Price Is Everything

Experienced gamblers are well aware of the importance of the price or odds you obtain when you place any bet. Unfortunately, less experienced gamblers often have little or no idea about the link between odds and probability, and therefore are doomed to lose money in the long term.

We hope that this blog will, over time, help to educate people about the factors which have an enormous effect on your prospects of showing a long term profit from your betting activities.

The single most important factor to consider when you place a bet is whether the odds of reward are less or greater than the true probability of that event actually occurring. To give a very simple example, if you toss a coin, there is a 50% chance of it landing heads, and a 50% chance of it landing tails. Therefore, if you were offered 5/4 heads by a bookmaker, it is clearly a good bet. If you were offered 4/5 heads, it is clearly a bad bet.

Of course you could have a situation whereby you backed heads at 5/4 and tossed the coin 10 times, and it  landed tails every single time. That is precisely the reason why you should only ever risk a small proportion of your betting bank on any one bet. In the example above, even if you obtained odds of 10/1 about heads, you could very easily lose your whole betting bank if you did not have a sensible staking plan in place.

It is much easier to calculate a fair price on an event such as a coin toss, where we have accurate information about the true probability, than on an event such as a horse race. The true probability of each horse winning a race is very subjective, and is dependent on many different factors. Different people will have different opinions about a horse's chances of winning, and therefore there are sometimes opportunities to obtain odds which underestimate the likelihood of a horse being successful in any given race when you know more about the horse than everybody else, including bookmakers.

You might rate a horse's chances of winning as around 40%, in other words 6/4, yet be able to obtain odds of 25/1 with bookmakers. When this happens, you are still happy to back the horse at 5/2 even if you have missed all the bigger prices which have been hoovered up by those who know the horse's true ability.

If you can regularly obtain 5/2 about a genuine 6/4 chance, you cannot realistically fail to win a lot of money in the long term.