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.

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
CellsD47 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.

Attached Files

kellgo4pascual.xls (47.5 KB, 479 views)