong unfortunately so we can’t say whether he was unlucky in form terms or not; and Mill Green scrambled home a little having gone clear but then dried up stamina-wise.

So there’s always a luck component. But spreading out using Tix allows me to play a huge variety of possible outcomes to differing stakes in search of either a big piece of a small pie or a small piece of a big pie. On this occasion, there were specific reasons for the deflated dividend when compared to other returns; but those reasons are why I had as much of it as I did, rather than a far thinner slice.

Hopefully that all makes sense, even if the takeaway is the somewhat oxymoronic “sometimes bad value can be good”. Crucially, I wouldn’t play things any differently next time. We can’t always get the best of it, but over time we’ll definitely come out in front with this approach.

Matt

p.s. here’s the full list of tickets I played. A non-runner (#1) in the last, moving to unnamed favourite, helped boost the number of winning lines whilst simultaneously deflating the dividend.