How to create arbs & middles on each-way bets
Each-way bets are two bets in one. Half of your stake goes on your selection to win, the other half goes on them to place. The place odds are calculated as a fraction of the win odds (e.g. 1/4 or 1/5). The exact fraction used depends on the size of the field and the number of places being paid to.
In the example above there are three each-way options, each with different odds and terms.
The option on the left pays odds of 5.50 on the win part of the bet and the place terms are 1/4 1-5 i.e. the place part will pay out if the player finishes in the top 5 and the odds will be 1/4 of the win odds.
The option on the right pays 5.00 for the win part and pays out on the place if the player finishes in the top 8. As more places are covered, the odds for the place part are only 1/5 of the win odds this time.
Each-way betting is more common in the UK than it is in Australia but there are some bookies that offer it to Australian customers on golf or UK racing. This presents us with an opportunity.
At Betfair the Win and Place markets are completely separate. The lay odds for a player to place are related to the odds for that player to win, but they are not tied to them. As a result, it is common for the each-way place odds to be much more generous than the Betfair lay odds.
How to create an each-way arb
To create an each-way arb we would place one each-way bet at the bookie and two separate lay bets at Betfair. The first lay bet is on the win market and will usually result in a small loss.
For example, if the lay odds for Scheffler in the event shown above were 5.80 and we had bet $20 e/w at 5.50 at Bet365 we would lay $19.16 for a loss of $1.99.
Based on the terms of the bet we would receive odds of 2.125 on Scheffler finishing in the top 5. This is calculated as ((5.5-1)/4)+1. We have to remove the stake before dividing by 4, then we add the stake back at the end.
If the Betfair lay odds for Scheffler in the Top 5 market were 1.75 we would lay $25.15 to lock-in $3.64 profit on that part of the bet.
The overall outcome is therefore -1.99+3.64 = +$1.65
How to create an each-way middle
If we were comfortable taking on some risk for the chance of a bigger payout we could look at middles instead. This time we would back Scheffler in the each-way market that pays to 8 places but we would lay him in the Top 5 market at Betfair.
Due to the lower back odds for this option the loss on the win part of the bet would increase to $3.62. We would also get lower odds on the place part, in this case ((5-1)/5)+1 = 1.80.
Our net position would be a loss of $3.60 if Scheffler finished inside the Top 5 or outside the Top 8. However, if he finished in 6th, 7th, or 8th we would win the place part of the bet at the bookie and also our lay bet on the Top 5 market on Betfair.
Not every each-way middle will be worth taking. It is important to run an expected value calculation that factors in each potential outcome along with their probability of occurring. This is exactly what our Golf Extra Place software does, making it easy for Pro members to find the best bets each week.
Extra Places
This strategy provides +EV opportunities every week, but it really shines during big events e.g. the Majors in golf and big UK race meetings like Cheltenham.
That is when you will find enhanced each-way terms. Bookies may pay extra places without changing the place odds fraction, or they may increase the fraction for the standard number of places. This provides even greater opportunities to profit.