Although horse betting might seem like a thing of the past compared to all the shiny new video slots, in truth, more bets are being placed than ever.
In order to win at horse betting, you need two things. The first is to be able to place a winning bet. Making money by betting on horse races can be hard because the odds are so heavily dependent on other punters. This means that experience and research can make even more of a difference than with other types of betting. However, in order to place these bets, you need money, and money management is one of the most understated and overlooked areas of betting.
Your bankroll
The fancy betting term for looking after your money is ‘bankroll management’; your bankroll is the amount of money you have available to bet with. Ideally, you should know how much this is because it allows you to set limits on the bets you make. This varies from person to person, but ultimately betting comes down to chance; your bankroll should never include money for groceries, rent, or anything essential, otherwise a single losing streak could have serious consequences. This isn’t assuming you will lose, but it’s simply preparing yourself in case you are unlucky.
How much should I place on a single bet?
Once you know how much money you have to bet with, the second question is ‘how much should you place on an individual bet?’ This is where various betting strategies come in, and whilst there isn’t any one that is clearly the best, there are definitely some which are worse than others.
Broadly speaking, the better betting strategies tend to include staking a proportion of your total bankroll. For example, you might want to bet 5% of your total bankroll per bet. This means if you win, your total bankroll increases so you can bet more next time. If you lose that bet, your bankroll is smaller so you should bet less the next time. This method can help to limit losing streaks.
If you bet a higher percentage of your total bankroll, it means your wins might be greater but it also means it’s far easier for you to lose it all. Because of this, if you want to bet big, then you ideally should have a larger bankroll so you can absorb any losses.
The Kelly Criterion
If you have heard about bankroll management before then you may have already come across the Kelly Criterion. The Kelly Criterion is a formula that estimates the percentage of your bankroll that you should place on a single bet. Note that this formula, as well as betting a set percentage of your bankroll in general, assumes you have equal amount of trust in each bet you place.
The Kelly Criterion consists of two main calculations. The first is to find the ‘overlay’ – a type of measure of the value of the odds for a particular bet. The second estimates the bankroll percentage you should bet. There are multiple versions of the Kelly Criterion to adjust for various things, such as bets being of different value. However, if you do the calculations, you will rarely find that you should spend anything over a couple of percent of your bankroll total, and often it might suggest you stake under one percent.
This might seem small, but keeping the percentage low means that if you were to do a decent amount of research, you would have to be very unlucky to go bankrupt. Some people bet even less, such as under a half or a quarter of a percent of their bankroll total, just to be cautious. Realistically, a bet is worth nothing unless you win that bet, so caution is a sensible thing.