Dutchy Schultz developed a betting system for betting on horse racing. However, the model can be applied to other sports. The “equal profit” strategy is believed to have been created by Al Capone’s accountant. Whether or not Dutzy Schultz was an associate of the legendary gangster, history is silent.
What is the essence of the strategy?
The scheme involves betting on several race favourites. Ending the race with the victory of one of the racehorses will give the bettor a guaranteed profit. Betting at random is not an option. Before placing a bet, a mathematical analysis of the bookmaker’s offer is required. First, the bettor should calculate the sum of the odds of the favourites. The total must be less than 1. The scheme can be used only in this case. Let’s imagine the situation: the betting company gives odds 3.0, 4.0, 5.0 and 6.0 for 4 favourites of the race. The inverse amount is 0.95. The market for Dutch Schultz’s tactic is suitable. The calculation must be carried out according to the formula:
P = 1/K1 + 1/K2 + 1/Kn, where P is the desired parameter and K are the odds of winning the racehorse
The player then has to calculate the betting amount for each competitor. The calculation must be based on the total pot. The formula for calculating the criterion is as follows:
C = B / P / K, where C is the value sought, B is the pot for the game, P is the sum of the inverse odds, and K is the odds of a particular outcome
It remains to substitute the numbers and determine the final criterion. In the current example we get:
С1 = 100 / 0.95 / 3.0 = 35.09
С2 = 100 / 0.95 / 4.0 = 26.3
С3 = 100 / 0.95 / 5.0 = 21.05
С4 = 100 / 0.95 / 6.0 = 17.54
After rounding off, the total betting amounts can be deduced. Winning any bet will give the bettor a profit of 105 euros. It will be possible to repay the betting amount and earn a little money.
The profitability of this method can be determined by the formula (1 – P)100. Using the data from the case study, we get (1 – 0.95)100. As the sum of the inverse odds drops, the profitability of the game increases.
Shortcomings of the Danish Schulz method
The scheme at first glance seems ideal. The player does not risk any money and receives a guaranteed profit on any result of the race. In fact, this game model has a lot of drawbacks. The problems concern 4 points:
- Losses in unforeseen scenarios;
- blocking of the account;
- the need to divide the bank;
- Adjustment of BC odds;
The disadvantages are substantial. Let’s examine each element in more detail and try to find out whether the lapses presented can somehow be mitigated.
Losses in unforeseeable scenarios
The presented game model is based on the assumption that either of the favourites wins. The gambler is satisfied with the victory of each horse. The client will get a guaranteed profit in any scenario. However, there are a lot of variables in sports. Horseracing is not an exception to the rule.
In the example shown, 4 horses with odds of up to 6.0 have been identified as favourites. However, nothing prevents a horse with odds of 7.0 from winning. In such a scenario, the BK client will lose money. The moment is unpleasant. Detailed analysis makes the situation even worse. The profitability of the scheme is 5%. It will be possible to recover losses at 20 plus bets. The chances of success are insignificant.
The way out of the situation is to search for races with higher profitability. It is also possible to limit the number of criteria used. A horse betting odds of 6.0 raises the return on the game to 21.7%. The P-value stops near 0.783. As the potential profit increases, the risk increases. Refusal to overlap one of the outcomes reduces the chances of winning. The player is faced with a classic dilemma. An increase in the probability of a plus play reduces the profitability.
Schultz’s Datchet system is an example of an incomplete fork. No matter how beautifully the game model is called, the fact remains. The selection of odds helps the user to be guaranteed to close a bet on the plus side. Such clients are not liked by the BK. The SB of the betting offices calculates the forked bettors and blocks the accounts.
There is no definite advice for minimizing the risk of freezing an account. Arbitrage aficionados suggest acting comprehensively:
- no fractional amounts;
- periodic betting on other markets;
- making atypical bets.
The techniques are effective, but they do not provide a 100% guarantee. From time to time BKs close down arbitrators’ accounts. People start using drop-ins and other schemes to circumvent the sanctions imposed.
The need to split the pot
Betting on different outcomes of the same market is not possible in some offices. Therefore, when using the Danish Schultz methodology, it is necessary to split the pot. This can affect the quality of the game. A bettor needs to learn how to reallocate money quickly, withdrawing from one betting shop and depositing at another. Prompt withdrawals are often impossible. Some bookmakers may require you to verify your account again. There are plenty of problems to deal with.
Adjusting your bookmaker’s odds
Bookmakers try to level out the risks of any schemes that can lead to guaranteed winnings for bettors. Playing with the odds helps operators achieve these results. Betting shops may intentionally give lower odds on favourites. As the profitability of a particular bet decreases, the P-rate rises. The player has to either abandon the tactic, or look for loopholes. The problem can be minimized by analyzing the run beforehand. One should try to remove as many potential winners as possible. The fewer there are, the more profitable the bet will become. Ideally, it is worth reducing the list to 3 horses.
Adaptation to modern realities
The tactic can be used for long-term betting. The scheme is suitable for betting on a championship winner. The player has the added advantage of relative ease of prediction.