Strategy

Introduction

Maths and models should be aids to thinking, not substitutes for it
Alfred Marshall – Founder of Cambridge economics

In my quest to become a profitable and consistent winner, I set myself the objective of developing a betting strategy and methodology using information that the public underuses or ignores based on the following primise

In order to make money betting on sports, you must either have information that is not being used by the betting public, or you must have a superior ability to process the information that is public

Approach

Using objective and intuitive analysis the overall aim of my handicapping process is to identify, in advance, the two out of three races that are not won by the crowd favourite and for win bets identify two non-favourite horses (or more) that are underestimated by the market and therefore most likely to beat the favourite.

Ratings Process

The raw data for my analysis is sourced from the excellent software package Proform Professional.

To determine contenders’ I have developed my own ratings using objective measures or “par” standards with each derived using statistical analysis techniques.  Each contestant is matched against these standards to create a rating and subsequently a relative ranking between horses.

I use ratings because they make our life as bettors so much easier. Rather than having to try and rationalise all of the various pieces of information, we can put it into a single figure which can be used to generate a decision matrix i.e betting line.

Ratings serve to bring out the logical contention in a race; beyond this they have only a small value. Skill in the work of making sound selections is found in the individual’s knowledge of horse racing and his ability to evaluate his ratings in accordance with the facts as they pertain to thoroughbred horses.

If horses were machines, then ratings alone could be accepted at near face value. But race horses are not machines; they are animal athletes whose performances in many instances are governed by stable intentions as well as the physical condition of the horse.

Also

Numbers alone never were, nor will be ever be, the “panacea” needed to show a profit year-in and year-out. Because if they were, wouldn’t IBM or some other computer giant have “cornered” the horse racing market by now?  They’d be able to win every race if the numbers alone were the solution to the multi-faceted handicapping challenge.

Because the ratings rely on historical data their achilles heel is that horses that lack recent and relevant form to determine an accurate assessment (annotated with a ‘?’) maybe subsequently priced in a way that is completely out of line with the opinion of the market. Sometime’s this can be a good thing but erring on the side of caution, as part of my handicapping process I treat these as obvious dangers which won’t show up in the ratings and note these horses to receive extra attention  in monitoring market movements during the day or before the start of the race

Contender Selection

In essence I use my ratings solely in the process of elimination, not to actually pick a specific winner.  Therefore you should not blindly back the top rated runner but follow the advice given in Clive Holt’s Book “Be A Successful Punter“. The suggested next steps are:

• Note the higher rated horses and closely rated horses
• Allowing for the draw bias, visualise the running of the race (see pace handicapping)
• Investigate their past performances and compare them with the race to be contested for any marked disparity in class, value and weight
• Establish which are capable of acting on the course, over the distance and on the prevailing going
• Take note of any form comment that indicates superiority or ill-luck in running.
• Review video form to establish if the horse can run to its best or promised best with evidence of recent proven, progressive or promising form
• Ensure the horse’s stable is in form and not suffering from below par performances
• Review the form of the Jockey as a signal of the trainers intentions.

In theory what remains at this point in the process are one or more legitimate contenders i.e. those that have the potential to win the race in question. After absorbing the opinion of the crowd into the statistical model via live odds updates, the final ratings are used to create a betting forecast however, it does not end there:

Value

The problem with any of these statistical handicapping methods is that it is hard to narrow in on “where the profit is”. They do great at general handicapping, but you’ve got to beat the crowd, not just pick reasonable probabilities..

I am a firm believer in the efficiency of the market and its ability (around 33%) to be the best judge in determining the probability of winning for each horse.

The market does a remarkable job of taking account of factors that are not widely available such as the opinion of the horses connections, the on course paddock judges, private and public handicappers using different rating methods, odds compliers, pundits, tipping lines, other punters and pin stickers etc. All of these opinions are efficiently factored into prices.

The Public Is Very Good At What It Does
Not only can the public tell the difference between two low odds horses say a horse that should be even money (1/1) versus a horse that should be say 2/1 we might be able to do that at a decent level, but it can tell the difference between high odds horses say a horse that should be 20-1 versus a horse that should be 25/1.

Now how do you do that? They are indistinguishable in the form yet the public can separate them in the long run. The horse that is 20-1 will win more than the horse that is 25-1.

Therefore the market (along with the transparency offered by the exchanges) is smart, hence in all races I intend to place a bet, my approach is to let the crowd make their choice first then handicapping the crowd in matching my opinion against theirs, any prices on offer considered “value” are punted just as the horses are entering the stalls.

After the race regardless of the result, I will watch the replay of the race and make notes for future reference then rinse and repeat the process at the next betting opportunity.

References:
Winning Thoroughbread Strategies – Dick Mitchell
“Computer Based Horse Race Handicapping and Wagering Systems” –   William Benter