Making Money from Each-Way Bets

Each-way bets are a popular form of wagering. Most often applied to horse racing, these bets allow you to bet that your chosen horse may finish first or second, or perhaps first, second and third. Typically you will only get half to a quarter of the odds you would if you were betting solely on the possibility of a win.

These bets can be interesting because, while there is a relationship between the chances of horse winning a race and a horse finishing second, it is not always straightforward. In races where one horse is a massive favourite, the horse most likely to come second may have very long odds due to the probability that it will finish behind the favourite. However, an each-way bet may be very good value in such a situation since the horse's win price does not reflect the fact that it is "favourite" to come in second.

Mathematicians call this type of angle "non-linearity". Basically that means things are not as simple as they look. Exploiting non-linearity can make you consistent profits at this and other forms of gambling. Things are rarely as straightforward as they seem.