The Single-Most Critical Factor To Making A Profit From Betting On Horse Racing

What is the most important thing you look for when analysing a new system, or a new tipster, and their sets of results?

Do you look for a high strike rate? Perhaps you are looking for a minimum of 30%

Do you look for decent winning prices? Maybe you want an average of at least 3/1

If you don’t already, what you should be doing is COMBINING these two benchmarks to see if you are getting VALUE and hence making a profit.

The only way you will make a profit from betting over the long term is if you consistently back horses at prices HIGHER than their actual chance of winning. In other words, when you get a VALUE price.

Equally, you will make money if you consistently lay bets on horses to lose at prices too LOW when compared to their actual chance of winning. This is how bookmakers have made their money for generations.

For example, if you consistently back horses with a 50% chance of winning, but always back at odds better than evens, you will make a profit. If you back 5/1 (chance) horses at prices of 6/1 then you will make a profit over time.

It’s obvious really, but too many times people get carried away with strike rates, and "never backing odds-on", when both these benchmarks are irrelevant if price does not also come into the equation.

A strike rate of 50% might seem impressive, but if it is achieved with horses at prices less than evens, you will lose money.

If a tipster’s average winning price was 4/5 odds-on, it might on the face of it seem like his tips were very poor value that anyone could pick. But if you learned he had a strike rate of 70% then it’s a different story. He is getting an average price of 4/5 about horses which should be priced at just 3/7 odds-on.

Prices and strike rates are all relative, and intrinsically linked with VALUE

Common misconceptions are that you cannot make money by backing short-priced horses, or that you only make money by selecting horses at higher prices. Both these theories have an element of truth, but need qualifying further for them to be totally true.

Myth #1 : Short-price horses are always poor value

The horse with the shortest price in a race is the favourite, and we all know that if we blindly backed the favourite in every race we would lose money – this is a fact. But the reason we would lose money is because the prices are manipulated by the bookmakers, such that the price of a horse is generally too short compared to its actual chance of winning.

For example, you would expect a horse priced at Even money to win 50% of the time – WRONG!! – in fact even money chances win only around 44% of the time. This is how bookmakers make their profit.

Let me show you how: The even money horse runs 100 races, and we as punters place our bets each time at even money. We will collect from the bookmaker only 44 times, but 56 times the bookmaker will keep our money.

But short-priced horses can still make you a profit – if the price is still too high compared to the chance of the horse winning. For example, a horse at even money is great value if it actually has a 60% chance of winning. You would be getting even money about a horse that should be priced at 4/6

Myth #2 : You can only make a profit by backing higher-priced horses

Of all the horses in a race, the favourite with the shortest price will win the most often – fact. So how can we make money by backing horses further down the market, with better prices. Well, the same theory applies as above – only back horses at a price higher than their actual chance of winning.

If you decide to only back horses at 10/1 but your system produces a strike rate of 8% then you will lose money. If, however, your strike rate is 12% then you will make a profit.

This is because you are backing horses at 10/1 (11.0) when their actual chance of winning is 12% and represented by a price of 8.33. You are getting a price of 11.0 for something that is actually only worth 8.33 – that is why you will profit.

Hopefully you can see that the key to making the profit here, is NOT the 10/1 price alone, nor the 12% strike rate, but getting the two together and achieving VALUE

Higher prices that still do not represent value, will still lead to a loss.

Let me give you an example of how by simply getting a better price about your selections can make the difference between winning and losing money:

Example One:
Zabenz Won 15/8
Briery Fox Lost 7/4
Fire Dragon Lost 6/4
Warlord Won 2/1
Blazing Guns Lost 9/4
Vicario Lost 13/8
Go On Ahead Lost 2/1
Harrowman Lost 15/8
Cloudy Lane Won 11/4
Supreme Prince Lost 13/8

Example Two:
Zabenz Won 2/1
Briery Fox Lost 15/8
Fire Dragon Lost 13/8
Warlord Won 9/4
Blazing Guns Lost 5/2
Vicario Lost 7/4
Go On Ahead Lost 9/4
Harrowman Lost 2/1
Cloudy Lane Won 3/1
Supreme Prince Lost 7/4

What is the difference between the two sets of results above? The same horses ran in the same races, with the same results. Both sets of results have a strike rate of 30%

The difference is in the prices. Each price has been increased by just one notch.

Let’s examine the difference this makes on our return:

In Example One we invest 10 x £100 = £1,000

Our return is £287 + £300 + £375 = £962 so we lose £38

In Example Two we invest the same amount of £1,000

However, our return is now £300 + £325 + £400 = £1,025 so we make a profit of £25

Mathematically, why did we lose money with Example One, yet make a profit with Example Two?

This is why:

In both cases we achieved a strike rate of 30% -- we scored 3 times from 10 attempts -- so our horses had a 30% chance of winning. A 30% chance is represented by a price of 3.33

In Example One the average winning price was the average of 15/8 (2.87), 2/1 (3.00) and 11/4 (3.75) which is 3.21

You can see, we were getting an average price of just 3.21 about horses which should have been priced at 3.33 – the price was too low compared to the actual chance of winning, and that is why we lost money over a series of bets.

In Example Two the average winning price was the average of 2/1 (3.00), 9/4 (3.25) and 3/1 (4.00) which is 3.42

You can see, we were getting an average price of 3.42 about horses which should have been priced at 3.33 – the price was higher when compared to the actual chance of winning, and that is why we made a profit over a series of bets.

How do you get extra value when placing bets?

1) Know what price you want. You wouldn’t go into Tesco’s and ask for a tin of beans, at whatever price the store wanted to charge.

2) If you cannot get the price you want, then do not bet. If you can learn to accept the disappointment of missing the occasional short-priced winner, than you will never have to suffer the pain of a short-priced loser.

3) Bet on the exchanges. Prices on the exchanges are typically 20% higher than those offered by high street bookmakers. Check out sites such as Betfair, Betdaq, and WBX World Bet Exchange.

Follow this link for Betfair www.reddracing.co.uk/betfair
Follow this link for Betdaq www.reddracing.co.uk/betdaq
Follow this link for WBX www.reddracing.co.uk/wbx

4) Post and forget your bets on the exchanges. No more sitting in front of your PC waiting for a price. Post your request for the price YOU want on a betting exchange, and you can walk away knowing that if your price is matched you have gotten a value bet – if it isn’t matched your bet will be cancelled and your money returned. You are in control of the price, not the bookmaker.

In Summary

The key lesson I want people to learn from this article is to gain the discipline of seeking value in any bets they place. If you find no value, then keep your money safe and watch the race. If you can learn to risk your money only when you have the prospect of a satisfactory return, then you will elevate yourself from 98% of punters who continue to lose money.

If you are a member of my service, pay attention to my advised prices, and only bet when you can get these prices. When I reach a 100% strike rate, only then should you bet at any price(!!) – until then you owe it to yourself to get VALUE

Recommended Reading....

The Value Horse Method is a fully comprehensive guide which will show you how to find the value bets in any race-card. Many professional gamblers, myself included, regularly practice the teachings in this guide to produce consistent profits and income. Visit www.reddracing.co.uk/vhm to find out more.