Success in betting is typically approached with the primary, and sometimes exclusive, goal of selecting winners, writes Russell Clarke. Whilst undoubtedly important, such an approach rather puts the cart before the horse (pardon the pun). Understanding the betting marketplace, and some of the basic maths, is the cornerstone of any viable strategy. This can then be built upon to identify areas that should be utilised and exploited by the knowledgeable punter.
In this weekly series, I will cover:
The Efficiency of the Marketplace: Why it is crucially important to recognise and accept The Wisdom of the Crowd, and how you can utilise it to assess the validity and accuracy of angles/edges/systems from limited data samples.
“Sharp” and “Soft” Bookmakers: Who is who? Why there is a difference and how to utilise that difference. Which are the greatest potential source of profit, and how.
Bookmaker Concessions: The Great, the Good and the Ugly. Evaluating and measuring new account opening offers along with "reload" offers and ongoing offers. Examining 'price boosts', where to find them and how to measure them. The importance of Best Odds Guaranteed and how much difference this concession makes to a successful strategy. Last, but definitely not least, a look at the vexing question of each-way betting. When is it optimal over win only betting, and are enhanced place terms better than the standard offers?
Variance and Positive Expected Value (EV+): Understanding the crucial role of variance even for “The Best System in the World” (well….possibly). How to calculate EV+.
Betting Psychology: Examining cognitive behaviours and their potential effect on betting.
The Logistics of Betting: Creating an optimal betting strategy that mathematically gives you the greatest chance of profit.
The purpose of this series of articles is to increase the efficiency of readers’ betting and thus impact directly upon your ‘bottom line’. There will be no reference to selection methods; instead I will concentrate on understanding the marketplace, and utilising that knowledge to create an optimal strategy. The articles should be useful for both the experienced and less experienced amongst you.
But, before all of that, who am I, and what qualifies me to write about such things?
About the Author: Russell Clarke
Those of more mature years may remember me from decades long since past! For those who don’t, in the 1990’s and 2000’s I ran what was, I hope, an ethical and successful racing service, wrote articles for the much missed Odds On magazine, and, was generally known for my statistical approach to betting: a poor man’s Nick Mordin if you will! Whatever happened to him?
I moved to Dubai in 2007 and, along with a betting partner, became one of the first to pay the Betfair Premium Tax for our football betting exploits. I remain as an advisor to a Scandanavian-based football betting syndicate.
However, the story starts some time before that, as a youngster (maybe 9 or 10 years old) compiling speed figures for my uncle. He took his racing and betting seriously and subscribed to both the form book and the daily Sporting Life. I was fascinated by the theory that you could calculate the likely winner of any given race through the use of numbers or ratings, an objective approach that appealed greatly to my nascent scientific leanings.
I was also drawn to Dick Whitford’s ratings that appeared on page 2 of The Sporting Life each day. Whitford was the doyen of private handicappers in those days and, as a curiosity, his top rated horses were awarded the lowest figures. Another part of the Sporting Life that attracted my interest in those early days was The Sporting Life Naps Table. I was young and naïve, and therefore surprised that such a small number of experts (typically around 20%) managed to show a profit on their 'naps' over the season. I also noticed that each season it was a different group of tipsters that headed the table. Clearly their subjective methods were not a route to profit! Almost half a century has since passed and yet the racing correspondents still seem to rely on the same opinions and hunches that have never worked on any long-term basis. Anyway, I digress...
These early experiences encouraged me to concentrate on an objective approach to betting. In my early teens I was rating horses' performances based upon time. I also dabbled in private handicapping via collateral form and started to explore the murky world of systems and systematic betting. In those days systems were sold in the media by unscrupulous rascals (I’m looking at you Mr Dawson) and most were useless. One of the more honest purveyors of the systematic approach was a gentleman who operated under the pen name of Alan Gregory. He wrote books on systematic betting and produced a weekly newsletter in the 50’s, 60’s and early 70’s. Much of the stuff, in hindsight, was misguided, but it certainly introduced me to an alternative way to make betting profitable.
