Last month in Practical Punting Monthly (PPM), our Melbourne correspondent Roman Kozlovski brought us the first part of an extensive interview with legendary bookmaker Bill Waterhouse. In this final part, he reveals more of what Bill had to say and also has a chat with Robbie Waterhouse.

In 1949, a keen punter named Ali wanted to determine if there were areas of the final tote dividends (they have an all-tote system in the USA) which were paying more than they should have when compared to the number of winners within each group.

For instance, was it more profitable to back all 2/1 chances or all 5/1 chances or all 10/1 chances and did any set of odds win more races than would have been expected?

His studies found the odds of all horses were amazingly linear in that favourites won more races than second favourites who won more races than third favourites who won more races than fourth favourites and so on right down to the despised outsiders.

His studies also showed the punters lost less per dollar invested on the more fancied groups than they did on the 5/1 chances and that the 5/1 chances lost less than the 10/1 chances.

In his book, Winning, the late Don Scott stated, “In 1955 I set out to discover the relationship between the starting price of a horse and its actual winning chance (as per Ali in 1949).” He found that horses starting at between 1/1 and 7/2 are the best horses to back because they lost only 5.25 per cent per dollar invested as compared to all runners who lost 17.25 per cent.

He also performed other surveys in later years which confirmed his original results and these were replicated in William Quirin’s 1979 book, Winning At The Races: Computer Discoveries In Thoroughbred Handicapping. I have read several other studies which all confirm the exactness of the order of the SP figures and the longer the prices the more you lose per dollar invested.

As most punters are aware, there has been a gradual devolution of Saturday class horse racing with the introduction of lower class races such as Class 3 and even lesser grades on occasions.

The number of midweek meetings has also increased with the introduction of night racing and it just seems as if there is a metropolitan meeting almost every second day. I wondered whether the accuracy of the market was still as linear and as valid as it was in the past studies of Ali, Quirin and Scott in these days of lower class metro events.

I asked Bill Waterhouse this question: “How accurate is the betting ring these days in its assessment of  favourites in the lower class races such as Class 3 and Class 4?” His answer was short and sharp: “The betting ring is accurate in all classes.” There was no hesitation in his answer: it was stated as a fact and that was that!

Although I never bet in the lower class events and have no figures to substantiate my beliefs, I suspect, quite strongly, that the market would indeed be just as accurate these days with the constant mixture of horses shifting classes as in the past when the class shifts were less volatile.

It makes sense, as there would be any number of keen punters crunching all sorts of form analysis through computer simulations and the resultant findings would be translated to the track via the one commodity that speaks all languages – money.

It’s interesting to note that someone like Bill Waterhouse, with all his experience, has complete faith in the accuracy of the market and in the ability of punters and bookmakers to accurately assess the order of favouritism.

The first formguide I ever kept for research purposes was dated April 25, 1967; thus, I celebrated my 40th punting year on Anzac Day this year, and without a shadow of doubt the best advancement for the punter and his bottom line I have seen has been the introduction of Betting Exchanges, notably Betfair.

I strongly believe there should be no punter who cannot break approximately square in today’s horseracing world by commonsense usage of a betting exchange and the “best fluctuation” service offered by most bookies.

Bookmakers, by virtue of the competition from betting exchanges, have been forced to offer better prices and I note the bookmaker’s percentages at the track, based on best fluctuations, are becoming quite competitive when compared with the percentages on Betfair.

Without any doubt, betting exchanges are here to stay and will keep punters away from the track unless changes are instigated which will entice the punters back.

I asked Bill: “What would you change if you were in total charge of horseracing?” He replied: “Racing is about punting where the battle is between the bookmaker and the punter. I would reduce the on-course take from TAB dividends to 10 per cent: this would bring punters back as they would have a monetary incentive.

“I would abolish entry fees and I would offer on-course bookmakers some concessions. Currently, bookmakers have to pay for stand fees, staff, use of betting boards and pay two lots of tax: one per cent on the amounts held and 10 per cent GST on the same amount, regardless of whether the horse won or lost.

