Steve Fierro produces the Raceday USA Betting Line for and has been enjoying horse-racing since 1978.

He has followed the teachings of the best in the business and in 1998 started the Raceday USA Betting Line Service and the same year became the host of ESPN's Everybody's Racing, a one-hour radio show all about the Sport Of Kings.

He is also currently the on-staff full-time handicapper at the Reno Hilton Superbook where he conducts educational seminars and coordinates programmes for northern Nevada players.

He has just released a book, The Four Quarters Of Horse Investing, subtitled, Plus: Betting Line Construction, and prefaced by one of PPM's favourites, Mark Cramer. The book is available from or and others.

In all the years I have been creating betting lines, knowing and understanding what type of favourite I am dealing with has been all-important. It has been a critical factor for increased profits. This has happened on a couple of different fronts. The easy one was the ability to capitalise on a false favourite.

The tougher one was learning when to stay out of a race because the favourite was legitimate. I once again increased my bottom-line profit, not by picking more winners, but betting fewer losers.

It cannot be emphasised enough that the public is a more than worthy adversary. They are right about the favourite 33 per cent of the time. The closer I can get to isolating where and when that 33 per cent will occur, the better I will be in the profit/loss column of my daily ledger.

Here's some food for thought. A baseball player that can hit a batting average of .333 is a multimillionaire and one of the stars of the game. Every time he steps up to the plate the pitcher knows he is dealing with a batter that must be reckoned with.

It is the same with the public favourite in every horse-race. The favourite must be understood and reckoned with. The public is a true talent. When it comes to racing, just as in baseball, when you are dealing with a 33 per cent hitter, how you handle that hitter is vital to your long-term success in the game.

Let's make something perfectly clear. When you start Attaching Value (Second Quarter) to your Contender Selection (First Quarter) you are doing just that, attaching value to your contenders. I have seen far too many players fall into a big trap.

They turn the betting line process into a "beat the favourite" process. If they know a certain horse will be heavily favoured, they create a betting line to beat that favourite. This is NOT the function of a betting line. There are good favourites!

Don't turn creating a betting line into a "beat the favourite" contest! All you are doing when attaching value to your contenders is just that, attaching value to the logical contenders in the race. If a contender appears to be a logical favourite, then give that contender/ favourite a logical betting line.

The function of the first two quarters of the Four Quarters of Handicapping is to find the logical contention in the race. You then assign fair odds to these contenders. This is done for the purpose of finding an overlay and potential value in a race. It is not done to create action and find a play.

When you throw out a solid favourite you in no way have an accurate betting line. I know I have stated at times throughout the book that when you create a betting line on a race you can't be wrong because that is your perception of the race.

The reason this type of "beat the favourite" mindset is wrong is because you have altered your true perception of the race. Instead of creating a line based on the perception you have of the race, you create a line based on a false perception. You are doing this because you are trying to "beat the favourite".

You will see when we get to an in-depth explanation of favourites why this last paragraph will be crucial to your success. The good news is that the public is wrong 67 per cent of the time. I have my edge on the game by exploiting this large percentage of strikeouts.

There are three places a favourite appears:

  1. The morning line. You must remember the morning line favourite has nothing to do with that entrant's true contention in the race.
  2. The actual post-time favourite.This is generally the racetrack morning line favourite. I have never seen a study attaching a percentage to how often the two are the same, but experience tells me the percentage is very high.
  3. My Betting Line favourite. To me, this is the real favourite. When you venture into the world of attaching value to your contenders, you now have "a say" in the matter of who is the real favourite. Sometimes you will agree with all concerned, sometimes you will not. This is what has led us to create the following filter.

PLF: Pass Legitimate Favourite.

Since I started attaching value to my contenders, there have been items that have surfaced as part of a "big  picture" learning curve. The "legitimate favourite" factor is a biggie in that regard.

Though I might be getting a little ahead of myself, I need to head back into the record-keeping area to give you some background on how this "discovery" happened. This will re-enforce why you need to extract your betting line  from your past performances and create your betting line sheets.

When a race is over, I highlight the winner. I have developed a habit when filing my monthly sheets of doing a quick scan of these highlighted winners.  It was early 1998 when doing one of these scans that I was drawn to just how many low- priced favourites on  my line had beat me out of my actual wager.

The favourites I am referring to weren't of the 2/1 or 5/2 variety; it was when I placed their betting line in the 7/5, 3/2, etc. range. These were horses I had a high degree of confidence in.

