Gambling theory videos

[Stillriledup]

Found a 15 minute video from Dylan Evans where he talks about the differences between expert gamblers and non expert gamblers and a horse racing study, among other things. I found it interesting, hopefully you will too.

I love watching videos or reading articles on stuff like this, always looking to learn, so, if you have anything else along these lines you want to post, go ahead and post it up, i'd love to watch it.

http://www.youtube.com/watch?v=7jyokhjUCyk

[AndyC]

Interesting, thanks for posting the link.

[stuball]

I am 71 yrs old and now I finally know why I lose at horse racing as
my score is 35.20 of possible 100...very low at analyzing risk..now how do
I fix it? I will never win $$$$ with a score that low...

Stuball :confused:

[Robert Goren]

I am 71 yrs old and now I finally know why I lose at horse racing as
my score is 35.20 of possible 100...very low at analyzing risk..now how do
I fix it? I will never win $$$$ with a score that low...

Stuball :confused: I think that score means you are cautious, maybe too cautious.

[glengarry]

I am 71 yrs old and now I finally know why I lose at horse racing as
my score is 35.20 of possible 100...very low at analyzing risk..now how do
I fix it? I will never win $$$$ with a score that low...

Stuball :confused:

If you have a low score, that means the things you think you know you don't really know. Put another way, think back to your school days (yes, a long time ago for many of us). Some kids take a test, think they did great, then get a C or a D. They think they know things, but obviously don't have the awareness to understand where their knowledge is lacking.

Translate that to a horse race. You cap out a race. You leave out a horse that has been off for 6 months even though his figs put him right there. He is 8 to 1 on the M.L. He beats your horse at the wire and pays 7.40. You scratch your head as you rip your tickets in little pieces. You thought you knew that the layoff would get to him. What you didn't know, or even calculate, was why he was laid off, the general health of the horse, or how he had trained up to the race. The pounding he took at the windows should have told you 2 things: 1. The general public, who all think alike, were not the ones making this horse 5 to 2 off an 8 to one M.L. 2. You threw out a fast horse assuming he wasn't ready instead of realizing that you just had no way of knowing. The obvious question then is: Well, when do you have knowledge of every variable? The answer is never, but you can cut down your risk by turning the page, especially when you see the non public money on the horse. Or bet against a layoff horse when he figures to be too slow, or you have some other basis to pitch the horse based on something you do know.

[Robert Fischer]

It's a great thing any time one of these speakers adds legitimacy to the skill set required by horseplaying.

[glengarry]

To see risk intelligence, and therefore risk assessment, in action, it's worth renting "Along Came Polly". Ben Stiller plays an insurance company risk assessor, who uses his proprietary formula to assign risk to a variety of activities. Plus you get to look at Jennifer Aniston, and laugh at the late great Phillip Seymour Hoffman.

All top level players not only see the risk, but assess it as well. They can't eliminate it, but understand its chance of biting them in the rear, and make their decision with that in mind. The average player (lifetime loser) will usually see the risk, but summarily dismiss it or underestimate it.

[BettinBilly]

Thanks for the post SRU.

Interesting presentation. I took the test while I was listening to the video.

72.25.

[olddaddy]

I got a 62, I figured that because I have always been a bet hedger. My life director got a 77, I figured that also because she has to be a risk taker to take on someone like me.

[glengarry]

I got a 62, I figured that because I have always been a bet hedger. My life director got a 77, I figured that also because she has to be a risk taker to take on someone like me.

My reading of the test score is that a higher score doesn't mean you are a risk taker. It really means the opposite of a risk taker, or better put, a good evaluator of risk. It means that you correctly assess risk. In other words, you know when there is little risk in taking a strong position, because you know when you are right. Some people think they are right, but are usually wrong. I gave the test to a very well read friend. Jeopardy contestant level well read. He scored very high. The questions, for the average person, are beyond their knowledge level. The test assesses how able you are to know your own level of knowledge. For my friend, he is so well read, the test really assesses something different. He really knows the answers to many of these, or knows enough to make truly educated guesses, thus reducing the risk.

[BettinBilly]

That's how I read it GG.

My 72 is probably where I thought I'd be, for what it's worth.

Interesting test. You can only take it once as you figure out at the end how to run the numbers if you want to. I thought I knew that 1/2 way through, but stayed the course as I wanted to know where I would end up in reality.

[whodoyoulike]

To see risk intelligence, and therefore risk assessment, in action, it's worth renting "Along Came Polly". Ben Stiller plays an insurance company risk assessor, who uses his proprietary formula to assign risk to a variety of activities. Plus you get to look at Jennifer Aniston, and laugh at the late great Phillip Seymour Hoffman.

All top level players not only see the risk, but assess it as well. They can't eliminate it, but understand its chance of biting them in the rear, and make their decision with that in mind. The average player (lifetime loser) will usually see the risk, but summarily dismiss it or underestimate it.

