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Why Bet on a Favorite at the Horse Track, Ever?

Horse racing article at Knup Sports

Joseph Tuttle joins Knup Sports as a contributor to bring us some “Horse Sense”. Today he talks about betting on favorites, and asks, should you?

For nearly 50-years its been common knowledge that, about 1 out of every 3 races run, the favorite wins – and as we all know, that’s precisely 33%. I often wondered why the Pareto Principle (also known as the 80/20 Rule) never took effect with regard to horse racing?

So, I decided to finally do some due-diligence, and what I came up with is quite revealing. You see, that 33% number is highly skewed. Example: A  horse going off at 1-9, as the PTF (Post Time Favorite), has exactly a 46% better chance of winning its race, as compared to a PTF that is sent off @ 5-2!  And as anyone can plainly see, betting on 1-9ers to win virtually pointless – and a lukewarm 5-2er isn’t a fabulous bargain, either!

The Math: There are (12) odds positions between 1-9 and 5-2 (1-5, 2-5, 1-2, 3-5, 4-5, Even, 6-5, 7-5, 3-2, 8-5, 9-5 & 2-1) – 100/12 = 8.3%, or an estimated 8%. 100-8 = 92…..92/2(Win/Lose Variant) = 46, or 46%.

Now, 46/2 equals 23, or 23%, and that’s a much more realistic percentile regarding favorites and their actual winning percentage with relation to the overall average Win price of $11.80 at most North American racing facilities. Additionally, 23% is a lot closer to 20% than it is to this ridiculous 33% – and thus bringing the Pareto Principle into effect.

Onto the Basics of the Pareto Principle, or the 80/20 Rule…..

In 1906, an Italian economist by the name of Vilfredo Pareto noticed that, 80% of the land was owned by only 20% of the population. He also noted that, 20% of his pea pods contained 80% of the peas.

Even in our everyday lives, the following happens to be very true: 20% of our clothes get 80% of their usage.This phenomenon (the 80/20 Rule) has carried over into all walks of life – from farming crops to being a real player on Wall Street. The principle is fairly rudimentary: 80% of resulting outcomes, come from only 20% of actual causes.

My Math (above) shows just how and why PTF’s and the 33% Win Percentage of favorites at post time is such a misleading statistic. Hypothetically, if you were nothing but a $200 win player, per race, and you only bet on the post time favorites, then, you’d find yourself in the poorhouse pretty fast!

Example: If you bet nine consecutive PTF’s at an average win price of $4.80, you’d win three times and lose six:
Three Wins: $280.00(profit)*3 equals (+$840.00).
Six Loses: $200.00*6 = (-$1.200.00)
Final Tally: (-$360.00)
So, as my heading suggests: Why bet on a favorite, Ever?
Personally, I never wager on any horse that’s not 2-1 or more. And, I’ve also (albeit in only one of my formula cells) incorporated the Pareto Principle in my ODTM (Odds Data Mining Tool), and I’m even willing to share the formula.

In closing, here’s a link to a tremendously educational video to learn more about the applications of the “80/20 Rule”.

The above was a guest post by Joseph J. Tuttle

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