Using Past Odds to Predict Present Results

I have often made the point that when it comes to predicting the outcome of a horse race, the betting public is among the very best. Sure, one can find individuals that outperform the pari-mutuel pools just as one can find Wall Street investors that regularly beat the market averages, but anybody who thinks that the crowd’s opinion is unimportant is likely to be scraping for bus fare after the last race.

That said, how many bettors use the odds to their full advantage? While even the most unsophisticated punter can look at the tote board and get an idea as to the main contention in today’s race, how many players use the odds from past races as a guide to a horse’s current speed, form and class?

Trust me, this is no trivial consideration.

As proof, look at how recent betting favorites in the Kentucky Derby, unquestionably the biggest race for three-year-olds in America, performed in their next three starts:

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Granted, a 3.4 percent return on investment (ROI) is not likely to get one invited to yacht parties with the rich and famous, but it’s not bad considering that the only criterion was that the horse be favored in Louisville on the first Saturday in May.

What’s more, this kind of analysis can be extended to other types of races and is especially helpful in events and at venues where information is scarce.

Take, for example, races from across the pond.

In the 16.40 at Cheltenham Racecourse on Tuesday, March 12 (Champion Day of the famed Cheltenham Festival), 19 runners faced the starter for the Grade 2 David Nicholson Mares' Hurdle over two miles and four furlongs.

Generally, a race such as this would be a tough nut for an American bloke like me to crack. However, look at how nicely the contenders come to the fore when we rank the purse values they competed for last time (a crude measurement of class), as well as the odds they offered in those contests:

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From the chart above, it’s readily apparent that Quevega is the dominant horse in the field — an assessment made even more obvious by her odds on March 12 (she was the 8-11 favorite). Although she’d been on the sidelines for nearly a year, a quick look at the past performances revealed that the vacation would not be a problem, as the nine-year-old mare hadn’t lost since May 24, 2009 and, in fact, had triumphed numerous times off of similar layoffs in the past.

It is equally apparent that Sirene D’ainay looks like a prime upset candidate. She was 5-2 in a race featuring a $106,000 purse last time — and she won that affair by six lengths.

Quevega and Sirene D’ainay ran 1-2 in the David Nicholson Mares' Hurdle. The $2 exacta returned $59.60.

Now, don’t get me wrong: I’m not advocating that one water down handicapping to a simple comparison of purse values (i.e. class) and odds, but I do think that such comparisons can help bettors get a better handle on the true contention in a race, particularly when other techniques are unavailable.

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