Wilfredo Pareto, an Italian economist at the turn of the previous century, discovered that 80 per cent of the wealth in the economy was controlled by 20 per cent of the population.
Pareto's Principle became universal and any undercover economist worth his salt will be able to apply it to anything ranging from business sales achievement to salmon upstreaming.
However, the 80:20 ratio is significantly altered when it comes to those who actually win money gambling -- summarised in the pert description, "The sure way of getting nothing from something." Nonetheless, out there amongst us flourish a select few who make a profit from gambling. Some even derive a living from it. But from among all who gamble, the number showing a profit from betting is closer in ratio to Einstein's definition of genius (1:99) than Pareto's 20:80.
With a bookmaker for a grandfather, betting has been part of life's landscape since I could make up a yankee, and in the course of this profession I encounter an anointed few who make betting pay on a consistent, long-term basis. So following the snow and the floods and the New Year return of racing, perhaps in 2010 nestled among your resolutions is the aim to finally make punting pay. If so, I have compiled the Seven Golden Rules that underpin any successful betting strategy.
1 Betting for Profit v Pleasure
This is the master key to successful betting. Take a moment and ask yourself about your motivation for having a bet -- are you betting for fun or for fortune? If you are betting for the thrill or the interest, that is perfectly valid, but be clear that you are in the entertainment business and any profit is more by luck than anything else.
Entertainment punters will have thrills and winning days but in the long run they can't beat the house. That's the price of entertainment.
However, any profitable gambler in any sphere that I have ever encountered is crystal clear about one central principle -- they are wagering with the sole intent of making a profit. One UK professional who began life as an entertainment punter and gradually transitioned, admitted the enjoyment he used to get from racing had more or less evaporated. The irony is that the thing that attracted him to the sport in the first place (addictive to many) was the very item to suffer -- so there are necessary sacrifices in the pursuit of riches.
Bookmakers, you will notice, have been very clever in recent years in altering their marketing -- moving from 'try your hand at beating the bookie' to a line around 'you can't beat the bookie but sport is more fun when you have a bet'. Moving from 'make a profit' to 'be entertained' has attracted thousands of casual punters in recent years which has seen betting turnover swell exponentially and bookmaker profits and share-prices soar.
Bookmakers are extremely clever professionals with huge resources. Entertainment punters are by definition amateur. An amateur might get lucky and beat the professional once, but never in the long run. So decision number one for 2010 is whether you are committed to betting for profit. If not, be entertained. If so, read on . . .
2 Keep a Record
I remember suggesting keeping a record of all bets as a basic starter-method to an inveterate punter who claimed he would do anything to make money from his betting. A month later I met him and asked how the list was coming along. To which he replied, "Ah, I started to do that, but when I saw how much I was losing, I just stopped."
All successful punters keep accounts and many will tell you how they love filling in the winning returns. But even professionals fill in the losers with reluctance. They do it so they can keep an accurate score and analyse what is working and what isn't. The more detailed the record the better. If it's racing, then items like month, stake, race type, distance, course are just some categories where analysis can lead to deeper insights as to what's working or not. For example, one jumps punter realised that his profitable time of year was in the autumn and spring because less deep ground was providing more predictable results.
No one can back every winner of every race. Moreover, with so much racing now even full-time application will not yield an edge every time. Working smart means specialising in an area where you feel you have the most knowledge, feel or understanding. And you will never know what this is if you don't adopt No 2 (keep a record) to know where that edge may lie.
Some prefer flat to jumps -- as a very broad specialism. Some specialise in flat sprint handicaps, or hunter chases. One punter specialises in undulating jumps tracks. He has a knack of figuring horses (with impressive flat track form) who are unlikely to act on an up-and-down circuit. His profit comes mostly from laying such horses at short prices on the exchanges. The more you specialise, the greater your edge and edge is the only path to profit in the long term.
4 Do the Work
'If you can't do the time, don't do the crime' is an old mob rule and it applies equally to getting a betting edge. Success in any discipline is about being prepared to pay the price in advance. To apply even rules 2 and 3 requires a huge amount of documentation, research and analysis, but after all 'success' only comes before 'work' in a dictionary.
I remember long before the advent of the internet, the late Simon 'Dodger' McCartney insisting that any serious punter needed to "spend the money on all the books". Of course, all that data is now available online -- and the rest. In this information age, every race is at your fingertips to replay on-screen. It is time-consuming but if you haven't done the work, be assured that the bookmaker, or someone on the other side of the exchange, has.
5 Understand the concept
Very few concepts are as misrepresented in betting as the term 'value'. Many seasoned broadcasters regularly equate a big price with value, when often it is just a big price reflecting the horse's true chance. If I offer you even money about the outcome of the toss of a coin is that value? No, it's a true reflection of probability. Bookmakers will offer you 5/6 your pick, heads or tails -- which is their profit margin.
Successful punting is about finding consistent opportunities to avail of bigger than even-money about real even-money shots. It doesn't follow that every bet will yield a winning return but if you consistently succeed in pinpointing value then you will show a long-term profit.
To know what constitutes value, of course, you need to follow rules 2, 3 and 4.
6 Have a Staking Plan
A punter is at his most vulnerable when he 'needs a winner' or is trying to 'get out'. I know plenty of guys who bet in tenners all day and end up having an even ton on the last favourite in the bumper just to break even. Poker professionals profess they never play with 'scared money' because their judgement is impaired, leading to mistakes and ultimately the poor house.
Have a long-term betting bank you are prepared to lose. Decide what your maximum bet is within that (at most one-tenth of your bank) and devise a scale (from minimum to maximum) to suit your budget.
7 Keep Your Cool
With a fixed staking plan it means you can ride the inevitable ups and downs of lady luck. The only sure thing about luck is that it will change.
The mark of the successful professional isn't how he handles the good runs, but how he copes with the bad. The fact is that successful punting still involves being wrong more often than being right and living with that reality requires a certain type of temperament. The main difference between a winner and a loser boils down to character.
Two comments from JP McManus stick in my mind under this heading. First is that, "There is always another day", and the second is that it is always the choice of the punter to bet or not to bet. Bookmakers are compelled to bet on every race.
Now there's an edge.