Backing winners and making money are two different things.


     It’s easy to find winners – just back every short-priced favourite. Unfortunately you won’t make money, because those short odds will never cover the cost of your losers. The only way to profit by backing horses is to get VALUE odds. In other words, if a horse’s odds are 6-1 but they “should” be 4-1, you’ll make money in the long run.


     It’s like flipping a coin heads/tails with someone: you pay them 40p if they call correctly, but they pay you 60p if you call correctly. Irrespective of the win/lose sequence, you can’t help but make money in the long run. That’s because the “true” odds of the coin are evens, but you’re being paid at odds of 6-4.


     If you’re new to racing, remember that your stake is returned when your horse wins. Therefore, if you back a horse for £40 and it wins at 5-1, your PROFIT is £200. You get £240 back from the bookmaker, but you spent £40 in the first place.


Which horses are likely to be value?


     Odds-on horses can be value. (Odds-on means less than evens, which is 1-1.) A 10-11 shot which has an 80% chance of winning is great value. Conversely, a 2-1 runner with a 20% winning chance is no value at all. But generally speaking, you’ll find that non-favourites are more value than favourites. (A favourite is the horse with the lowest odds in a race.)


     Favourites aren’t often value because of punters’ herd instinct. When a majority of people are putting money on one horse, the weight of such money shortens its odds. When odds shorten, more people take it as a good sign of a winning chance, and they too back the horse. Its odds shorten further, more people lump on, and so forth.


     Note that the winning chance of the horse hasn’t changed – it’s just a snowball effect that’s shortening the odds. The runner may have been value in the morning, at say 3-1, but later at 2-1 the value has vanished.


Why weight of money shifts the odds


     To understand this phenomenon, we first need to see how the bookmaking process works. Long before betting begins, each firm of bookmakers works out what the odds (often called prices) are likely to be on each horse. These odds are known as “tissue prices” and are the first odds offered to the public.


     Newspaper and TV racing tips often start punters’ money pouring in; bookmakers continuously adjust odds to reflect their payout/profit positions. Each firm of bookmakers will have slightly different liabilities, so each firm will offer slightly different prices. No matter which horse wins, the firms aim to take enough money on the other runners to finance their payout AND make a profit.


How a bookmaker’s odds may be constructed


     On an imaginary race, let’s say the original “tissue prices” on the market leaders were 6-4, 2-1, 3-1 and 6-1 with one firm of bookmakers. If nationally-available racing tips stimulate a disproportionate volume of money for that 6-4 favourite, it could transpire that the bookmaker would lose out if the favourite won.


     Thus the company would reduce the favourite’s price to, say, 5-4, whilst increasing the other odds to perhaps 5-2, 10-3 and 13-2. This would effectively attract money away from the favourite. If all odds in a race were expressed as percentages, and odds were added together, bookies would want them to total over 100% – say 115%.


     100% would represent a dead book, upon which they made no profit. 115% would represent 15% profit, which is known as the OVER-ROUND. On average, bookies seek to make 1.5% profit per runner in a race. So, in an 8 runner race, they want to create a 12% over-round, in a 14 runner race a 21% over-round, and so on.


     Whilst early prices differ from bookie to bookie, every bookmaker’s SP (starting price) is the same. The SP is calculated by recording different bookmakers’ odds just before a race starts, and determining the average.


How to find a VALUE horse


     As we know, odds are depressed by weight of money. The weight is created by a volume of people backing the same horse. Why do they choose the horse? Many tipsters could have selected it. The animal could have had a low tissue price in relation to competitors. It could be an “obvious” selection for many reasons. And it may conform to lots of well known racing system rules for producing likely winners. Example: back a horse running within 7 days of its last run (this indicates that the trainer believes the animal to be fit).


     Even if you find trends on specialist racing websites, such as “horses dropped in class today and not beaten by over 5 lengths last time are good prospects”, they’ll turn out NOT to be profitable … because a trend worth knowing about spreads like wildfire, and takes the odds down with it. What you must do is back horses that most people AREN’T backing, because such odds will usually represent VALUE.


But will the horse WIN?


     Most horses win at some time. Check back through any day’s results and you’ll probably see 8-1 winners, the odd 16-1 success, and maybe a victor at 25-1. Three weeks ago I spotted a 200-1 winner!


     Obviously short priced runners succeed more often than high-odds longshots. Contenders at 25-1 win big but infrequently, whilst 6-4 chances win little and often. Overall, the returns are similar.


     Most punters worry about finding the winner of each race in which they’re involved. That’s where they go wrong – they should concentrate on the combined outcome of a SERIES of races. In such a series 6-4 shots will win, 7-1 runners will win, most prices will win ... but if you’ve picked value in YOUR series of races, you’re guaranteed a profit in the end.


     Forget trying to pick winners. Winners will pick themselves. Instead, try and pick value.