Why People Lose Money With Horse Racing

I have spent many years looking in to what works and what doesn’t work regarding horse racing systems. I am sure that many of you are aware of the vast number of horse race betting systems that come on to the market each month.

It is true to say, that the majority of those systems are not effective over the long term. In fact, there are only a handful of systems and methods that actually are effective.

When I first started looking at ways to make money on horses, about seven years ago, I was as green as they come, and very naïve. I was one of the many people that believed the figures stated on the sales page, and got very excited at the prospect of making a good income betting on the horses.

It wasn’t long before I realised that things weren’t always as they appeared on the sales page.

So what went wrong?

The sales pages of those sites were convincing with their results, but when I went on to use the systems, invariably, I would end up with a reduced bank. This may be the same experience you are either having now, or maybe have experienced in the past.

During my reducing bank phase in my early days of horse racing, I decided to stop wasting my money and decided to look at the mechanics and mathematics behind betting. I saw the statistics that only 2% of bettors make a profit. Although I couldn’t argue with the official stats, I wanted to find out how and why they were so low.

The Odds

Firstly, you are at a disadvantage. You may have heard of the casino house edge, where on the roulette table for example, the 0 pay nothing, so the house has a 2.5% edge – their commission, and they play for the long term. The exact same thing applies in horse racing. The bookies call it “the over round”. The over round is where the bookies make their long term money. The basically guarantee that virtually all the odds on offer are value, but not value for you. If you were to add up all of the odds in terms of percentages, they should without an over round add up to 100%, but the bookies make sure the over round bumps it up to say 105% or more. So on each race on average, they are making 5% of all the money placed on a race. It is not exactly like that, but roughly, on average.

The other thing I found, was that the odds on offer were very accurate to the horses chances of winning. When I mean accurate, I mean consistently accurate. Take a look at this table that shows the consistency of average odds. You can see for example, that the odds of evens to 11-8 for the favourite is virtually identical to the average percentage chances of a horse winning if it is the 2nd

If you were to bet on any horse to win, just because the odds are low and they are the favourite, you can see from this table that you would end up with little or no bank.

In summary with the odds therefore, you can get a feel of the chances that horse will win from the bookies accuracy in setting the odds, but to beat the bookie or the other players on the exchanges, you will have to have a proven strategy in place.

Favourite

I think this is where the majority of bettors lose their money. The favourite is a sure money loser in the long run. Favourites virtually always offer poor value as a back bet. This is because the bookies set the odds low initially, and the market often drives the price even lower. If ever there is a value bet to be had when a horse that is not favourite say, but steams in to become favourite, by the time it is favourite, the value will almost certainly be gone.

For those of you that do like to back the favourite, here are some sobering statistics:

In the last 10 yeas, if you would have backed the favourite in every race with a flat stake of £10, you would have made a loss of £37,198. Now that is quite an eye opener. Here are further statistics on the favourite over the last 10 years:

There would have been 48577 Races

You would have won 13950 of those bets

Your average strike rate would have been 28.7%

Great statistics on paper, but clearly, the favourites are very poor value. Even if you back the favourite on Betfair for example, you would have made a big loss, because although the odds are higher for the favourite compared with the industry standard, the 5% commission (which most people are on) strips the value, bringing you in to a loss.

Jockey / Trainer

Many people follow the top rated jockey or the top trainers. This makes good sense at a glance, but that factor alone will be another losing strategy in the long run. Let’s take the top jockey and trainer, and give them a nag to train. I can tell you the out come right now. It won’t win. The quality of the horse factors a huge percentage of the outcome of the race, and the jockey may only contribute around 5% – 10% as a factor in the horse winning, so the jockey’s influence is not on average that significant to a strategy. It may become significant when factored in to other criteria, and that is where we can start to look a little deeper in to putting together a good strategy.

A General Guide to Finding Value

Now we have covered what doesn’t work with betting, i.e. backing favourites just because it’s the favourite, or betting on odds on horses just because the odds are so low it must win, or picking the jockey because he/ she wins a lot of races, we can move on to look at what does work.

Really, there is only one thing in race betting that works. It doesn’t work on every race, and you will have losing runs. However, adopting this strategy will, in the long run make you profitable.

The one thing I am talking about is that you must find value odds to be consistently profitable in the long run. If you are in to racing for the long run, and I imagine most of you are, then this is an important aspect to grasp. I am aware, that finding value bets is easier said than done, but this is a method that you can apply as a system if you like, and it should serve you well.

Finding Value System

Firstly, you should take a look at the Racing Post betting forecast favourite, and also the 2^nd favourite.

Next, make sure the odds are between 2/1 and 4/1 for either of the two horses.

Then check to see what the Racing Post spotlight say about these horses. If the conclusion is that they will win the race, then this is the horse you should monitor.

Now we have a horse that stands a high chance of winning the race compared with the others. All we have to do is to make sure we get the horse at a value price.

We now monitor the horse right up to the off. About 10 minutes before the off, is where the money comes in on the betting, and is where the horse drift or steam in quite rapidly a lot of the time. We want to keep an eye out for a big change in odds. When I say big, I mean a 25% change, so a 4/1 horse will drift out to 5/1. If the selection does this, then you back it to win. You do this because in the long run, the prices will always be value. The horse doesn’t know it is drifting in the betting, and it is the same horse that everyone was raving about earlier.

It is a fact that if you were to back all the steamers, you would lose money, and that is because the odds would have steamed in and below the value of what the percentage chance was of that horse winning the race.

If you like the potential of this method, then have a try of it on paper, and see how you get on.

I hope you have enjoyed this article, and I wish you the very best in your horse racing venture.

All the best,
Chris Castell