BSP has become an important industry standard over the last 15 years, but why? what does it mean?
Synonymous with the measurement of successful tipsters and wisdom of crowds, the BSP is the purest form of starting price (SP), dictated by the universal laws of market supply and demand.
In the remainder of this article, we’ll explain why and how the BSP is so important…
What is the BSP in Betting?
In betting, the term BSP stands for Betfair Starting Price. But this is not just the starting price (SP) of one bookmaker – it’s unique.
Betfair’s Exchange appeared in the early 2000’s amidst the internet boom. In a few short years, it had become a major player and with very good reason. They offered a new way to bet, end-users were able to ‘exchange’ bets against each other for the first time. It revolutionised the industry, and bookmakers absolutely hated it.
Until this time, punters were only able to place bets with a bookmaker. They had two options; fixed prices (at the time of their bet) or starting prices (SP). As the name suggests, the SP is the price the bookmaker offers when the event starts. For the bookmaker, this was great as they had full control over price!
However, on exchanges, market supply and demand would set the price and users would pay commission on winnings.
For the bookmaker, control was gone.
This is why the BSP is almost always better than a bookmakers starting price.
Betfair Starting Price is the price at which the exchange is trading when the betting market starts, thus, there is no extravagant bookmakers margin included. Typically, betting exchanges will consistently trade close to 100% overround at post time – true market value.
Don’t know what over-round means? This article explains it perfectly.
So the most concise definition of BSP would be:
Betfair Starting Price (BSP) is an efficient pricing mechanism dictated by the interest of its users on a platform that does not include pricing margins.
If you haven’t ever used an exchange, you can get a Betfair exchange account here (£20 Bonus Included).
Why the BSP is So Influential…
With BSP being dictated by market forces, this makes it a great tool for measurement. The reason is simple; its extremely hard to manipulate the BSP.
Furthermore, it offers a factual point of reference that all betting mediums can be measured against – the point at which the event started.
In the wonky world of betting (its a devious industry) many tipsters, bookmakers and pundits will quote and manipulate results to suit their agenda. You may find them advising morning prices you’d never get and including various terms such as ‘best odds’ after the matter.
It’s just how things are, and probably always will be. However, back-testing results to BSP is one way of seeing the truth amongst the noise.
This is why BSP is so important.
BSP in Horse Racing & Greyhound Betting:
You’ll find both horse racing and greyhound markets
In horse racing and greyhound betting, you’ll find the BSP functions in exactly the same way – with one noteworthy exception…
Greyhound betting markets are notorious for limited liquidity. And while there is usually adequate liquidity by the start of a greyhound race, you may find the BSP is open to more variation. Just one or two large exchange bets can skew the Betfair Starting Price on greyhounds, particularly when the market isn’t very popular.
On the other hand, this is extremely rare in horse racing as there is significant volume bet on the lead up to post.
In most cases, horse racing BSP’s are extremely efficient. The more ‘informed’ an exchange market is, the more efficient the BSP is likely to be. Thus, the most popular races are unlikely to leave value in a price at the start, especially when you consider commission on winnings. That said, it’s still better than a bookmaker.
Related: Rule 4 Deductions Help for Traders