The world of betting is full of new words and phrases that you may not have heard of before. A couple that we want to focus on here are ‘steamers’ and ‘drifters’, two terms most often used within horse racing. As well as looking at what they mean, we will also consider their importance and if they can be used to shape your betting approach.
Steamers in Horse Racing
First of all, we have what are known as steamers. Rather than something you might use to cook your vegetables, steamers in a betting context are runners that are falling in price. If a horse was generally trading at 4/1 but their price drops to 3/1 and then to 2/1, this would be a prime example of a steamer.
There is no agreed-upon definition of how much a price must fall for a horse to enter steamer territory but it should be significant. In other words, not a horse going from 1/6 to 1/7, for example. In the past, some have suggested that the odds should reflect an implied probability increase of at least 5% for a horse to be considered a steamer.
Drifters in Horse Racing
By contrast, drifters are horses that see their odds increase, or ‘drift’ as it is often referred to. They are the opposite of steamers in that rather than a price decrease. To become a drifter, the price must have increased significantly. Again, there is no consensus on what the increase must be, but an example might be a horse that moves from 12/1 to 16/1. Typically, drifters tend to come from further down the betting but more well-fancied options are not immune from a notable odds movement either.
In both instances the price changes should happen a relatively short space of time to be true steamers or drifters. If a horse very gradually drops in price in an ante-post market, over the space of a month, this does not really fit the definition.
Why Do the Odds Change?
The first thing to remember when it comes to the odds a bookmaker offers is that they are usually trying to hedge their bets. They would rather not be in a position where they stand to lose a lot of money if one horse wins, because punters have disproportionately backed it. Shortening and drifting odds is a mechanism that can help prevent such imbalances. Thus such movements are used to restore some liabilities balance for an individual race.
To keep things very simple, imagine you had a two-horse race featuring Horse A and Horse B. As they were both initially deemed of equal ability, the bookmaker opened the market by pricing them both at 5/6. Bettors, however, much preferred Horse A, who attracted 70% of the early betting (£7,000), compared to 30% (£3,000) for Horse B. This is how the situation would look for the bookie at the time.
Horse A Win: £3000 in losing bets – £5833 in winning bets = -£2833 loss
Horse B Win: £7000 in losing bets – £2500 in winning bets = £3500 gain
In this example, the bookmaker stands to lose a fair amount should Horse A secure victory. In an attempt to ‘fix’ this, they would begin to shorten the odds on Horse A, and increase them on Horse B. The reason for doing this is to make Horse B a more attractive selection and encourage more money to go on them, rather than their rival. A bookmaker can alter the odds as much as required before Horse B begins attracting more bets than Horse A.
It will not always be possible to balance the books as punters may simply like Horse A so much that they will back them at a significantly shortened price. At least by shortening the odds though, the bookmaker stands to lose less money than they would have done otherwise.
Betting Activity
Betting activity is the main driver behind odds fluctuations in the markets. This is why there are often the most changes close to the start of the race, as this is when the most money is staked. There can, however, be other reasons for the bookies changing their prices.
This usually happens in response to significant news, such as unexpected weather conditions that work against a leading horse, or the withdrawal of a top jockey. If they know something has happened that will cause a horse to be much more popular, they will be quick to shorten the odds to prevent a sea of bets from coming their way.
What Influences Betting Activity
We know that the price fluctuations for each horse in a race are strongly influenced by the levels of betting activity, but what causes some horses to be so popular and others not? How steamers and drifters are created is usually down to one or more of the reasons provided below.
Smart Betting
Sometimes a horse can become a steamer because a small number of punters have received some valuable insider information. It could be that the horse’s trainer has told a few contacts that their runner has been training exceptionally well and is in top shape for the upcoming contest. If the judgement/source is trusted, this can lead to some large bets as punters look to take full advantage of the information.
There often does not need to be too much betting activity to trigger a price drop so just a few people ‘in the know’ staking a decent whack will usually be sufficient. Drifters cannot usually be created in the same way, at least in big-field races or with outsiders, as a handful of people choosing to ignore a horse will not impact its price. Drifters, therefore, tend to be born when punters as a whole, do not fancy them, not just a minority of people with some extra knowledge.
Initial Pricing Wrong
The bookies are generally very good at calculating starting prices for horses. You do not find 100/1 outsiders winning on a regular basis, nor do you find odds-on favourites frequently losing. In most cases, punters will look at a horse and think it is fairly priced, or their opinion on it will be mixed. There are instances though where there is a strong feeling among punters that a particular horse is over or undervalued.
When this occurs, punters will either flock to put money on the horse, if undervalued, or keep well clear, if overvalued. This will in turn create steamers and drifters as the bookies adjust their odds in response to the high, or low demand.
A Self-Fulfilling Prophecy
The other main cause behind the existence of steamers and drifters is simply because they are something of a self-fulfilling prophecy. If people see the odds are dropping on a horse, some start to think that this is where all the ‘smart’ money is going. The thinking is that perhaps some punters know something they do not and to avoid missing out, they want to hop on the hype train too. The more people that do this, the quicker the odds will tumble, only intensifying the whole cycle. In many instances, it will not take many bets to trigger this domino effect.
Similarly, when punters see a horse drifting, they may begin to ask questions as to why it is lacking such support in the market. While a steamer can be created due to the (possibly misplaced) confidence of a few big gamblers, a drifter is a result of widespread disinterest. This may lead a bettor to question whether the horse is a good pick for a race, or if they are actually missing something/exaggerating its chances.
Should You Bet on Steamers or Drifters?
The assumption might be that backing steamers is the better approach because these are underpriced horses or ones attracting the ‘smart’ money. There is little evidence that this is the case, however, so blindly backing any horse with a decreasing price is not the way to go. The only way it would be an effective strategy is if punters were much better at finding the ‘true’ probabilities for horses than the bookies.
Imagine if the bookies began by giving a horse an implied 20% (4/1) chance of success. If the punters believe this is too low and the odds subsequently shorten to 28.6% (5/2), anyone who got in or around the original price would be at an advantage, if punters are more accurate.
The trouble is though, that punters, as a homogenous mass, are not better at calculating probabilities than bookmakers. Of course, bookies do not get it right every time but they are generally superior at judging ‘fair’ value for horses than bettors. Even if they are slightly off, they have the benefit of having the house edge built into the odds. As the probabilities of all runners in a race will always equal less than 100%, the bookmakers can afford to be a little off.
At this point you may be thinking that backing drifters is the way to go. If a horse the bookies initially priced at 10/1 is now available at 14/1 due to a lack of interest, surely this represents good value for money? There is certainly (potentially) some truth in this and there have been studies showing that backing drifters over steamers tends to produce better returns. This is not to say backing drifters consistently will result in a winning strategy; it probably will not, as shrewd bets cannot simply rely on looking at the odds alone.
The main takeaway is that you should not be at all alarmed if the price of a horse is dropping, providing it is not absolutely plummeting. Drifters can be well-worth backing due to their enhanced price so it is always worth assessing their chances. But always also look at the many other factors that can influence a horse’s chances of success.