• The Kelly Formula

    Successful gamblers have two distinct advantages over their peers. They know when the odds are stacked in their favour and they know how much to bet in order to maximise their advantage. For example, Bill Benter who leads the most successful Hong Kong betting syndicate wins around $20m per year because he has worked out the true odds of a horse winning a race and uses that information to determine how much to bet. Regarding the latter Benter, like many other sophisticated punters, uses a mathematical formula called the Kelly Criterion to maximise his profits.

    The Kelly criterion is a formula that tells a gambler how much of their betting bank to bet on each round of a profitable gamble so as to maximise the growth rate of their wealth. The formula has been shown to work. For example, in a paper written in 1994 Bill Benter explained how he had used the Kelly formula to win several times his initial wealth in a sequence of around 2,500 horse races. Not bad! Other famous gamblers and investors like Edward Thorp used Kelly when counting cards at blackjack. The claim has also been made that well-known successful investors including Warren Buffett and Bill Gross also use Kelly methods.

    What is the Kelly formula?

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  • When is a horse well handicapped?

    Handicaps are one of my favourite races to bet. This wasn’t the case in my early years in racing. In those days I used to think that the best way to make my betting pay was to only ever bet in non-handicaps. My logic was sound enough. I reasoned that it was hard enough working out the best horse in a race. The extra complexity of then having to work out which horse was the best off at the weights sounded like a step too far. These days I’m more open minded and I treat handicap races as interesting puzzles, and far more rewarding than completing the days Sudoku in my morning newspaper!

    Handicap races also form the vast majority of a day's racing, especially over jumps. Strict adherence to a policy of only betting in non-handicaps over the sticks would mean that you would end up betting far too often than is good for you in novice chases and juvenile hurdle races. The other advantage of betting in handicaps in jump races is that most horses have exposed form. In other words each horse has ran a number of times and so you have a far idea of how good are horse is and some idea of its preferred conditions in terms of track, going, jockey and distance. is made up by such races. This is help from a form perspective and it helps to take out a bit of the guesswork when studying a race because you basically have more evidence to work with.

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  • Does the early worm catch the worm?

    Picking winners is hard enough but to make a profit at the racing game you also need to place your bets at the best possible odds in order to maximise your chance of making a profit. If you consistently back at odds that are lower than the true chance of your selections winning then you will end up a losing punter in the end, even if you are brilliant at picking winners. In contrast if you consistently get odds greater than the true odds then, while you may not be the best tipster in the world, at the end of the day you will turn in a good profit. Most serious players know this. The troubling question for them is when to place a bet. Should they bet a selection early at the morning line odds or should they leave it and wait for the odds to lengthen? This article offers a few pointers.

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  • A simple system for two-year old races

    Now that we are towards the back end of the turf flat season there are plenty of races for two-year olds. I've come to love these types of race because I have uncovered a profitable little system for them which has shown a smallish but consistent rate of return over the years.

    When developing betting systems it often pays to keep things simple. I have found time after time that you are better off basing systems around the core form factors and then thinking about ways in which you can exploit blind spots in the market to attain value.

    A few years ago I developed a simple system for two-year-old races that is based on just five simple factors. I’ll first describe the system, its rationale and then go on to discuss its results.

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  • Horses to follow for the 2017/18 NH season

    Autumn is in the air and it won’t be too long before the curtain falls on the flat season and attention will turn towards the winter game. It definitely pays to do some serious research on the form book, and to make a list of the top horses to follow ahead of the new season. My list of horses to follow for the 2016/17 National Hunt season turned in a good profit, including some juicy priced winners along the way. It might be too much to hope but I’m hoping to repeat the dose again this year.

    Here are our selections…

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