Example 2

In this example, there are 10 bets, of which 8 were losers and 2 were winners.  The strike rate is therefore 2/10 or 20%.  The minimum average odds of the winners therefore needs to be 80/20 + 5% + 1.0.  This equals 5.2.  The winners were Over the Thumb (odds 6.2) and Fred Bear (odds 3.6).  Their combined odds were 6.2 + 3.6 = 9.8 and their average odds were 9.8/2 = 4.9.  4.9 is less than 5.2 and therefore, in theory, we ought to make a loss on our betting activity.  From the above table, we find that we did make a loss of £1.18.

Example 3

In this example, there are 10 bets, of which 8 were losers and 2 were winners.  The strike rate is therefore 2/10 or 20%.  The minimum average odds of the winners therefore needs to be 80/20 + 1.0 + 5%.  This equals 5.2.  The winners were Over the Thumb (odds 6.3) and Fred Bear (odds 4.1).  Their combined odds were 6.3 + 4.1 = 10.4 and their average odds were 10.4/2 = 5.2.  5.2 is equal to 5.2 and therefore, in theory, we ought to break even on our betting activity.  From the above table, we find that we lost £0.04.  The 4p difference is due to conversion issues.

Example 4

In this example, there are 10 bets, of which 8 were losers and 2 were winners.  The strike rate is therefore 2/10 or 20%.  The minimum average odds of the winners therefore needs to be 80/20 + 5% + 1.0.  This equals 5.2.  The winners were Over the Thumb (odds 8.2) and Fred Bear (odds 4.6).  Their combined odds were 8.2 + 4.6 = 12.8 and their average odds were 12.8/2 = 6.4.  6.4 is greater than 5.2 and therefore, in theory, we ought to make a profit on our betting activity.  From the above table, we find that we made a loss of £15.64.  Why?  Because the stakes were totally random and, as I explained earlier, placing random amounts on  selections produces random results.  The minimum average odds calculation only holds true if stakes are consistent.

We have covered the situation from a backer’s point of view.  Now let us look at the situation from a layer’s point of view.

If you lay horses to lose, then perform the following calculation:

Divide the winning bet percentage by the losing bet bet percentage.  In the examples below our winning bet percentage is 80% and our losing bet percentage is 20%.  We therefore divide 80 by 20.  This gives us 4.0.  We then add 5%.  This allows for the betting exchange’s commission.  If your betting exchange charges commission at a different rate, then use that percentage rate instead of 5%.  5% of 4.0 is 0.2.  Therefore, we must add 0.2 to 4.0.  This gives us 4.2.  We must now add 1.0 to convert from fractional to decimal odds.  This gives us 5.2.

This figure is important.  It is the average odds of your losing bets, below which your betting activities will show a profit, above which your betting activities will show a loss and at which your betting activities will break even.  It therefore determines the maximum average price of the selections that you should consider laying at.