I'm sorry, you shouldn't use these words in the same post. I've lost my train of thought.

[rupiefied]

I got a 45 but after seeing why if you just answer the middle every time you will get a high score. Seems to me it also gagues if your risk averse as well.

[Johnny V]

Thanks for posting that link. Interesting video but I thought the test was pretty obvious since it is a true/false test. 50% chance either way. Just bet (0% or 100%) when you are absolutely sure. Of course I missed some of those. My final score was 80 but I am very far from being even close to an expert gambler although I would like to sometimes think of myself as one until the actual reality always sets in.

[raybo]

69.79, a bit lower than I thought I'd get, but, I've never been able to create a good odds line either - LOL. I suppose this is why I believe in flat betting as being the best measure of how likely one is to remain profitable, long term. I don't vary my wagers according to any "perceived" edge in individual races, but rather, I look at the long term, knowing that sometimes I'll lose money and sometimes I'll win money, but in the end I'll win more money than I lose.

[lansdale]

Found a 15 minute video from Dylan Evans where he talks about the differences between expert gamblers and non expert gamblers and a horse racing study, among other things. I found it interesting, hopefully you will too.

I love watching videos or reading articles on stuff like this, always looking to learn, so, if you have anything else along these lines you want to post, go ahead and post it up, i'd love to watch it.

http://www.youtube.com/watch?v=7jyokhjUCyk

Hi SRU,

Thanks for posting this. Although surprisingly basic for a TED speech, it contains the gist of a message concerning the power of variance/uncertainty about which I've posted here more than a few (maybe too many) times. Anyone who has read Taleb should, by now, be well aware of it. And I'm sure that Thaskalos and Delta Lover are very familiar with it via the Socratic paradox: "The only thing I know is that I know nothing."

Worth noting that the speaker does not include horserace handicapping among the games that can become professions: poker, blackjack, and sports betting. Although we know from this site that there are a few exceptions, this jibes with my experience, although I would add video poker as a fourth.

I got a 90.25 on the test, only because I realized immediately what it was about, thanks to many years of tutoring by professional gamblers much smarter than myself on such subjects as variance, expected value (EV), risk-of-ruin (ROR), and standard deviation (SD).

Cheers,

lansdale

[thaskalos]

Hi SRU,

Thanks for posting this. Although surprisingly basic for a TED speech, it contains the gist of a message concerning the power of variance/uncertainty about which I've posted here more than a few (maybe too many) times. Anyone who has read Taleb should, by now, be well aware of it. And I'm sure that Thaskalos and Delta Lover are very familiar with it via the Socratic paradox: "The only thing I know is that I know nothing."

Worth noting that the speaker does not include horserace handicapping among the games that can become professions: poker, blackjack, and sports betting. Although we know from this site that there are a few exceptions, this jibes with my experience, although I would add video poker as a fourth.

I got a 90.25 on the test, only because I realized immediately what it was about, thanks to many years of tutoring by professional gamblers much smarter than myself on such subjects as variance, expected value (EV), risk-of-ruin (ROR), and standard deviation (SD).

Cheers,

lansdale

to be fair...he did include horse racing among the "betting sports".

But I think most would agree that there are way more professional poker players out there than pro gamblers of any other type.

[Dark Horse]

With all due respect, but that is one horrible presentation. And quite sly how he focuses on a few gamblers in the 1980's, or was it the 1890's?, so he can sidestep the one thing that changed everything: computers. There's a reason they called 'm the Computer Group back in the ... 1980's.

[AndyC]

With all due respect, but that is one horrible presentation. And quite sly how he focuses on a few gamblers in the 1980's, or was it the 1890's?, so he can sidestep the one thing that changed everything: computers. There's a reason they called 'm the Computer Group back in the ... 1980's.

Wouldn't people with a higher RI utilize computers better than those with a lower RI?

[lansdale]

to be fair...he did include horse racing among the "betting sports".

But I think most would agree that there are way more professional poker players out there than pro gamblers of any other type.

Hi Thask,

I think there's absolutely no doubt about this - there are far more pro poker players, or at least players making a consistent amount of money at the game, than with any other gambling endeavor. I would say the ratio of poker to blackjack players, for example, is over 20:1. I'm less sure about sports bettors, which seem to fall in between - their number also seems to have declined since the 2008 crash. But these three games are generally understood as those at which money can be made in the gambling world.

BTW, I think the speaker referred to the 'expertise' of horseplayers which is somewhat ambiguous, but obviously there are professional horseplayers, although they seem to be far fewer in number, as they would be - it's a more difficult game than the others.

