No guide on gambling is complete without a quick rundown of the most fundamental gambling concept. No doubt you would have heard this discussed many times before (if not, don’t be concerned as you will learn all you need to now), and you may even be sick of hearing others speak about it.
What am I talking about? Yes the idea of ‘value’. Instead of simply making the assumption that readers understand fully the idea of betting value, I decided that this was too important to take for granted and so, have included a short explanation. The other reason I decided to provide my own explanation of the idea of value is because there are many punters who do not fully understand the term although they use it as if they do.
Don Scott was the one who really started the ‘value’ revolution in Australia. His methods were at the time revolutionary and were seized on by many horse racing punters.
|“There is a big difference between a long price and a good value bet!“|
The term ‘value’ is often used by punters when they really mean a horse at a long price. There is a big difference between a long price and a good value bet! The media can be blamed for this incorrect belief. For example, racing radio stations will cross to a race track minutes before a race is due to start for the on course betting information. The race caller is usually the person who discusses the ‘action’ in the betting ring. If a horse is at a greater price than that on offer with the bookmakers, the presenter will often class that horse to be a value runner. Just because the price of the runner is shorter on course than with the TAB, it doesn’t magically make it good value.
So If That Isn’t Value, Then What Is?
There is only one definition of value and that is when you can take a price in excess of what you assess the correct price of the runner to be. That is if a horse that goes off at odds of 5.0 when you make the horse a 3.0 favourite represents a great value bet.
Value is simply the opinion of the individual punter. What may be thought to be good value for one punter may be very ordinary value for another. These opinions though are what make the successful punters successful and the unprofitable punters, well, unprofitable!
So to discover if you have a good bet, you must make an assessment of the horse’s chances of winning the race. It is then that you can compare your assessment with the prices being offered by the TAB, bookmakers or betting exchanges.
Strictly speaking, to determine if a certain bet represents value, a punter would generally have to take the inverse of the odds (that is to convert the odds into a probability), and then compare his assessment with that of the betting market. For example, a punter may make a horse a 33% chance of winning a race however the market has the horse priced at odds of 5.0 which represents a probability of 20%. In this case you have a good bet on your hands. That is because you give the horse a greater chance of winning than the declared odds.
Very few punters will talk in terms of probabilities however they are happy to speak in terms of odds even though they are one and the same. There are other punters who do not think of a betting proposition in terms of probabilities but look at the prices. For example, instead of actually quantifying the chances of each of the outcomes as a probability, they may look at the runner’s price of 5.0 and know that this price is much greater than it should be.
Betting value runners is the cornerstone of any successful punter’s approach. There are many punters who believe that if you simply back more winners then you don’t have to worry about all of this ‘value stuff’. This is the ‘any price a winner’ mentality. Although it may seem logical that if you back more winners you will come out ahead, this is not actually the case.
Winners are not all that important by themselves. Yes, you may think I am insane to make such a comment. To explain; on the face of it, a 50% win strike rate does sound impressive doesn’t it? Of course it does. However, if your average dividend is 1.99 or less, you are losing money. Let’s say that your average price for a winner is 1.9. After 100 bets of $10, you would have bet a total of $10 X 100 = $1,000. You expect to win 50% of the 100 bets (50 bets). One winning bet (1.9 X $10), returns you $19 so if you made 50 such bets, your return would be $950 thus you would have lost $50.
Let us consider that instead of your average price being 1.9 it was 2.1. Now you have a profitable approach. If you have $10 on a horse at odds of 2.1 you will return $21. At the completion of your 100 bets, you would have 50 winners. 50 x $21 = $1,050 and thus you have made a $50 profit!
Can you see what I am getting at here? Picking more winners doesn’t mean anything by itself. Hell, you should be able to achieve a strike rate of 80% if you continually backed horses at odds of 1.25 or less.
That is why there needs to be a value judgement. You not only need to find winners, you need to back those winners at a price that will provide you with a long term profit.
It is interesting to note that many punters accept the idea of betting for value but still find it hard to get their head around the fact that the runner they believe has the best chance of winning may not be a good bet. The good bet may be with another horse.
For example, you believe that a horse priced at odds of 1.5 should really win the race, however you turn around and back a horse priced at 10.0 in the market. Most punters find this logic simply too hard to believe. As we were saying, backing winners is not enough, we MUST be backing them at a price greater than it should be.
Regardless of how little chance a horse has of winning, it still has a chance and as such, there is always a price point where it becomes a good bet. This may even be as much as odds of 101.0 or even 501.0.
When we bet against Federer in the tennis, it can seem as though we are throwing money away because he rarely loses. However, the majority of the time he is ‘over-bet’. His price is usually shorter than the true chances of him winning.
This is the true meaning of value and fully understanding and accepting the idea will mean that you have a great chance of becoming a successful punter.
The idea of value explains the important difference between picking winners and picking winning bets.