Money Management: The Foundation of All Winning Horseplayers

Money Management

Money management is the key to becoming a winning horseplayer.

The United States national debt is over $15 trillion.  Over a million bankruptcies were filed last year.  More than a million properties are in foreclosure.  The average credit card debt in the United States is greater than $15,000.  Money management is an afterthought for many in this country and around the world.  Overspending and overextending are the new trends in money management.

The worst part about those situations is none of them are surprising.  When I was in college working a 15 hour a week part-time job, making $10 an hour I was getting credit card offers in the mail almost everyday.  Back then they offered modest credit limits that were in line with income levels.  My first credit card had a $200 limit.  I used it strictly for buying gas.  I built my credit slowly, the right way, by always paying off the balance and never approaching the credit limit.

Fast forward a few years and boy did things change.  While still working part-time I applied for a department store credit card in order to save 15% on a purchase.  I shopped at the store regularly and it would provide an alternate credit card in case anything ever happened to my other card so it seemed justified.  What was not justified was the credit limit I was given.  My income had increased but not by 2400%.  My new credit card had a $5,000 limit.  While I never abused that credit card many people like me did and this situation has only gotten worse.

The root of the problem is a lack of education.  Had I not majored in Finance in college I would have had no formal education regarding money management.  Fortunately I have responsible parents that taught me early on about money management and together with my education I have never been in financial distress.

So what does any of this have to do with horse racing?

The horse racing industry does a poor job of educating horseplayers about money management.  In fact it does the exact opposite by promoting carryovers for the types of bets that destroy small and medium size bankrolls.  For every story published about a huge Pick 6 hit on a small ticket there are thousands of unpublished stories about losing tickets that slowly erode horseplayers bankrolls.  While there is no harm in taking an occasional shot at a big carryover doing so on a regular basis is a huge mistake for those that are underfunded for the most difficult to hit bets.


For those that don’t know a bankroll is the money that is available for betting on horses.  Most horseplayers fund their bankroll with discretionary income, that is, money left over after all of their bills have been paid and all other financial obligations have been met.  Unless you are a professional horseplayer that is the recommended course of action for several reasons.

First and foremost betting on horses always comes second to putting food on the table for you and your family, paying your mortgage or rent, paying your utility bills and paying any other bills (such as automobile loans, credit cards, student loans, etc.).  The stress created by playing with money that is needed to maintain your lifestyle is not worth the risk.  On top of causing stress playing with what Mark Cramer calls “Scared Money” will almost always be detrimental to your betting decision-making.

Scared Money is money that should not be used to bet because it causes apprehension and results in overly conservative betting.  You will be less likely to go for the big score or bet your normal amount on top selections so even when you do win you will be leaving money on the table.  Worst of all you may bypass a bet on a long shot to instead bet one of the favorites or pass the race entirely because you know you shouldn’t be betting anyway.

The bottom line is don’t play with Scared Money.

Bet Within Your Means

An obvious problem with many people in the world today is to live within their means.  Trillions of dollars in national debt, rampant bankruptcies and foreclosures and excess credit card debt are all signs that the average person chooses to live beyond their means.  Don’t be one of those people when it comes to betting on horses, otherwise your time with us will be short-lived.

Define Your Bankroll

Only you know your financial situation so I can’t give you hard and fast rules about the size of your bankroll.  What I can do is give you some general pointers.  First, if possible set aside the money for your bankroll at the beginning of the year.  If that is not feasible set aside the money for your bankroll on a weekly, bi-weekly or monthly basis depending on what works for you.  Second and most important, keep your bankroll separate from the rest of your money and vice versa.

Choose Appropriate Bets

The size of your bankroll should determine the betting pools you play not the other way around.  The following graph illustrates the recommended bet types based on the size of your daily bankroll.

 Horse Racing Bankroll

Small bankrolls would be those that provide $50 or less for each day of betting, medium bankrolls provide $200 to $300 per day and large bankrolls provide $1,000 or more per day.  The key to that statement is per day.  What this translates to is for each day you plan on betting on horses you need that level of bankroll.  So for example if you bet once a month you need $50 a month or less to fund a small bankroll.  If you bet once a week you need $200 a month to fund a small bankroll and so on.

As you can see the smaller the bankroll the more conservative the betting pools you should be playing.  The primary reason for this is to avoid or delay tapping out (or running out of money) for as long as possible.  As the difficulty in bets increases so to does the likelihood of prolonged losing streaks.  A horseplayer with a small bankroll will very likely never hit a Pick 6 by betting a $50 ticket and will therefore tap out rather quickly.

Focusing on less risky bet types will allow your bankroll to grow and as the bankroll grows the types of available bets will expand.  If however you are insistent on betting into a pool that is beyond the recommend level of your bankroll there are two alternatives.

First you can simply save your bankroll for a few weeks until you have the recommended amount of money to play the particular pool.  For example lets say you want to bet the Pick 4 but you only have $50 a week to bet.  A $50 investment into the Pick 4 will likely result in low payoffs because more likely than not you will be using only a few logical contenders in each race.  More likely however you will suffer prolonged losing streaks because $50 doesn’t provide very much coverage in a four race sequence.  A better approach would be to bet the Pick 4 once a month with a $200 investment which will allow you to execute the recommended multi-ticket approach that will provide better coverage and will maximize returns when your handicapping is spot on.

