It’s always a surprise when you discover that your pet theories have been built on shifting sands. For example, place betting is a safe way to bet; after all, you have three chances of getting a return.

Okay, so the returns aren’t all that great, but you get a lot more of them than if you had bet for a win.

Maybe after thinking about it for a bit, you decide that each way betting is definitely the way to go, because if your horse hits the winning post first then you get the win dividend plus the place. On the other hand, if it runs second or third there is still the possibility of coming out ahead.

This month, as in previous articles, I’ll go back over the first six months of the 2006/2007 season and examine the results of win, place and each way betting on actual bets from my own records. These are not figures plucked out of the air to bolster a pet theory but the real McCoy.

All win and place bets will be for one dollar while the each way bets will be one dollar to win and four for a place for an outlay of five dollars. Taking the win bets first, after the first race where the winner was struck, there followed a sequence of 10 losses. It was not until the 14th race that the bank went into profit and stayed there.

At the end of February, the bank was $169.20 in profit after a total outlay of $129, giving a profit on turnover of 131 per cent. Of the 129 bets, winners were struck 64 times for a strike rate of 49 per cent.

At first look, the place bets were a little more encouraging. Of the ten consecutive win losses early on, two were placed but because the dividends were small, it took until the 29th bet before the bank was in profit and stayed there. Sadly, the final figures were not very inspiring. After an outlay of $129, the profit was only $29.60 for a POT of 23 per cent. With 87 successful place bets for a strike rate of 67 per cent, that profit was disappointing.

At this stage, it seems that win betting, even with a smaller strike rate, is more profitable because of the bigger dividends. Looking at each way betting on the same horses it is not until the 16th bet that a profit is reached and sustained. Total outlay for the six months was $645 and a profit of $287.60 gave a POT of 44 per cent.

Summing up each of the options, we find that the best one is win betting with a POT of 131 per cent. Each way bets of $1 to win and $4 a place had a POT of 44 per cent, while place betting showed a POT of only 23 per cent. If the amount of $5 outlaid on each way bets had instead been put on for a win, then while the POT would still have been 131 per cent, the actual dollar profit would have been $846.

It’s interesting to play around with the balance of each way outlay. By betting $1 each way, the profit would have been $198.80 for a POT of 77 per cent. Alternatively, betting $2 to win and $3 for a place gives a profit of $427.20 and a POT of 66 per cent.

When it’s all boiled down,  it just shows that win betting is hard to beat for a profit. Another way to increase collects is to look at doubles. There is a lot of potential with doubles to increase your profits without sacrificing your bank.

Take this simple method – $2 to win on horse “A”, if it wins, pocket half the collect and put the balance on horse “B”. If the balance is not a whole dollar amount, pocket the cents as well. Say horse “A” wins and pays $3.60, from your $2 bet you collect $7.20. Put half, $3.60, in your pocket along with the odd 60 cents leaving a whole dollar amount of $3, which you put on horse “B”.

At this point, you have recouped your initial outlay and still have the potential to collect again from horse “B” if it wins. On the other hand, if “B” loses, you are still ahead. Profits can be compounded by starting the sequence again with horse “B” being considered as a new horse “A” and putting an opening $2 bet on it as well as the $3 bet from the proceeds of “A”.

Using this method on the period under examination, after the first winning bet it wasn’t until the 13th bet that a profit was reached. In total to the end of February, the outlay was $520 with a profit of $680.20 and a POT of 131 per cent.

This approach can be further modified. Instead of betting on two horses “A” and “B”, consider three, four or five horses. Three horses would require an initial bet of $3 on “A”, then after pocketing one third of the collect, the balance is split into two equal whole dollar amounts and these are then put on horse “B” and horse “C”.
Using the above example of “A” winning and paying $3.60, your collect would be $10.80. Of this, you pocket $3.60 leaving a remainder of $7.20. Pocket a further $1.20 to bring it down to an even $6 and put $3 on “B” and $3 on “C”.

Once again, a profit was not reached until after the 13th bet. By the end of February, the total outlay had been $900 and the profit was $1,306.30 with a POT of 145 per cent. To cover four or five horses in a similar manner would require initial bets of $4 and $5, and then follow the same procedure of pocketing one dividend and dividing the balance over the remaining horses.

