Betting Strategy #5: Value Horse Analysis

The vital ingredient in your recipe for success

For the best part of fifteen years I’ve been trying to discover what it takes to be successful at betting, and one word comes up again and again…. VALUE

Successful betting – and by that I mean ‘financially’ successful betting – is all about looking for value. A good tipster can find lots of winners, but a professional punter also has to ensure he gets over-paid on his winning bets, and often as possible.

I’ve put together a FREE mini-report on value betting because it’s my sincere wish to help you not only find more winners, but that you also start to see more money coming back from your winning bets.

Before you download it, I hope you might take the time to read the following article below.

Exploding The Myth Behind Value Betting

Click Here to Download This FREE Report in PDF Format

The subject of ‘value’ has been bounced around for years in gambling circles. On the one side there are those who say that every and any winner has value, because it won and winning is all that matters, regardless of what price you get.

Whilst on the other side of the fence are stood those punters who are happy to miss winners and back losers, as long as their bets represent ‘value’. Their argument is that in the long run this is a profitable strategy.

Exactly what is ‘value’ when it comes to betting?

In simple terms, ‘value’ in betting is when you take odds about a horse (or other sporting result) that are higher than the true odds of that horse actually winning (or the result happening).

How do you identify value?

The most direct way to search for value is first to establish the true odds of the event happening, then seeing if and how they differ from the actual odds available. But this is sometimes a lot easier said than done….

The classic example of an event which is really easy to work out is the toss of a coin. In a fair coin flip both Heads and Tails have an equal chance of coming up. So the true odds are evens (50%) for Heads and evens for Tails. If by chance you found someone prepared to offer you 2/1 about Tails coming up, then you would have secured a value bet (although in reality I would be extremely suspicious there were something dodgy going on, as no-one in their right mind offers 2/1 about a coin toss!).

Another example is the roulette wheel. There are thirty six numbers and a Zero on a standard roulette wheel. Which means the true odds of any number coming up is one-in-thirty-seven or 36/1

The casino makes money in the long run, because the House offers you 35/1 that the ball will settle on your number. They give you a price of 35/1 about a 36/1 chance. The casino always has the value on their side.

But should you ever wander into a casino and they offer you 40/1 on any number coming up, and even if they only let you back one number, then you should put your money on. It doesn’t matter that you will win only very rarely (once in every thirty six spins, on average). The fact remains that you will have secured value in your bets, and the odds and probability will be in your favour. Employing this strategy you cannot fail to win over any significant period of time (but be sure to drop me a line when you find this Fantasy Casino!).

How about the odds of picking the Ace of Spades from a deck of playing cards? This is a true one-in-fifty-two (51/1) chance, and so you can regard any odds or prices over that as value.

Clearly, with all of these examples it is simple to calculate the true odds, because in each example there are a specific number of possible outcomes. The coin toss will result in either Heads or Tails. The ball can only land on one of the thirty seven numbers on a roulette wheel, and there are fifty-two different cards from which to choose in a standard deck.

But what happens when the event on which you are betting is infinitely more random in nature, and there are many more possible outcomes? For example, what if you wanted to bet on a White Christmas this year. How would you start working out the true odds of snow falling on a particular day? How would you know if the odds available represent value?

In such a case you would need to do some research and check some historical data. According to the Met Office, a White Christmas will come around about once every 15-20 years (in London at least), which is roughly a 6% chance of it happening each year.

If it snows on Christmas Day in London about once every 16 years then 15/1 would be an intelligent estimation of the true odds of this happening in any given year. If you were to find a bookmaker offering say 20/1 or better on this year being a White Christmas, you could very easily argue that you had secured value, and you should get your money on. Sadly, the bookmakers all have access to the same weather information as you and me, which is why they only offer 8/1 which is no value at all. The downside to this particular bet is the frequency. Whereas you can flip a coin all day long, and the law of averages will soon be seen in evidence, it is absolutely possible it may not snow on Christmas Day for another thirty years, and although you may have value, you may have a long wait until you get paid!

Just because you have a value bet, it does not guarantee you will win on a certain event. It simply means you have the odds on your side, and when you do come to win, you will be over-paid. Bet consistently with the odds in your favour and you will profit in the long run. At least, that is the theory.

Do the bookmakers EVER get it wrong?

So far we’ve discussed the fool offering 2/1 on the toss of a coin, and the fantasy casino paying out at 40/1 on the roulette wheel. So is all this talk of value purely academic? Do the bookmakers ever get it wrong and allow punters to profit? Well, the answer is ‘yes’.

Around twenty years ago two punters travelled the whole country visiting independent bookmakers to get odds about a Hole-in-One happening in a particular golf tournament. They had evaluated the true odds to be about 2/1 that someone would score a hole-in-one in a given tournament. But they managed to take prices ranging from 16/1 to 100/1 from numerous bookmakers.

