Calibrating betting odds with actual horse race results

February 22, 2019 | By More

Calibrating predicted probabilities (betting odds) with actual race results is an excellent way to test the accuracy of your ratings.

Your ratings are your personal opinions on the chances of each horse winning.

Without going into the maths, the total of the ratings given to each horse in a race usually summates to a 100% betting market.

Discussions around betting odds and framing markets can get deeply mathematical but it’s important and satisfying to understand.

Punters who think deeply about maths and probabilities usually have a good handle on the maths.

A practical example for calculating betting odds

One such example appeared recently in our popular Tipping Forum regarding the framing of race markets.

Long-time member (Kincsem) asked if anyone calibrates their predicted probabilities (odds) with race results.

Kincsem suggests to calibrate your predicted probabilities with actual results so that you can better understand the market.

In addition to other betting strategies, this an excellent way to test the accuracy of your ratings when framing markets.

“It is perhaps the truest measure of testing prediction accuracy.”

The ‘Kincsem Analysis’ tests whether the horses you price actually win as often as your odds suggest.

For example, do horses rated as a $10 chance actually end up winning 10% of the time?

Do $2 chances win 50% of the time?

Do horses rated $100 win 1%?

Kincsem has been very surprised by the results of his recent analysis.

He found that horses “all seemed to win as often as my prices predict”.

He further wrote, “I thought there would be outliers that would skew certain price ranges.”

“Literally, across the board, the odds aligned almost perfectly with the results.”

Another forum member Delta Deel suggests that computer software is available to do this and provide an even greater comparison.

Graphical evidence is used in the discussion to illustrate the points made.

What is a predicted probability?

A predicted probability in horse racing is, in its most basic form, the odds given on a horse’s chance of winning.

Betting odds are calculated from available data; race form, competitor analysis and prevailing race conditions.

It also includes the margin the bookmaker holds and the costs charged for services.

Calibrating betting odds is a fascinating form of analysis because it can provide a measurable indicator of the accuracy of your ratings.

If you’re a student of punting and probabilities, it’s well worth checking out the discussion thread on our Tipping Forum.

Who knows, maybe you can think of valuable insight that can give us the competitive edge!

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