A competitive horse-race handicapping algorithm based on analysis of covariance

A model for empirically determining Competitive Strength or Class of races in a historical database is presented. The method, based on Analysis of Variance methods, is based on horses’ succesive runs, and includes a necessary weight allowance. The variable is applied out-of-sample to forecast the results of future races, with aCase Study being carried out on a set of 1,309AustralianMetropolitan Sprint races, demonstrating significant added value, in both a statistical sense and a financial sense.