Are you getting value from racing tips?

Some punters are paying up to $270 per month for tips that deliver up to 10% profit on turnover. That's pretty good profit but is it really worth $270 twelve times a year? Are there better alternatives to forking out this much of your 'hard earned' every month to get the good oil?

We take you through the real cost-benefit analysis associated with buying expensive tip packages using a few real life examples.

A $270 per month service for a $100 win bet punter has the following value proposition assuming an average of 5 tips per week over the a 12 month period.

Profit at 10% on Turnover (POT) = $2,600

Less cost of service = 12 x $270 = $3,240

Net loss = ($640) per annum.

Punter strips clear of the big guys

Melbournian EvolutionRacing at theGreatTipOff.com is nearly 20 years of age but youth hasn't hindered his ability to back winners. Over the past 12 months he has tipped no less than 303 winners from over 1,200 selections on UK races. His winners have paid $4.65 on average a win delivering his followers a very attractive 14.1% POT. Over 4% points more than the online premium services are advertising.

Punters following EvolutionRacing with $100 win bets have pocketed a cool $17,424 over the 12 month period. On average the Victorian tipped four times a week which raised a bill of $28 per week or $112 per month for his followers.

Using the same assumptions as above, EvolutionRacing's value proposition to punters looks like this

Profit at 14.1% on Turnover (POT) = $3,666

Less cost of service = 12 x $112 = $1,344

Net Profit= $2,322

Racing media expert blows them away

We haven't found a tipping website around that can match the performance of popular racing journalist Clinton Payne over the past 365 days. Over this time frame Payne has delivered his band of followers 45.4% POT. That's over four times greater return than sites that currently charge over $250 a month for their information. Here's the best bit - Payne offers his best bets for Wednesday and Saturday meetings for free.

The equation for backing Payne's best bets sees the profit line grow higher and the cost line evaporate to nothing.

Again using the same assumptions as in the above cases, Payne's tips drive the following value.

Profit from 45.4% POT = $9,080

Less cost of service = 12 x $0 = $0

Net Profit = $9,080

This means $100 punters would have been $9,720 better off dropping their $270 subscription and following Payne i.e. $9,080 + $640 = $9,720.

If your average bet size is greater than $100 then the benefit here is greater. At $125 average bet size you would break even with your $270 subscription. While following Payne would elevate you to a neat annual profit of $14,755.

Key Lessons

• Understand the break-even POT before you subscribe - before you sign-up to an expensive tipping subscription service, understand how much return they have to deliver to justify their fee. If you're paying $270 per month and placing $100 bets on average, they need to hit 12.5% POT for you to merely break even (that's assuming they offer 5 tips per week and you back every one of them).
• Do your research - most professional form analysts are in their roles for a reason - they know a thing or two about racing. Check their tipping statistics before you spend your hard earned money on self-validated tipsters.

Mike Steward