Many years ago when I started playing racing in a serious fashion, one of the most difficult things to do was manage a bankroll.
I remember as a student working the summer at a meat packing plant. I'd be in at 7AM and out at 3:30, head home on the subway (while reading the past performances); getting ready for an evening of racing. I was making okay money at the union job, but I was also using that to bet. I'd walk into the track with my $50 or so, and that was my bankroll, my food money, hell, it was my subway money for the next morning. Managing $50 and betting in any type of optimal way was impossible.
What would continually end up happening was me making a run to the ATM, when there was no money in the ATM. It made racing completely frustrating. I was picking great horses, but I was broke all the time.
One day I entered the track after a day of work and made a nice score. I got lucky on a horse I had been following and I think I made upwards of $6,000. At that point, after I paid debts, set aside $2,000 for tuition and books and another $2,000 for regular living, I had about a $1,500 bankroll specifically for horse racing. Playing with that bankroll was a blessing. It was the first time I ever had one, and betting properly (I knew how to bet properly, I just never could put it into practice), was something I knew needed to be done.
My betting life that year was much different. I knew I could bet $30 to win on something I liked, because $30 was not out of my rent money, it was 2% of my betting bankroll. I could take a pick 4 for $24, because it made sense to.
Every handicapping book you'll ever read talks about playing with a bankroll that is not money in which you need to live. It's set aside money, entertainment money, money you don't need. Those books and authors were not blowing smoke, they were completely and unequivocally right on.
In this day and age (if you are a weekend warrior, or thrice a week player) there is no excuse for not playing with a bankroll. ADW's are built for it and they are an amazing tool. They keep score for you, show you what bets you are good and bad at, and allow you to calculate bet sizing accordingly. Playing a bankroll in them (or with a players rewards card on track) are a godsend.
Why is playing with a bankroll so important?
It Gives You a Starting Point
Instead of walking into the track with $100 and hoping to hit something by betting $10 WP and $24 in supers in the first race (44% of your bankroll), then reloading at the ATM, think of how much better it is if one walks in with $1,000 you saved up to play. $44 out of $1,000 is 4.4% (still too high a bet size if you are betting anything longer than non-chalk) but it takes the pressure off. There is no frustration with getting beaten a head. You have upwards of 96% of your bankroll left.
$1,000 might sound like a lot of money and for many people it is, but think to yourself how many times this meet you reloaded. I bet for a lot of people it totals way over $1,000. You're starting bankroll on a Tuesday is always bigger than it really is. You're much better off starting with $1,000 and working from it.
It Changes Your Thinking About Gambling
When you play with a proper bankroll, and bet size right, it allows you to think of your money not as money, but as a way of keeping score. Over time you will change from thinking this money is money that's lost (horse racing is hard, and most people think if they bring $100 to the track it's gone), to money that has some return. If you have $1,000 as a bankroll and roll it over 8 times, you bet $8,000 and you are (unless you are betting one trillion to one shots) going to get something back. In the long run, if you bet win only with any skill whatsoever, your $1,000 should only lose the rake, or end up at $750 or so. It's not lost money and knowing this allows you to bet with more confidence and less distraction.
If You Win, It Frees Your Mind
When you play with a bankroll and win, say, 5% over a long period of time, you learn your edge. Knowing you have an edge's importance can not be understated. When you lose by a jock strangling a speed horse, get knocked out in an inquiry, get beaten by three noses in a row, you know in the long run you are going to win. This frees your mind from the thoughts that befall 98% of horseplayers: The seeds of doubt, the frustration, the bad feelings, the overbetting, the going on tilt - those things get slowly put on the backburner. You start to care less about the instances, because you know in the long run things will work out.
Playing for a long time also makes you a better player. You bet size better, you bet better, you get better. You learn to maximize that edge and you put in the work needed to increase that edge. There are a lot of public handicappers, I am sure, who have a five percent edge that end up broke at the end of the year because they don't know how to bet. A consistent betting bankroll, even with a small edge, can mean the world to you as a horseplayer.
Horse racing is a brutally difficult game. 98% of the people - battling high rakes - can't make money at it at the end of the year. A lot leave in frustration. If you do not set the table to be a good player, you will never become a good player, in my opinion. Making sure one has a proper bankroll, and managing that bankroll correctly can add to your enjoyment. And who knows, at the end of the year you might have more money than you started with.
Related: Money Management Fundamentals.
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