Bet With the Best: Expert Strategies from America's Leading Handicappers

Excerpt from the book hailed as the most comprehensive book on handicapping thoroughbred horseracers that has been published in over a decade. Written by DRF experts Andrew Beyer, Steve Davidowitz, James Quinn, Tom Brohamer, Steven Crist and many more. This excerpt is a courtesy of NBN Books, the book's distributor. Order your copy online!

CHAPTER 3: CRIST ON VALUE

BY STEVEN CRIST

Continued from Page 1

Probability and Odds

Forget for a moment everything you know about parimutuel betting and pretend that horse racing is set up like sports betting or a game of blackjack: If you pick the winning horse, the track doubles your bet. Every winner, regardless of how many people bet on him, pays $4.

Now ask yourself two questions:

Do you want to play?
How would you handicap and bet differently from the way you do now?

Most horseplayers will realize after a moment of thought that the correct answer to the first question is yes. It might not be a great deal of fun, but you could sit around and wait for mismatches, races in which one horse is so clearly superior to the competition that anyone could fairly agree that he has a better than 50 percent chance of winning the race. You would never bet a horse you honestly believed had less than a 50 percent chance of winning.

If you could find 50 races in which you discovered a horse with a legitimate 70 percent chance of winning, you would invest $100-50 $2 bets-and get a $4 payoff on 35 of those 50 races for a return of $140. A $140 return on a $100 investment is a 40 percent profit, and you could quit your day job and spend the rest of your life refining your criteria for horses with a 70 percent chance of winning.

Racing unfortunately does not work this way. Horses that everyone perceives as having a 70 percent chance of winning pay substantially less than $4 because the odds are determined by the amount of money actually bet on each horse, and because track takeout and breakage further depress the payout.

It's worth examining the mechanics of this situation. Let's look at a $1,000 win pool on a hypothetical four-horse race in which every contestant attracts an amount of betting that accurately reflects his chance of winning:

	Horse	Winning chance	$ Bet
	A	50 percent	$500
	B	30 percent	$300
	C	15 percent	$150
	D	 5 percent	$ 50

Now, what will these horses actually pay to win? Based on the percentages, most horseplayers would guess about 1-1 ($4), 5-2 ($7), 6-1 ($14), and 20-1 ($42). In fact, the payouts are significantly lower.

Let's say this race is being run in Kentucky, with a 16 percent takeout and breakage that rounds payoffs down to the nearest 20-cent increment. That leaves only $840 of the original $1,000 pool to split up among the winning ticket-holders. (The other $160 goes to pay the race purses, maintain the track, and fatten the coffers of the Bluegrass State.) So Horse A does not pay $4, but $3.36, which is rounded down to $3.20. Horse B does not pay $7, but $5.60. Horse C returns $11.20 instead of $14, and the longshot returns $33.60 instead of $42.

In each of these cases, the actual return is lower than what is required to break even, much less show a profit, over time. If you bet horses who win 50 percent of the time and pay $3.20, you will lose 20 percent of your investment.

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