One of the challenges in front of punters who are just entering the world of horse racing is to learn and remember all the specific phrases which constitute this field’s lingo. So far we have gone through the different horse racing events, main standard and exotic bets, and the in-play method of wagering. The purpose of this last part of our horse racing betting guide is to explain what is meant by the term value and why it is important for betting enthusiasts to always strive to base their selections on value odds.
As this is the strategy most likely to help you have a long-term profitable betting experience, it is worth reading what we have to tell you and putting it into practice as much as possible. The article depicts what exactly value betting means, gives detailed instructions on how to properly manage your bankroll, and how to make the respective calculations.
The Concept of Value in Horse Racing Betting
In a few words, we use the term value to describe the relationship between the horse’s real probability of winning and its chances according to the published betting odds. The essence of sports betting is such that no matter how experienced you are and what superb skills you have, you simply will not win all your bets. We have witnessed many hot streaks with impressive total payouts but cold streaks are equally probable. If we look at the long term, it is not that important what the ratio between one’s successful bets and failures is but rather what their value has been. For example, if you back an outsider who is with high odds and your prediction is correct, the bet can make up for a few short-odd losses.
If you are not betting just for fun but your goal is long-term profit, you should focus all your efforts to understand when the market is off the line and how you should take advantage of it. In order to be able to enjoy some profit in the long run, you will need to bet often enough on horses with odds that are higher than the true probability of winning. Unfortunately, true probability is a subjective issue, and determining it is not an easy task. As with any other sport, horse racing features the occurrence of favorites and underdogs. The first are arguably known for winning more often while the latter bring more excitement and impressive one-shot payouts.
In value betting on horse racing, gambling devotees must make their own predictions about the likelihood of a particular horse finishing as the winner, be it a favorite or an underdog. This type of skill allows you to make much better decisions and, accordingly, more often to enjoy a good profit. It takes quite some time to develop a sense of value betting, which would mean that you will be able to sift out horse races in which the chances of specific events do not match what the odds show.
Managing Your Bankroll
If you have a time-tested bankroll management system and you have the discipline to stick to it, then your chances of being a long-term winner will increase tremendously. It is not enough to understand the concept of value in horse racing betting and be able to find value bets, you also need to wisely manage your money. Bankroll management is one of the most valuable sports betting strategies you can, actually need to learn. It has to do with the amount of money you can afford to invest in gambling at a given time and how exactly you will decide to invest it.
There is no universally applicable and correct way to control the flow of your money, but there are still a few basic principles that we recommend you follow. Be prepared for the worst, work for the best.
Do not go over your budget
Do not succumb to the impulse of chasing your losses if this means spending more than you can afford. A cold streak is a cold streak, you better give yourself a little rest and try placing a winning bet when you can do it without risking money intended for your rent, for example. Although we all expect some profit when gambling, betting is primarily meant to be fun, do not cause yourself unnecessary stress.
Keep track of your betting activity
This may sound like something that is natural to do and you wonder why we mention it. Well, our experience in the field of sports betting shows that this is a much underestimated and neglected issue. Two simple things you need to know – how much you have in your bankroll and how much you have won and lost within a specific period of time. This will not only help you not to suddenly find yourself without any money but will also give you an idea of your weaknesses and strengths as an online punter. By reviewing your past bets you can see in what conditions your predictions are more likely to be correct and adjust your horse racing betting strategy. If you focus on markets where your bets are usually more accurate and avoid those that have the tendency to exhaust your wallet, you can achieve a much better end result.
Have a separate bankroll for betting
This is very important, establish a separate sports betting fund and never mix it with the money you spend on household expenses, bank loans, school fees, etc. If you do not do this and withdraw from your personal bank account every time you place a bet, you will very easily lose track of your total wins and losses and are very likely to damage your overall finances.
Horse racing bettors regularly work on the gradual accumulation of their bankroll. One way to do this is not to withdraw money every time you make a profit. If you want to improve your performance as a punter and pave the way to big profits, it is really important to keep as much of the money in your bankroll as possible. It is like ammunition for betting enthusiasts and the more you have, the more bets you will be able to make. Just in case, we remind once again – all this must happen only within your separate betting bankroll.
