Brits on Pole

It’s the halfway point in the season – nine races run, nine to go. Right, left and centre are people offering their two-pennyworth of how the drivers and teams have done thus far.

And they have plenty to talk about. It’s been a long time since a season has been so exciting – three drivers tied on points at the halfway stage, and no sign of anyone resorting to m’learned friends to set out diversion signs into the nearest courtroom.

Naturally we’re as interested in this subject as anyone else following Formula One – and we have our own preferred crystal ball to gaze into. As regular readers will recall, we like to consult the available betting odds.

This is a method of prediction that’s now found serious favour with some heavyweight economists (who are usually keen sports fans as well, for some reason).

Put very simply, it’s down to something called the Efficient Markets Hypothesis. Bear with us here – this is very straightforward stuff, and extremely useful to know.

This simply states that the market (in our case what bets are being laid with a particular bookmaker) already reflects all known information on a given subject.

Meaning that the combined knowledge, opinion and intuition of everyone betting on the Formula One championships is a pretty damned impressive body of expertise that encompasses all the stuff that’s out there and worth knowing.

And for that reason it’s very likely to be right.

What does this mean for the sports fan? Well, spend two minutes looking up some online prices on any sport you care to name. Preferably one you know absolutely nothing about.

Because of the amount of knowledge that’s gone into shaping those markets, you will now have as good a grasp of form as the seasoned fan who watches every game religiously and pores over the statistics.

Incidentally one economist and baseball fan who specialises in this sort of thing is called Justin Wolfers. And he has a great rule of thumb to share with fellow sports enthusiasts.

In a recent talk he suggested that when a bookmaker tells you that something has a x per cent chance of happening, in reality that works out to around a x-2 per cent chance. That extra 2 per cent is the bookie’s edge. You might want to remember that tip next time you lay a bet yourself.

But back to the subject in hand. How did things stand last time we did this, at the end of May?

Then, despite Hamilton’s recent spectacular win in Monaco, the markets were squarely behind Kimi Raikkonen and Ferrari for the drivers’ and constructors’ championships.

Hamilton was on short odds at around 6/4 – but Raikkonen, typically evens or just odds-on, was definitively the favourite. Also in the game were Massa who, in with a fighting chance but on odds as long as 4/1 was undoubtedly the most attractive for a punt. Robert Kubica generally couldn’t do better than about 16/1.

So, what’s changed now? The figures below relate to what’s called the “outright” drivers’ championship market, or bets on the ultimate season result. Just to remind ourselves how things are situated at the moment, here’s the top bit of the drivers’ standings:

** PLEASE NOTE: we are looking at this topic as a measurement of the form of drivers and teams and not as a reliable or authoritative guide on where to place bets. And odds are correct at time of publication only. As ever, if you want to place a bet, equip yourself with up-to-date odds and information and don’t rely on us.

Drivers’ championship odds:

So, what do these figures tell us about who is going to win the drivers’ championship? To reveal the full story we need to do a little more work on them. The first step is to examine the way they are expressed.

We’ve used fractional odds because that’s the way most people in the UK are used to thinking about betting markets. But there are other ways of expressing odds – for instance, as decimals.

And once this conversion is done it’s easy to plot the results as a graph. Here it is:

Remember, the lower the odds, the more likely a winner the driver is felt to be. So clearly nobody is really expecting Kubica to remain in the contest, or Massa to be able to stay among the front runners.

Out of the eight bookmakers whose data we used only one, 888.com, has Lewis Hamilton on shorter odds than Kimi Raikkonen. The others all put the two drivers nose to nose, or Raikkonen just ahead.

And, if the markets have got this right, it would seem that the F1 drivers’ championship is going right down to the wire with Raikkonen once again beating Hamilton to it at the last minute.

Here’s a graph of the average odds to illustrate this point again:

To finish off, it might be illuminating to see exactly how things have changed since the Monaco Grand Prix. The graphs below show how things stood the last time we tried this.

We used a slightly different range of bookmakers, but otherwise the results should stand comparison. We’ve left Betfair out altogether because they operate under different rules.

It’s clear to see how Kubica’s shortened slightly since the end of May, Massa’s held pretty much firm but Hamilton has earned himself a fair dose of credibility with punters that just wasn’t showing up straight after Monaco:

To sum up: Hamilton’s now looking to many people like a very serious prospect for the world championship, and capable of challenging Raikkonen. But Raikkonen’s still attracting more money and is still the favourite to win.

Who knows what the next nine races will bring?