12/23/2015 9:57AM

Fornatale: Developing a business plan for contest play


December is an important month for contest players. Not only is time running out to win your seat at the National Handicapping Championship at the end of January, it’s also a time to start thinking about the future beyond that.

Several years ago, I worked on a book (co-authored with Frank Scatoni) called “Six Secrets of Successful Bettors.” In that book, we looked at the habits of professional horseplayers to see what they shared in common. The first chapter was called “A Hard Way to Make an Easy Living,” and in it we described how one thing that united the pros was their general approach – they treated their gambling like a business.

This is a lesson that should trickle down from the pros to enthusiastic amateurs. It’s important to have a business plan, even if it’s a loose one. You should start by setting a goal. In a high-risk, high-reward endeavor like contest play, this can be tricky. In the same event, you might lose your bankroll or you might win $100,000 – and the difference might be a nose.

There are questions worth asking yourself. Are you playing mostly for fun and the chance to hang with your pals? Maybe breaking even and getting an NHC seat should be your goal. Are you a professional player looking to play contests for the fun of them but also want a lottery ticket for a life-changing score?

I’d focus on getting entries to the NHC and Breeders’ Cup Betting Challenge, where the winners will walk away with at least $250,000. Maybe your goal is to get into the top 20 on the NHC Tour, or to win a live-bankroll contest, or to spend three weekends playing horses with your friends in Las Vegas. Whatever your goal, you’ll have a better chance of reaching it if you acknowledge it and plot a course toward achieving it.

The next step is to set aside a dedicated bankroll. Anyone who is risking an appreciable amount of money throughout the year – whether it’s at the windows or in contest play – should have a framework in place. The casual player doesn’t need to apply the same level of vigor to this process as the professional, but it’s a good idea nonetheless.

One idea is to set aside a certain amount of cash at the start of the year – say $5,000 – and simply use that to fund your play. Within that $5,000, perhaps you’ll want to dedicate a portion to trying to qualify for the NHC and another portion to qualify for the BCBC. If you have a larger amount, say $10,000, perhaps you’ll want to earmark $4,500 right off the bat for a contest like the Gulfstream-Santa Anita live-bankroll event coming up in March and use the rest for online qualifying.

With the array of contests available, both in person and online, there are many ways to allocate your funds that will dovetail with your style of play and place of residence. A Northeastern player might set aside a certain amount for New York Racing Association and Monmouth contests, while a Southern California player will want to take a few NHC shots at Surfside and Los Alamitos. Perhaps a more conservative player will allot more of his bankroll for online head-to-head contests, where a higher strike rate can be expected.

If this all sounds too rigid for you, that’s OK. You can also portion out money in smaller chunks. One’s financial situation can change dramatically throughout the year. There is logic in setting a budget month by month or season by season instead of dealing with the whole year at once. You might know you’re not that active in the winter and that a few grand will get you through April. At that point, you may have trips planned to Saratoga and Del Mar and know that you’ll need at least $5,000 for those meets.

Why bother with any of this? First and foremost, having a plan definitely will protect you from losing more money than you can easily afford. It’s an uncomfortable truth that contest play is still gambling, and gambling can be addictive. And even if you don’t have a problem with gambling today, that doesn’t mean you won’t have one down the line. Why not safeguard yourself?

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That aside, it’s rare to find the player who makes his best decisions when playing out of the same pocket he uses for other life expenses. Knowing that 98 percent of the best players bet from a devoted bankroll, wouldn’t you rather be in that camp? After all, other than the ability to be lazy, there are no benefits to having no plan.

The final step in the process is to keep records, even if they’re pretty basic. These will allow/force you to track your results. Another idea to consider is setting up a separate checking or savings account to deal with your horse-playing activity. This can have tax benefits as well, as I’ll cover in another piece before year’s end.

Keeping records will help you make better decisions about what contests to play in, encouraging you to focus on personal strengths and avoid weaknesses. When you go back to evaluate your play, you might be surprised by the patterns you find. Perhaps there is a particular time of year or circuit where you excel or fare poorly and won’t notice unless you look at the numbers.

As we approach 2016, I encourage all horseplayers to look at their financial pictures and take a step forward as players. It’s not a new year’s resolution exactly, it’s just a new way of looking at your betting life. All it takes is a spreadsheet and a dream.