Once your horse handicapping has reached the point of proficiency that assures some profits – in horse race betting, money and betting management becomes all important. In fact, that’s really what separates the “pro” from the “dabbler” – a seriousness and savvy about horse race betting that translates into increased profits. There are a lot of good handicappers, but there are few professional bettors.
At the most basic level, there are only 3 approaches to betting horse racing;
1. Raise bets up when you win
2. Raise bets up when you lose
3. Keep bets at the same level
The latter is just good old-fashioned “flat” betting. If a player feels comfortable with $20.00 bets but not $30.00 bets – he’ll fall into a groove of pretty much always betting $15 to $25. And that’s okay. As we’ve said many times, the goals of some players might be just entertainment, or the handicapping challenge – etc..
If, however, your goal for horse racing betting is maximized profits – then the serious player can’t just stay on the same flat bet level without regard to gclub ROI percentage, winning race percentage, average payoff prices etc.. This will not allow optimal bankroll growth.
An improved tactic might be to raise flat bet levels by a given percentage on each doubling of the betting bankroll. We’ve discussed that in the “Professional Horse Betting Now!” e-book and won’t get back into it here.
The second listed approach – that of raising bets on losses – is the most potentially dangerous approach. These kinds of ” betting progressions” can and have been applied successfully, but they can also easily lead to loss of the betting bankroll. In a later article, we’ll delve into this style of betting a bit.
The first listed approach – that of raising bets on a win – has by far the greatest potential to increase your betting profits. That is the method we’ll discuss here.
Betting a set percentage of the bankroll accomplishes this and is the most commonly used. Many of you are no doubt familiar with the Kelly formula: win percentage minus loss percentage divided by return to the dollar.
For a good many years this money management approach for horse betting was touted in racing circles as being the approach to profit optimization.
The real problem with Kelly is that it escalates bet levels too rapidly while also allowing a relatively short losing streak to decimate or eliminate large profits accrued during a long series of profitable wagers.
Most players who use Kelly use a “fractional Kelly” as a way of ameliorating this problem. It is usually far too radical to use more than 1/2 or even 1/4 Kelly.
If you do use Kelly – it is essential to take profits on any large “spike” in the bankroll. This will help the above mentioned volatility issue. That way when the inevitable losing streak comes – good profits will have already been withdrawn from the bankroll.
Older handicapping wisdom has said never bet more than 2-5 percent of your bankroll on any one wager – no matter what your perceived advantage. The astute player with a real advantage might push those parameters out a little – but not too much!
Here’s a suggested alternative to Kelly.
A “structured flow” horse betting method – raising the bet on wins and lowering it on losses – is still a good and viable way of increasing profits, so how can we approach this in a way that is a bit less radical than the Kelly formula?
Remember – dealing with streaks – both winning and losing – is all important to our bottom-line. The streaks will come – that is a given. The longer odds your average winner – the longer the potential losing streak. Conversely, it takes only a short winning streak at high odds payoffs to explode a bankroll upwards.