One of the grumbles I hear from punters is that they don't understand the "money side" of gambling. They're okay at just about everything else but why, they ask, can they rarely make a killing?

My colleague Brian Blackwell, who advocates the use of "overlay" betting with his ImpactPro 2001 ratings on the Practical Punting Daily website, says he's surprised at how few punters understand the concept of value, and of achieving the best prices about their selections.

I often suspect that punters in the '30s and '40s knew more about this aspect of betting than today's so called "informed" punters.

The late Rem Plante, one of the masters of the game in Australia, wrote in his best-seller The Australian Horse Racing and Punter's Guide: "You don't have to be an economist to realise that success in racing as in any other business depends a great deal on value and obtainable prices.

"The higher the value and the better the prices about your selections, the more profit they will yield. Correctly assessing the value of your selection is just as important as doing the weights. A highly valued fancy at a fair price, can be a good betting proposition, but a lowgraded runner at short odds represents poor value at great risk. Avoid it."

Economic value, wrote Plante, is the appraised worth of something at a certain time in particular circumstances. Needless to say that economic value is governed by supply and demand.

Intrinsic or genuine value, Plante explained, is the type of value not dependent on external circumstances.

"For example, a good suit is worth more to you than a similar one of a poorer quality at the same or higher price. A Jaguar motorcar will be valued higher than a Ford Falcon. Likewise, a selection in a Flying Handicap should be worth more than a selection in a weak Maiden event," wrote Plante.

"Yet often we witness huge bets being placed on comparatively weak animals while much better horses in other races are having less support even at better prices. It seems that people lose their sense of value once they are on a racecourse. Apparently most of them are gamblers.

"They do not realise the very bad value of a weak horse at even money while there are better horses at, say, 4/1 or more in other events of higher class."

Plante had his own idea of how to control one's betting. He devised a series of what he called "price limits" on races graded from A through to E. It went like this:

(a) Races Grade A and B ... 2/1
(b) Races Grade C up to 15 runners ... 2/1
(c) Races Grade C more than 15 runners ... 5/2
(d) Races Grade D up to 15 runners ... 3/1
(c) Races Grade D more than 15 runners ... 4/1
(f) Races Grade E ... NO BET (leave this race alone)

If there were two or more selections in the same race, Plante advocated increasing the price limits by 1 point. Thus, two selection in a Grade A race, for example, would require a minimum price of 3/1 or above on each.

The maths of successful betting basically demand that you secure as much value as possible on your selections. The professionals will tell you not to worry about how many winners you get, provided they return you MORE than you outlaid.

This is what successful betting is all about. Not 40 per cent strike rates (though such a strike rate would help), but getting back more money than you bet, even if your actual strike rate of winning bets is only 10 per cent.

The great American professional Ernie Dahlman recently told American handicapper Barry Meadow, in an interview in Meadow's Racing Monthly: "I met this guy once who told me he had made 15 bets all year and won nine of them, and I said that's great, I won $825,000 this year, how about you?

"Whoever makes the most money wins, that's how you keep the score. It's not that I made 20 place bets and won all 20 and I made $1260 and I'm on welfare."

Dahlman knows what he's talking about. He's never had a job in his life, he's won enough to put his six children through college (no loans involved), live in luxury with his second wife in a very pleasant gated community, and drive a silver Corvette.

As I said earlier, my colleague Brian Blackwell believes in always shooting for value. It's the concept behind his successful ImpactPro 2001 approach on the PPD Club.

"The price assessments are as accurate as I can get them," he says. "Often the value just isn't there, but then there are days when we just belt them. I had a 53/1 winner assessed at 9/2 at a recent Queensland meeting. Those are the joys of results you wait for, and which you earn by doing it all properly.

"But there are heartbreaks as well. ImpactPro had Grey Regent assessed at 3/1 recently and it ran a length 2nd at 32/1. So you have to cop these sorts of things on the chin as well. It's not all count the dollars."

Finding the "overlays" then is what it's all about. That means getting it right enough times to keep yourself ahead of the game.

Knowing what the mathematics are all about is essential. Many people have no understanding of odds. They take the view that so long as the horse wins, whether 6/4, 7/4 or 2/1, it doesn't matter. But there is a big difference.

Price will always be of the utmost importance. The difference between a return at 7/4 and one at 6/4 is 16.7 per cent. Over a lengthy period, this will mean a LOT when you start to balance up your profit and loss account.

If you do your form properly and assess that a horse has, say, a 3/1 chance of winning (25 per cent), and then you go and back this horse at 2/1 (33 per cent), you are taking BAD value. Your assessment is that the horse will win 25 in every 100 races and yet you have taken a price about the horse that indicates it will win 33 races per 100.

On a horse assessed at 3/1, you will need to accept that price or, better still, more than that. The bigger your overlay, the bigger your profit edge.

Bookies, of course, are key players in this game. They don't want you to bet at the true prices. They build in a profit for themselves; these days this will be up in the 25 to 35 per cent range, sometimes smaller.

Example: Assume the bookmaker is offering even-money Red, 2/1 Black, 3/1 Blue and 4/1 White. The percentages go like this:

RED (evens)50
BLACK (2/1)33
BLUE (3/1)25
WHITE (4/1)20


Add them up and they total 128. In "true" odds, each of the four starters has a "quarter" chance; added together this equals 1. At the above bookmaker's prices, the sum total is 1.280 which means those odds provide the bookmaker with a 28 per cent advantage over the bettor.

If he laid all four horses at the quoted price, he would, on a $100 book, be holding $128 to pay out $100. Thus, the percentage would be all in his favour.

If, on the other hand, the bookmaker was betting 2/1 one of those four horses and 4/1 the other three, the total would only be 93 and that's under the sum total of the four at 100, so the bookmaker would be operating to a 7 per cent loss.

The punter would be able to back all four and show a 7 per cent profit irrespective of which horse won.

But let's not get excited. Bookmakers don't do this. They use the percentages to protect themselves. Your job is to "suss" them out and find their weaknesses on individual runners.

You might have decided that Red is not an even-money chance and should be 2/1, while Black is the true even-money chance. On that basis, you would bet Black for $50 at 2/1. Should it win, you receive $150 back and you've made a profit of $100.

There is more to this aspect of betting and I'll be going into the details in the next issue of Practical Punting Monthly in January. We'll show you some of the ImpactPro 2001 successful strikes and also how you can back several chances in a race to produce a significant profit should one of them win.

In our February issue, we'll examine some of the approaches used by international punters. How do they beat the game and what aspect of the "maths of betting" do they favour?

Click here to read Part 2.

By Richard Hartley Junior