Best,

lansdale

[lansdale]

Wouldn't people with a higher RI utilize computers better than those with a lower RI?,

Hi AC

Not necessarily. RQ isn't really gambling-related per se - it's about how accurate your grasp of reality is in any area where there is uncertainty about the outcome - pretty much all of life. You can grasp the importance of this concept without knowing anything about computers. Poker is one good of example of a game where being tech savvy doesn't provide much of an additional edge - especially now that online poker is all but dead.

Cheers,

lansdale

[thaskalos]

Hi Thask,

I think there's absolutely no doubt about this - there are far more pro poker players, or at least players making a consistent amount of money at the game, than with any other gambling endeavor. I would say the ratio of poker to blackjack players, for example, is over 20:1. I'm less sure about sports bettors, which seem to fall in between - their number also seems to have declined since the 2008 crash. But these three games are generally understood as those at which money can be made in the gambling world.

BTW, I think the speaker referred to the 'expertise' of horseplayers which is somewhat ambiguous, but obviously there are professional horseplayers, although they seem to be far fewer in number, as they would be - it's a more difficult game than the others.

Best,

lansdale

Yes...horse racing is much tougher to beat...and the skilled horseplayer's "edge" is much more tenuous -- because the game is left largely unregulated. When a game is not properly regulated, then changes are likely to occur within the game which adversely affect everything -- including the winning player's profits.

That's why I believe that the horseplayer should keep several gambling options open to him...

[AndyC]

,

Hi AC

Not necessarily. RQ isn't really gambling-related per se - it's about how accurate your grasp of reality is in any area where there is uncertainty about the outcome - pretty much all of life. You can grasp the importance of this concept without knowing anything about computers. Poker is one good of example of a game where being tech savvy doesn't provide much of an additional edge - especially now that online poker is all but dead.

Cheers,

lansdale

I guess my point is that there have always been new innovations with regard to utilizing information in sports/horse race betting. I don't see how a person with a high RQ would have their advantage diminished. Doesn't it all come down to decision making based on the information?

[cashmachine]

I've got 51, much lower than I expected. BWT, I think he is somewhat misleading in the video then he said that it doesn't make sense to be very humble, and then it turned out that you can get perfect score always choosing 50%.

[Dark Horse]

Wouldn't people with a higher RI utilize computers better than those with a lower RI?

What he's talking about is some sort of ability to intuitively determine one's edge. That may have worked before computers. But it will fall short against computers. Because computers can do the same with mathematical precision.

The ability to weigh odds in one's mind has nothing to do with the ability to identify an edge in a sport. There is no risk in identifying an edge. And once it is identified, it doesn't represent a risk.

If you want to find some instructive videos about betting look for 'SBR Justin' on Youtube. Back in the day he used to write the Pinnacle Pulse. Pinnacle, as you may know, has been the sharpest offshore sportsbook for many years. He's a professional gambler, and the co-author of 'Conquering Risk'. Not every video is good, but there's definitely good stuff in there.

[Robert Goren]

This test is a free version of something they are trying to sell to large companies to screen new employees. It looks like "snake oil" to me.

[HUSKER55]

sooooo......the lower the score means you are not as smart as you think you are because you knew the answer to the majority of the questions.

OKAY


but it was an interesting video. So he is saying that gamblers are so smart we gamble for our adrenalin rush.


Paalessse do not inform my doctor as I am taking more meds than I want! And I don't need more therapy....although she is a looker....... :lol:

[AndyC]

What he's talking about is some sort of ability to intuitively determine one's edge. That may have worked before computers. But it will fall short against computers. Because computers can do the same with mathematical precision.

The ability to weigh odds in one's mind has nothing to do with the ability to identify an edge in a sport. There is no risk in identifying an edge. And once it is identified, it doesn't represent a risk.

Computers are great if your input or factors are meaningful, but yes, they should outperform an intuitive conclusion.

The problem I see with gamblers is that many don't consider the risks and will bet regardless.

[raybo]

It appeared to me to measure one's ability to be completely honest with oneself, by admitting that you don't know some of the answers. The fact that you "guess" at the answer, by selecting a percentage that is not 50% nor 100% nor 0% really reflects that you either have some knowledge of the subject, but not enough to say for sure (100%), or, you just think you do.

I'm sure if you knew the answer to every question and selected 100%, you would have scored high on the test, maybe even a perfect score. But, I doubt anyone here knew the answers to all those questions, so we will never know what score you would get.

The correct response would be, if you don't know the answer, for sure (100% sure), then you actually "don't know the answer", you would just be guessing if you selected anything other than 50% (I have no idea).

The lesson to be learned? Guessing doesn't cut it, unless of course you're getting double digit odds on that horse. :lol:

[ultracapper]

to be fair...he did include horse racing among the "betting sports".

But I think most would agree that there are way more professional poker players out there than pro gamblers of any other type.

Just over 11,000 people in 2012 reported on there tax return a profession of "Professional Gambler". Over 10,000 of them were poker players.