“When a punter rings us from off course we are only allowed to let the punter know the prices of a maximum three horses per race and we can only use the telephone to take bets. There are too many restrictions on bookmakers.”

As part of this series I also asked Robbie Waterhouse a similar set of questions and in some cases the same questions I asked his father. Like his dad the word “value” was emphasised by comments such as “there are, of course, hundreds of punters who don’t lose. Most successful punters are at the racecourse seeking the best value” and “I have two friends, both who have access to a successful punter’s prices; one is a big winner, the other a huge loser. The loser has a poor concept of value; he chases his losses taking unders”.

Robbie also sees backing several horses in one race as “sensible . . . depends on the value” and when asked to provide three main forms of attack he would initiate for long term success Robbie replied: “Getting the best of the odds,  understanding where the market was wrong and staking sensibly.”

These days, getting the best odds can simply be achieved by asking for the best fluctuation from your bookmaker and the issue of staking sensibly has both dad and son agreeing that a “Don Scott type staking plan” is the best long term approach.

The issue of “understanding where the market was wrong” is the key to successful punting. Every keen punter who really wants to do well on the punt has theories as to why horses fail to win, apart from those out of form and outclassed.

Some refuse to back first-up and second-up starters, some won’t back horses that have never won at a distance, others feel the same way about first-time wet track runners. The list can be quite extensive.

What throws punters is when a horse defies the theory and still wins. However, that is horseracing because nothing in this game is set and dried in concrete.

According to Robbie, if you have “a firm opinion before you go”, you will satisfy his key slice of advice for the punter and which supports legendary US punter Pittsburgh Phil’s comment that “a man without an opinion of his own and the ability to stick to it has not one chance in a million to beat the races for any length of time”.

One area Robbie touched on when I asked him what he would change if he was totally in charge of horseracing was to “make the handicapper do his job, for example, by expanding the weight scale”. Robbie believes, as do many keen punters these days, that the handicappers are behaving “outrageously”, which he qualified with these statistics: “In the most recently published figures there were 1,872 horses that carried 60kg or more with 370 winning (19.76 per cent) but 8,978 carried 52kg or less with only 442 (4.92 per cent). It is a benefit for topweights and a fraud on bottom weights.”

Recently, one of Robbie’s friends published a couple of examples of the handicapper handicapping from the top weight down in the Hall Mark Stakes.

The weighting of Takeover Target had all other runners weighted on the limit in a race in which TT was to carry the maximum topweight of 61kg. When Takeover Target didn’t accept all runners still had the same weight and a last start Group 3 winner was carrying the same weight as a last start Class 3 handicap winner: horses that had won huge amounts of money were carrying the same weight as a horse whose career winnings were $43,000.

From a punter’s point of view, I think this situation advantages the punter as it’s quite easy to eliminate several of the limit weight runners as serious winning chances, however, I know this is a short term view.

Eventually what will happen is that owners will become disillusioned as horses they own with some sort of a chance of winning a city race will be continually weighted out of events because the topweight is carrying kilos less than it really should.

This will lead to smaller fields with shorter priced favourites and these are not fields the general punter, who really keeps the game going, wants to bet on. There is an argument that says we should look after our better horses and not crucify them with massive weights otherwise they will head overseas and we will be left with the lesser lights. This view, however, forgets that handicaps are supposed to equalise the chances of all runners whether they are top class, average or lower class.

So, there we have it. The combined opinions of Bill Waterhouse and his son Robbie give you, the punter, an insight into how the “other side” operates and what they feel is important in the racing game.

The word “value” is echoed repeatedly throughout my notes, as is the worth of a systematic approach to staking similar to the Don Scott method of setting your prices and betting to them. Their thoughts are not based on wildcat ideas but on the cold hard facts that separate racetrack winners from racetrack losers.

*Part 1 on Bill Warerhouse stirred at lot of interest last month and we had many readers requesting details on the book, The Gambling Man by Kevin Perkins . . . go to:

Click here to read Part 1.

By Roman Kozlovski