As I’ve done many times before, I’m taking a look at ways to increase chances of making a profit on the punt. Maybe I’m banging my head against a brick wall but I’m sure that there’s a method of manipulating favourites to achieve this end.

What makes a horse a favourite? The obvious answer is that punters have bet the most money on it. This could be because either 1,000 punters put \$10 on it or maybe only 10 punters put \$1,000 on it. Whatever the reason, a race usually has only one favourite.

I figured that Saturday was the day that most punters were active and so it would be a good day to try out a little idea I’d had. We’ve been told that favourites win around 30 per cent of all races. It’s also been pointed out, but often not thought about, that favourites lose 70 per cent of races.

Betting on the favourite in every race can be a recipe for disaster so we need a method that does two things:

1. reduces the number of bets, and
2. finds better dividends.

One way this can be achieved is by selecting the horse with the lowest dividend you would bet on.

Imagine there are 100 races under consideration. This obviously means 100 favourites paying anywhere from \$1.10 up to say, \$5.00 or possibly more. If you were to bet on every one of them you’d probably end the day losing. So, what if you decide to bet only on the favourite if it was paying more than, say, \$1.50?

The first two Saturdays in June, 2008 had a total of 190 races. Betting on each favourite would have lost you \$2 betting for a win and \$18.00 betting for a place.

Only betting on horses that paid more than \$1.50 would have reduced the number of bets by five to 185. But you would have lost \$2.60 on win bets and \$17.70 on place bets.

If the minimum figure was raised to \$2.00, bets were reduced to 167 and a profit of \$2.80 for win betting was achieved. Place betting resulted in a loss of \$14.20. Let’s jump up to favourites paying \$3.00 or more. At this point, we start to see a meaningful profit.

The number of bets dropped to 101 with a profit of \$11.10 for win bets but place betting remained unprofitable at -\$6.70.

Increasing the minimum figure beyond \$3 starts a backward slide. \$3.50 sees a profit of only \$2.70 from 57 bets and the place bet loses \$11.80. So it looks like we have reached the optimum figure at \$3 for our lowest acceptable favourite dividend.

Okay, we’ve looked at setting the minimum dividend we will bet on; now, is there any chance we could look at the other end of the scale and increase profits by reducing the highest dividend we will bet on?

Remember, if we bet to win on all favourites we would have lost \$2.00. I don’t think there is any future in betting favourites for a place as so far they haven’t shown a profit. So let’s start by limiting the maximum dividend we’ll bet on to \$5.00.

Doing this reduces the number of bets to 183 and produces a profit of \$5.00. When we reduce the maximum dividend to \$4.50, the bets drop to 179 and the profit to \$4.40. Reducing the dividend further to \$4.00 drops bets to 159 and we finish up with a loss of 40 cents.

By reducing the dividend any further, we start to lose at a rapid rate. It would appear that there is no future in that direction.

Let’s set the maximum dividend at \$5.00 then and see if including a minimum dividend will enhance our profit.
The minimum dividend that was most profitable was found to be \$3.00. Now if we couple that figure with our maximum figure of \$5.00, we get the following rule – if the favourite is paying between \$3.00 and \$5.00 inclusive, it’s a bet.

Let’s try it and see if we are on the right track. For Saturday June 7, there were 52 bets with 16 winners giving us a 31 per cent strike rate for a profit of \$5.60 and a POT of 10.7 per cent. The following Saturday saw 51 bets and 18 winners, a strike rate of 35 per cent, profit of \$12.50 and a POT of 24.5 per cent.

The totals for the two days were 103 bets, 34 winners, 33 per cent strike rate, \$18.10 profit and 33 per cent POT. Considering that we are betting on favourites, that’s a pretty good return.

It seems then, that betting on favourites and using a little discrimination about acceptable dividends, can return you a reasonable profit. Good luck.

By Mr Money

PRACTICAL PUNTING – AUGUST 2008