[thaskalos]

Just over 11,000 people in 2012 reported on there tax return a profession of "Professional Gambler". Over 10,000 of them were poker players.
Any idea how many of them were horseplayers?

[Clocker]

Just over 11,000 people in 2012 reported on there tax return a profession of "Professional Gambler". Over 10,000 of them were poker players.

I would guess that those numbers would be skewed by the fact that poker tournament winnings are reported by the house to the IRS.

[barn32]

For every 100 professional poker players there is one professional horse player.

For every 1000 professional poker players there is one professional sports better.

[ultracapper]

Any idea how many of them were horseplayers?

No I don't, but one other thing I read in that report is they figure for every tax payer that reports as a "professional gambler" there may be as many as ten others that make significant (above the poverty level) unreported income gambling on a yearly basis.

[ultracapper]

I would guess that those numbers would be skewed by the fact that poker tournament winnings are reported by the house to the IRS.

That could be very well indeed as exactly how the 90% unreported are making their money is up for discussion, though I would bet a large percentage of that is still going to be poker players.

[glengarry]

It's a very simple premise. People who make a living off of games of change are not gamblers, they are wagerers. They will not play a game where the odds are against them. They are not looking for entertainment any more than the average accountant. It's a business. Because certain people are skilled at calculating, and thus avoiding, risk, the first risk they will avoid is playing horses. Too corrupt, too much inside information, too subject to chance, too high a takeout. That is why there are few real professional horseplayers. That is why it is hard to attract young people to the game. The young minds, the mathematical minds, can easily see the risk/reward ratio in racing is poor, and therefore they flock to poker.

Take a look at the video, and one thing stands out as correct. There are 3 types of bettors. The problem gambler, the recreational gambler, and the pro. The first 2 are seeking entertainment and an adrenaline rush. People can't beat the game for a lot of reasons. Many are just too dumb to grasp the concepts. But plenty of very smart people lose consistently. Why? Because the more a person becomes profit driven, the less fun the game is. Yes, for people that are smart (which generally means higher earners) losing is more fun than winning. It sounds counter intuitive, but it's not. The amount of work and discipline required to win turns the game into work. High income earners in the real world have enough work crunching numbers all day. They don't need more of it on their leisure time.

I look at the thousands of man hours people here put into the game to hope to maybe find a winning system or strategy that can grind out a profit. For most people, even bright ones, it's too much work for too little reward. For the real genius that can analyze the risk, they see early on that they are better off trading pork bellies or entering poker tournaments. Far more chance of victory. Way more riches as well.

[thaskalos]

It's a very simple premise. People who make a living off of games of change are not gamblers, they are wagerers. They will not play a game where the odds are against them. They are not looking for entertainment any more than the average accountant. It's a business. Because certain people are skilled at calculating, and thus avoiding, risk, the first risk they will avoid is playing horses. Too corrupt, too much inside information, too subject to chance, too high a takeout. That is why there are few real professional horseplayers. That is why it is hard to attract young people to the game. The young minds, the mathematical minds, can easily see the risk/reward ratio in racing is poor, and therefore they flock to poker.

Take a look at the video, and one thing stands out as correct. There are 3 types of bettors. The problem gambler, the recreational gambler, and the pro. The first 2 are seeking entertainment and an adrenaline rush. People can't beat the game for a lot of reasons. Many are just too dumb to grasp the concepts. But plenty of very smart people lose consistently. Why? Because the more a person becomes profit driven, the less fun the game is. Yes, for people that are smart (which generally means higher earners) losing is more fun than winning. It sounds counter intuitive, but it's not. The amount of work and discipline required to win turns the game into work. High income earners in the real world have enough work crunching numbers all day. They don't need more of it on their leisure time.

I look at the thousands of man hours people here put into the game to hope to maybe find a winning system or strategy that can grind out a profit. For most people, even bright ones, it's too much work for too little reward. For the real genius that can analyze the risk, they see early on that they are better off trading pork bellies or entering poker tournaments. Far more chance of victory. Way more riches as well.
I was with you right up to your last two sentences. The real money in poker isn't in the poker tournaments. The poker tournaments are for the thrill-seekers...who are looking to retire in a week. The real money is in the cash games...where you can climb as high up the ladder as your skill will allow.

[glengarry]

I was with you right up to your last two sentences. The real money in poker isn't in the poker tournaments. The poker tournaments are for the thrill-seekers...who are looking to retire in a week. The real money is in the cash games...where you can climb as high up the ladder as your skill will allow.

I'm not a big poker guy, so I stand corrected. It does seem like there are a lot of tournaments going on.

[BettinBilly]

I have a distant relative that is borderline Autistic Savant. He's not Rain Man, as he is higher functioning than what was portrayed in the film, but he is more than 1/2 way there. He's typical of that stereotype. Bad with people and social mannerisms, but absolutely brilliant with numbers.

