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Work Out The Minimum Odds You Should Take In Less Than 5 Minutes

(Last Updated On: April 19, 2015)

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.

  1. It acknowledges that different ratings are on different scales and accounts for it.
  2. 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:

Screen Shot 2015-04-17 at 18.11.27

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:

Screen Shot 2015-04-17 at 18.14.36

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.

But…

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.

Screen Shot 2015-04-19 at 22.10.00

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:

Screen Shot 2015-04-19 at 22.11.35

You repeat this process for every runner until you end up with a filled table…

Screen Shot 2015-04-19 at 22.12.25

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:

Screen Shot 2015-04-19 at 22.13.18

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.

Screen Shot 2015-04-19 at 22.14.49

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…

Screen Shot 2015-04-19 at 22.15.56

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.

EXCEL

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.

Michael Wilding

Michael started the Race Advisor in 2009 to help bettors become long-term profitable. After writing hundreds of articles I started to build software that contained my personal ratings. The Race Advisor has more factors for UK horse racing than any other site, and we pride ourselves on creating tools and strategies that are unique, and allow you to make a long-term profit without the need for tipsters. You can also check out my personal blog or my personal Instagram account.

50 Comments

  1. Hi Michael,

    I haven’t a clue about power ratings, impact values or how to combine different ratings. So yes I would greatly appreciate you showing me how it’s done.

    Kindest regards

    Ramsey

  2. Hi Michael, I have the same issue with this method as with many similar. It is with this statement: “the next stage is to work out the probability for each horse by adding together all of Alans Scores together”. Clearly this is the crux of the whole method, but is not justified in any way! Can you do so? Thanks, Gavin

    1. The reason for doing this is to work out what percentage of the whole each horse has and this becomes the probability. Of course this is just an estimate and there should also be an allowance made for the fact that the final rating is not going to be 100% accurate. Usually this is done by requiring a selection to have odds a percentage higher than estimated value odds.

      1. Thanks Michael. The question to answer is why these ratios should bear any relation to the probability. I am afraid I just don’t see it.

        1. Good question Gavin. If done correctly then the power rating should be combining all the factors in such a way that they’re probably balanced and the horses rating is indicative of the real chance the horse has of winning the race. It’s like using a multinomial regression analysis but simpler.

          1. Thanks Michael. It would be great if you could cover this point in more detail in the next article we are all clamouring for!

  3. I’d also appreciate a clear, concise article on producing and combining ratings. (If such a thing is possible).

  4. Hi Michael,
    I would like to see an article publishesd on Imapct values to Power ratings to round of this example. Well done for finding Alans article , it’s a little gem and of course thanks for the accompanying spreadsheet. Have you considered expanding this article for a Smartersig edition ?. It would be interesting.

    Cheers

  5. Good article, but I haven’t a clue about ratings except for the Racing Post postdata etc.
    Any advice would be much appreciated.
    Thanks John

  6. Michael this is a brilliant post, really really useful stuff. Thank you so much for sharing! I will defo see how I can integrate this with some ratings I have been creating using the tekkers in your Race Ratings Pro course 🙂

  7. Hi Michael
    Great clarity in teachings as always.
    Would this approach work with rating such as RPR or even OR or do the ratings chosen need to be a bit more specific?
    Many thanks
    Chris

  8. Michael,
    If the idea is to find potential Value odds, then I can’t see why you would bother adding in the Over-Round. Surely the figures are more useful (for betting purposes) without trying to predict what the Ratings-based the SP would be.

  9. is the excel file useable michael, if we wanted to input sat 12 runners for eg would we have to manually input the scores ect
    thanks for the article,
    good stuff as usual.
    many thanks
    george

    1. The Excel file is indeed useable 🙂 Replace the horse names with the horses in the race and their ratings. To add more horses you will need to copy the formulas in columns C, D, E and F down.

      1. thankyou very much michael, i will find this very useful in determining if im betting at the fair odds.
        very helpful as per usual.
        cheers
        george

      1. Hi Michael, no it tells me the file is not in recognisable format. So it is obviously my computer, and I have a lot of trouble this way, and I am waiting for my son to come and do it for me, he is my IT manager/trouble shooter. Thanks Michael.

  10. Michael the miracle man! Wow the hours you put in to raise the sights of yer average punter. Thanks for
    latest, esp the spreadsheet.

  11. why not just look at the same race last year ? or if there is no corresponding race then dont bet in fact dont ever bet if there is no corresponding to compare with ?

    1. peterspc, im sorry but i dont understand your comment, what maichael is doing is finding ways to determine value and fair odds by using ratings, what would looking at a corresponding race from a year ago do in aiding looking at fair odds. im baffled.
      regards
      george

  12. A decent set of ratings will have a top rated win rate of around 25%.
    So the point of these calculations are to determine if any of your ratings produce a price smaller than actual quoted prices.
    Bearing in mind that starting from the top rated you have around only 25% chance to start with, which decreases the further you go down the list.
    So you have a horse ranked say 5th that says its a 10/1 shot in your little sheet and you look at its actual price and its priced at 33/1. Is this a quick fix to finding value?
    It is most definitely a quick route to the poor house.
    The calculations define nothing at all, they are far too basic to have any real influence on what value bets to make.
    It has potential as a starting point but much much more needs to be done before it could even be thought of as a way to find value. Interesting and thought provoking stuff all the same which I’ll probably dip in and out of when I find the time over the coming weeks. But please don’t use it as it stands now it can’t possibly work long term.

  13. thack you Michael for that you do a good job for us,

    just like to say with my top 3 rating i look to see if any have been a better class winner i have had a few nice prices up to 16/1 it just a way to cut the races down as well for me.

    cheers

    stephen

  14. Great article

    However I have always believed in using the odds available but placing your rank against odds rank

    then stumbling on the puntology confirmed this (however struggling with the equation)

    The only problem with that is I don’t know if to bet if my rank is 1 and market has it as favorite

    Maybe these equations could set a base somehow

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