Guide To Profitable Dutching

I believe that value is the most important part of betting. As I am sure you have heard many times, you can select as many winners as you want but if you aren’t getting good value in the odds then you will still lose money. I have been looking at new ways of getting good value in the odds and of profiting from it.

I would like to talk about a method I call the Dutch Overlay. For those of you who are not sure what an overlay is, it occurs when the betting market believes that a horse has for example a 50% chance to win, but you believe the horse has 75% chance to win. In other words, in your opinion the market is under estimating the horse’s chance of success.

There are some excellent websites around for past data on racing. One that you can use for free is www.adrianmassey.com. This site has a huge amount of data and, even better, it allows you to create custom reports for free.  It tells you for instance, that across all types of races in the last 7 years the average strike rate for a favourite is 35%, a second favourite is 20% and a third favourite is 14%. This means that the chance of the winning horse being from the top 3 favourites is 69%. An excellent starting point. I would be looking here for overlays for the 1st, 2nd and 3rd favourites as a group. The objective is to look for situations where the chances of one of the horses winning is 69% or greater. When researching, I like to start with the most important aspects of a race. I begin with the number of runners, the ground condition and the distance. Of course you can go into as much detail as you like, course, jockey, form etc… and the more detail, the higher the strike rate but the fewer the bets. So, my first set of conditions would be a 7 furlong race with 8 or 9 runners on firm ground. The probability of either the 1st, 2nd or 3rd favourite winning the race is 76.3%. This is above the minimum level of 69% so we can write this down as a given:

In a 7 furlong race on firm ground with 8 or 9 runners the probability of the 1st, 2nd or 3rd favourite horse winning is 76.3%.

Now, armed with this information you can go to your daily paper and find out if there are any 7 furlong races on firm ground with 8 or 9 runners and mark them down.  Then 5 minutes before the start of the race have a look at the odds of the first 3 favourites. Convert the odds on these horses to probabilities or percentages. This is a straight forward sum:

Probability = 1 / decimal odds

For a short cut, use the table below that shows the main odds and their probability of winning:

Odds Percentage Table
1-10 ……… 90.91    4-1 ………. 20.00
1-5 ………. 83.33    9-2 ………. 18.19
2-5 ………. 71.42    5-1 ………. 16.67
1-2 ………. 66.67    6-1 ………. 14.29
3-5 ………. 62.50    7-1 ………. 12.50
4-5 ………. 55.56    8-1 ………. 11.11
1-1 ………. 50.00    9-1 ………. 10.00
6-5 ………. 45.45    10-1 ……….. 9.09
7-5 ………. 41.67    11-1 ……….. 8.33
3-2 ………. 40.00    12-1 ……….. 7.69
8-5 ………. 38.46    15-1 ……….. 6.25
9-5 ………. 35.71    20-1 ……….. 4.76
2-1 ………. 33.33    25-1 ……….. 3.85
5-2 ………. 28.57    30-1 ……….. 3.23
3-1 ………. 25.00    50-1 ……….. 1.96
7-2 ………. 22.22    99-1 ……….. 1.00

Then add together the probability for the first 3 favourites in the betting. If this probability is less than 76.3% then there is a possible overlay. Theoretically anything over 5% would return a profit (5% due to the commission Betfair takes) however, personally I wouldn’t bet on anything with less than a 10% advantage. This means that in the above example we are looking for the betting market to say that the first 3 in the betting have 66.3% chance of winning or less.

Now, if the favourite has odds of 2-1 or 33.33%, the second favourite has odds of 4-1 or 20% and the third favourite has odds of 7-1 or 12.5%, this means that the betting market is saying that the chance of the first 3 favourites in betting winning the race is 65.83%. Since we already know that actually it should be 76.3%  we have found a value bet.

So how do we bet? We will Dutch these 3 horses, which is why I call it Dutch Overlay. Dutching is the process of spreading your stake across a number of horses, so that as long as one of them wins you will make a profit. The easiest way to do this is to go to www.oddschecker.com, on the top right of the screen there is a drop down menu with free tools. Choose the Dutching calculator, delete the odds they have in their as default, and put in your decimal odds for the selections. It will show you the amount to bet on each selection, and the profit you will make should one of them win.

In the above example you will make a massive 51.9% ROI if your horse comes in. Odds this high are unlikely, but I used them in order to give a clear picture of how to exploit overlays. You can experiment with this in endless ways, using different types of combinations of numbers of runners, going and distance. Alternatively, you can choose your own settings, as long as the market is saying there is a smaller chance of winning than you know they have, you will be making a profit in the long-term.
I believe that value is the most important part of betting. As I am sure you have heard many times, you can select as many winners as you want but if you aren’t getting good value in the odds then you will still lose money. I have been looking at new ways of getting good value in the odds and of profiting from it.