Since he was a very young man, he has kept track of Baseball Statistics feverishly and has Handicapped Baseball to the extreme. You name it, he Handicaps it with regard to Baseball. And he remembers game stats from months gone by. It's almost scarey.

It's not a passion, it's obsessive compulsive behavior that he's damn good at. For years I have asked him to please start Handicapping horses. I've tried to tell him that there are more stats in Horse Racing than Baseball. After all, that's why he is obsessed with Baseball. It's not the sport, it's the numbers. I have always thought that if I somehow could get him focused on our sport, I'd have a Handicapping Guru in my pocket. But, unfortunately, he's obsessive with Baseball and won't budge. Just like Rain Man and his "10 minutes to Wopner".

I'm wondering how an Autistic Savant would do on this test.

[Fox]

Just over 11,000 people in 2012 reported on there tax return a profession of "Professional Gambler". Over 10,000 of them were poker players.

Could you please provide the source. Thank you.

[Stillriledup]

I have a distant relative that is borderline Autistic Savant. He's not Rain Man, as he is higher functioning than what was portrayed in the film, but he is more than 1/2 way there. He's typical of that stereotype. Bad with people and social mannerisms, but absolutely brilliant with numbers.

Since he was a very young man, he has kept track of Baseball Statistics feverishly and has Handicapped Baseball to the extreme. You name it, he Handicaps it with regard to Baseball. And he remembers game stats from months gone by. It's almost scarey.

It's not a passion, it's obsessive compulsive behavior that he's damn good at. For years I have asked him to please start Handicapping horses. I've tried to tell him that there are more stats in Horse Racing than Baseball. After all, that's why he is obsessed with Baseball. It's not the sport, it's the numbers. I have always thought that if I somehow could get him focused on our sport, I'd have a Handicapping Guru in my pocket. But, unfortunately, he's obsessive with Baseball and won't budge. Just like Rain Man and his "10 minutes to Wopner".

I'm wondering how an Autistic Savant would do on this test.

http://www.dailymail.co.uk/news/article-2608861/How-brain-injury-turned-average-Joe-math-genius-40-people-WORLD-released-inner-Einstein-trauma.html

[Robert Goren]

I was with you right up to your last two sentences. The real money in poker isn't in the poker tournaments. The poker tournaments are for the thrill-seekers...who are looking to retire in a week. The real money is in the cash games...where you can climb as high up the ladder as your skill will allow.Playing poker tournaments opens the door to private cash games.

[barn32]

Playing poker tournaments opens the door to private cash games.Really?

[Robert Fischer]

chSHqogx2CI

good related video.

he talks about some of the irrational behavior.

I don't have time to find them again, but may post up some of the more interesting points in the video later.

[Harvhorse]

Thanks for posting the vidio, I liked it.

[ultracapper]

Could you please provide the source. Thank you.

One of those free poker mags that you pick up at the OTB while you're sitting around waiting for a race to go off. Must have been the March or April 2013 edition of one of them because there was a section on "tax time". Thinking about this now, the subject tax year of the article must have been 2010 or 2011 because they wouldn't have had 2012 info yet. Sorry I can't be anymore clear than that. It was one of those things that I came across and found interesting and just remembered a couple things from it. I wasn't looking for it or even thinking about it, but found it interesting.

[ultracapper]

Found a 15 minute video from Dylan Evans where he talks about the differences between expert gamblers and non expert gamblers and a horse racing study, among other things. I found it interesting, hopefully you will too.

I love watching videos or reading articles on stuff like this, always looking to learn, so, if you have anything else along these lines you want to post, go ahead and post it up, i'd love to watch it.

http://www.youtube.com/watch?v=7jyokhjUCyk

I took this test and it got the wheels turning a little. It wouldn't be a bad idea to use a scale of -5 to +5 as you handicap a race. Grade the horses you KNOW won't win with a -5. Those that you feel very strongly about with a +4 through +5, and those that make you nervous but can't put a finger on why, -4 through 0. Those that you like but just don't think will cut it +1 through +3. If you find your -4 through 0s are coming in, see if there are certain common things about those horses that you have been dismissive of that might be beating you. If your +1 through +3s are winning, there may be things that are common that you've been under estimating as relevant in your handicapping. I'm going to look at some races over the next month or so and see what kind of results I get. Your -5s, +4s and +5s should perform as expected. If not, you really need to break down your handicapping and see what's wrong.

BTW, I scored a 75.something. I didn't figure out how to "game" it either until I read the page afterwards and then of course it made total sense.

[BettinBilly]

http://www.dailymail.co.uk/news/article-2608861/How-brain-injury-turned-average-Joe-math-genius-40-people-WORLD-released-inner-Einstein-trauma.html

Thanks SRU.

