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Random Odds
by
Charles Carroll
One of the most useful things that you can do to fine tune your handicapping—regardless of how you handicap—is to make your own odds line. Whether your off-track handicapping is focused on speed, pace, class, pedigree, trips, trainers, or all of the above, if you’ve never done it before, making your own odds line will be an eye opener. It is also fundamental to modern “value” betting. The next few articles will cover some of the basics and some of the things that are interesting to observe when you begin paying close attention to odds.
Making odds is one of those things that can be surprisingly simple, or remarkably complex. “Simple” is really all you need in order to add the huge benefit to your handicapping that making a line can provide. Later, if you are going to move into value betting, you will probably want to refine the odds process considerably.
There are two useful parts to making a line; one is the exercise itself and what it tells you about your own handicapping. The other is that it is absolutely essential to “value betting,” which we’ll get to later. Even though I’ve written a computer program that automatically makes an odds line that I have extreme confidence in, whenever I feel that my handicapping is getting stale I’ve found that the fastest way to give myself both a tune-up and a reality-check is to handicap a few races and make a simple odds line by hand.
Nobody’s done a better job of explaining odds and odds lines in succinct fashion than Barry Meadow in his now classic “Money Secrets At The Racetrack.” In order to construct an odds line, you need some kind of a mental template, and the one he suggests is this: “If this race were run 100 times, how many would each horse win?” Personally, I’ve always just used the more straight-to-the point analogy of, “What percent chance of winning does this horse have?” Both mental pictures arrive at the same result—a percentage representing each horse’s probability of winning. I do like Barry’s image though, because it forces you to think about the uncertainty of racing just a little bit differently: it forces you to get past the “I-like-the-three-horse-syndrome.”
Say you do like the 3-horse. In your mental pre-race movie, the 3-horse stalks to the top of the stretch, where the 1 and 4 fade from their speed duel and the 3 romps home in a hand ride. Now, rewind the mental tape and run the race again—a hundred times. Does the 3-horse always win, or does the 4—which you were always a little worried about—sometimes hang on and nip it by a nose? Maybe after four or five runnings of the same race, the 1-horse nips them both. After 15 runnings, the other stalker, the 6-horse, has its jockey wake up to make a bid and surprises the whole field.
This type of analogy is also good for envisioning “high uncertainty races.” Say you’ve got a field of ten, well-bred, well-trained Kentucky three-year-olds who have been eating out of sterling silver buckets at places like Lane’s End all their lives, lined up in the gate at Churchill in June, and running for a nice purse. If you run this race 100 times, does every horse in the field stand a chance of winning at least once in a while? You’re darned tootin’. Highbred three-year-old races are not un-handicapable, but they are among the most situational. Both your handicapping and your odds line need to be in tune to today’s race and today’s factors. The same field next Wednesday may give you a totally different result.
On the other hand, picture the more common fields at most tracks. Could there be some horses entered that will never hit the wire first—even if you re-run the race from now to eternity? You bet, and this fact—horses that would never, or very, very rarely win—comes into play if you are going to devise a more mathematically sophisticated odds line, but for now let’s just note that such horses and such races do occur.
By taking the first step and either picturing the race run 100 times, or by simply postulating that based on your best handicapping you think the 1-horse has a 25% chance of winning; the 2-horse, a 10% chance; the 3-horse a 20% chance, and so forth, for the whole field, you come up with a percentage guess for each horse. What’s the first thing you notice? Chances are it will be that your percentages add up to a hell of a lot more than 100%.
First lesson of odds making: we tend to over-estimate contenders. If you have four horses that you think have a decent chance to win in a 12-horse field, and you hang a 30% probability on the standout, 20% on the second standout, and 15% on each of the other two—then that leaves only 20% for the other eight horses. But maybe you gave one or even two of them an 8% to 10% chance—and you are way over 100%.
The Morning Line is a 125% line, and it is not (or should not be—I have a story about when it once was) a handicapping line. In other words, the Morning Line should not be a track handicapper’s prediction of the outcome of the race, but rather his prediction of what the public odds should be, given the factors that the public is known to use. The 125% is intended to cover the take-out, but for handicapping purposes, we stick to 100% for our total.
The second step of making a simple odds line is where you really learn to fine-tune your handicapping: Make your percentage predictions for all the entries total 100%. Again, no matter what kind of handicapper you are—and whether or not you roll this into your everyday routine—this is one of the most useful exercises you can do to build your handicapping muscles. By adjusting your percentage predictions for each horse until the total for the field is 100%, you will have to think about your handicapping (and eventually your betting) in ways you never have before.
Once you are satisfied with your percentage predictions and they add up to 100%, you may have something like: 1-horse, 12%; 2-horse 6%; 3-horse 25%; 4-horse 3%; etc. for the whole field.
There is a fairly simple way to mathematically convert probabilities (the “percentages” above) to odds—but it is a heck of a lot simpler to use a table. For convenience, there is an odds table posted on this site (check the "Article Library" links). You can save the odds table page onto the desk top of your handicapping computer so it is just a click away when you need it, or you can find these tables in many books, notably Barry Meadow’s and Dick Mitchell’s betting books. These will give you direct conversions of percentages to odds. For example 50% = 1 to 1 (“even money”); 22.22% = 7 to 2; 4.76% = 20 to 1; etc. When you look at the tables and begin to use them with your own predicted percentages, you will begin to see some really interesting—and from a profit standpoint, really important—things.
One of my favorites is one of the most basic. “Random odds” or “Natural Odds,” is simply the probability of any given entry winning, if all other factors are equal. Examples are used like dropping ten marbles simultaneously from a ten-story building. Unless it’s done in a vacuum, the marbles will fall differently, but totally unpredictably. Each marble has a 1 in 10 chance or a 10% probability of hitting the ground first; so random odds are 9 to 1—one chance of a “positive” outcome, nine chances for a different one. Say you handicap a race with a 10-horse field and have a good, solid feeling about your work. If ability and all the other factors that we handicap had no meaning, each horse would have a 10% chance of winning and its “natural odds” would be 9 to 1. However, all those factors do matter, so you give the 4-horse a 25% chance of winning (3 to 1), another contender a 16% chance (about 5 to 1) and the rest lesser percentage probabilities. In this 10-horse field, as soon as you give any horse a greater than 10% chance of winning, then some other horse or horses must have less than 10%. The more horses you put above 10% and the higher you put them, the lower other horses must drop in order to maintain a 100% total.
So you get to the track and guess what? You were right! The 4-horse is the favorite and is absolutely destined to win, but the crowd didn’t miss that fact and it is “odds-on” at 4 to 5. All of your three contenders are standing at odds less than what you predicted—commonly called “underlays.” And, all exotics using them are pathetic. The only thing you notice is that a horse that you made 12 to 1 is standing at a whopping 30 to 1 on the boards! Wow! What an overlay! At this point you need to put down your Budweiser.
You just did a fabulous job of handicapping. The only problem is that the crowd did too. You gave this 12 to 1 horse a less-than-random chance of winning. First law of odds making: if you believe in your work, then a horse you give less than random odds of winning is not an overlay at any price. Betting on a less-than-random horse is betting directly against your own handicapping skill.
Were you wrong because you made the favorite 3 to 1? The public made it “odds-on” at 4 to 5. Did you underestimate the ability of this horse by almost 30 percent? (Your 25% vs public’s 55.6%.) Not likely. You were probably more right than they were. That’s next week.
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