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So you want to be a Punter?

So you want to bet on horses or at least are planning to make some informed gambles in the near future. What should you do and know before you place your bet?

You’re competing against the house

The first thing you should try to understand, is that information and the amount of information you have, can change the risk associated with your bet. Making a blind bet on a horse you know nothing about is a bad idea, the only information you have in this case is the information given to you by the betting house/organization. This will (at least on average) mean you will lose money and if you keep doing this, lots of it too. Why would this be the case? The business that facilitates your betting probably has an incentive to see you lose. This is especially true in casinos, but unless your bookie is independent from the organization that organizes the races, his employer wins when you lose, because a bet will in general be a bet against the house. This means that the house has an incentive to give out information, odds etc. in such a way that (on average) you lose your bets. Getting the information yourself and doing your own analyses will negate this effect and give you a real chance of winning some money.

When should I bet on a horse?

If you want to bet on horse A winning a certain race, and the payout is 2 times the price of your bet (2:1 odds) than that horse should have more than 50% chance of winning the race if you want to take that bet. This is of course because you lose the same amount of money when the horse loses as you win when the horse wins. So for this to be a worthwhile bet for you, you want to have more than 50% chance of winning the race, that way even if you lose, if you keep making these kinds of bets eventually you’ll come out on top with more money than you had before. Of course logic changes a bit when you have different odds but you get the point.

In the first paragraph I told you how the house has an incentive to not give you the full story. However when you think about the incentives of the house you can arrive at what information of theirs you can trust. The house provides you odds, and although they might be a bit skewed in the houses favour sometimes you can trust them. If the house would have all the information one could possibly have, it would of course never give you low odds of winning (and thus high payouts) on a horse that is sure to win. That would be a sure-fire way for them to lose money. Of course the house doesn’t have all the information, but you can still see their odds as a bit of an indicator.

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