Kelly Method
 

Can one use the Kelly method in working out the amount to bet on two horses in the same race?

Benny

Yes, you just need to know your advantage - Kelly staking will not work unless there is a level stakes profit.

Example:
Horse A: Rated @ Evens ($2) Available 2/1 ($3) edge = 16.7%
Horse B; Rated @ 2/1 ($3) Available 4/1 ($5) edge = 13.3%

A 'true' Kelly bet would demand that you should bet 30% of your bank split into the two proportions as shown above. But in reality most punter wouldn't risk this much of their bank and would use a half-Kelly or some other alternative amount.

Assuming a 100% market, horses "A" and "B" represent 83.3% of that market, so in this instance, I would use the remaining 16.7% as the basis of the stake, which translates to:

A: Stake 9 units
B: Stake 7 units for a total outlay of 16 units

If "A" wins at the available odds then the return would be 27 units for an 11 unit profit on the total outlay;
If "B" wins at the available odds the the return would be 35 units for a 19 unit profit on the total outlay.

Of course, if neither win then the 16 units would be lost.

How do I work out the amounts?

Benny

It's all based on your edge Benny - no edge, no bet.

In the example I quoted the edge is worked out as follows:

16.7% and 13.3% which translates to 55.67% and 44.33% of the 30% total, so to work out the amounts is simply a matter of dividing whatever the total outlay is by the 55.67% and 44.33% respectively.

In the example, I recommended that 16.7 is the amount of the outlay, so 16.7 x 55.67% = 9 (rounded down) and 16.7 x 14.33% is 7 (rounded down).

The beauty of doing it this way is that IF your pricing/assessing is correct then you lock in some beautiful overlays.

Hope that all makes sense.

Pascual Method
 

Hi Benny,
Once you get a handle on using the basic kelly formula, you can then incorporate two other sets of information into the above equation.
I'm attaching a spreadsheet that requires 4 pieces of information (marked with * on sheet).

Cell F1 enter number of runners 1-4
CellsB4:B7 enter your own ratings these are set to odds /1
CellsD4:D7 enter the tote prices to odds/1
CellsF4:F7 enter your win/strike rate for your rated runners (CellB:B7)you can either use the win rate based on ranking or based on odds/probabilities this is the better method, in my own sheets i incorporate both.
This will give you a basic idea as to how to accomplish group overlays using Kelly/Pascual multibets.