Recently I’ve been reading through some old betting magazines. And it was during one of these forays into a magazine that I read Alan Coldricks article on how to convert ratings into odds.
It’s very difficult to determine whether a horse is offering value odds, even if you are using a reliable set of ratings.
There are a variety of ways that one can create an odds line from ratings but most of them are quite complicated using techniques such as regression, or too simple and therefore offering nothing like an accurate figure.
Alan’s approach is different to those I have seen before, and indeed the ones I use, but it excels in it’s simplicity and over my limited test effectiveness.
Despite trying to get hold of Alan, I have been unsuccessful. And so I am going to publish here his approach in my own words which may differ from his original writings.
There are two core reasons that I like this approach.
- It acknowledges that different ratings are on different scales and accounts for it.
- It calculates odds based on the most important information that can be gleaned from a rating.
The first of these reasons is pretty self-explanatory. You may be using a rating on a scale of 0-1 or a scale of 0-100 or a scale of 0-1000.
You could even be using ratings that have no maximum or minimum threshold.
Most approaches at creating odds lines don’t inherently take this into account. Of course, taking it into account is part of the process but with the approach I’m about to share you don’t need to even consider this because it is done automatically without you realising.
The second of these reasons requires a little bit more explanation.
As I’ve written in numerous blog posts before, ratings are estimates of a horse’s performance in the particular area the rating is designed to measure.
A power rating combines ratings from multiple areas to produce a rating that is designed to give a complete idea of a horse’s ability after taking everything into consideration.
The majority of users of ratings initially begin their research into how to use them by looking at the top rated.
But that isn’t the best way to use them.
Look at the screenshot below:
This screenshot shows some of the ratings on one of my race cards inside the Racing Dossier but the same would apply to any ratings.
Look at the PFP rating which I have circled above.
Now look at the top three rated horses which have ratings of 1543, 1521 and 1520.
If you’re looking at this rating for the first time, aside from the fact you know the top rated is probably the best, you may not get much more information from it.
However if I create a race card with this rating on that shows how far away from the top rated each horse is we see this:
This tells you a lot more about the horses for this rating. Immediately we can see that the top rated horse is Rawnaq because the difference between his rating and the best rating in the race is 0 (because his rating is the best!).
Then we move down to the next best horse and can see there is quite a difference between the best rated and the second best.
Between the second best rated horse and the next few runners the difference is much smaller.
In fact, the difference between the best rated and the second best rated is bigger than the difference between the second rated and the worst rated horse.
Immediately we have a much clearer picture of what this particular rating means. And Alan’s approach to creating an odds line from ratings takes this most accessible and important information into account.
So here’s how it works!
You start by giving the lowest rated horse a score of 1. In the example above Irish Saint would be given a 1.
Next you take each horses rating and subtract the lowest rated horses rating from it and then add 1.
So… Carraig Mor would be:
1507 – 1504 = 3
3 + 1 = 4
The new table would look like:
You repeat this process for every runner until you end up with a filled table…
As you can see, it’s pretty easy and you’re already almost finished!
The next stage is to work out the probability for each horse by adding together all of Alans Scores together, which in our example would give a total of 112. Then you divide each horse’s Alans Score by this total.
Rawnaq would have: 40 ÷ 112 = 0.36
The entire table would now look like:
The only thing we haven’t done is allow for the over-round that the bookmakers put into their odds.
Here are the recommended addition to the probability for over-rounds:
Up to 5 runners: 10%
6 to 15 runners: 20%
16 or more runners: 40%
This would change our sum for Rawnaq to: 40 ÷ 112 = 0.36 + 10% = 0.39
You can either use the percentage figure on your calculator or multiple the 0.36 answer by 1.10 to add the 10%. To add 20% you would multiply by 1.20 and to add 40% you would multiply by 1.40.
The last step is to convert your final figure into odds.
This is as quick as the rest of the process and can be done by simply dividing 1 by the horses probability with over-round.
Taking Rawnaq again this would be: 1 ÷ 0.39 = 2.55
The decimal odds that we would think of as fair for Rawnaq in this race based on the PFP rating are 2.55.
For all the horses in the race it would be…
If you have a strong comprehensive rating then this approach can give you a very effective odds line very quickly.
Even though it’s pretty quick to do this yourself, I thought I would give you the Excel file that I made to work these out. You can download it below.
The PFP rating that I am using in this example is a rating that is focused on measuring the collateral form of a horse. This approach should be used with a rating that assesses a horses ability in a range of areas.
If you don’t have a rating that does this then you can combine ratings that measure different areas of a horse’s performance using impact values to get your power rating.
If you’re not sure how to do this and would like me to write an article explaining then please leave me a comment to let me know.