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Understanding Horse Racing Percentages

One of the sad truths is that if you asked 100 punters to explain horse racing percentages to you, all but about 8 would struggle and yet it is one of the most fundamental parts of the whole profit / loss equation.

The easiest way to get a handle on it is to imagine a five horse race where all horses are of equal ability and (in your opinion) chance.

If you were a bookmaker (read odds maker) your market - (to BREAK EVEN on the race) would BY NECESSITY then look like this:

Horse A   $5.00    (4/1)    or 20% chance of winning

Horse B   $5.00   (4/1)    or 20% chance of winning

Horse C   $5.00   (4/1)    or 20% chance of winning

Horse D   $5.00   (4/1)    or 20% chance of winning

Horse E   $5.00   (4/1)    or 20% chance of winning

- which of course gives you the perfect 100% market but unfortunately doesn't cover your costs nor make you a profit if you took even amounts on each horse.

To do that then (make a profit!) your market on the same horses of equal ability and chance would have to look like this:

Horse A   $4.50   (7/2)    but in reality (in your opinion) still with a 20% chance of winning

Horse B   $4.50   (7/2)    but in reality (in your opinion) still with a 20% chance of winning

Horse C   $4.50   (7/2)    but in reality (in your opinion) still with a 20% chance of winning

Horse D   $4.50   (7/2)    but in reality (in your opinion) still with a 20% chance of winning

Horse E   $4.50   (7/2)    but in reality (in your opinion) still with a 20% chance of winning

Of course that is in a perfect theoretical world where none of us lives!

A real market, where you estimate horses to have a different level of chance, adjusted to 120% to make a profit, would have the following look:

Horse A   $2.00    (1/1)    or 50% chance of winning

Horse B   $3.00   (2/1)    or 33% chance of winning

Horse C   $6.00   (5/1)    or 17% chance of winning

Horse D   $8.00   (7/1)    or 13% chance of winning

Horse E   $15.00   (14/1)    or 7% chance of winning

This means no matter which horse wins the bookmaker pulls a 20% profit on turnover.

This is therefore the game: if you are an "opinion punter" - you have to be better at accurately estimating a horse's winning chances than the bookmaker if you are betting with him or if you are betting on the Tote, better at estimating a horse's winning chances than the punting fraternity at large who set the market via the TAB

The big moments come when you successfully get "overs" in terms of percentages when you are right and they are wrong and bet accordingly. In these circumstances you ONLY bet when you believe you have the "percentages edge".

See - easy as that! The real skill then is in correctly estimating a horse's real chance of winning and comparing that to the odds available. What? Just got difficult again?

This article is copyright RaceRate.com May 2012 . All rights reserved. May be copied freely for personal use and yes you can put it up on your web page providing this copyright notice stays in tact.

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