While luck is undeniably a factor when it comes to placing bets, there’s a lot more to consider when deciding which horse to back. A gut feeling can help you when you’re stuck between two equally attractive options, but the best bettors use that as a last resort. Instead, your guiding star should be risk management, calculating the expected value of each horse to get the best outcome possible.
This isn’t exclusive to horse betting, either. Perhaps the best example of risk management is poker, where each possible hand has been ranked, and players use poker cheat sheets to memorize them. Great hands encourage riskier play, while weaker hands may require players to back off and take it slow. But in both cases, the situation can change at the drop of a hat as more cards are drawn.
It’s a similar story with horse racing, where players are working with incomplete information and running the math in their head to predict probability. In this article, we’ll walk you through how to effectively manage risk and protect your bankroll.
Establish a Betting Bank
The best way to stay in control of your budget is to separate it from your everyday funds. How much this bank will contain depends on how much you can spare. You don’t have to have the full amount ready from the get-go. However, until you top it up to a sum you’re comfortable with, you should adjust your bets accordingly.
Your betting bank will also set the limit to how much you can bet per turn. We’d all love to be turning over four-digit sums, but if you only have $500 to play with, that’s not a realistic proposition.
Balancing Risk and Profit
It’s human nature to look at the big number, to see a wager and its potential payout and throw caution to the wind. However, if you only consider possible profit without balancing it with risk, you’ll quickly find your budget runs dry. Even the best horse has a bad day, after all. That’s why you need to plan ahead and balance risk and profit.
Flat Staking
For people just getting into horse racing, flat staking is the simplest and most-advised approach. Every bet, no matter the odds, gets the same amount of money. That makes it easy to plan things out: check how many races are happening, divide the number by the money in your betting bank, and start playing. Of course, that also means your profits do not increase with your wins, which may not appeal to everyone.
Playing the Percentages
Another option is to go for percentage staking. Here, you’re constantly adjusting your wagers to be a fixed percent of your total budget. Let’s go back to our example of $500. If you bet 2% of that $500, you’ll be wagering $10. Increase your bank to $550, and your bet increases to $11. Knock it down to $450, it decreases to $9. The system automatically self-corrects, raising bets during winning streaks and decreasing them when you’re not doing so hot.
Target Staking
Finally, you can go for target staking, where you change your bet to achieve a specific outcome. Let’s say you want to win $20, but the horse shows 4/1 odds. In that case, you’ll bet $5. If the horse shows 2/1 odds, you’ll bet $10. This method may suit some bettors, but the other two are more beginner-friendly.
Stick to Your Saddle
It’s also human nature to be tempted to deviate from the plan. After all, it can be hard to stick to fixed staking when you’re on a hot streak and it feels like every bet is going through. However, that’s precisely why bankroll strategies exist. Their goal is to keep you from sinking your entire betting bank due to a couple of bad bets. They minimize risk, rather than eliminating it. Use the one that best suits your appetite for risk and have fun.
