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Betting Strategies and Probabilities

"FLAT" BETTING and MONEY MANAGEMENT
Flat or "Level Stakes" bets are the simplest method of betting. Widely considered a "low risk" strategy (it is NOT), the same equal stake is wagered, as a win single, on every selection. While flat bets are easy to comprehend, they are essentially a "control" strategy and neither minimise risk nor realise maximum potential profit. Nonetheless, level stakes betting is a good starting point for novice players. However, inexperienced backers should be aware of the risk potential of such a betting strategy, which very much depends on the percentage of the betting bank staked. Any betting strategy must be capable of enduring the long losing run. A very low risk level stakes strategy uses 2% of the available betting bank, allowing for a losing run of 50 before the bank is exhausted. In contrast, a very high risk strategy uses stakes of 10%, allowing for just 10 losers before the cash runs out. A "medium risk" strategy, utilising 5% of the bank per selection is recommended, allowing for a losing run of 20. 

WIN PERCENTAGES, WINNING EDGE and CORRECT STAKING
Professional gamblers consider a win percentage of 35%-40% to be very respectable. These expert punters aim for a minimum return on investment (ROI) in the region of 20%, i.e. a return of $1.20 for every $1 bet, which compares favourably with savings and other investments. They place their wagers on "premium" selections, with a clear advantage over the field and offered at VALUE ODDS. Many casual players are capable of achieving a 20% ROI, but few do. The critical factor that players fail to appreciate is that long-term profits depend on the odds at which the winning bets are struck and the correct stake. Knowing the win percentage and winners` average odds enables a backer to determine their "winning edge," according to the formula: 

Winning Edge = Win % x Average Odds - Loss %. For example, for a punter with a win percentage of 30% at average odds of 5/2: Winning Edge = 30 x 2.5 - 70 = 5%. 

This edge determines the correct size of the bet, according to the formula: Stake = Winning Edge ÷ Odds, so for the above, the optimal stake is 5 ÷ 2.5 = 2% of the betting bank. However, if the backer is able to increase the win percentage to 33%, the winning edge becomes 15.5% profit, a more than threefold increase. The required stakes also increase though, requiring 7.75% of the betting bank. The latter scenario should be within easy reach of most recreational speculators prepared to put in a little work on form analysis. 

MULTIPLE or EXOTIC BETS

In North America, there are many exotic bets involving one more races. On a single race, Exacta involve picking the 1st 2 finishers in correct order, Trifectas requires the 1st 3 finishers in order, Superfectas are made up of the 1st 4 finishers and under different titles some tracks offer a wager on the 1st 5 finishers. Risk increases proportionately with the number of horses involved and reward also increases. Multiple Race wagers are also offered that include doubles that require the player to select the winner of 2 consecutive races and increses to Pick 3,s, Pick 4's, Pick 5's, Pick 6 and so on. Risk or Probability can be calcualted based on win percentage. For example, if the handicapper is capable of picking winners at a 33% rate then the probabilities for a double win are 1/3 X 1/3 or 1/9 chance of winning. On a pick 3, this increases to 1/27. These probabilities are reduced by playing multiple horses in each race but more money is put at risk and a higher payoff is required to achieve a profit.

An important strategy for Exotic Plays is to find a horse with an edge or win advantage that is not the favorite. Playing an"overlay" as key a key selection increases the profit potential significantly. It is very worthwhile to practice on making this type of selection to determine when you may have an edge in an exotic bet. This is an aproach that requires patience and perseverence but it can turn a losing player into a winner if practiced consistently. Of course, careful money management, as discussed above, has to be applied in this approach as losing streaks will increase but winning plays can quickly turn the bankroll around.

In the United Kingdom, many experienced horse racing investors scorn multiple bets, given the difficulty in achieving a profit and the bookmakers` profit margins on such bets. Nonetheless, they retain their appeal to many punters because of potential large returns for a small outlay.

Strictly, a "multiple bet" is a accumulator wager involving 2 or more horses in different races, all of which must win for the bet to succeed, as the returns from a winner become the stake on the next runner in the bet. The term "multiple bet" is more commonly used for wagers involving 3+ selections covered by single, double, treble and accumulator bets. Common (and colourfully named) multiple bets are the Patent (3 selections in singles, doubles and a treble; 7 bets), Yankee (4 selections in doubles, trebles and an accumulator; 11 bets) and Super Yankee (5 selections in doubles, trebles, 4-folds and an accumulator; 26 bets). "Full cover" multiples incorporating more than 5 selections represent poor value, due to the prohibitively large number of permutations involved. For example, a Heinz bet with 2 winners requires them to be at least 7/1 to realise a meagre profit of 7 times the unit stake. Multiple bets such as the "Lucky 15" and "Alphabet" represent far better value. 

A Lucky 15 involves 4 selections and comprises 4 singles, 6 doubles, 4 x trebles and 1 fourfold accumulator. If a punter achieves only one winner, bookmakers offer consolation payments of double, or sometimes, even treble the odds on the win single on the successful choice. For investors lucky (or indeed skilful) enough to select 4 winners, bookmakers add bonus payments of 10% or 20% added to the total returns. These consolations and bonuses make the Lucky 15 a good value multiple bet.

The Alphabet is so-named since it involves in 26 bets. For the sake of convenience, we will number the selections 1 to 6. An Alphabet comprises 2 Patents on selections 1-3 and 4-6, a Yankee on selections 2-5 and a six-fold accumulator. With a return guaranteed for just one winner and the prospect of a huge return for a small stake, this bet is one of the best multiples available in today`s betting markets.

One multiple wager that should definitely be avoided is the "Union Jack." This involves 9 selections arranged in a 3 x 3 grid. The bet comprises 8 trebles, on each horizontal, vertical and diagonal line. This bet offers appalling value, since it is possible to select 5 winners from 9 (your author knows from experience) representing a win percentage of over 55% and achieve no return. 

BACKING FAVOURITES
Many players adopt the betting strategy of always backing the favourite in a horse race. This may be because everyone loves a winner and favourites win about 30% of the time, giving punters every chance of 1 winner out of 3 wagers. However, blindly backing favourites is a certain way to give away the bankroll. By way of illustration, we will look at a random selection of widespread UK racecourses, say, Chester, Doncaster, Goodwood, Musselburgh and Salisbury. In the period from March 2001 to November 2010, 34,728 Flat races were run at these courses. There were 11,028 winning favourites (31.8%), whilst 20,947 (60.3%) were in top 3 finishers. In isolation, these statistics appear impressive. However, the average starting price of the winning favourites was 1.9/1 or about 10/11. A $1 win bet on every favourite would have resulted in a loss of $2200.62, whilst $1 each-way would have produced a loss of $5322.34. Betting with the Tote was even worse, with $3613.90 lost on $1 wins bets and $7019.93 on $1 each-way bets. Furthermore, the longest sequence of consecutive losing favourites was 23, enough to see off many betting banks. The same example holds true for North American Racing.