Face it, when you make a horse 3/2, you are saying this horse has a 40 per cent probability of winning. Think about all that can happen in a race. When you give a horse a four in ten chance of winning, this is a confident call. I then set out to see if there was a certain odds level that was critical and started with 2/1.

I then worked my way through 9/5 and 8/5. It was when I got to the 3/2 level that I noticed some big things started to happen. When I did research above this level, no real discernible pattern developed.

When I looked at races 3/2 or below, a couple of interesting patterns developed.

The first pattern I noticed at 3/2 and below was that the percentage of winners really jumped out at me. The second item I noticed was the odds on the other contenders.

They were sent to post at unusually higher than normal odds. Then, finally, when I made my favourite 3/2 or less these runners were hammered at the windows.

They were generally sent to post below even-money.

So I dived in and did some research on just under a year's worth of past betting line sheets. The results were a real eye-opener. When I made my favourite 3/2 or less this horse won 47 per cent of the time. This 47 per cent equals odds right between 6/5 and even-money. The problem was that the average win mutual was between $3.20 and $3.40.

This is between 4/5 and 3/5 in terms of odds. Like I said a few lines ago, the pattern on this type of horse with this type of betting line was that the general public usually overbet the animal and made him the odds-on favourite.

These horses are extreme underlays and, though they win at a higher than normal rate, they would lose me .23 cents on the dollar.

When you have a "hit rate" of 6/5 or even-money and are only being rewarded at the 3/5 or 4/5 level, you will lose money.

This is yet another key reason why picking your price and not your horse is how you make money in this game. Think about it.

I have a situation where almost half the time I have selected the winner and I still lost money.

The bottom line is that when you win at 47 per cent you need an average mutual of $4.40 to $4.80 to turn a profit. When the actual mutuals are $3.20 to $3.40 you can see exactly why this is a money-burning situation.

Let's face it, going five for ten on any race card may seem like an accomplishment, but if you have lost money you have accomplished squat.

The picture gets worse, and better, at the same time. The second thing I spotted was that in these races I was really playing some bombs. Here is what the typical line looked like at post time:

Betting LineClosing Odds
Horse A 7/54/5
Horse B 7/29/1
Horse C 9/215/1
NOTE: Since you have already completed the template portion of the book, you know you can only have this legitimate favourite situation in a three-contender race.

The situation you are looking at above is typical of the legitimate favourite filter. The second item I was sick to find out was this: Whenever I set a line on a horse at 3/2 or less and the public agreed and bet this horse below 3/2, the other listed contenders were false overlays.

The reason they become false overlays is because of the heavy betting action on the overwhelming favourite.

I lost an astonishing .44 cents on the dollar when betting into this type of contender/ favourite. What I had uncovered is a level of betting line (3/2 for me, yours may be different) that exposed an element of betting line/value-based play that had never been exposed before.

This is the fact that you can have false overlays in a race under certain conditions.

Here are the conditions of the PLF (Pass Legitimate Favourite) filter: Whenever I assign my top contender/favourite a betting line of 3/2 or less and the public agrees by sending this horse to post at 3/2 or less, this filter leads me to declare the race a pass. I am passing because we have a legitimate favourite.

I pass because I have proven through record-keeping that I am in a no-win situation. The favourite is legitimate. They are winning 47 per cent of the time. They still are money losers at .23 cents on the dollar.

I then am faced with the other side of the coin, the false overlay. These are even bigger money burners at.44 cents on the dollar.

Once I isolated this PLF filter in 1998, my ROI (return on investment) in 1999 went up a positive +.04 cents on the dollar. It is important to note that this happened not because I was picking more winners, but because I was betting fewer losers. I had truly isolated a no-win type of race for my style of First and Second Quarter tactics.

Another positive of this legitimate favourite filter is that I've been able to narrow down what type of horse makes up a good deal of the public's 33 per cent win percentage. In general, the public is right 33 per cent of the time. When I agree with them, this level is raised to 47 per cent. Of course, the game is about making money, not picking winners.

The last thing I will explain will make monitoring this filter easy. If (in my case) the Top Contender (TCI) is not listed at 3/2 or less, this filter does not apply to the race. When you get to the point in your line-making experience that you isolate your "legitimate favourite" level, remember:

If your top contender is not set at that level, or lower, you don't need to be concerned about this filter.

By Steve Fierro