Handicapping Horses for Value

Hey everyone. Sorry for the lack of updates--have been in Phoenix and haven't had the chance to update. Additionally, planning to graduate from college in a month takes up a lot of my old gambling time...hmmm.

Anyways, I want to talk about value betting and horseracing today. The public is often a tough opponent, and even if you make a winning bet it may not be for an effective value that is worth your betting dollar.

The important thing to do here is to look at the form and come up with our own odds and lines for each horse in every race that we are going to bet on. We effectively give each horse a percentage chance of winning, ensuring that these always come to a total of one-hundred percent.

Only by doing this and having our own lines that we can compare to the final odds set by the public can we tell when we come across a value situation. For instance, say you have a horse that you have handicapped as a 7/2 favorite, and the final odds given after the public's betting are 3/1. In this case we have a situation where we can make a bet with a positive expectation (assuming we have effectively handicapped the horses). Even better is a situation where we can determine that a race is a two-horse affair. If we can make an exacta box of these two horses we can potentially see a payoff that is much higher than the odds given by the public, even if one of the horses in our exacta box has very low odds.

For those of you more familiar with poker, this is the exact same idea as a value bet on the river in limit hold em. In a typical value bet situation, you are betting a mediocre hand assuming that it is the best hand and will be called by a weaker hand. You are trying to get the maximum value for a positive expectation situation. In this case, you are simply betting on a horse base on what you think is a positive expectation rather than on a poker hand with a positive expectation.

Well, I'm about ready to get my PokerStars account to exactly $100 (enough to buy in for the max at the $5 tables) and start playing poker to build the bankroll up enough that I can start playing the ponies.

Until next time, happy gambling.

Bankroll Management V - Playing the Ponies

Many of you understand that poker is a game that can be won because you are betting against other players rather than the house.  But maybe you are wondering why it is possible to win betting on the horses when you are playing against the track.

The answer is pari-mutuel betting.  You are not in fact betting against the track at all, but against all of the other bettors who have made the same bet as you.  The track then takes a cut (similar to the rake in public room poker) and returns the rest to the winning players.  For instance, in any given race, everyone making a trifecta bet will have their money pooled, and the amount remaining after the track's deduction will be paid to those with the winning trifecta tickets.   This means that if you can handicap horses better than the next guy, you will win in the long run.

We'll discuss handicapping and betting in the future, however.  The simplest method of bankroll management for horse racing is never to bet more than 1% of your total bankroll on any one race, and never to bet on any horse where you don't have a positive expectation.  As long as you are making positive value bets, your bankroll will slowly grow and you'll be able to make larger bets while still risking only 1% of your total bankroll.  While this is a very generalised approach similar to the 5% rule for poker, it is almost guaranteed never to fail.  For this reason, this will be my approach for horse betting bankrolling.

Next time we'll talk a little bit about handicapping and the different types of bets available at the track.

Until then, happy gambling!