Interesting how the brain works, especially after injury.

My distant relative was born as an Autistic Savant, and as I said, he's VERY high functioning. Still lacking in social graces, but absolutely a flat out genius with numbers, spreadsheets, stats, etc. Man, don't I WISH I could get him interested in Handicapping Horses instead of Baseball! I'll keep trying.

[glengarry]

Thanks SRU.

Interesting how the brain works, especially after injury.

My distant relative was born as an Autistic Savant, and as I said, he's VERY high functioning. Still lacking in social graces, but absolutely a flat out genius with numbers, spreadsheets, stats, etc. Man, don't I WISH I could get him interested in Handicapping Horses instead of Baseball! I'll keep trying.

I go to the track with a brilliant friend. Cal Tech educated. Ivy League grad school. Honors galore, his works published a hundred times. He's an older guy now. You know his system, based on years of studying the races? He circles the horses with the fastest times. I'm not joking. Puts thousands through the machines each year, and breaks out about even year after year. Cashes more tickets than any man alive, only betting exactas, tris, supers and p3 and p4. Occasionally plays, and hits, a p 5. I suggested he use his math and reasoning skills to find a way to show a profit. He said no thanks, it isn't worth the effort to try to beat a game with a 40% takeout. Only thing that excites him are carryovers. That's the only way the 40% takeout is reduced to workable levels.

[BettinBilly]

I go to the track with a brilliant friend. Cal Tech educated. Ivy League grad school. Honors galore, his works published a hundred times. He's an older guy now. You know his system, based on years of studying the races? He circles the horses with the fastest times. I'm not joking. Puts thousands through the machines each year, and breaks out about even year after year. Cashes more tickets than any man alive, only betting exactas, tris, supers and p3 and p4. Occasionally plays, and hits, a p 5. I suggested he use his math and reasoning skills to find a way to show a profit. He said no thanks, it isn't worth the effort to try to beat a game with a 40% takeout. Only thing that excites him are carryovers. That's the only way the 40% takeout is reduced to workable levels.

Interesting, GG. Well, at least he has a system, simplistic as it is. Sometimes when I'm on a bad losing streak, I often say to myself "Maybe I should just circle the horses with two vowels in their names" :)

[cashmachine]

He said no thanks, it isn't worth the effort to try to beat a game with a 40% takeout. Only thing that excites him are carryovers. That's the only way the 40% takeout is reduced to workable levels.
It is not 40%, it is only 20%.

[AndyC]

It is not 40%, it is only 20%.

The effective take-out rate can certainly approach 40%.

[glengarry]

It is not 40%, it is only 20%.

Cal Tech guy did a study years ago, and insists that true takeout in many races is in the range of 40%. He based this on what he called the "insider takeout". To truly get the 14-20% takeout tracks must post by law, depending on type of wager, you must hit races that are either devoid of insider money, or "chaos" races where the inside money gets beat. His premise is that a game where a lot of money wagered includes bets placed by people with access to more pertinent information (insiders), the inside money that is allowed means it's not a true parimutuel system.

I didn't do the study with him, so I can't say I know how he came up with the 40% number. But it does make some sense. He compared betting horses to playing poker with a player at the table that can see the next card coming, or see one of your hole cards. No sane person would do it. But in horse racing, you play against some people with real serious money that have access to certain factors most players don't have. It's not a skill differential, which happens in poker, but a question of whether the playing field is a level one. It's not. To me, there is enough unskilled money in the pools to offset insider money most of the time.

[cashmachine]

Takeout is the house %, that's it. Insider money make game more efficient, but this is different from takeout. You can give precise estimate for the house %, and this is an estimate how much house hurts you, but how do you estimate how much insider money hurt you? I am sure that that figure (40%) is just a WILD exaggeration they tell themselves to justify their loses. Just think about it, ONLY INSIDERS can estimate how much more efficient they make the game. And people talking about "research"!!! WHO MADE THAT RESEARCH? INSIDERS? AND REPORTED RESULTS TO YOU??? Huh?

[glengarry]

Takeout is the house %, that's it. Insider money make game more efficient, but this is different from takeout. You can give precise estimate for the house %, and this is an estimate how much house hurts you, but how do you estimate how much insider money hurt you? I am sure that that figure (40%) is just a WILD exaggeration they tell themselves to justify their loses. Just think about it, ONLY INSIDERS can estimate how much more efficient they make the game. And people talking about "research"!!! WHO MADE THAT RESEARCH? INSIDERS? AND REPORTED RESULTS TO YOU??? Huh?

Just passing along what the guy told me. It was in response to another poster's story about an autistic savant relative and how he wishes he would use his brainpower for the racing game. What research he did I do not know. I don't think he needs to make some alleged stats or research up to sooth his ego. When you are at the top of your field and have the accolades to back that up, that's as much of an ego stroke as one will usually need. My take is that is makes sense that, in a game that doesn't limit or ban what is in essence the equal to insider trading, one should expect some resultant payout shortcomings. If you are comfortable with the takeout and can succeed nonetheless, that's good for you.