The advent of computers and their processing power was the revolution that changed the way many successful punters approached their betting. One product in particular, Racing Systems Builder (now unfortunately no longer with us), allowed you to test various factors in minutes rather than devoting weeks or months to ploughing through old newspapers. Many long-held racing truisms and beliefs were challenged and overturned using this product. Users were able to measure accurately the effect that hundreds of variables had on racehorse performance. They no longer had to guess how important, or otherwise, it was for a horse to be a distance winner, a winner on the prevailing ground, stepping up in class etc.; it could now be measured and quantified. I was like a dog with two tails!
With the information revolution underway, profitable betting came within reach of the ordinary punter. During this period, the racecourse market thrived (as it was a way of avoiding betting tax and obtaining better prices than starting price). I went racing three or four times a week and there were a number of professionals operating on any given circuit. Off-course bookmakers began offering more generous early morning prices and this was truly a golden age for punters. Although accounts were closed, they were relatively easily re-opened and the bookmakers were far less sophisticated than they are today. Some bookmakers headed abroad to places such as Gibraltar, Alderney and Malta, to provide tax-free betting facilities. Things got better still when betting exchanges took their first steps. Flutter and Betfair led the way until the latter bought the former and became the dominant force.
During all of this change I had become more and more aware of the influence of value on profitable betting. It is now accepted that value is an intrinsic part of profitable betting, but from the 70’s to the mid 80’s, the majority were simply interested in finding a winner at any price. It was Mark Coton’s Pricewise column that really brought the concept of value to the masses. By this time I had begun reading American racing books and their knowledge was clearly far in advance of their British counterparts.
Interestingly, despite the fact they had to bet into pools and, therefore, value becomes difficult to calculate, many of the American authors wrote extensively about measuring value and optimising staking. One overseas author that had a great influence on myself was an Australian professional punter called Don Scott. I think Don retired as a losing punter overall, but his book The Winning Way introduced me to the calculation of an odds line. An odds line, also known here as a tissue, allocates a percentage chance of winning to each horse and that is then converted into a price. The simple theory is that, to obtain value, you must bet at odds greater than the odds line indicates. This brings in the concept of backing horses that are perhaps not your first choice in a race - indeed they could be your 5th, 6th or worse, choice. That takes a change of thought process!
At this stage, I was a regular winner at early morning prices and the number of accounts closed approached a hundred. I was operating a full-time tipping service and more and more of my personal betting was via the exchanges. I had also begun to explore other sources of potential betting profit. My theory was simply that what worked in the very complex world of horse racing should also work in other sports. Football was the obvious target because it had such liquidity.
I found a talented football/computer addict as a partner and together we set about betting for profit on Premier League football. Our approach was systematic and, using a fantastic piece of software that my partner had developed, we bet into every available market on all the televised games. The software worked out a price on every market and we simply offered to lay at, or below, that price or back at a margin above that price. The software was able to operate in-play as long as it knew the current score and number of minutes until the end of the game (other relevant information such as injuries, sending-offs, etc. was factored into the price calculations).
Our profits exceeded seven figures and it was only when Betfair effectively doubled their ill-conceived Premium Charge (profits tax) to an effective 50%, did we call a halt to our betting partnership.
Personally, a good deal of my time is now spent on investments within a Hedge Fund that utilises similar statistical techniques to those utilised by myself in the sports betting arena. I was attracted to this approach to financial investments because of the huge liquidity alongside the availability of large amounts of data and advanced statistical tests/techniques that make much of what we utilise in horse racing look, quite frankly, a little amateurish by comparison.
That's more than enough about me. Matt has invited me to pass on my experience in a series of articles that I have entitled “Money Without Work”. Those of you who go racing will know this is the catchphrase of a well known Midlands bookmaker. I have used it here because the articles will hopefully provide easy to utilise advice that will improve your returns with no effort on your part in terms of changing your selection process. I hope you'll enjoy them.
p.s. Next week's article is around the wisdom of the crowds and the efficiency of the marketplace.