Beating The Bookies?

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Alvin Hall

About our expert

Alvin Hall has written several training manuals and books including the best selling Getting Started In Mutual Funds. As well as presenting the BBC’s Your Money or Your Life he runs seminars about the investment markets for financial companies. Alvin’s favourite phrase is "As long as you invest no more money than you can afford to lose, you’ll have few sleepless nights"

This article is an edited transcript from an edition of Ever Wondered.

Chances are...

What happens next? And in ten years time? To predict the future, you need to get to grips with probability.

Related programme

More Or Less

The Ever Wondered team gave financial guru Alvin Hall a fiver and sent him off to a greyhound track to explore how you can use numbers to shorten the odds...

But before he places his first bet, he needs to talk to people in the know to get some inside knowledge. First stop is trackside.

Alvin with Sally Killengrey

Alvin: Does the size of the dog matter?

Sally Killengrey, Race Assistant: If it’s really drastic then we have to pull them out, that’s called a weight variation. They have to be within a kilo of their weight.

Alvin: By just looking at the dog, can you tell which one is going to win?

Sally Killengrey: If they’re happy, their tail’s wagging, they feel good about themselves - it could make a difference out there on the track.

Alvin: So when we go out there to look at them, we should look for a dog that’s been through dog therapy, it has a smile on its face, right?

But does winning depend solely on the dog’s happiness? Is the bottom line money? Alvin investigates what racing has in common with other investment markets. Alvin goes in search of an Economic Historian.

Jack Dowie

Alvin: Is betting on the dogs like playing the stock market?

Jack Dowie, Economic Historian: Pretty much, you’ve got the gamble, you’ve got the possibility of winning; you’ve got a downside, the possibility of losing. The risk to order ratio is very set and it’s about 20% of whatever you bet with, and because the markets are very efficient, as with the stock market, you can come here and enjoy yourself without losing much money or you can lose it all, but percentage-wise you can have a good time for very little.

Alvin: So how do they set the odds?

Jack Dowie: Well, the tote’s very simple because it doesn’t set the odds, it just waits for people to bet on the various dogs and at the end it calculates the percentage of money on each dog and divides it up amongst the winners. They then take 20% off the top.

Alvin: So the tote always makes money.

Jack Dowie: They always make money, they can’t lose. The bookmaker operates in basically the same way, he wants to end up with 20% and also there’s an initial line which can be set by the experts and then, as people come along, particular bookmakers will react to the supply and demand for that particular dog.

Dogs at start of race Alvin: In that case it’s like the stock market: wherever the money flows, the difference gets narrower and narrower. Where there is no money, the spread widens.

Jack Dowie: That’s exactly right. It’s those little patterns and the movements of the odds that I’m interested in because that means I can go to any track anywhere in the world and be a participant. Whereas if I have to know all the facts and variables, about the dogs the horses, I’m out of it.