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Instead of opinions, I prefer to deal in statistical facts when analyzing horse racing:
1. EVERY horse in a race has some chance to win. Win probability on some approaches 50%, win probability on others may be less than 1%.
2. If you bet a horse at odds higher than those implied by its win probability, you have +EV and you will win $ over a large enough sample size. Similarly, if you bet a horse at odds lower than those implied by its win probability, you have -EV and you will lose $ over a large enough sample size. For example, betting horses at 1-1 odds that win more than 50% of the time will win $. Similarly, betting horses at 9-1 that win more than 10% of the time will win $. But betting horses at 1-1 that win less than 50% of the time will LOSE $.
3. When deciding to bet, we have to estimate win probability. Again, to bet the 1-1 horse we need to estimate it will win more than 50% of the time. And to bet at horse at 9-1 we need to estimate it will win more than 10% of the time.
4. The horse that we estimate is MOST likely to win may or may not be a bet -- not because we think the odds are too low on an absolute basis, but because we think the odds are too low RELATIVE to our estimate of the horse's chance to win.
5. The odds on a horse are determined by everyone betting in the pari-mutuel pool. Therefore, we are not betting ON horses, we are betting AGAINST other bettors in the pool (and their opinions backed by $).
6. If you are only willing to bet the horse you estimate is most likely to win, you will need to be a much better handicapper than the large rebate syndicates that populate this part of the pools, since they are willing to take worse odds in order to build volume for their rebates.
7. Kelly betting says you should bet more on horses with a higher win probability than you do on horses with a lower win probability.
8. If you are not maximizing your rebate you are leaving $ on the table.
9. The 20% plus takeout in horse racing is a HUGE nut to overcome.
10. Given the takeout, bookies on the planet LOVE horseplayers as long as they can limit the payouts on longshots, since the vig will grind most of them down over time.
Richard
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