If Nothing Works, How Do Some People Make a Living?

By getting a better price than the one the race starts at. Not by picking more winners.

That is the answer, and it sounds like a technicality until you see what it does to the arithmetic. Everything this month has shown that being right about horses gets you roughly to where the market already is, at which point the charge decides the outcome. The only route past that is to be paid more for the same opinion than the market eventually settles on.

The trade is called taking value against the closing line, and the people who do it professionally do it by being early rather than clever. If you back a horse at 6/1 and it starts at 4/1, you took a price the market later decided was too generous. Six-to-one implies a chance of about one in seven; four-to-one implies one in five. You were paid as though the horse had less chance than the market finally agreed it had.

The direction catches people out, so it is worth being plain about it. You want the price you took to be bigger than the price at the off. If that same horse drifts out to 8/1 instead, you are still settled at the 6/1 you struck, so drifting never pays you more. It only tells you the market thought your price was too short to begin with. Best odds guaranteed is the exception, and we come back to it below, because it is a bookmaker promotion rather than part of the trade.

One thing this does not mean is that you have won anything. If the horse loses you lose your stake like everyone else. What improves is the expected value of the bet, and that only turns into money across a long run of them.

Bookmakers know all of this precisely, which is why the accounts that beat the closing line consistently tend to get restricted.

We have been testing it in public

Three months ago we started logging our model's selections at the morning price rather than the starting price, to see whether the morning price was systematically better.

The results split in a way we did not expect to be able to publish.

Read those rows carefully, because the gaps between them are the whole point. The first two are the same selections in the same races, and the only thing that changes is when the price was taken. The row below them is those same bets again with best odds guaranteed applied, which pays the larger of your price and the starting price. That row carries the biggest number on the table and the least of our doing: most of the distance between it and the row above is the value of a promotion rather than the value of being early.

The measure underneath all of it is closing line value, which asks whether the price you took beat the price at the off. You can follow the whole thing live on our closing-line experiment page, where every bet is logged before the race runs.

Why we are not calling this an edge

We would be doing exactly what we spend this site criticising if we stopped there, so here is the other half.

Take the promotion away and the case gets much thinner. Settled at the morning price alone, the return is positive, but its confidence interval runs from below zero to well above it. An interval straddling zero is not a demonstrated edge. It is a result that cannot yet tell a small gain apart from no gain at all. The only return on that table whose interval clears zero is the one with best odds guaranteed inside it, and even that clears by a whisker.

The closing-line measure itself, the price advantage rather than the money, is the steadier of the two and is marginally positive. That is the part pointing the way theory says it should, and it is also the part that moves the slowest, which is why we treat it as the headline.

Our own reliability measure, printed alongside the figures above, puts it plainly: on the current sample the finding is around half reliable, and we would need roughly twice the bets we have now, in total, before we would be willing to call it real.

It also depends on conditions that may not last. Best odds guaranteed is a promotion, not a law, and the table shows how much of the headline leans on it. Morning prices are available to accounts that have not been restricted, and restriction is precisely what happens to accounts that keep beating the closing line. The positive is a British result too; our Irish sample is much smaller and has gone the other way so far.

So the honest position is: there is a signal, it points the way theory says it should, and it is not proven. We will publish it either way, and if it collapses we will say so on this page.

Tomorrow, the last of the month: is any of this worth doing at all?

A word on all of this

None of these pages is a tip, and none describes a way to win. They describe what betting costs, which is a different and more reliable subject. If your betting has stopped being fun, BeGambleAware has free, confidential help, and the National Gambling Helpline is on 0808 8020 133.

Common questions

How do professional gamblers make money?

Mainly by taking prices before the market corrects, rather than by picking more winners than everyone else. The measure is whether your price beats the closing price.

What is closing line value?

The difference between the price you took and the price the horse started at. Consistently beating the closing line is the strongest available indicator that a bettor has an edge.

Do you want the price to go up or down after you have bet?

Down. You want the price you took to be bigger than the price at the off, so backing something at 6/1 that then starts at 4/1 is the good outcome. If it drifts to 8/1 instead you are still settled at the 6/1 you struck, so the drift does not pay you more, and it means the market decided your price was too short. Best odds guaranteed is the exception, because it pays the larger of the two.

Have you proved you have an edge?

No. Settled at the morning price on its own, the interval around our positive return includes zero. The only return whose interval clears zero is the one that includes best odds guaranteed, and it clears by a whisker. Our reliability measure says we would need roughly twice our current number of bets before calling any of it real.

Why does best odds guaranteed matter so much?

Because it pays the larger of your price and the starting price, so it keeps the gain when the market moves your way and removes the loss when it moves against. That is worth a great deal, and it is why our headline figure and our morning-price figure sit so far apart. It is also a promotion a bookmaker can withdraw, so we publish the two as separate rows rather than as one number.

Why do bookmakers restrict winning accounts?

Because an account that consistently beats the closing line is expected to be profitable over time, whatever it has actually won so far.