FRAMEWORK -ODDS
(How The Automatics Perform to Actual and Morning Line Odds)
By: Ed Bain
Feature Article from our February 2007 Newsletter 

The dictionary states the meaning of odds as: A difference by which one thing is favored over another. The real problem with setting odds on a horses chance to win is that it is subjective.

There are no rules to setting odds. What you think the horse’s odds should be is derived from one’s rationalization of the race.

I have always been told the betting public is a formidable opponent. Early in my handicapping life I was part of the crowd, a follower and I bet what the public bet. I had the same results as the crowd, I lost money. My opinion of the public is they always over bet the favorite. They are also willing to follow any one else’s opinion and the players that do handicap play speed. The crowd pays no attention to any other handicapping factor.

Today the crowd is my opponent. If I cannot beat the public I can not make a living betting the horses. The best way to beat the public is through a framework of betting only horses that you know what the results are before you place the bet.

Every racetrack employs some one to set the Morning Line (M/L) on every horse on the card. There are no formal classes to learn how to set the Morning Line. The goal of all line makers is to predict which horse the crowd is going to bet as the favorite. They do not set odds on who they think is going to win, they set odds on the tendency’s of the betting public.

A good line maker will have the favorite in his top three picks. To set a proper Morning Line it helps if the Line Maker is a good handicapper; some are, two good ones are the line makers in New York and Southern California ; two bad ones are at Charles Town and Maryland . It may not be a coincidence that the Line Maker in Maryland came out of Charles Town. Most Line Makers are familiar with every horse on the back stretch. Talk to them and the good ones remember what happened to the horse in his last race and how he looked when he ran. Setting a good line is very tough to do. Setting the line is an inexact science.

When you look at the M/L in the Daily Racing Form it is a throw out. The line is set by anyone they can find to do it, virtually any one; the copy boy, a tow truck operator or the person who walks you to your seat. Literally any one and that is why their line is goofy when compared to the Line Maker at the track.

There are two lines at work in every race.  The M/L, and who the public is betting which are the actual odds. One large advantage a horse player can have is if he knows what the odds mean when converted to a percentage.  As an example, 2/1 has a 33% win rate. That means this horse should win 33 from every 100 races and pay $6. It also means you win 33 times and you only break even. If you know the results of a group of odds you then know if it is a good or bad bet based on percentage.

I designed a framework for every bet I make. The 4+30 is my betting stat and it means this trainer has produced 4 wins or more plus a 30% win rate or higher.  All the bets I make are from the 4+30. This is a framework to place bets.  This is an approach that can be applied to betting because I know the results before I bet the 4+30.  It has a 23% win rate, a 43% place rate and a 47% show rate. 

To increase these numbers I have a group of Automatic bets.  These are trainers who are bet as an Automatic because of their high win rate. The current list of Automatics have had 837 starts, 228 wins for a 27% win rate, 384 win/place hits for a 45% place rate and 496 hit the show hole for a 59% show rate. Automatics are also a framework to place a bet.

I separated these 837 starts first by Morning Line odds and then by Actual odds to compare how the Automatics are bet by the crowd and how the odds are set by the Line Maker. I did this to find out if there is a percentage advantage from either the M/L or Actual odds.

96 Automatics had closing odds of 4/5 and lower, 46 won which is a 47% win rate, 68 win/placed for a 70% place rate and 78 showed for an 81% show rate.

The crowd bet 11% of all the Automatics to odds on status. The problem is at 4/5 to break even one has to produce a 63% win rate. This makes Actual odds of 4/5 an underlay and a bad bet.

3 Automatics had a Morning Line of 4/5 or lower, 1 hit for a 33% win rate and 2 placed for 66% hit rate. The M/L represented .03% of the 837 starts at 4/5 or lower less than 1 percent. The public bet 11 percent.

The Line Makers are not willing to commit to setting low odds. The crowd is determined to make a favorite then bet the favorite into oblivion. Keep in mind that Actual odds is the actual payout for that odds level. At 2/1 Actual odds produced 107 starts at 2/1 which is a 33% win rate.  Actual produced 28 wins for a 26% win rate. That means 2/1 is not a good bet based on the actual hit rate of 26% because the crowd over bets 2/1 and that is 7 points under break even.

The M/L will have a lower payout than the $6 payout of 2/1.  64 Automatics had a M/L of 2/1, 22 won for a 34% strike rate making 2/1 a good bet based on its 1% overlay.  However, 2/1 M/L had an average win mutuel of $4.85 for the 22 winners. If I bet all the Automatics at 2/1 M/L it would be a bad bet because $4.85 is 7/5 and needs a 42% win rate to break even. 2/1 is a good bet for serial bets like the pick 3 or 4 and the daily double. 

Betting with the win rate percentage is a good bet when betting exotics.

The crowd bet 28 odds levels with the 837 Automatics.

The M/L used 20 odds levels.

At 7/1 and up the crowd produced 8 wins from 133 stats for a 6% hit rate.

Line Makers do not include a 7/1 M/L they skip to 8/1.  From 8/1 and up the M/L produced 129 stats and 11 wins for an 8% hit rate.

Actual odds had 9 odds levels where the crowd performed above the break even percentage.

M/L also had 9 levels where the Line Makers performed above the break even percentage.

Actual odds performed best between 3/2 and 6/1.

M/L performed best between 8/5 and 6/1.

When I compared 11 odds levels starting at 3/2 and up to 6/1 I added all the percentages together then divided that figure by 11, the M/L had a win rate percentage of 31%. Actual odds came out to 27%. That means the M/L out performed the crowd by 4 points on the Automatics which is significant.

The reasons for the 4+30 and Automatics, is to take advantage of simulcasting. Find a high percentage trainer from any track and then bet within a framework of results; so, you know before you bet what your chances are of cashing that bet based on past results. In the case of Automatics it can be the hit rates for the Morning Line and the hit rate for Actual Odds. I bet the Automatics between 8/5 and 6/1. The Morning Line I rarely bet below 8/5 or above 6/1 because they are under laid to their win percentages. I prefer the M/L over Actual odds. The purpose of this approach is to avoid betting on low or no chance to win plays and to make only as many informed bets as possible.

Here are the tables for the Morning Line and then Actual odds: The 1st column on the left has the percentage for that odds level; then the M/L followed by the Number of Automatics for that odds level, then the number of wins, win/place and show hits, then the win%, win/place% and show%.