Dutching

Dutching

Dutching lets you back multiple runners in the same race (or selections in the same event) with stakes calculated so you profit the same amount whichever one wins. Named after Dutch Schultz, a 1930s gangster who allegedly used this technique at the racetrack, dutching is the mathematical solution to "I like three horses but can't pick between them." Instead of choosing one and hoping, you back all three with proportional stakes, guaranteeing equal profit from any of them.

Table of Contents

• How Dutching Works
• Calculating Dutch Stakes
• Dutching Profitability
• Dutching vs Other Strategies
• When to Dutch
• Advanced Dutching

How Dutching Works {#how-it-works}

Dutching distributes your total stake across multiple selections with smaller stakes on favorites (lower odds) and larger stakes on longshots (higher odds).

Basic Example: Horse Racing

Budget: $100 Selections: 3 horses you believe have value

Result: $33.33 profit whichever horse wins

Why This Works

Stakes are inversely proportional to odds:

Higher odds → smaller stake needed for same return

The Dutching Principle

For any two selections i and j, their potential returns must be equal.

Calculating Dutch Stakes {#calculation}

Step-by-Step Method

1. Sum the implied probabilities:

2. Calculate each stake:

3. Calculate return:

Worked Example

Budget: $200 Selections: Odds 2.50, 3.50, 5.00

Step 1: Sum implied probabilities

Step 2: Calculate stakes

• Stake A = $200 × (0.40 / 0.886) = $200 × 0.451 = $90.27
• Stake B = $200 × (0.286 / 0.886) = $200 × 0.323 = $64.56
• Stake C = $200 × (0.20 / 0.886) = $200 × 0.226 = $45.17

Step 3: Calculate return

Verification:

• $90.27 × 2.50 = $225.68 ✓
• $64.56 × 3.50 = $225.96 ✓
• $45.17 × 5.00 = $225.85 ✓

(Minor differences due to rounding)

Quick Reference Table

Dutching Profitability {#profitability}

The Break-Even Point

Dutching is profitable only if combined implied probability < 100%:

Profit/Loss Calculation

Example:

• Sum of implied probs: 0.886
• Profit = (1/0.886) - 1 = 0.129 = 12.9% profit

Profitability Table

Why Dutching Usually Loses

Bookmaker margins mean selections are overpriced:

Typical 8-runner race:

The 13% overround means dutching all selections guarantees ~13% loss.

Dutching vs Other Strategies {#vs-other}

Dutching vs Arbitrage

Dutching vs Hedging

Dutching vs Each-Way

When to Dutch {#when-to-use}

Good Dutching Scenarios

Bad Dutching Scenarios

The 100% Rule

Always check before dutching:

Advanced Dutching {#advanced}

Target Profit Dutching

Instead of using full budget, calculate stakes for desired profit:

Example: Want $50 profit from selections at 3.00, 4.00, 5.00

Sum = 0.333 + 0.25 + 0.20 = 0.783 Budget needed = $50 / (1 - 0.783) = $50 / 0.217 = $230

Dutching with Different Bookmakers

Combine dutching with line shopping:

Using best odds: Sum = 0.313 + 0.25 + 0.182 = 0.745 vs single book: Sum = 0.833

Much better return by shopping lines.

Partial Dutching

Don't have to cover all fancied selections equally. Adjust for confidence:

Returns won't be equal, but reflects your analysis better.

Live Dutching

Adjust dutch positions during an event:

Pre-race: Dutch horses A, B, C During race: Horse A struggling, B and C looking good

Option: Lay horse A in-play to reduce that exposure.

Common Dutching Mistakes {#mistakes}

Mistake 1: Ignoring the Sum

Dutching selections that sum > 100% guaranteed loss. Always calculate first.

Mistake 2: Too Many Selections

Dutching 5+ selections rarely profitable:

More selections = harder to find enough value.

Mistake 3: Forgetting Opportunity Cost

Dutching $100 across 3 horses at 12% expected profit = $12 vs Single $100 bet on 20% value = $20

Sometimes concentration beats diversification.

Mistake 4: Dutching Favorites Only

Low odds have highest margin. Dutching favorites often yields negative expected value even when you're "right."

Related Calculators

• Dutching Calculator - Calculate optimal stakes
• Arbitrage Calculator - Compare to arb opportunities