In life, you may have stumbled across the concept of the Pareto Principle, which states that for ‘80% of consequences come from 20% of causes’.
It was derived from the work of the Italian economist Vilfredo Pareto, who found that 80% of Italy’s land mass was owned by 20% of its population (back in the early 1900s, at least).
He extrapolated his 80/20 rule into many other fields, with it held today in the business world that ‘80% of sales come from 20% of clients’.
These are approximations, rather than exact figures, but its interesting that horse racing has its own 80/20 principle: roughly 80% of races are won by 20% of jockeys and trainers. That explains why backing certain jockey-trainer partnerships, who have the requisite number of wins and places under their belts, is a system deployed by many punters.
And there’s another betting strategy which utilises these digits…
The 80/20 Betting System
One of the common questions that newcomers to horse racing betting have is, ‘should I bet on a horse to win, place or both?’
Wagering on the horses is a hobby packed with paradoxes. You’ll bet on a horse to win and watch it place, or back it each way and rue the fact that it comes home in first place – meaning that you haven’t maximised your return on the selection.
To help combat some of those feelings of uncertainty and regret, you can deploy the 80/20 rule in your betting to provide a simple, concrete system to deploy when backing any horse.
The strategy is simple: you place 80% of your stake on the horse to place, and the remaining 20% on them to win on the nose.
By doing so, you can effectively win twice if your pick does prevail, while ensuring that if they place you still take home a fair ROI compared to a traditional each way bet.
But does the maths behind the 80/20 betting system actually stand up?
80/20 vs Each Way
Let’s imagine that you want to wager £10 per race.
For each way bets, that would be £5 e/w (for a total outlay of £10), while in our 80/20 system we would stick £8 on the place bet and £2 on them to win outright.
If we crunch the numbers, how do the two approaches compare?
Let’s find out: we’re backing One-Eyed Willie in the 14:50 at Cheltenham at odds of 10/3, with three places paid at 1/5 (you can find out more about each way place terms etc in our other articles).
Each Way:
- If One-Eyed Willie wins, we get £30 back (£20 plus stake)
- If One-Eyed Willie places, we get £8.33 back (£1.67 loss)
- If One-Eyed Willie neither wins or places, we lose £10
As you can see, this is the traditional each way betting plan that – at relatively short odds of 10/3 – scores an overall loss if the selection places and doesn’t win. That can be a frustrating outcome.
So what would happen in this scenario if we deployed the 80/20 system? Note that One-Eyed Willie is 10/3 to win and 11/10 to place.
80/20:
- If One-Eyed Willie wins, we get £8.67 (win) and £16.80 (place) for an actual return (so minus stake) of £15.47.
- If One-Eyed Willie places, we get £16.80 back (£8.80 more than our stake) minus the £2 lost on the win stake, for a net of £6.80.
- If One-Eyed Willie neither wins or places, we lose £10
As you can see, in this example the 80/20 rule really is the way to go if you think that your pick has a greater chance of placing than winning, which is generally the case in 99.9% of your bets.
The formula stands up whether you are betting on short-odds runners or longshots. Backing a 7/4 favourite each way scores a £20.50 return if it wins and a loss of £3.25 if it places. Under the 80/20 system, you’ll return a total of £17.77 if it wins and a net of £10.57 if it places.
At 10/1, your each way returns are £70 (win) and £15 (place), while an 80/20 pair of punts yields £22 (win) and £24 (place odds of 2/1) respectively.
Clearly, if you bet on the entirety of the National Hunt and/or Flat season, you will back more placers than winners – that is simple probability theory. By deploying the 80/20 theory, you can maximise your returns from horses that place while sacrificing some of the extra returns you would make if you do back a winner or two.
Therefore, your own psychology will determine whether the 80/20 system beats betting each way, but the maths of outcomes displayed above speaks volumes.
Of course, there are other ways you can manoeuvre the odds in your favour. For the win part of your 80/20 bet you will, of course, take the best price available. But you can take extra place promotions and the like for the ‘80’ part, and you can even spread your win and place bets across different bookmakers if there’s discrepancies in pricing between two firms.
80/20 Outright Betting Strategy
There’s not a great deal more to say about the 80/20 betting system other than to say it can work for other sports and markets beyond horse racing.
In fact, any outright market where there’s a list of runners and places are paid can be a target for 80/20 – who will win the Premier League/Wimbledon/World Darts Championship etc. The strategy can be used to maximise returns should your chosen team or player place, with a decent ROI should they manage to lift the trophy.
The 80/20 system really comes into its own for huge odds selections, which are most likely to lose, place or win in that order. But the rewards if you can back a placer are clear with this strategy – it’s perfect for golf betting, where picks of 30/1 and longer regularly hit the places each and every week.
A 80/20 punt on a 50/1 golfer would yield £102 if they win (£2 stake) and around £88 if they place (£8 stake), compared to £301 and £55 respectively from an each way punt. But with winners hard to come by and up to eight places available for each event, there’s no mistaking which betting system is the savvier.