Each Way Betting Basics and Risks
What Is an Each Way Bet?
Each way (E/W) bets are most commonly placed on horse racing. An each way bet is essentially two bets combined. When you place an each way bet, you place one bet on a horse to win the race, and one bet on the horse to place in the race.
When you place an each way bet, you place an equal stake on both of these bets. So, for example, if you place a £10 E/W bet on a horse, you place £10 on the horse to win and £10 on the horse to place, meaning you’ve staked a total of £20.
The to win bet is simple:
- You win this bet if the horse wins the race.
- A winning to win bet pays out the full odds that the horse was backed at.
The to place bet is a little more complicated:
- You win this bet if the horse finishes in the top few places of a race.
- The number of places that win a standard to place bet varies depending on the number of runners in the race, from just 1st and 2nd, up to 1st, 2nd, 3rd and 4th.
- A winning to place bet pays out at a fraction of the odds that the horse was backed at, depending on the number of runners in the race. 1/4 and 1/5 are common fractions for to place bets.
In the UK, the Jockey Club sets the standard terms on which to place bets are settled, and these are common to all bookies. The following table sets out these terms.
Bookies do sometimes offer enhanced each way terms, which we can use to generate profits. This is discussed further in the Making Profits from Each Way Bets Tutorial.
How Do We Lay an Each Way Bet?
Because an each way bet is essentially two bets combined, to lay one we need to place two lay bets.
1Lay the to win part of the each way bet.
Laying the to win part of the bet is functionally the same as laying any standard horse racing bet.
2Lay the to place part of the each way bet.
To lay the to place part of an each way bet, we use the to place market on the exchange. To do this, we first calculate the odds at which the bookie’s to place bet will pay out, and then compare this to the odds on the to place exchange.
For example, a winning to place bet on a horse in a race with 6 runners will usually pay out at 1/4 of the horse’s to win odds with a bookie. We would calculate 1/4 of the horse’s to win odds, and then compare this to the to place odds on the exchange to see if the match was favourable.
Risks of Each Way Matched Betting
Although there are potential profits to be made with matched betting on each way bets, these bets are fundamentally more complex and involve many more variables than standard matched bets. As such, only the most advanced matched bettors should attempt to take advantage of these bets. There are also significant risks involved that need to be understood.
Fewer Places Paid Due to Non-Runners
The most potentially costly risk from each way matched betting arises as a result of the differences in the way bookies and exchanges deal with non-runners.
- A bookie will pay out a number of places on a to place bet based on the number of runners who start the race
- An exchange market pays out a fixed number of places.
- When a race has non-runners, this can cause the bookie to pay out fewer places for a matched to place bet than the exchange does.
- This can result in both back and lay bets losing, which can incur significant losses for a matched bettor.
For example, consider the following situation:
- A £100 each way bet is placed on a horse in a race with 8 runners.
- The to place part of the bet is laid at odds of 5.0 and, because the race has 8 runners, will win at the bookie and lose at the exchange if the horse finishes 1st, 2nd, or 3rd.
- Before the race starts, a horse drops out so that only 7 runners start the race.
- The bookie who took the each way bet will now only pay out the to place bet if the horse finishes 1st or 2nd.
- However, the exchange bet will still pay out if the horse finishes 1st, 2nd or 3rd.
- If the horse finishes 3rd, the player placing the bets loses both their £100 stake with the bookie and their approx. £400 liability on the exchange.
This scenario isn’t one that will be encountered every time, but it can and does happen regularly. It is strongly recommended that matched bettors:
- Never place a matched each way bet on a race with a number of runners close to any of the thresholds for place payment.
- Do not place a matched each way bet too long before the start of a race, because the longer there is before the race starts, the more chance there is that more horses will drop out.
Reduced Odds Due to Non-Runners
Similarly, losses can be incurred when a non-runner causes a bookie to pay out to place bets at a lower fraction of the to win odds. For example, when a horse drops out of a 12 horse handicap race to leave 11 runners, a bookie will drop the fraction they pay out on winning to place bets, from 1/4 to 1/5 of full odds.
The liability of lay bets on the exchange will also drop when there are non-runners, due to the reduction factor applied by the exchange, though this will usually be less than the drop in bookie odds.
Mistakes and Market Movement
As mentioned above, each way bets are fundamentally more complex than standard matched bets, involve more variables, and require more bets to be placed. Because of this, they are intrinsically more susceptible to human error. It is very important to check all factors carefully and be confident that you are not making any mistakes in placing your back and lay bets. This task is made more difficult by the fact that to reduce exposure to the risk of non-runners, each way bets generally need to be placed close to the start of races when markets can be more volatile.