VALUE BETTING
Andrew Lowrie of Optimum Racing
To make money gambling, you need to understand the meaning of value, and more importantly, you need to obtain it on every, or at least the majority of bets you strike.
What is value? Value when betting is simply when the bettor takes better odds on an event occurring than the true odds represent.
For example, the odds of you correctly predicting a roll of a dice is 5/1, there are six possibilities. If a bookmaker were to offer you 6/1, you would be playing with an edge, obtaining value. Whether you receive 4/1 or 6/1 on predicting the outcome, the amount of times you are correct will not change. What will change, however, is that at 6/1 you are guaranteed to make a profit in the long term, and at 4/1 you are guaranteed to make a loss. Successful American horseplayer Steven Crist once said, “People talk about value as if it is a ‘factor’ or an angle, when in fact it is the definition of success at pari mutuel wagering”. He is quite right too. If you play with an edge, backing horses at bigger odds than their actual true chance of winning, then you will make it pay.
One of the main factors that separates a winning bettor and the rest, is that while the average recreational backer will go to the track or sit at home and back the horses, he “likes”, regardless of the price, the successful bettor will only ever play when he is playing with an edge.
We discussed earlier about achieving odds of 6/1 to predict the roll of a dice, unfortunately there is no one daft enough to lay such odds as they would be guaranteed to do their brains! However, this sort of value is achievable in Sports betting, providing you are prepared to work hard to gain your advantage.
The main difference regarding probability when betting on horses compared to games of chance is that games of chance are easy to work out the true odds. A toss of a coin is 50/50 (even money), a roll of a dice is 5/1. These are both objective probabilities, i.e. they are factual and mathematically cannot be argued with.
With Sports betting probability is subjective. Having analysed a race, I may price up a horse at 7/2, someone else may do so at 7/1. It is only after many bets that you know whether you are obtaining value or not, and that is by looking at your profit and loss at the end of a set period of time. Playing with the odds in your favour guarantees nothing in the short term, standard deviation (or luck) dictates that, however, it is the only way to ensure long term profitability. Think of a toss of a coin, we know it is a 50/50 chance of landing heads or tails, so if you back heads every time at bigger than evens, you are bound to win long term. Short term, however, it may come up tails 8 times out of 10, you have done nothing wrong, but due to standard deviation you have done your money. Keep betting heads at 11/10 though and you will come out on top long term, guaranteed. The very same principles apply to Sports betting and horseracing.
So next time you have a bet, don’t ask yourself who is most likely to win, but instead who appears to represent the best value. It may not make you a winner overnight; however, it will be an important step towards improving your profit and loss in the future.
During the course of the next few months, I will try and explain my approach to having a bet, and how I determine whether a horse offers value or not. I look forward to sharing my bets this Jumps season with you as well as my reasoning behind them.
next time you have a bet, ask yourself who appears to represent the best value