Wikipedia
In gambling, Dutching is sharing the risk of losing across a number or runners by backing more than one selection in a race or event. The process calculates the correct stake to place on each selection so that the return is the same if any of them wins. Although not fool proof, because handicapping is still involved, there have been successful bettors throughout history that have applied this system. This is not to be confused with what constitutes a Dutch book which is when a bookmaker goes overbroke (the opposite to overround).
It is thought the strategy behind Dutching was originally conceived and employed by Arthur Flegenheimer (aka Dutch Schultz) alongside various rackets he had running at the racetrack. The system has since taken his name.
The strategy can pay dividends when gamblers successfully reduce the potential winners of an event to a select few from the field or when information about runners not expected to perform well does not reach the market (so as to affect the odds) making backing the rest of the field profitable.
Dutching can also be used to reduce the price of the commission you'd pay at a betting exchange by dutching at two bookmakers (normally Asian style) instead.
When will dutching be profitable
A Dutch or an arb is profitable if the sum of the reciprocals of the decimal odds of each selection is less than 1.
Additionally, the profitability of a Dutch/arb can be expressed as 1-R, where R is the sum of the reciprocals.
Worked examples
The simplest form of market to Dutch is two way, such as a tennis match or a game of football, but any number of runners can be dutched. These examples use a football game and over under on the goals scored.
Example 1 - an unprofitable 2 way arb
Over 2.5 - odds of 2.1 at Book 1
Under 2.5 - odds of 1.8 at Book 2
Sum of Reciprocals = 1/(decimal odds at Book 1) + 1/(decimal odds at Book 2) = 1/2.1 + 1/1.8 = 0.476 + 0.555 = 1.031
Therefore, this would give a loss of 3.1% (1 - 1.031 = -0.031) of the total stakes, so these odds not profitable.
Example 2 - a profitable 2 way arb Using the same situation as above, but an alternative bookmaker (Book 3) is offering odds of 1.95 on the Under 2.5 outcome.
Over 2.5 - odds of 2.1 at Book 1
Under 2.5 - odds of 1.95 at Book 3
Sum of Reciprocals = 1/(decimal odds at Book 1) + 1/(decimal odds at Book 3) = 1/2.1 + 1/1.95 = 0.476 + 0.513 = 0.989
Therefore, this would give a profit of 1.1% (1 - 0.989 = 0.011) on the total stakes.
Dutching calculators that perform the mathematics behind the system are freely available on the internet.
Usage examples of "dutching".
How must it have felt, Pikes, the night they seized your films, like entrails yanked from the camera, out of your guts, dutching them in coils and wads to stuff them up a stove to burn away!