In recent weeks the weakness of the on-course betting market at Dundalk has really come to prominence.

To briefly summarise the issues, the well-publicised dispute between the on-course bookmakers, Dundalk and Horse Racing Ireland has resulted in a situation where there are very few on-course bookmakers standing at Dundalk who are willing to hold significant liabilities, resulting in a very weak market.

This is obviously a problem for those who wish to have a bet at the track, but it has resulted in even bigger problems for off-course bettors of late. The prevailing situation makes it very easy for representatives of off-course bookmakers to shorten the prices of horses with the on-course bookmakers, resulting in significantly shorter starting prices. Their reasons for doing this could be numerous, but more than likely they are seeking to shorten the SPs of horses who have been backed early in the day only to drift on track in an effort to save themselves having to pay out at inflated prices due to their best-odds guaranteed policies. This practice also reduces their liabilities to punters that have bet at starting price.

A suitable way to illustrate this in practice is to compare the industry starting price with the Betfair starting price, which is reflective of what price the horse in question was trading at on Betfair at the off. There have been many examples in recent weeks, but these were the most blatant cases:

There is nothing illegal going on here. It is accepted practice for bookmakers to hedge their liabilities into the betting ring and/or try to shorten starting prices. However, the ease with which the off-course bookmakers can control the starting prices in weak on-course markets such as at Dundalk is concerning. This isn’t just a Dundalk problem either, as there have been multiple cases of starting prices being returned that are significantly shorter than the Betfair market suggest they should be at tracks in England that have weak betting rings, such as mid-week all-weather fixtures at Kempton.

These goings-on raise serious questions. Given that the on-course markets in general have weakened significantly since the arrival of the betting exchanges and mobile betting options, one has to wonder whether it is appropriate in this day and age for the on-course market to be the sole means used to return a starting price that the whole betting industry use. Is it time to consider using a combination of the on-course and exchange markets to return starting prices that reflect the bigger picture?

This would need some tinkering in the case of races with a short-priced favourite, as the Betfair SP reflects a win only market whereas the ring SP reflects an each-way market, but these cases could be accounted for by using the Betfair SP of their place market to balance the equation. It wouldn’t be entirely straightforward, but in light of the weaknesses of the current system being exposed at Dundalk, it is certainly something that needs to be considered.