Put simply, the bets would go “A” on to “B”, “A” on to “C”, “A” on to “D” and “A” on to “E”. Obviously if any “A” bet fails you lose the amount outlaid but if it wins you stand a chance of increasing your dollar profit but not necessarily your POT. For example, A/B profit was $680.20 and POT was 131 per cent, A/B and A/C profit was $1306.30, POT was 145 per cent, A/B, A/C and A/D profit was $1832.60, POT was 143 per cent while A/B, A/C, A/D and A/E profit was $2,237.60 but POT was reduced to 135 per cent.

This same approach can be followed with place bets but even though there will be more hits, because of the lower dividends, the returns will not make you wealthy in the short term. A/B profit was $87.70 or 23 per cent, A/B, A/C, $160.00 or 26 per cent, A/B, A/C and A/D, $221.20 or 25 per cent while A/B, A/C, A/D, and A/E profit was $270.10 or 24 per cent.

In these figures, the profit on turnover has been calculated using the total amount invested out of pocket on horse “A” as well as the proceeds of any wins placed on the horses “B”, “C”, “D” and “E”. If you chose to consider only the amounts invested on horse “A” because these come out of your pocket and not from profits, then the figures for per cent profit would be quite different.

Taking just A/B double with a total of 129 races bet on, $2 on each “A” means that your out of pocket investment would be $258. The final profit from these bets was a nice $680.20 or a return on investment of 263 per cent. Let’s dream for a moment – say a race is over and done with in five minutes; 129 races then would take 645 minutes or ten-and-three-quarter hours. I don’t know of any financial institute that offers that sort of return on investment over that period of time.

Another path to riches is the all-up bet where the proceeds from a bet are invested on the next horse. You can choose to have as many horses as you like in a group but it depends on how many sequential winners are struck as to whether it will be a great success or not.

In this approach, I’ll group five horses and use some serious (for me) money. $10 is invested for a place on each horse. If it wins, the proceeds go on to the next horse and this is repeated on each horse until the fifth one has run.

Therefore, bets would go “A” on to “B” then proceeds on to “C” then “D” and finally, “E”. Imagine that “A” won and paid $1.60, you collect $16 which goes on to “B”. “B” pays $1.30 and you collect $20.80. Pocket the 80 cents and put $20 on “C”. If you were lucky and the next three horses won and paid $1.50 each, you’d finish up with a final collect of $67.50. Now that has to be a satisfactory outcome for an initial $10 bet.

On the other hand, if one of the five horses in that group loses, you will lose only your initial outlay of $10. By investing $10 on each horse, you will be starting a new five-horse group with every bet. The rewards can be quite spectacular.

In this scenario of 129 races, the total out of pocket investment was $1,290. This amount is constant regardless of the number of horses grouped. For a simple double A/B, the profit was $661.

Three horses grouped, $1,435, four horses, $2,664 and five horses, $4,188. Grouping more than five can be very rewarding but there is a possibility of a large investment affecting the dividend.

Bear in mind that whatever grouping you use, be it three, four or five horses, if the number of sequential hits is less than that number, you will lose your initial investment. There is nothing more frustrating than getting two or three winners in a row when you have decided to group them in fours.

It boils down to this – whatever the number of horses you group, it will still cost the same. The smaller the group, the more times you’ll have a collect but it will be a small collect. The larger the group, the less collects you’ll get but they will be larger.

Whether these returns will be enough to cover costs is the question. Personally, I wouldn’t group more than five even though I’ve been lucky enough to snag 12 places in a row on two occasions. My preferred groupings would be three or four.

On any given day, this grouping of horses can be in chronological order and spread over two or more tracks or if you prefer, you can group them by track.  If you choose to do it this way, you might have to wait for a few weeks to complete a group of bets.

I mentioned above that I’d had two lucky runs of 12 consecutive places. Just out of curiosity I checked what the profit would have been, had I grouped 12 horses. The first run was from October 3 through to the 22nd and the collect would have been $13,894 just from that group of 12.

However, the last two bets would have been for $4,000 and $7,700, meaning, the dividends would have been very much smaller than they were – most likely just $1 so these bets would have been an unnecessary risk and a waste of time.

The other run was from November 16  to November 28 and the collect was $4,829 but the last two bets were for $1,600 and $3,700 so dividends would have been affected again. One possible way to prevent this happening in any group would be to decide to stop all upping when bets reach say $500.

As you can see, there are some exciting possibilities that have the potential to dramatically increase your profitability without risking too much of your hard earned. Moderation is the key here – don’t be too greedy. I think of the old story of the monkey and the jar of nuts.

One nut at a time was not good enough so he grabs a fistful, then finds he can’t pull his fist out and has to settle for one at a time again.

By Mr Money