Better Horse Racing Handicapping Using the Pareto Principle For Big Improvements

If you’re looking to be a better handicapper, and who isn’t, then a simple rule or principle of economics and distribution may help you to do less work and get better results. It’s called Pareto’s Principle and it’s named after Vilfredo Pareto, an Italian economist who observed in 1906 that 80% of the land in Italy was owned by 20% of the population. When he looked at other systems in nature and human endeavor he found that roughly the same amounts applied. For instance, 80% of the beans in his garden were contained in just 20% of the pods.

Land? Beans? Italy in 1906? What does this all have to do with improving your ability to pick winners and make money betting on horses? Here’s a fact that may help you to start to realize how this rule might affect your ability to handicap. Roughly 80% of the races are won by the three lowest odds horses. In other words, when you look at the toteboard and see the three horses that have the lowest odds, the winner will be among those horses in 80% of the races or 4 out of 5.

How efficiently do you handicap races? How do you spend your time and mental energy on each race? Do you spend as much time researching and contemplating that horse that will go off at 12-1 as you do on the horse that will go to post at 2-1? Unless you’re specifically using a horse racing system that finds good long shot bets, you’re wasting a lot of time and energy that could be better invested in narrowing down those three top horses and determining fair value odds among them.

Here’s another 80-20 rule application. Because of the takeout and breakage about 80% of the win pool is distributed to the winning bettors. 20% is retained by the track. If there is $10,000 in the win pool the winning bettors will receive $8,000. I’ve never done a study but I’d be willing to bet a few bucks that if you polled the people leaving the race track on any given day 20% of them would be winners and the other 80% would be behind.

After reviewing the past performances that I have stacked around my desk, an informal statistical study, I agree, it seems like 4 out of 5 races are won by a horse at less than 5-1 odds. So concentrating on horses at less than 5-1 at post time and within the top three in the betting odds, it appears that a bettor may possibly have a statistical edge over the long shot Louie’s who are always chasing that big score and feeding money into the pools that will be paid out on the winning tickets that are held by about 20% of the crowd.