‘Value odds’ may be the opposite of what you think

A couple of weeks ago I mentioned the favourite/longshot bias in an article on lay betting. This bias means that the betting market under-rates the winning chance of horses that are in the market. Put another way, profitability is in direct correlation with price but is the reverse of how most punters perceive it to be. The favourite is the most profitable segment of the market and that profitability reduces as odds increase. Which means the fact is that the greater the price, the greater the edge you have working against you. Don’t believe me? For metropolitan races in the period 2007-2010, favourites were not that far off break-even, losing a little more than 3 cents in the dollar. And the best performing price range for favourites was under $3.00, not over. Second favourites were the second most profitable group, third favourites were third and so on. This is contrary to almost everything we are constantly told as punters. But the fact is you can find value at the shorter end of the market. Successful punting is all about value, which means getting odds that are better than the true chance of the horse winning. $1.50 is a value price if the horse has a 67%+ chance of winning the race. $10 is not value if the horse has anything less than a 11% chance of winning the race. It really comes down to: (a) knowing what a value price is and refusing to accept anything less (b) staking smart, which means outlaying more on horses at shorter prices (c) making the effort to shop around for the best available odds We can look at ‘true favourites’ in coming weeks, but one key factor is to make sure you are confident in the jockey because some struggle to handle the extra focus and attention when they are expected to win, particularly if the race turns out to be a tactical affair. Some cope well with being the hunted, but others really struggle to cope with the extra pressure. Racing is full of ‘truisms’ that have been quoted to us for as long as we have been punting, but are not so true when you actually look at the stats. ‘Odds-on, get on’ is closer to the truth than it’s far more famous counterpart. As a punter make sure you don’t believe something to be fact just because you hear it all the time. Rubbish repeated is still rubbish.