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Hedging Your Bets Through Dutching

Hedging Your Bets Through Dutching

Betting definitely isn’t an exact science, and sometimes even experienced, successful gamblers have a hard time deciding between the various possible outcomes or simply want to hedge their bets. Provided it’s done properly, this strategy of betting on more than one outcome—known as dutching or ditching—can be quite profitable.

It’s thought that this strategy was first invented by Al Capone’s accountant Arthur Flegenheimer, also known as “Dutch” Schultz (hence its name), who used it to bet on multiple horses to give himself a better chance of winning. While it is definitely useful in horse racing, dutch betting can be just as useful for sports bettors who fully understand the concept.

While there are many websites available that can quickly calculate dutch bets for you, it’s first necessary to gain a better insight into exactly how it works and the principles behind it.

How Dutch Betting Works

The simplest form of dutching would involve only two possible outcomes, where the bettor would divide a certain percentage of the total stake between the two outcomes based on the odds. For instance, if the odds are listed as:

Outcome A: 4/1 (1.25 decimal odds)

Outcome B: 1/4 (5.0 decimal odds)

Before we can determine how much to bet on each outcome, and indeed whether dutch betting is a good strategy in this case, it’s first necessary to convert the odds to their implied probabilities. For decimal odds, the equation is 1 / decimal odds. So, in the case of outcome A, we get 1 / 1.25 = 0.80 or 80%.

For fractional odds, you need to divide the denominator by the sum of the numerator and denominator together. So, in the case of outcome B, we get 4 / (1 + 4) = 4 / 5 = 0.20 or 20%.

So, by following dutch betting, if we start with a stake of £100, we will break even if we bet £80 on A and £20 on B. Of course, the point is to win money, not just to break even, so there would be no reason to use dutch betting for this particular bet.

However, if those same odds were changed slightly, and the bookmaker was offering odds of 1.30 on A and the same 5.0 on B, we suddenly come to a profitable situation. By calculating the two probabilities, you’ll see that A is now only 77% and the total of the two equals 97%, so in this case dutch betting would yield a profit of 3%.

Nonetheless, these two situations are more theoretical than anything, as it’s not likely you’ll ever finding a bookmaker offering you odds that equal less than 100%, as it would be too risky and they wouldn’t make any money. Basically, you’re not likely to ever be able to make a profit using dutching when there are only two possible outcomes, as bookmakers just don’t offer even or better odds. Still, this doesn’t mean that dutching doesn’t still have its uses in sports betting, especially if you want to hedge your bets and go with more than one possible outcome.

Using Dutching in Sports Betting

As you’ve seen, dutching probably doesn’t have very many uses in situations where there are only two or three possible outcomes, unless you’re luckily enough to find a bookmaker offering odds in your favour instead of theirs. However, it can come in handy in situations where there are many possible outcomes, such as racing or in smaller side betting in sports, such as picking which player will score first.

Let’s say Real Madrid and Barcelona are going to play each other, and you’re considering placing a bet on who will score first. After looking at a bookmaker’s website, you see they are offering the following odds:

Cristiano Ronaldo: 4.75

Lionel Messi: 6.0

Neymar: 7.0

Karim Benzema: 7.0

By converting these decimal odds into their probabilities ( 1 / decimal odds), it then becomes possible to see how much you would need to bet on each player in order to make the same profit no matter what the result. For instance, if you think that one of Ronaldo, Messi or Neymar will be the first to score (which, all things considered, seems a pretty sound bet). After converting the three decimal odds into probabilities you get Ronaldo 21.05%, Messi 16.67% and Neymar 14.28%.

So, to make a profit if either of the three score first, all you need to do is place a bet equal to that player’s respective percentages. Don’t believe it? Here’s the math to prove it, using this simple formula:

Total from Winning Bet (Probability x (1 – decimal odds)) – Total Losses

So by following this logic, if we were to bet 21.05 on Ronaldo, 16.67 on Messi and 14.28 on Neymar we would get:

Ronaldo Win: 21.05 (Probability) x (1 – 4.75) = 78.94 Winnings – 30.95 (Total Lost on Neymar and Messi bets) = 47.99 total

Messi Win: 16.67 x (1 – 6) = 83.35 winnings – 35.33 losses = 48.02 total

Neymar Win: 14.28 x (1 – 7) = 85.68 winnings – 37.72 losses = 47.96

As you can see, if you place each bet based on its respective probability, you’ll end up winning around 48 if any of the three score first. Of course, this same formula also works based on fractions, so you can just as easily bet half of each amount of 100 times it and the outcome will always be the same. This shows just how useful a dutch betting strategy can be, as these same principles can be applied to virtually any situation where there are multiple outcomes you can bet on.

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