These bookies thought (naively) that a hole-in-one rarely happened, and taking any bets was like money in the bank. Theese two punters made thousands of pounds simply by getting tremendous value on an event that, for once, the bookmakers priced up wrongly. But think about it for a moment…. you have around 150 professional golfers, playing four par 3 holes, four times each in a tournament. That’s 2,400 attempts at the flag in each tournament. To get 100/1 about just one of these attempts proving fruitful does seem like good value! You see, by offering that price, bookmakers were suggesting that a hole-in-one in a professional golf event happened once every 100 tournaments.

The two guys did not win at every tournament, but they knew that they had bet at 100/1 about something that happened once roughly every three tournaments. The odds and probabilities were very much in their favour!

How does ‘value’ apply in horse racing?

So what about horse racing? This has to be just about the hardest event of all in which to evaluate true odds, and this is where the whole ‘value’ argument really begins. With so many variables to take into account when trying to find a winner, how do you really know when a horse is value or not?

The fact of the matter is that there isn’t any absolute way of determining what does represent value and what doesn’t. It all comes down to opinion, and what you might consider to be value, may not be value to another punter. Betfair and the betting exchanges could not exist were it not for these differences of opinion between punters.

Obviously if someone had offered you 33/1 last year about Goldikova winning a selling race at Leicester in a field of five runners, then this would clearly be value as she would have to be very skinny odds to win. But it’s a different story when we look at a thirty-runner sprint handicap at Royal Ascot. Where do we begin to look for value when the bookies go 10/1 against the field?

Most professional punters will approach this problem by first compiling their own betting forecast, then comparing these odds with what is available in the market. If they assess the favourite an even money chance, whilst the market is offering 3/1 then this would look like the sort of bet that would appeal to value bettors. To be able to compile your own betting forecast you first need to be familiar with how markets are formed, with betting percentages, and over-rounds. You cannot simply give arbitrary odds to each runner.

Let’s re-visit the coin toss. We know that it’s a 50% chance that either Heads or Tails will come up. So clearly, if you want to bet on the outcome of the coin flip you would want at least even money for you to want to strike a bet. You have a £1 on Heads and get £2 back if you are right – your initial stake, plus £1 profit.

But if you’re the bookmaker laying the bets at those prices then you cannot win. Because if for example Alan has £1 on Heads and Brian has £1 on Tails, then you have taken £2 in stakes but will have to pay out £2 no matter what side the coin comes down. There is no profit for him, so instead the Bookmaker will offer you perhaps 10/11 Heads or 10/11 Tails. You now have to bet £1.10 to win that same £1. If Alan has £1.10 on Heads and Brian has £1.10 on Tails the bookmaker now has £2.20 in stakes but no matter what side the coin lands on he only has to pay out £2.10. Now the bookmaker wins! It is his business after all.

If we now convert the odds to a percentage you can see how the market has changed in favour of the bookmakers. The easiest way to do this is to imagine the size of stake needed to return £100 at the odds….

So even money can be expressed as 50% (as £50 at evens will return £100)

3/1 is 25% (£25 at 3/1 will return our £100)
4/1 is 20% (£20 at 4/1 returns £100)
9/1 is 10% (£10 at 9/1 returns £100) and so on.

Maths is not my strongest point, and it may not be yours either, so I hope you are still with me?

In our coin-flip before the bookmaker appeared on the scene, we were merrily betting even money on Heads and even money on Tails. Our betting market totalled exactly 100% after adding together the odds for each outcome expressed as a percantage, ie. 50% for Heads and 50% for Tails. We could not lose, because a betting market of 100% means you can theoretically bet on every runner in the field, and still get exactly your money back without any loss.

When the bookie sticks his oar in for a piece of the action, he changes the odds to 10/11 and this market now shifts to 104.7% as 10/11 is 52.3% as a percentage. This extra 4.7% is called the ‘over-round’ and is what helps to ensure the bookmaker has a profit. The higher this over-round then theoretically the bookmaker makes more profit (assuming an equal amount of money is staked on each and every runner). A normal horse-race will usually be bet to an over-round of about 110-125% but this years Grand National saw the returned prices amount to a 155% book or 55% over-round.

By contrast, on the rare occasion that you are able to bet in a market that has an ’under-round’ book you can theoretically bet all the runners in the field and make money no matter who wins. It happens fairly regularly in sporting events involving only two players – snooker or tennis for example – different betting firms have differing opinions on the outcome. Playing two betting firms off against each other is known as ‘betting arbitrage’ and the punter simply backs both players. You then sit back safe in the knowledge that whoever wins you will profit.