[thaskalos]

Cal Tech guy did a study years ago, and insists that true takeout in many races is in the range of 40%. He based this on what he called the "insider takeout". To truly get the 14-20% takeout tracks must post by law, depending on type of wager, you must hit races that are either devoid of insider money, or "chaos" races where the inside money gets beat. His premise is that a game where a lot of money wagered includes bets placed by people with access to more pertinent information (insiders), the inside money that is allowed means it's not a true parimutuel system.

I didn't do the study with him, so I can't say I know how he came up with the 40% number. But it does make some sense. He compared betting horses to playing poker with a player at the table that can see the next card coming, or see one of your hole cards. No sane person would do it. But in horse racing, you play against some people with real serious money that have access to certain factors most players don't have. It's not a skill differential, which happens in poker, but a question of whether the playing field is a level one. It's not. To me, there is enough unskilled money in the pools to offset insider money most of the time.

A very astute observation! :ThmbUp:

[cashmachine]

My take is that is makes sense that, in a game that doesn't limit or ban what is in essence the equal to insider trading, one should expect some resultant payout shortcomings.
If you worry that problem of insider money is so profound in the US, you can bet in Hong-Kong. I am collecting odds 9, 7, 5, 3, 1 minutes before the start and final odds in four pools (win, place, quinella and quinella place) in order to measure precisely the extent to which professional syndicates affect odds. I can report that although final odds are more precise than latest odds (that you can see, react and place your bet), syndicates' effect on odds is mild; professional syndicates today have approximately same edge over general public as Benter's program had over general public 20 years ago. So my conclusion is that there are no "insiders" in Hong-Kong who have much better information than public.

[Hoofless_Wonder]

For every 100 professional poker players there is one professional horse player.

For every 1000 professional poker players there is one professional sports better.

Based on my observations and personal experience, these numbers are backwards.

It's far, far easier to show profits betting on sports, and I know many recreational players that do this - for football mostly, and I've met a few pros over the years as well. Even as a weekend warrior, I've been able to show a profit on pigskins 7 out of the last 12 years. It's really not any more difficult than trading stocks, options or futures.

The ponies are far, far more difficult, and I've only had one profitable season since the turn of the century. The pros I did know back in the 1980s have moved on to other ways to make a living. The takeout and the drugs are killing the sport.

Regardless, I would agree that a small fraction of either sports bettors or horseplayers as compared to poker players make a living at it. Unfortunately for me, I'm terrible at poker, and have little interest in the game.

[thaskalos]

Based on my observations and personal experience, these numbers are backwards.

It's far, far easier to show profits betting on sports, and I know many recreational players that do this - for football mostly, and I've met a few pros over the years as well. Even as a weekend warrior, I've been able to show a profit on pigskins 7 out of the last 12 years. It's really not any more difficult than trading stocks, options or futures.

The ponies are far, far more difficult, and I've only had one profitable season since the turn of the century. The pros I did know back in the 1980s have moved on to other ways to make a living. The takeout and the drugs are killing the sport.

Regardless, I would agree that a small fraction of either sports bettors or horseplayers as compared to poker players make a living at it. Unfortunately for me, I'm terrible at poker, and have little interest in the game.

Thaskalos to the rescue. Read these two books...and be terrible no more.

http://www.amazon.com/How-Be-Poker-Player-Philosophy-ebook/dp/B00HFDJU6A/ref=pd_sim_b_1?ie=UTF8&refRID=1XKGSZAXFGWA59G95EJH

http://www.amazon.com/Quantum-Poker-Derric-Haynie-ebook/dp/B009SE1Z9E/ref=sr_1_1?s=books&ie=UTF8&qid=1398147325&sr=1-1&keywords=quantum+poker

Believe me...there are no books like these in horse racing.

[Hoofless_Wonder]

If you worry that problem of insider money is so profound in the US, you can bet in Hong-Kong. I am collecting odds 9, 7, 5, 3, 1 minutes before the start and final odds in four pools (win, place, quinella and quinella place) in order to measure precisely the extent to which professional syndicates affect odds. I can report that although final odds are more precise than latest odds (that you can see, react and place your bet), syndicates' effect on odds is mild; professional syndicates today have approximately same edge over general public as Benter's program had over general public 20 years ago. So my conclusion is that there are no "insiders" in Hong-Kong who have much better information than public.

Do you happen to know and be willing to share the strike rate of the "steam" or brown lamp horses in Hong Kong? For example, in race 1 on Monday (or Sunday night), the :14: Splendid Guy had his odds cut from 21-1 down to 6-1 in the final minute of wagering. He broke last, and finished decently as a non-threatening sixth. The amount of money wagered late appears to be around $1.5M HK, or around $200K US.

