The definition of overlay betting is simply “securing your value prices or better”.  In other words, a horse is an overlay when you can get odds about any horse you have value rated that are the same or better than the prices you have rated it at.  If A is value rated at 2/1 and 2/1 or better is the price you can get, then the horse is an overlay and should be backed.  If the horse is at 3/1 then this is sometimes described as a 50% overlay.  At 4/1 the horse would be described as a double overlay etc.

Since computers revolutionised the rating business in the 80”s the vast majority of thinking punters have adopted the overlay principle, i.e. they only bet when they can obtain an overlay.  Unfortunately, the bookmakers of today are privy to the same information we are and do their best to ensure that as few overlay’s as possible are available.  These days it is becoming more and more difficult to obtain overlay prices about your selections.

The original concept was to back every rated runner in a race on which you could obtain an overlay price and ignore those horses that were an underlay or poor value.  The problem with this is that as the value prices get longer the actual prospects of these longer rated horses winning recedes as the price goes out.  Your 4/1 value rated chances will probably only win 1 race in 4.5, your value rated horses at 5/1 will probably win only 1 race in 7, your value rated horses at 10/1 will only win perhaps 1 race in 20 and so on.

This is not to say that your value ratings are faulty, far from it.  You will find that the underlay or poor value horse will win far more than it’s rightful proportion of races.  This effect is accelerated as the ratings prices shrink so that when we reach the value rated horses at 2/1 or less that are only available at under our rated prices we will find that those horses actually achieve a win rate of around 50% and sometimes more.

Before we delve more deeply into the underlays let’s look at a race in which we back the overlays.  In a 3yo race in February 92 the value ratings and available prices are..

TROOPING  7/4  4/1
REGINA MADRE 7/2  8/13

Trooping was off his best form and plodded into third place.  Regina Madre bolted in at odds on!

If we backed only the overlay, Trooping, we lose.  The severe underlay Regina Madre was bad value so there was not even the option of having a saver here.  It illustrated that underlay horses often win though.

In our sample race in Putting It All Together

SALESTI   3/1  11/1
TURNOUT   13/2  7/2
PELAGIC   13/2  5/2
KARA KORAM  13/2  9/1
PATRIOTIC STAR  9/1  10/1

You can see here that the poorest value horse Pelagic is the winner whilst the best Value horse Salesti ran second.  In both the above cases there was simply no value.  If we stuck with our Top Rated horse, an each way bet was the best value going.

Let’s look at one last race in which there are several even chances in Brisbane on March 28th 1992.

PRINCE OF MARSCAY  4/1  3/1
ISLAY MIST    9/2  7/2
FOUND GOLD   9/2  8/1
VISCOUNT WAVERLEY  5/1  7/1

Here the bets would have been placed on only two horses, Found Gold and Viscount Waverley.  The end result would have been a moderate win.

You can see from the above examples just how difficult it is to win these days be betting just eh overlays.  You will constantly find yourself betting against your Top Rated horses.  Or you will find yourself in a dilemma with horses that you have rated far inferior being priced much shorter in the market.  What to do?

Underlays

In Race Winning Strategy I stated that I now seek Winners At Any Price.  Some readers took me to task at that because it flies in the face of established betting practice.  Too many people mis-interpreted the statement.  What is important is to select as many winners as possible, and in doing this you will frequently find yourself faced with an underlay or poor value situation.  As I stated above, the facts are that when your Top Rated Value bet (that you have rated at 2/1) is only available at the price or less, then you are in a situation where your chances of being on the winner are much greater than your rating.  In these circumstances I bet.  I draw the line at odds of 4/5 though.  Any shorter than this is not worth it.

Let’s look at the situation another way.  You have decided that the selection is the best chance in the race, perhaps the only horse in the race.  When you go to place your bet you find that everybody else agrees with you.  What are you going to do?  Are you going to back your second rated selections just because you can get a better price?  It is an established fact that the shorter the price of a horse in the market, the greater chance it has of winning.

In a lot of these cases, the horse is a false favourite.  If you yourself have done your homework correctly and have come up with this favourite as your outright selection then the horse is obviously a true favourite even it it’s price is less than you want it to be.

The decision you have to make is a) forget the race or b) back your selection at the price on offer.

In my own years of experience I have found that in these circumstances that the strike rate is in excess of 50%.  I can’t decide for you but the odds appear to favour placing the bet.

Arn Rogers, of Turf Monthly often recounts the story about his friend who subscribed to one of Australia’s better rating services.  His strategy.. “Back the underlays”.  And that’s all he did.  And won.