1.THE METHOD is based on an understanding of (a) How to convert ODDS into PROBABILITIES. (b) How to calculate the SUM of the PROBABILITIES (SOP) for any given race or contest and(c) How to calculate PROPORTIONAL BETS (PB) in relation to the probabilities.
2.PROBABILITIES. A probability is a number between 0 and 1, and is represented by p. If p=0, the event to which it refers is an impossibility. If p=1, the event is a certainty. If p=0.5, the event has an
exactly even chance of occurring. eg when a coin is tossed for heads, p=0.5 and for tails p=0.5. When a dice is rolled, each number has a 1/6 chance of being uppermost, and so for each number on the dice p=1/6 or 0.166666666.
3.THEORETICAL EXAMPLE. Consider a race between ten equally matched contestants: the probability of any particular contestant winning is 0.1. The odds
against any particular contestant winning are 9-1, since there are 9 losers to 1 winner.
4.CONVERSION of ODDS to PROBABILITIES. In the case of the tossed coin (see above) it was found that p=0.5. The odds for either head or tail landing uppermost are evens, ie 1-1. In the Theoretical Example (also above) , the odds are 9-1, and the probability is 0.1.
IN GENERAL: If the odds are x to y, the probability is y/(x+y); ie the second number divided by the sum of the numbers. NOTE in this connexion that odds-on must be expressed as (eg) 4-6 and not as 6-4 on.
5.EXAMPLES of CONVERSIONS. Evens (= 1-1) >> p=0.5 (calculation 1/2). 9-1 > p=0.1 (1/10)6-4 >>p=0.4 (4/10). 3-1 >> p=0.25 (1/4). 4-5 (ie 5-4 on ) >> p=0.555 (5/9). 13-8 >p=0.381 (8/21). 100-30 >> p= 0.231 (30/130) etc etc. NB If odds-on, probability exceeds 0.5.
6.EVALUATION of the SUM of the PROBABILITIES. (SOP) SOP is calculated by adding together the probabilities of all the contestants. Examples: Ten contestants, each is 9-1, for each p=0.1 so SOP in this case is 1.00 (10 x 0.1). Ten contestants each 11-1, for each p=0.0833, SOP=0.833. Ten contestants each 7-1, for each p=0.125, SOP=1.25. Thus it is clear that when odds increase (lengthen), SOP decreases and when odds decrease (shorten), SOP increases. Another example: four contestants, A is 9-1, p=0.1. B is 4-1, p=0.2. C is 7-3, p=0.3. D is 6-4, p=0.4. SOP=1.00
7.EVALUATION of PROPORTIONAL BETS (PB). A proportional bet (PB) is a fixed sum of money multiplied by the probability and a PB is placed to win on each contestant. Examples with four contestants A, B, C and D using a £100 fixed sum: A 9-1, p=0.1, PB=£10 (calculation: £100 x 0.1). B 4-1, p=0.2, PB=£20. C 7-3, p=0.3, PB=£30. D 6-4, p=0.4, PB=£40. SOP=1.00 (as above). The fixed sum does not have to be £100, but whatever it is, the same amount must be applied to each contestant. In the above example it will be noticed that: (a) The longer the odds, the lower the bet. (b) The shorter the odds, the higher the bet. (c) The SOP is 1.00. (d) The total stake is £100 and (e) whichever wins, the payout is £100. From which we may deduce RULE No 1 which states: "When a proportional bet is placed on every contestant in a contest where SOP=1.00, the result is that the person placing the bets will exactly break even - no profit, no loss."
In the next example, we have shorter odds on contestant A now 7-1, p=0.125, PB=£12.50. If B, C and D remain the same the SOP is now 1.025, the winning payout is still £100 BUT the total stake would be £102.50 which represents a loss of £2.50 and we may therefore deduce RULE No 2 which states: "When a PB is placed on every contestant in a contest where SOP is GREATER THAN 1.00, the person placing the bets will make a LOSS."
In the final example, we have longer odds. A 9-1, p=0.1, PB=£10. B 4-1, p=0.2, PB=£20. C 3-1, p=0.25, PB=£25. D 6-4, p=0.4, PB=£40. SOP is now 0.95. Total stake £95. Whichever wins pays out £100. Profit is £5. Which gives us RULE No 3 which states: "When a proportional bet is placed to win on every contestant in a race or contest where SOP is LESS THAN 1.00, the result is that the person placing the bets will make a profit."
8.Therefore THE METHOD for making money by betting on races and other contests is based on Rules 1, 2 and 3 as described above and is as follows: (i) Find a race or contest where SOP is less than 1.00. (ii) Place a proportional bet to win on every contestant and (iii) You are bound to profit !!
9. NOTE This method takes no account of dead-heats, each-way bets, accumulators, betting tax.
10.EXAMPLES from English Football Association Premier League October 2003, betting only on matches where home win is odds-on and ignoring the away win:
(i) Chelsea v Man City: Home win 1-2, p=0.667, draw 5-2, p=0.286. SOP=0.953. Bet home win £67, draw £29, total stake £96. Result home win pays out £100, profit £4. (ii) Liverpool v Leeds. Home win 4-9, draw13-5. Using method already described results in £3 profit. (iii) Man Utd v Fulham. Home 1-4, draw 7-2, SOP exceeds 1.00 so no bet !! (iv) Newcastle v Portsmouth. Relevant odds are 8-15 and 5-2. SOP 0.938. Profit £6. (v) Spurs v Boro, SOP 0.858, shows a profit of £14. Betting on these four matches, £400 invested has shown a profit of £27, ie 6.75% which is a higher rate of return than that currently on offer at banks and building societies.
