25/1/2002 edition

Safe Betting Bank

What is a safe bank for betting on horses? Is there even such a thing?

For the purposes of this article we will assume that the selections at least break even and odds significantly inferior to what are available are not regularly taken about them. If selections are poor they must lose long term. If horses are backed at odds below their true winning chances, it means those horses must return a long term loss. That means any betting bank over the long term only head in one direction - down to zero.

Many punters over the years have been misled into believing that you can safely bet even five per cent of a bank and turn it into a fortune by some marketers of horse racing systems.

Betting 5% non-reducing of a bank is mathematically guaranteed to wipe you out. It is only 20 betting units and even the best selection methods will lose 20 units during an extended bad run.

I had a phone call from one of our small betting members last year. This member started with a bank of $500 and $20 bets and only backed our selections at double figure odds. As the bank increased the bet size proportionally increased. All was fine and the bank increased to $5000 and $200 bets. Then a bad run came and all the profits disappeared.

With level stakes betting a profit would still have been shown. But the real problem was that betting 4% non-reducing of a bank was simply just too much. The bet size was simply too high. It did not allow for a perfectly normal, statistical bad run.

Well then, what is a safe bet percentage of a bank to bet?

Let us give an answer by looking at bank size needed when playing blackjack and card counting.

When the card count is positive - there are considerably more high cards than low cards remaining to be played, the player has slightly better than a 50% chance of winning each hand played.

You would think a maximum, non-reducing bet of 1% would be safe. Yet despite having an advantage with every hand played, only having to beat the dealer's hand, and not another 10 or so horses, there is a very realistic, mathematical chance, around 3%, of losing 100 maximum betting units. That is, losing your entire bank.

If the maximum bet is 2% non-reducing, the chances of losing the entire bank at some stage increase to 10%. Of course, in both these examples, the chances of losing 50% of the bank are substantially higher.

Let's apply this to betting on horses.

1. The majority of horses backed do not have a better than 50% chance of winning the race.

2. There will be substantially increased losing runs compared to playing blackjack.

Now we can see why many punters who otherwise are disciplined, lose at horse racing. They are undercapitalised in relation to bet size. The selections they use may be fine but as soon as a normal, statistical, losing run occurs they see their bank rapidly disappearing and assume the selections are no good.

Some years ago I saw a successful punter go through a horror run with very strong selections - only three wins from over 50 bets. These were not horses at double figure odds - they can have even bigger losing runs. These were horses that had a 33% to 50% chance of winning each race. Many of them were heavily plunged in the betting ring as well.

There was nothing wrong with the selections or the prices obtained. But there was a lot of bad luck in running - horses getting held up for a run, being trapped wide, getting injured or being headed on the line. Then there were the poor rides by normally reliable jockeys. Of course there were also inexplicable form reversals - racehorses are equine athletes, not machines and do have off days like human athletes. Just as human athletes get injured you can guarantee when you are having a bad run you'll be backing horses that pull up lame. That's racing.

Because this punter was betting a very small percentage of his bank the bad run was irrelevant. Betting 2% non-reducing, he would have been wiped out. Betting 1% non-reducing, he would have been extremely uncomfortable.

A worthwhile betting/staking method to consider is backing your strongest selections with a maximum 1% of your bank. (If possible use an even smaller percentage. Lower strike rate selections should also have a smaller percentage of your bank bet on them or alternatively use a separate bank for them.)

After each bet on your strongest selections you keep the stake at 1%. So if your first bet is a winner at $11.00 (10/1) your bank is now $11,000 and your next bet is $110. Should your next $110 bet lose your bank has been reduced to $10,890, so staking 1% your next bet would be $109. For practical purposes you might round up or down the bet size to the nearest five dollars.

The advantage of a staking method like this is that you do not lose your profits faster than it took to get them. Most punters who operate with betting banks, should they be fortunate enough to make profits, then lose those profits quicker than they got them when a bad run hits.

That is because they made their profits on a good run with smaller, increasing bets as their bank increased but when the bad run hits they lose their profits (and their confidence) with their biggest bets. They increased the bet size as the profits increased, but never adjusted the bet size downwards as losses started to mount.

Even worse, plenty of punters then become emotional and undisciplined. A common ploy is to increase bet sizes on a losing run because that winner "must be due". It doesn't work that way.

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Short Priced Tote Favourites
These are losing bets.
Look at the table below and see the percentages lost backing short priced tote favourites compared with the top official bookmaker betting ring prices.

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