A second option is to pool your money together with one or more friends to ensure you have adequate funding for your desired bet.  This approach is common when playing the Pick 6 because most horseplayers are not sufficiently bankrolled to attack the most difficult bet in horse racing.  The only downside to this approach is that when you do win you will have to split the profits but that beats tearing up your tickets.

Determining How Much to Bet

Now that you know what betting pools you should be playing based on the size of your bankroll the next step is to decide how much to bet on any given bet.  This will sound obvious when you read it but in reality most horseplayers don’t abide by this rule.  The rule for determining how much to bet is to bet based on the strength of your opinion.  Easy right?  The problem is most horseplayers bet the same amount on each race no matter how strong their opinion is on any given race.

I did this when I first started out because I didn’t know any better.  The standard for me was $10 or $20 a race and I would bet a $2 Exacta box using my top two choices, a $1 Trifecta box with my top three choices and if I had the extra $10 I would bet it to win on my top choice.  Looking back I laugh at my naivety.  First off I should never have been betting Trifecta’s with such a limited bankroll and secondly I should have never bet the Exacta in equal strength using my top two choices unless I thought they had the same chance of winning the race which is rarely the case.

Had I known what I know now after twelve years of experience I would have probably focused solely on Win bets until I had a sufficient bankroll to move on to the next level.  Once I had enough money to bet Exacta’s and Trifecta’s I would have weighted my bets based on my opinion of each contender.  Instead of a boxing an Exacta using my top two choices I would bet more on the combination using my top choice on top and less the other way.

Weighting your bets will put you ahead of most horseplayers and will also maximize your profits when your handicapping is perfect.  The general consensus for determining the size of your bet is to separate your bets into three categories:

  1. Prime Bets
  2. Non-prime Bets
  3. Action Bets

Prime Bets

Prime bets are those that you have the highest confidence level in or offer extreme value.  Generally you will only find one or two of these on a given day.  These are bets that generate the most profits and should produce the highest win rates.  If you find yourself losing several Prime bets in a row you may need to reassess your handicapping because chances are you are overconfident in your selection process.  Prime bets should be allocated the highest base wager amount.  For example assuming you have a $50 daily bankroll a Prime bet might be worth $20.

Non-prime Bets

Non-prime bets are those that are just below your Prime bets but either don’t instill the confidence level of a Prime bet or don’t offer great value.  Non-prime bets should produce a moderate win rate.  Assuming the same $50 daily bankroll a Non-prime bet might be worth $10.

Action Bets

Action bets are just what they sound like, they are keeping you in action between the other two types of bets.  Action bets could be on a long shot that looks interesting or on a horse that fits one of your betting angles.  The key with making Action bets is to limit them as they will produce low win rates and can erode your bankroll quickly if you are not careful. Assuming the same $50 daily bankroll and Action bet might be worth $2 to $5.

Know When to Hold ’em, Know When to Fold ’em

The make or break proposition for most horseplayers is knowing when to bet and when to pass.  Understandably it is hard to pass a race if you only bet once a week or once a month and focus on one or two tracks because you are limited to 20 races or so.  It is also hard to sit around for an hour or more without making a bet because the time feels wasted but the difference between winning horseplayers and losing horseplayers is the ability to pass on those races that you don’t have a strong opinion on or that offer poor value.  I’m not saying you need to pass everyone of those races because Action bets can fill the void some of the time but you must pass some races because it is impossible to have a strong opinion on every race on the card.

I say both from my own experience and from watching others that betting on every race will result in more losing days then winning and is a sure fire way to tap out in the long run.  So if your goal, like mine, is to be a winning horseplayer you need to realize that you can’t bet every race.  You also need to realize that sitting out is not a waste of time because passing a race or races doesn’t mean you don’t watch them.  You should watch every race at the track or tracks you are following because you never know when you will see something during the race that will lead to a future winning bet.  You should also review the past performances of the top finishers and make note of any factors that you may have missed had you bet the race.

Learning how to pass a race or races will put you light years ahead of most horseplayers and is in my opinion the most important part of becoming a winning horseplayer.

Think Long Term

Unless you only attend the races once or twice a year you should be looking beyond today in terms of profits and losses. Most horseplayers focus on how they did from day to day or week to week when they should be focusing on how they did from year to year.  If you plan on sticking around a while you need to focus on the long term otherwise you are compromising your chances of becoming a winning horseplayer.

Think about it this way, do Fortune 500 companies focus on daily sales?  Do successful investment bankers focus on daily profits and losses?  Do the best baseball players focus on how they performed in every game?  The answer to all three is no.  Successful people and successful companies focus on the long term because daily variances can be very volatile and typically don’t reflect long term performance.

It took me a while to realize that the same strategy applies to betting on horses.  I used to think that I had to be ahead each day I bet but I finally realized that was not important because there will be winning and losing days and more of the latter for most horseplayers.  When I finally buckled down and created a record keeping database to track my bets I started to focus on my annual profits and losses and not on daily results and guess what?  My results started to improve because I stopped trying to recoup my losses at the end of the day on races I would have never otherwise bet.

