Horse Racing - Odds Setting

Profitable wagering isn't just about choosing winners; it is also about deciding if it's worth backing them at the odds you are given. The thing to ask yourself all the time is if you are getting good enough odds to justify parting with your hard earned (or won) cash?

To find out, you have to use the same tools as we do - and you have to use your special advantage. That is that you are concentrating on just one race at one meeting on one day or on whatever single event you have picked on. We, on the other hand, have to cover numerous matches, races and events each day, and we can't get them all right.

There are several questions I ask about every horse in a race - and you must, too - are as follows:

>> In the past year, has the horse been first or ever been placed in a race in a race of this class?
>> Has it been placed on this or a very similar course recently?
>> Has it won over the distance?
>> Has it ended the race within half a length per furlong of the winner in either of its last two runs?
>> Has it recorded an adjusted top speed rating (which you can find in the Racing Post) or today's race that is no lower than 75% of the highest ranking for the race?
>> Has it been placed on today's going in the last 12 months?
>> Would it be inconvenienced by the draw?
>> Has it run within the last 50 days?
>> Has the jockey every ridden the horse before and if so, as he won or been placed on that particular horse?
>> Has the trainer had three horses placed in the past fortnight?

As with other types of sports, as well as form, I consider injuries and fitness, home advantage and weather. You should also consider facts such as, 28% of all football matches end in draws and UK participants are usually underpriced because too many punters bet on sentiment.

If you can get all these right, you'll know the true odds. The best tactic is to look for races or events where I and my colleagues and competitors have got them wrong. If we have, you've found a value bet, and making value bets is the only way to beat the bookies.

When I began in this industry, the only sports covered, apart from horses and dogs, were one-offs - tennis for Wimbledon, golf for the Open and the major football matches like the FA Cup final. Now there has been a mass proliferation, and everyone is betting on anything that moves - for example, three tennis tournaments a week.  It's been sustained by the fact that there are now almost 100 online bookmakers and betting exchanges.

Our forecasts are reflected in the early prices (also called tissue prices). The forecasts are faxed to the Racing Post every day at 4pm, so that they can be quoted in the next day's paper. A copy of the Racing Post is obtained at midnight, to see how our tissues compare with our competitors and make adjustments. When business starts at 9.30am and we have started taking bets, the odds can change considerably in response to where the money is going.

Over the years, I have sat with a newspapers piled around me and cuttings, manually writing odds. Sometimes I got them right, sometimes very wrong. When I worked with Hills, I priced the golfer Ian Baker-Finch at 50/1 for the Open. The Post tipped Ian to win and he was the main headline tip. He did win. The amount of money lost on this was £250,000, and I was lucky to keep my job.

Arbsters and bookies can co-exist
We wouldn't ban successful arbsters, but we know who they are and we watch their accounts very carefully, to make sure we don't catch a bad cold. You can't blame people for making free money. It's perfectly legal.

I have to admit that, if you are willing to put in the time and effort, devote some time in information technology, have a high degree of mathematical expertise, and are disciplined to regard arbitrage as a proper job, you can forge a good living out of exploiting the differences in the prices offered by competing bookmakers. Bear in mind that you sometimes have to spend hundreds of pounds to win less than a fiver.

The key is in looking out for the odds that are out of line with true probability. There are a lot of websites to help you, but you are better to do your own maths, because we will be keeping an eye on the percentages the comparison sites are publishing, too.

A worthy tip is always put a wager on the 'wrong' price first, because if we alter the odds in response to a rush of bets, at least you are on the right side of the equation.

If you press the 'How To' button, you can view the odds chart, which is an essential tool. The chart consists of three columns. The first column displays 84 possible odds, expressed as fractions. The third column is the same odds in decimals, the method in which the betting exchanges express them. The middle column is the vital figure - this expresses them in terms of a percentage. The total percentages in an event, added together, are called the over round when they add up to over 100 (and the overbroke when the total is less than 100 - my nightmare).

What you have to do - and which we can do automatically, either with our software, or, after years of practice, in our heads - is to tot up all the overround figures and make sure they come out at over 100. If, by amalgamating all the best prices on all the betting outlets they are less, you've got us. And it does happen, more often than we like. Good luck in trying to find them!