Value is the single most important
thing in betting.
A good strike rate is
no use at all if the bets are not made at value odds. That is why I decided to write this
short piece.
The scenario I want you
to imagine is of three people walking into a room where
different bets are on offer.
The first person sees a table where you
can bet on the spin of a coin. The odds on offer are 10/11
for a correct choice.
He feels lucky and bets
on heads, which comes up. So he has another bet, and this
also wins. "I'm feeling lucky", he says, "I'm
going to stay at this table all night".
The second person sees a table where
you can bet on the correct number thrown with a dice. The
odds on offer are 11/2.
He has a bet on '3',
which loses, and then on '5', which loses. But he's not
deterred; "I'm staying on this table", he says,
"see you later".
The third person sees a table where you
can bet on predicting a playing card randomly chosen from
a pack. The odds on offer are 66/1.
He likes the prospect
of a big win, so he has a go. In fact he has 10 goes, and
none are correct. Luckily, he has brought plenty of cash
with him, so he says "I'm staying here for the night".
The three agree to meet up again in 8
hours time, when they will compare how each has done.
Eight hours passed, and
it was time for the three to go home.
The coin man was not happy; "I
seemed to be winning regularly", he said, "I
didn't have any long losing runs, but I'm out of pocket!"
In fact he'd had 1,000
bets, and 500 of them had been correct. He'd been betting
at £20 a time, as he knew he wouldn't have long losing
runs. So over the night he'd staked £20,000, and from
his 500 winners paying £38.18 a time, he'd received a
total of £19,090. He had lost £910 when he seemed to be
doing so well. People had been remarking at how many
winners he was having, but that didn't matter to him now.
He certainly wouldn't play that game again.
The second arrived, with a smile on his
face; "I started slowly", he said, "and my
strike rate was not good all night  I had many losing
runs well into double figures. I didn't feel as if I was
winning, but now that I've counted up I realise that I've
done well."
In fact, he too had
placed 1,000 bets over the night at £20 each. He had
picked 166 winners and 834 losers. At his quoted odds of
11/2, each winner had paid him £130  a total return of
£21,580. He had won £1,580 on the night and was happy.
The third returned laughing; "I
can't believe it", he said, "I chose those
cards terribly  I had massive losing runs which I
thought would never end. In fact I had 1,000 bets at £20
each and only won 19 of them  good job my bank was big
enough for the evening!" But at 66/1, the 19 winners
had returned a total of £25,460, making him £5,460 
enough for the cruise he'd been planning.
Simple enough, and we
can see why the coin man was attracted by the prospect of
regular winners  it made him feel like he was doing well.
The dice man had a strike rate of 16.67%, which was more
than enough, given that he was offered the value odds of
11/2 each time. The odds quoted were only half a point
too high, but that was enough for him and he took
advantage. The card man was fortunate to have a big bank
behind him  his losing runs were massive, only 19
winners from 1,000 at a strike rate of 1.9%. But the 66/1
he was given was far too high, and he made a lot of money.
If these people were to return every
night for a year, betting on the same games and with the
same stakes, the coin man would lose £332,150, the dice
man would win £576,700 and the card man would win £1,992,900.
They were all winning
as often as they were entitled to do  nobody was luckier
or unluckier than the others. It all came down to the
value their bets offered.
In that example, the value was easy to
see. Mathematically, it could be determined exactly. But
how do we know what value is in horseracing? How do we
know we won't end up like the coin man?
The answer is that we
need to try to determine the actual
odds of our horse winning. We can't do this exactly,
of course, but we can get fairly close.
Say for example the race we are
studying has 10 runners, and we have decided that 4 of
them have no chance whatsoever. We can confidently cross
those 4 through, but we must be absolutely sure they can't
win. That leaves 6 runners, and we may decide that 3 of
those can't be dismissed completely even though we don't
think they can win. Maybe they have half a chance. Fine,
that's 3 runners with half a chance each, and the other 3
are the serious contenders (of which one is our selection).
Our selection, therefore,
has 1
chance in 4.5 (3 serious plus 3 half chances). Our interpretation of its
actual odds is 7/2.
If we can get better than 7/2 for our
selection we bet. The bigger the price above 7/2, the
more we stake. It makes sense  if the dice man went back
the following night he would stake much higher at that
price. If our horse, however, is quoted at less than 7/2
we cannot bet  not ever.
It may well win, but if
we continually take chances like that we will eventually come
unstuck. If the odds are 3/1 we have to leave
it alone and come back another day.
Again, that's a simple example, and I'm
sure most punters think along those lines. To get more of
an exact figure we need to break our fractions down
further  to percentage chances.
If we say that the
total chances of all the runners in a race is 100%, we
need to then determine how much of that 100% is made up
of our horse's chance. In the above example the 100% was
split between 6 runners that had either a chance or half
a chance. There were a total of 4.5 chances, each one 22.22%
of the overall 100%.
A 22.22% chance is equal to 7/2, so if
we are right in our judgement (and we must stick to our judgement, as that is the whole point of betting),
anything better than 7/2 offers value.
A friend of mine has
the same approach, although he tackles it slightly
differently. He allocates 100 points to a race (each
point is a 1% chance). From those 100 points, he
allocates to each horse a number, which he thinks
represents its chance of winning. The important thing
here is that all the points must come back to 100 when
added at the end.
He may analyse a race like this: His
selection 27pts, horse 'B' 20pts, horses 'C', 'D', 'E',
and 'F' 12pts each, and horse 'G' 5pts.
He has given his
selection a 27% chance, which equals just over 11/4. So
if my friend can get better than 11/4 for his bet
he will be on. If not, he won't.
To convert the points out of 100 you
have awarded to each horse into odds, do the following:
Say you gave 28pts:
divide 100 by 28 = 3.57, and then deduct 1 = 2.57.
Those are the odds to one: 2.57/1.
Given that 2.5/1 is the same as 5/2, you would need
better than 5/2 for a horse to which you had awarded 28pts.
Please make sure you
don't totally discount a horse and give it 0pts unless
you are sure that it can't win. Make sure your entire points total 100 exactly. You will have to change them
many times before they do  and don't bother if the
points awarded are strange numbers, like 27 or 41. it
doesn't matter as long as you work out the odds
correctly afterwards.
You will suddenly find that you are spending
less time trying to pick winners, and more time selecting horses that
are likely to run to the best of their abilities at prices which are
bigger than they really should be.
Value  the single most important thing,
no matter what you bet on.