There is a reason the final race of the day is called the “get out race” because it is the last chance for all the losing horseplayers to get even or ahead for the day.  Don’t be one of those people unless you truly have a strong opinion in the final race of the day.  Remember there is always tomorrow or next week or next month.  The money lost today is only a fraction of your bankroll and has no bearing on your financial situation so long as your are not playing with Scared Money.

 Give AdequateTime to Betting Strategy

The final piece of money management is to make sure you are spending adequate time plotting out your betting strategy.  More often then not horseplayers spend the bulk of their time handicapping the races only to spend a few minutes deciding how they will be betting.  This lopsided ratio leaves a lot of money on the table.

Think about it this way, if you were buying a house would you spend weeks looking at houses and researching online and then spend five minutes deciding on how much to offer the seller?  I hope your answer to that question is no.  The proper course of action would be to discuss the situation with your realtor then take a few days to do your own research before making an offer.

Why then would you spend hours handicapping a race card and then spend a minute on deciding how to bet each race?  Hopefully you see my logic.  My strategy is to handicap the entire race card the night before or the morning of the races and then plot out my entire days betting strategy based on my available bankroll.  I write my bets down on a sheet of paper and take them with me to the track or have them sitting next to my computer if I am betting from home.  This could take anywhere from 30 minutes to an hour depending on how many races and bets I plan to make.  For big days such as the Breeders’ Cup it might take a few hours.

I then make adjustments based on program changes just before the races begin.  I typically only bet the bets I have pre-planned but occasionally an opportunity arises that I hadn’t planned for and I will add that to my list.  This could be a race that I thought offered no value but the betting has made my top choice an overlay or a program change has effected the probable pace leaving a lone speed horse at a big price or some other unforeseen situation comes up.

The last point about planning and implementing your betting strategy is to not deviate from the planned bet amounts based on how you have done during the course of the day. Just because you won an early bet doesn’t mean you should increase the amount of later bets.  I often hear people say after cashing a ticket “I’m playing with the tracks money” so I can increase my bets.  Guess what?  Once that money is in your pocket or account it is your money not the tracks so don’t go throwing it away.  Similarly if you lose your first few bets don’t reduce the size of your last few bets because the worst feeling is watching your best bet of the day win only to realize you cut your bet in half on it.

Spend adequate time planning your betting strategy and implementing it on race day and you will reap the long term benefits.

Final Thoughts

It is entirely possible to be a winning horseplayer.  It takes a lot of hard work and dedication and a little bit of luck now and then but it is possible.   I can vouch for this because since I began keeping records of my betting over four years ago I can proudly say I am ahead.  Not every year was a profitable one but overall I am in the black.  Learning proper money management is the key to becoming a winning horseplayer.  You can be the greatest handicapper in the world but if you fail to bet properly you can easily end up down for the year.  I can’t tell you how many times I have heard someone say I am a good handicapper but a bad bettor.  Invariably most of those people are long term losing horseplayers and until they learn how to bet to maximize their opinions they will never become winning horseplayers.

If you want to become a winning horseplayer remember to:

  • Fund your bankroll with discretionary income and don’t play with Scared Money
  • Define the size of your bankroll and choose bets appropriate to it
  • Assign dollar amounts to Prime, Non-prime and Action bets and choose the appropriate bet type based on the strength of your opinion or the value being offered on a given race
  • Pass on betting races that you have little or no opinion on or offer poor betting value
  • Focus on long term results not day-to-day results
  • Spend adequate time planning your betting strategy and implement it on race day


How has implementing any or all of the above techniques improved your results at the track?  Are there any points I missed regarding money management?  If you have answers to one or both questions please leave your response in the comments below.  Also if you found this article to be helpful and informative I would appreciate it if you shared it with your fellow horseplayers especially those that are new to the sport.

The links for Mark Cramer’s Scared Money are affiliate links and if you decide to purchase the book through those links I will receive a small commission.  I own the book and recommend it to horseplayers of all levels, particularly those new to the sport.  The book chronicles the journey of a man trying to become a professional horseplayer and discusses many of the points about money management that were included in the above article.

 Creative Commons photo courtesy of AMagill



  1. Great read!

  2. John Burton says:

    I really need to learn and implement the Money Management Strategies, listed and described in this article, in my horse playing. I am a “Losing Horseplayer” across the years – but I love and enjoy it so much! especially the track experiences at Keeneland Race Course, Saratoga Race Course, and Gulfstream Park. I hope to eventually make it to DEL MAR someday…but now I finally decided I am tired of being a “Losing Horseplayer” and need to study, learn, and improve the following: Handicapping Skills; Betting Strategies, and Money Management Strategies. This article taught me so much about Money Management Strategies. I took notes and will strive to remember them and implement them. One last question: Is there a commercial “record-keeping database” to help me collect my horse-racing wagering data so…1. I can analyze the data….so as to 2…eventually, over time, improve the quality and profit of my horse-playing. Thanks! John Burton, East Berlin, PA,

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