However, before you write out your letter of resignation and slap it on the desk of your boss, telling him you are quiting to be a professional ‘arber’ a cutionary word to the wise…. Arbitrage opportunities are fleeting to say the least! You have to be very alert to them, as there are plenty of other people with the same idea, and they have ‘bots and computer programs running all day sniffing out these market errors and pouncing as soon as they become available. Also, the amounts you can win in any one market are relatively small and you can often find your stakes are limited. It may be a win/win situation but it’s a really boring and time-intensive strategy for grinding out a living.

As Ronnie Corbett would say, “I digress”. So let’s get back to our betting markets.

We now have a better understanding of how they work, so how should we go about having a stab at compling our own betting forecast?

Your first option may be to cheat, and look at somebody elses! Why not crib off an ‘expert’ and look at the betting forecast in your daily paper, or better still, the Racing Post? These are prices put up by their expert race odds compiler, and they represent his views on how the market will be formed. If you look for any significant discrepancies you can see, in this one expert’s opinion at least, where the value lies. For example, he may have one horse chalked up at 4/1 wheras you can get 16/1 at William Hill. According to this odds compiler this would seem to be a value bet.

At this point in your betting career you may consider the odds compiler to have sharper view than you, but there’s no fun in that, nor any sense of achievement when the result turns out in your favour. Much more rewarding to make up your own market using your own opinions or system.

The easiest way to form your own prices is to have a system that affords some sort of numeric rating to each runner. I have my own such method, and I call it….

The Value Horse Analysis system

This system helps you to assign a score to each runner in a given race. There is then a process you can apply to arrive at a price for each horse, allowing you to form a book of odds.

Click Here to Download The Value Horse Analysis System

Once you have compiled your odds for a race, you can compare your rices with those available, and highlight potential value bets. I suggest you paper-trade this strategy for a while, until you become comfortable and confident in your ability to handicap a race to a reasonable degree of accuracy.

So there you have it…. we’ve explored the subject of ‘value’ in betting at some considerable length!

On which side of the fence do you stand?

Summary for the Defence:

Finding winners in horse racing isn’t that difficult. Blindly back every horse priced around even money and you will be right roughly half the time (roughly, but not exactly, in fact a little under half, which is why you will lose money). The difference between being a profitable punter and a losing one, is where you can get maximum value for your bets, most of the time.

Any competent poker player is familiar with his pot odds. He knows when to play his cards, and even when he feels he may be holding a losing hand it’s still a ‘good call’ when the odds are in your favour. If he keeps betting his hand in these circumstances, over time the law of averages plays to his advantage and he will win in the long run. And it’s very similar with horse-racing. If you keep betting horses at prices too high compared to their actual chance of winning, then over time you will win. It’s (relatively) simple maths.

Betting for value also involves being diligent about getting the best odds possible. For sure Betfair will generally offer better odds than the High Street bookmakers, but do not assume this will be the case every time. Shop aroundfor the best price. It’s all very well finding 20/1 in Ladbrokes about a horse you assess as a 10/1 chance. But if Corals are offering 33/1 ….? Make use of odds comparison sites such as

Yes, using this strategy you will still back losers, and you will be frustrated when you identify a potential bet, leave it unbacked because of the price, and it goes on to win. But in my opinion there is no net benefit in backing a horse at 7/4 if you think he should be no shorter than a 5/1 chance. It’s better to back horses that should win once in three races (2/1) and get paid instead four times your money at 4/1. Quite simply, finding horses underestimated by the market and getting over-paid on your winning bets is the mathematical way to make a profit from betting over the long term.

Summary for the Prosecution:

Theoretical baloney! What do you mean “It’s okay not to back a winner if the odds aren’t right?” Do me a favour!

The idea of value may well apply in poker. But there the odds are determined according to how many cards are left in the deck. You cannot apply the same thinking to horse racing. For a start…. how do you work out whether a horse is a 3/1 chance, or a 7/1 shot? You can’t, it’s all down to opinion. I’d much rather sit down and work out which horse is going to win the race, and then back it at the best odds I can get. If my opinion is that the horse will win (and clearly that is my opinion otherwise I wouldn’t be backing it) then any price is value. Until someone develops a computer program that can accurately calculate the true odds of a horse winning a race, without using subjective variables such as market forces, opinion, and guesswork, then I shall carry on backing my selections whatever their odds.

For sure, I agree that you have to shop around to get the best price… that is common sense. You don’t Thomas Cook it when you can get the exact same holiday package through First Choice and save £500 but that is a totally different argument than backing, or not backing at all, horses at 3/1 because you don’t agree with the price!

A winning bet still gives you a return on top of your stake, and as long as you keep making the right selections you’re going to win in the long term…. regardless of whether you took 33/1 about a horse that finishes first past the post, that someone else did not back because they thought it should be 100/1

Backing winners enough times and at odds that more than cover all your stakes is the only sure-fire way to win in the long term.

Which side in the ‘value betting’ debate has your vote?

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