Reverse Dutching

What is Reverse Dutching?

Reverse Dutching might sound slightly complicated; however, it is remarkably simple, in fact all it is, is the opposite of regular dutching and thus is essentially n a staking system that minimises risk. Instead of backing several selections in the same event, the punter will aim to lay more than one selection using a betting exchange to increase the likelihood of winning or minimising risk.

Why Reverse Dutching?

In sports betting, particularly horse racing, it is often far easier to say that something will not win, rather than to say something will win. There are many times where with a degree of confidence bettors can rule out several of the runners without coming to any clear-cut view of what the winner will be. When coming to these conclusions, because the option to lay multiple horses is now readily available thanks to the prominence of betfair, bettors can lay each of the horses they think can easily be dismissed.

Reverse dutching is also for those bettors who are really striving to minimise risk. The bettors who are looking to spread their liabilities in order to achieve a greater number of smaller percentage wins.
There are also bettors – focussing their betting attentions on laying – who only tend to lay the shorter priced favourites, but shy away from laying bigger priced selections for fear of having to pay out larger sums. On the one hand this is more than understandable, as from a liability point of view it is better to lay a selection at 2.5 then 8.0. However, using the reverse dutching method bettors can considerably lower their risk by laying more than one selection.

So, Reverse dutching, How?

How do we go about carrying out the reverse dutching method? The first thing to know is that planning is important. Reverse dutching works best when it is your intention to lay multiple selections in the same race from the outset. For example if you’re looking to lay a number of runners in a horse race, make sure you have researched the race, ensuring you have a solid grasp of the form and any other important information. If you have put the work in here, you should have come to a clear decision on which horses to lay.

 A simple example:

In a big field handicap horse race, you have decided that the first and second favourites are worth laying, and at odds of decimal 6.0 & 7.0 (5/1 & 6/1) you are willing to do so.

The maximum pay-out you are looking for is £50. The first thing you need to do here is to calculate the implied probability. This can be done by dividing 1 by the odds of each selection.

Of course, this is a simple example so the calculations for staking are straightforward. If your maximum pay-out is £50, and the favourites are available are odds of 6.0 and 7.0 each, you need to do the following calculations in order to determine both implied probability and staking.
Implied probability horse 1 = 1/6 * 100 = 16.6
Implied probability horse 2 = 1/7 * 100 = 14.2

To calculate the correct staking, take the numbers from above and use them in the following calculation.

Stake = selections Implied probability / total of the selections implied probability * pay-out
So for the race above you would do the following:

(16.6 / (16.6 + 14.2)) * 50 = 26.94
(14.2 / (16.6 + 14.2)) * 50 = 23.05

Let us now assume that your thoughts were confirmed and both of the front two in the market failed to affect the race in the way their pricing suggested and thus failed to come home in front. In laying the pair you have won £50 (minus commission – usually 5%).

Now you may be thinking that if the aim is to reach a £50 pay-out by getting both the horses beat, then why does is it important to split the stake in the way shown above? Well, it is important to go through the above calculation in order to work out how much you will lay each horse for simply because by doing so each horse you lay will result in the same liability.

Therefore, if you get it wrong and one of the horses wins, regardless of which one it is you will be liable for the same amount.

Reverse dutching is usually done with more than two horses, in fact it is often better to lay more than two horses because not only does this minimise risk further, it can also result in greater pay-outs providing you have called the race correctly.

Regardless of whether you are laying 4, 5, 6, or even more horses in an event, you should determine beforehand the maximum pay-out you are looking for and then go through the same calculations as above for each horse.

The Benefits

The main advantage of using the reverse dutching method as an exchange layer is that it of course reduces risk and therefore increases the bettor’s chance of winning.

Realistically, particularly once you are experienced in reverse dutching, this should result in both more frequent winning bets and more frequent returns.

Aside from these financial benefits, reverse dutching can also, at times, make it easier for bettors to assess a race/event. Since, as mentioned previously, it is often much easier to conclusively determining what will lose or at least what has little chance of winning as opposed to determining the winner of an event.

The Drawbacks

Unlike regular dutching there are not really any glaring drawbacks to reverse dutching. Perhaps the only real drawback to regular dutching, is the lack of sizeable returns, or more – the dilution of profit.

Naturally as you increase the number of selections you are dutching to minimise risk you are also minimising the amount of profit that will be made. If you are dutching the key here is to find the right balance, look for a balance in the event where by backing a certain number in relation to the number of market entrants you’re minimising the risk to a degree but are also seeking a reasonable profit.

As we are concerned with reverse dutching this is not really an issue. The more selections you lay, the greater the potential profit can be. Likewise, the more selections you lay, the more you minimise the risk, as even if one does win you will be collecting on those who did not.

However, this is not to say that blindly laying any selection in a race/event is a good idea. Be thorough in your research and put the work in to get a good understanding of the event you are betting on.