Money management is critical for any bettor. It doesn’t matter if you like to bet horses online or play online slot machines and blackjack. You must have a clear idea of how you will manage your bankroll before you make your first bet. Having no plan is the quickest way to lose your money at an online horse betting site. When it comes to betting horses, bankroll management is even more important because there is more risk involved when one compares horse race betting with other forms of gambling.
Betting on Horses Vs. Betting on Blackjack
A good way to compare the risks associated with different forms of gambling is to look at betting on horses in comparison with betting on a casino game like blackjack. The mentality and approach for each is much different.
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We chose blackjack for comparison because it is a casino game in which the player can swing the odds in his or her favor with correct play (more on that at CountingEdge.com). The blackjack player has a method of adjusting the house edge if they use proper strategy. Therefore, a blackjack bankroll has to be managed in a certain way. Players will look for opportunities where they can increase their minimum bet size in order to win more money. In each hand of blackjack, the player has a role to play in the outcome of the hand based on their own skill level. The same cannot be said for horse racing.
While the smart handicapper can bring all of their skills to bear when picking a horse to win, there is still an element of the game that is out of the bettor’s control. Once the bet has been made and the starting gates open, the player can do nothing but sit and watch for the final results. In blackjack, the player may even have an opportunity to reduce their bet once the hand is started. This is known as surrender. There is no surrender in horse racing. Once a bet is made, the bettor is stuck with his or her selection.
Why does this matter? It matters because more attention must be given to how bankroll money is being used by the horse race bettor. One must learn to analyze the best spots for betting and bet accordingly. More consideration must be given to risk and reward. There are some bets in horse racing which require only a small investment for a potentially large return. Other bets are perhaps easier to win but offer little upside in terms of reward. Let’s start by looking at how much money you should have to play at an online racebook.
Starting Bankroll Size in Horse Racing
Blackjack is a game that requires a minimum bet on each hand. The game also involves variance because it is to some extent a random proposition. What this means is that you can have large winning or losing streaks. And, in the case of blackjack, this variance doesn’t really change. The house edge still holds up over time. This is how the casinos make money.
In horse racing, the win or loss streaks you encounter are far more dependent on the kind of bet you play. For example, if you chose to play only Win bets then you can reasonably expect to cash one out of every three tickets. The kicker here is that you can receive different odds on horses. In blackjack you receive set odds on every hand. Therefore, you can increase your potential return in horse racing by only betting on horses with high odds. But doing so means you will have longer losing streaks.
What this means is that you must have a large enough starting bankroll to withstand some losses. We would recommend 100X the minimum bet size to begin betting at an online racebook. Since horse racing bets are all calculated on the premise of a $2 bet, this means you should try to make a starting deposit of $200. That would give you a reasonable chance to make a profit if you are making $2 bets.
Allocating Your Bankroll in Horse Racing
Now that you have $200 in your racebook account, don’t rush into making bets. You need to allocate how much you will spend on certain bet types and the maximum you will wager on any specific race. This can be hard to do and will often be a matter of personal preference, but you need to stick to one rule that is important for all gamblers. Always put the bulk of your money in when you have a strong edge.
You should be using larger portions of your horse racing bankroll when you are taking shots at winning more money. For example, you should be willing to invest more in the purchase of a Pick Six ticket than you are in a straight win bet. Why? The potential return is much greater and therefore you are receiving better odds on each dollar spent.
Let’s say you make a bet on a horse at odds of 2-1. Your $2 bet will return $4 plus your original wager if the horse wins for a total of $6. Let’s say that you put the same $2 on a Pick Six ticket and win $10,000 when all of your horses come in. That’s odds of 5000-1 on your money. The problem is that a $2 bet in this situation is way out of proportion in regards to risk. You can reasonably invest more money in the bet to increase your chance of a win and still receive amazing odds.
It sounds complicated but think of it like this. A $2 bet on a 2-1 horse to win gives you one chance to cash your ticket. That horse must finish first. What if you had invested $5,000 in the Pick Six for a chance to win $10,000? The difference here is that instead of one chance to win the bet you would have had 2,500 chances to win if you were playing the $2 minimum bet. Now, we’re talking about a bankroll of $200 here and not $5,000, but you get the point.
We would encourage you to allocate about 30% of your total bankroll to straight wagers and about 60% to exotic bets like the Pick Six, Daily Double, and Trifecta. You simply must be putting your money into the situations where you have the best chance of a large return. You will be cashing less tickets than you will on straight win bets, but when you do cash a ticket the reward will be much higher. In horse racing you will never win the life changing money you hear about unless you take a chance at the big pools.
Action Betting in Horse Racing
You may notice in the above paragraph that we left out 10%. Where does that portion of your online racebook go? We would recommend you reserve this portion for action bets.
Actions bets, also called flyers, are bets that you make on horses simply for the purpose of having action on the race. It could be a bet on a horse that you just have a hunch will do well. Maybe you have some connection to the owner of the horse and are privy to inside information. Action bets don’t require a lot of handicapping. That’s why you should only be spending a small amount on these flights of fancy.
It can be boring to sit around and wait for a betting race to present itself. Not all races have a good betting option. Andrew Beyer has said that he likes to make the occasional action bet from time to time just to preserve his interest in the race card.
There is nothing wrong with making an action bet from time to time if you have the money to spare, but you should not be investing more than 10% of your total bankroll.
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