How to Calculate Value Bets
There is certainly more than one way to find valuable bets. It is extremely important to understand what these methods are and to choose the right one for you, as each of the options has pros and cons that you need to consider. As we have already discussed, betting odds should not be your only reference point when deciding which horse to place your bet on. Bookmakers have some influence only on morning line odds but these highly fluctuate depending on wagers made. What is more, they need to make some money, so they offer odds that are slightly worse than their predictions. If you consider that it is more likely for a horse to become a winner than the betting odds on offer suggest, then you have a value bet in front of you.
For a punter to be successful in the long run, he must not only fully understand the meaning of the term value, but also be able to assess the likelihood of an event occurring. As this is a somewhat subjective task, there is no exact way to calculate the chances of an outcome. After estimating the probability through a method that is convenient and works for you, it is time to see the odds and then calculate the value. Briefly, the bet value is equal to the probability multiplied by the relevant decimal odds minus 1. If the result is above zero, then you have a value bet.
New information is more easily perceived with the help of examples, so let’s look at one. You have decided to bet on the horse Thunder Storm to finish the upcoming race as a winner. Its odds at the time of bet placement are 3.57 but according to you, the real probability is much higher – 70% (0.7). The calculation you have to do is as follows:
3.57 x 0.7 – 1 = 1.499 – 1 = 0.499
The number exceeds zero which means there is some value in this bet. As you see, value calculation is a piece of cake. The tricky part is to accurately assess the true probability. While it is true that reading betting guides and tips can be helpful, to develop such a skill you need time. In other words, only theoretical schooling is not enough, you need a lot of experience and in-depth knowledge of horse racing. Factors to be considered are past results, statistics, track surface, weather conditions, race type, etc. So, if you are still a novice, you better think of starting with match betting as it is much easier to practice and is almost 100% risk-free.
How to Calculate Expected Value?
The expected value of a bet indicates how much we can win in the event of a successful bet. This makes it the most valuable calculation a punter can make after comparing the odds published by different online bookmakers. The relevant formula is pretty simple – just multiply the estimated winning probability by the amount you could possibly win per wager and after that subtract the probability of losing multiplied by the amount lost per wager.
Let’s look at the odds of the Top 4 favorites in the Saint Cloud race in France.
|Horse/Jockey||Betting Odds||Potential Profit with a $10 Stake|
|No.1 Inedit Star / C Soumillon||2.2||$12.00|
|No. 4 Interdite / E Hardouin||9||$80.00|
|No. 3 Idee D’etat / Alex Roussel||7||$60.00|
|No. 2 Hester D’ath on / C Grosbois||4.1||$31.00|
Although the bookmaker suggests that No.1 is the favorite, your research shows No. 2’ winning chances are currently better. In order to decide whether it is worth betting money on that horse, we recommend that you make the appropriate calculation.
(Probability of Winning) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet)
Before you can replace the words in parentheses with numbers, you need to do some very simple calculations. Odds need to be converted to percentages and this happens by dividing them into 1, i.e. 1 / 4.1 = 0.2439 (24.39%). The probability of No.2 not becoming a winner is the sum total coming from all the other possible outcomes, namely 0.4545 + 0.1111 + 0.1428. Now, let’s get back to the above formula:
0.2439 x 31 – 0.7084 x 10 = 7.5609 – 7.084 = 0.4769
The above numbers show that if you place a bet on No. 2 Hester D’ath on and it really crosses the finish line before the other competitors, you will win $0.4769 for every $10 wagered.
Value betting is considered to be the most profitable and mathematically based strategy. Two are the main ways online punters make a profit from value betting. The first is practiced by experts in this particular sport who are confident enough to create their own odds and compare them with the bookie’s predictions. The other uses a somewhat technical approach that involves mathematics to determine what the real odds are according to the market and then finds bookies who contradict the market.
The good thing is bookmakers sometimes fail to properly assess a horse’s chances of winning and if you can find overpriced odds, for example, odds of 5.20 instead of 2.18 your bet on horse racing can bring you substantial profit. Remember, however, that despite all its advantages, it is not a risk-free betting method. Even when everything is done correctly, you may be unlucky and make a loss. Nevertheless, the advantages value betting comes with are too significant to be ignored.