Finding +EV

[rdiam]

I hate to "beat a dead horse" (pun intended), but the secret to "beating" the races is not picking the right contenders/pace lines, but finding horses whose public odds differ significantly from their probability of winning to overcome the track take and breakage, i.e, +EV. Horses whose odds are significantly below their win probabilities should be bet against, while those whose odds are significantly above their win probabilities should be bet.

According to Glendon Jones, author of "Horse Racing Logic", favorites will be overlaid to their win probabilities about 20% of the time, and underlaid to their win probabilities also about 20% of the time, which neatly lines up with the current win % of favorites these days of around 40%. This implies that in 20% of the races we should be looking to bet on the favorite, and 20% of the races we should be looking to bet against the favorite.

In the remaining 60% of the races, the favorite will be "properly" bet to reflect its win probabilities, and these are the races to look for "classic" overlays. However, statistical studies show there is a favorite/longshot bias in the paramutuel win pool, such that only 10% of horses showing 5-1 odds will be overlaid to win probabilities, and only 5% of horses showing 10-1 odds will be overlaid, and only 2% of horses showing 20-1 odds and higher will be overlaid. This focuses on a discussion about a 20-1 cutoff in another thread, where the "real" reason for passing on most of these horses is that their odds rarely exceed their win probabilities.

So we will need to be betting favorites around 1 out of every 5 races: the criteria for such a bet that the favorite's odds are 1-1 or higher and the SECOND favorite's odds are 7-2/3-1 or less AND has very little chance of winning. Even better if the third public choice also has very little chance of winning.

We will also needs to bet AGAINST the favorite around 1 out of every 5 races: the criteria for such a bet if that the favorite if bet down to at least 3-2, preferably 1-1 or less AND cannot win today. Most of the time our bet will be on the second public choice and/or the third public choice.

Roughly 60% of the time the first 2-3 public choices will be fairly bet or overbet, and this is the situation to try to find the "classic" overlay: my rule of thumb in this case is to bet such a horse as long as its odds are equal to or greater than half the number of horses starting: that is, in a 6 horse field, 3-1 minimum, in an 8 horse field, 4-1 minimum, in a 10 horse field, 5-1 minimum. The Sartin 2-horse bet in such a case according to Kelly (which will maximize bankroll growth) is to bet this "classic" overlay or overlays combined with enough on the "fairly" priced favorite to breakeven if/when the favorite wins. Alternatively, bet a single horse to win, and back it up with a place bet big enough to breakeven if the horse comes in second.

Bottom line, you are badly mistaken if you think you can create +EV without watching and using the tote board to structure your bets.

Richard