In this article Neale Yardley looks at the age-old question of whether each-way betting is better or worse than win-only betting.
The topic of each-way or win-versus betting has been thrashed around by the experts for years.
In last month's P.P.M. it was the subject of two articles. In my article Avoid Risk Win I suggested that place betting short-priced favourites that firm in the betting can be profitable, and Richard Hartley Jnr concluded that the decision to bet win only or each-way should be based upon the expected strike rate of the horses being backed.
Most punters will now be aware of the advice given by Don Scott in Winning More advocating place or each-way betting only in races with fewer than 13 runners. Many will also know that bookmakers find it harder to balance their place books in races with short-priced favourites.
When it comes to the crunch all you really want to know is whether a particular selection in a given race represents value at the each-way or place odds on offer.
Roger Dedman, in his authorative book Commonsense Punting, attempts to answer this question. Dedman begins by agreeing that the main argument against each-way betting-that it represents poor value-is generally correct.
He rightly points out, however, that there are situations in which each-way betting and even place betting, can be a sound proposition.
In an attempt to determine whether a particular bet is a good each-way betting proposition or not, Dedman considers the hypothetical situation in which a race is contested by nine evenly matched horses all at odds of 8/1.
Since each has a probability of winning of one-ninth, the probability that any one of them will place is three times this or one-third. This represents odds of 2/1.
The same sort of analysis shows that a race of 24 runners all at 23/1 gives rise to place odds of 7/1, nearly one-third of the win odds.
Since the one-quarter of the win odds offered by the bookies is well under this theoretical one-third, authors conclude that each-way and place betting represents poor value for large fields.
So what about smaller fields where the prices are usually shorter?
Dedman considers the example of a race with five winning chances at 4/1 and the remaining runners at long odds.
True place odds for one of the 4/1 shots are around 4/6 (calculated from a probability of three-fifths). Clearly the even money place bet provided by the bookies 4/1 each-way price is good value.
Dedman considers a number of realistic examples in which the favourite is short-priced, and proves that the place value provided by each-way bets becomes more pronounced as the favoured runners shorten in price. For example, in a race of eight or more runners with an even money favourite, Dedman calculates a genuine 5/1 chance to have a true place chance of 4/6. Similarly a 4/1 chance has true place odds of 1/2, a 3/1 chance true place odds of 2/7 and a 2/1 chance true place odds of 1 /10.
As with the previous example, the quarter of the win odds continues to represent good value for the place. For example, bookie place odds of 5/4 about the 5/1 chance are much better than the true place odds calculated by Dedman of 4/6. Even one-quarter of 3/1 would still be over the odds for the place.
Unfortunately bookies don't usually offer one-quarter of the win odds for place only bets; rather the quarter of the win odds are used for the place portion of an each-way bet. In other words, you have to accept an each-way bet to take advantage of the generous place odds.
If you are lucky enough to find either the tote or a bookie offering one-quarter of the win odds for place-only betting when win prices are of the order mentioned in the above examples, then by all means take the place bet.
If you can only secure decent place odds as part of an each-way bet then you will have to determine what is a fair each-way price.
For example, what would be the fair each-way price about our 5/1 chance in a race with an even-money favourite?
Since 5/1 is the fair win price and 3/1 has been calculated as the fair place price, the fair each-way price must be somewhere between the two Dedman calculates it to be 4/1.
What this means is that in a race with an even-money favourite, a horse with true win odds of 5/1 can be backed as low as 4/1 each-way and still remain a value bet. Any value lost on the win portion of the bet is made up for on the place portion. (Place-only you can bet as low as 3/1, if available).
Roger Dedman has tabulated the fair place and each-way odds for horses over a range of prices and in races with favourites ranging from 1/1 to 4/1. (These tables were reproduced on page 51 of Equestrian's recent publication Dollars and Sense).
To give you a feel for what sort of each-way prices are acceptable, here are some extracts from the tables.
In a race with a 4/6 favourite you can accept 11/4 each-way about a 4/1 chance, 7/2 each-way about a 5/1 chance and 9/2 each-way about a 6/1 chance.
In a race with an even-money favourite you can accept 7/4 each-way about a 5/2 chance, 9/4 each-way about a 3/1 chance, 3/1 each-way about a 4/1 chance, 4/1 each-way about a 5/1 chance and 5/1 each-way about a 6/1 chance.
In a race with a 6/4 favourite you can accept 2/1 each-way about a 5/2 chance, 5/2 about a 3/1 chance, 7/2 each-way about a 4/1 chance, 9/2 each-way about a 5/1 chance and 11/2 each-way about a 6/1 chance.
As you can see the place value provided over and above the bookies quarter of the win odds rule is more pronounced for shorter-priced selections and in races with shorter-priced favourites.
To take full advantage of these results you should get a copy of Commonsense Punting, photocopy the tables and keep the copy close at hand both at home when doing the form and at the track when placing bets. Dedman's tables are the perfect companion for the punter armed with a set of rated prices, since they allow you to convert your predicted win market into predicted place and each-way markets.
In case you don't want to bother with detailed tables, consider the rough rule of thumb that for each-way betting on horses under 6/1 you can accept a price around one point under the acceptable win price if the prize of the favourite in the race is odds-on and around half a point under the acceptable win price if the favourite in the race is in the range evens to 6/4.
Each-way betting is all about risk, like anything else in punting. In a book I came across recently called Taking Risks, authors Kenneth MacCrimmon and Donald Wehrung say risk arises from three determining factors, namely lack of control, lack of information and lack of time.
The implications of this to racetrack betting are worth noting since when viewed in this light it becomes apparent that betting risks can be reduced if we have more control over our bets, more information about each runner's form and more time to assess each race.
For example, you can control the total amount it is possible to lose, the degree of exposure to risk and the spread or share of risks. How? By betting in smaller amounts, by betting only on top-class horses in good-quality races, and by having saver bets and/or betting each-way.
How do you get more information? You can get more form by subscribing to a ratings service or computer database service. You can be more informed by reading more racing magazines and newspaper form and sports guides.
And time? You can save time by using computer programs to speed up the process of picking selections and determining bet sizes.
That's just food for thought. I'm sure you can think of other ways in which you can gain more control over your punting activities, get more information about the horses and create more time in which to assess the form. Think about it now and you might save yourself some losing bets!
NEXT MONTH: Neale Yardley introduces a first for P.P.M. by examining forms of gambling other than horse racing. He will look at casino games, card games, poker machines, Lotto and lotteries to see whether the percentages are stacked against you and if so, whether they can be swung around in your favour.
By Neal YardleyPRACTICAL PUNTING - JULY 1990