You may have asked yourself before now “If the bookmakers always stack the odds in their favour, what chance does a punter have of ever making a profit?”
Because of the over-round a bookmaker works into his “book”, it is hardly surprising that as many as 95% of punters fail to come out in front when betting the horses over the long term. The powerful High Street bookmakers employ the very best odds compilers who are experts at estimating the true chances of a horse winning a race, setting prices, and locking in a profit margin.
Nevertheless, horse racing can never be 100% statistically quantifiable, in the sense that cards or other forms of casino gambling can be. Games such as roulette and blackjack are governed by simple rules of probability. For example, my chance of winning on number 18 on the roulette wheel is undeniably one-in-thirty seven. Whereas the true chance of Kauto Star winning the Cheltenham Gold Cup is debatable – because it is based upon opinion.
And if I think I know what his chances are, what gives me the right to say my estimate is more accurate than the bookmaker’s?
The answer to this question will come only after time, with experience, and by immersing yourself in the sport and its betting markets. The good news is that bookmakers are human, and like all humans, they make mistakes. Admittedly they do not make them in every race, every day of the week, but nonetheless they do have errors in judgement. The trick of course, as a knowledgeable bettor, is to be able to spot these errors, and pounce upon them.
A good example, although in a different sport, was when William Hill went a crazy 200/1 about Primoz Peterka, a Slovenian ski jumper, to win the opening ski jumping World Cup competition of the 2002/03 season in Finland. This price was offered despite the fact that he had won the qualifying competition the night before, and was clearly in form. Furthermore he had been double world champion in previous seasons. The true odds for him to win were more likely around 10/1 and this is how most of the rival bookmakers had him in their books. This was a glaring example of the price being far too high compared to the actual chance of winning. As an aside, Peterka won, William Hill ceased offering odds for the ski jumping World Cup shortly thereafter, and I’m sure someone would have left the William Hill building with his P45 that day!
Of course, such large mistakes are very rare, and it’s the smaller pricing errors the professional punter will go in search of every day in order to earn his living. But make no mistake, the only way to profit from betting long term is to seek out and take advantage of value bets where the odds are in favour of the bettor.
Punters adopt many different strategies to gain that crucial edge over the market. Some will employ a mathematical approach by using race rating systems which analyse past performance in order to predict future outcomes. Others will spend hours each week delving into form books and internet sites to avail themselves with as much information as they can about a particular race. This may include news from inside the stable or from observers on the training gallops. Others may base their decisions on nothing more than a subjective feel for the upcoming race, relying upon their experience and perhaps a hunch about how the race will unfold. And finally there are those punters who pay others to do the calculating, form study, and thinking for them, by subscribing to tipster services.
There is no right or wrong way to seek a betting edge. At the end of the day, the best one is the one that works for you, and hopefully one that returns a profit. However, a word of caution when following a professional service…. basic economics and common sense should tell you that the more punters there are backing the same horse ‘tipped’ to win, the smaller the opportunity to secure value. Much better to have your own unique angle to selecting horses, and avoid sharing the value that might be available.
What any successful approach has in common with other methods, is a shared goal of finding ‘value’ in the odds and prices, where the actual chance of a horse winning is greater than that estimated by the bookmaker or the market on the betting exchanges. The vast majority of punters are ignorant of the importance of value betting. They generally think that to win at betting you just need to pick more winners. A short-priced winner is better than the horse at 20/1 that loses, right? Well, yes, but as a winning punter the trick is to make your decision before the event, and make the right decision at the right price, enough times to ensure a profit.
A genuine value bettor is typically unconcerned about backing a horse other than the favourite. The favourite is more often than not the horse with the best chance of winning, yet the value in the race is often in backing horses more likely to lose. Backing horses with a price that suggests a 10% chance of winning, ie 9/1 when the true chance is 20% and 4/1 makes sense. They will not always win, but they will win enough times at generous prices to see you collect more money than you stake.
It may seem counter-intuitive to back a horse you do not think will win, but probability will guarantee you a profit nonetheless, if you consistently back horses at prices higher than they should be.
The genuine value bettor does not think in terms of one single race, but rather, “If the same race were run 100 times, which horse would I want to back at the prices offered.?”
Since odds are just a way of expressing probabilities, value betting provides the only way to beat the bookmaker over the long haul. Your average punter can back as many ‘winners’ as he likes, but if he ignores the prices and therefore the risk-reward ratios, then his winnings may not be enough to return a profit. The successful bettor will be prepared for his fair share of losing bets and bad luck stories, but he will alway be encouraged by the value bettors’ motto “Find the value, and the winners will take care of themselves.”
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