A question that pops up repeatedly is whether it’s better to bet for a win, a place or each way.

I decided some years ago that place betting was not profitable. At least, not when I used my own selection methods. Even with an 82 per cent strike rate over a period of time, I still managed to lose money on place betting.

Using tried and trusted selection methods, most systems will lean towards picking horses that are first, second or third favourite. In most cases, this will mean lower dividends.

However, I’m against making that sort of general statement and prefer to look at actual figures.

I recently noted down win and place dividends for a Saturday and sorted the win dividends into nine columns.

These were headed $1 to $1.90, $2 to $2.90, $3 to $3.90 and so on up to $9 to $9.90. I then jotted down the equivalent place dividends in these columns, added them up and divided by how many there were to find an average.

This turned out to be an interesting exercise. There were six winners that paid between $1.00 and $1.90 and the total place dividends added up to $7.70. Therefore, the average place dividend was $1.28. I won’t bore you with all the figure work for the other eight columns but will just give you their average place dividends.

Just bear in mind that the following figures are only one day’s results. Over a larger number of samples, the average will most likely vary.

$2 to $2.90 = $1.39
$3 to $3.90 = $1.53
$4 to $4.90 = $1.76
$5 to $5.90 = $2.22
$6 to $6.90 = $2.37
$7 to $7.90 = $2.55
$8 to $8.90 = $2.35
$9 to $9.90 = $2.88

It’s often said that favourites win around 30 per cent of races so let’s see how close that figure is to reality. On Saturday, February 16, 2008, there were 89 races in Australia of which favourites won 25, which equates to 28 per cent, which is not too far off the mark. They ran second in 14 races, third in 19 races and lost 31.

The average win dividend was $2.65 and the average place dividend was $1.46. Let’s assume that you have decided to bet on 10 favourites. The worst case scenario is that they are in the 31 that lost. Best case is that they all won.

I’m now going to compare win betting, place betting and each way betting with the worst case scenario first. At $1 to win or place, you’d have lost $10 in either case. Each way betting at $1 each way would have cost you $20 or if you had $1 to win and $4 a place, you would have lost $50.

Now, let’s take a look at the best case. If all of your $1 win bets won, you would have got back $26.50 for your $10 giving you a profit of $16.50. This means a profit on turnover of 165 per cent. Had you bet for a place only, you would have had a return of $14.60 for a $4.60 profit and a POT of 46 per cent.

If you had bet $1 each way and they had all won, you would have got back $41.10 for your outlay of $20 giving a profit of $21.10. This means a POT of 105.5 per cent. Had you chosen to bet $1 to win and $4 for a place, your return would have been $84.90 for an outlay of $50. This gives a profit of $34.90 and a POT of 69.8 per cent.

These figures show win betting gives a higher POT than each way betting. Your $1 E/W profit of $21.10 could have been doubled if the dollar that you bet for a place had been added to the win bet. Your total outlay for the race would have still been the same, but your win profit would have been doubled.

What if none of them had won but all were placed. The win bets would have lost you $10. Place betting would have seen you collect $14.60, for a profit of $4.60 and a POT of 46 per cent. $1 each way would have seen you outlay $20 and get back only $14.60 – meaning that you still managed to lose $5.40.

The final scenario for each way betting is $1 to win and $4 a place. For an outlay of $50, were they all placed you would have collected $58.40 for a profit of $8.40 and a POT of 16.8 per cent. You don’t have to be a rocket scientist to see from these figures that each way betting is not as profitable as putting the total amount of your each way bet on for a win.

Somewhere between these two extremes will be the likely outcome. I hope these examples have helped you come to a decision about which betting method you would feel more comfortable with. Good luck.

By Mr Money