I would assume this is syndicate money, but maybe it was just a guy who had been drinking. The announcer, Darren Flindell, after noticing the odds coming down said something like, "Who know's where this will end up - the last time they piled on Splendid Guy late, they made him the favorite...".

This seems to happen a couple of times per card, but I seem to recall from when I last followed the Hong Kong circuit that these "steam" horses only win about 25% of the time....

[Hoofless_Wonder]

Thaskalos to the rescue. Read these two books...and be terrible no more.

http://www.amazon.com/How-Be-Poker-Player-Philosophy-ebook/dp/B00HFDJU6A/ref=pd_sim_b_1?ie=UTF8&refRID=1XKGSZAXFGWA59G95EJH

http://www.amazon.com/Quantum-Poker-Derric-Haynie-ebook/dp/B009SE1Z9E/ref=sr_1_1?s=books&ie=UTF8&qid=1398147325&sr=1-1&keywords=quantum+poker

Believe me...there are no books like these in horse racing.

Hmmm. Not sure if these could help, since my greatest weaknesses when playing poker are lack of patience, and many tells - I'm a bit too honest for my own good at times. But, perhaps they have some lessons which could be applied to the horses or sports betting?

[cashmachine]

Do you happen to know and be willing to share the strike rate of the "steam" or brown lamp horses in Hong Kong?

My results are based on the last 825 races; out of which 40 were late scratches - when horse was scratched less than 9 minutes before the start; I discarded races with late scratches. For the remaining races we have:

10% drop: 2143 horses, 268 wins (12.51%), 753 places (35.14%)
20% drop: 1401 horses, 175 wins (12.49%), 495 places (35.33%)
30% drop: 868 horses, 102 wins (11.75%), 303 places (34.91%)
40% drop: 439 horses, 48 wins (10.93%), 143 places (32.57%)
50% drop: 158 horses, 15 wins (9.49%), 43 places (27.22%)

Each line corresponds to a drop in the WIN odds from 1 minute before the start to the final odds. I would say that for 40% drop and 50% drop we do not have enough data to be statistically significant. As you can see, they do not come anywhere close to 25% hit rate in the win pool. Our chances are not that bad :). From the other hand, almost all races had at least 11+ horses, and almost half of races had 13+ horses, so 35% hit rate in the place pool doesn't look too bad either.

[cashmachine]

I thought about the results for some time and realized that they show that syndicates doing not very well; but in reality many of horses that were hit by the late money had pretty large odds. I realized that in order to get an idea how successful are the syndicates we need to compute ROI, as if we would made a flat bet on each horse in the corresponding group. The results are

10% drop: 2143 horses, 268 wins (12.51%, ROI -0.09), 753 places (35.14%, ROI -0.08)
20% drop: 1401 horses, 175 wins (12.49%, ROI -0.08), 495 places (35.33%, ROI -0.09)
30% drop: 868 horses, 102 wins (11.75%, ROI -0.17), 303 places (34.91%, ROI -0.09)
40% drop: 439 horses, 48 wins (10.93%, ROI -0.19), 143 places (32.57%, ROI -0.20)
50% drop: 158 horses, 15 wins (9.49%, ROI -0.21), 43 places (27.22%, ROI -0.27)

This is something completely unexpected - ROI in all cases is negative!!! I just cannot believe it. I can understand why ROI decreases as drop % increases (because larger drop means that many different syndicates hit the horse, that make it underlay), but I don't understand why ROI is negative for the 10% drop. Syndicates lose money??? Any idea?

[cashmachine]

Party people, I found them!!!!!!!!

I was thinking about the results and how it is strange that syndicates lose money and I remember one thing that Benter said in his paper: optimal amount to bet usually is surprisingly small in comparison with total pool size. I also remember I read somewhere that when Benter would make his bet his money would constitute about 2% of the total pool size. Bingo!!! I realized that "late money" can be divided into 2 groups.

First group is compulsive gamblers with deep pockets. They would place a bet on a hunch, or because they like name of the horse or because they own the horse. These guys are rich and want to hit it BIG, so they bet huge sums of money.

Second group is the professional syndicates we are interested in. They would not place huge bet because they concerned not to harm their odds. So, how do we find them? I decided to compute stats for horses with small drop in the odds, in other words I discarded all the horses that had drop in win odds 6% or more. The results were:

1% drop: 394 horses, 62 wins (15.74%, ROI 0.14), 132 places (33.50%, ROI -0.04)
2% drop: 324 horses, 55 wins (16.98%, ROI 0.24), 114 places (35.19%, ROI 0.04)
3% drop: 264 horses, 46 wins (17.42%, ROI 0.35), 95 places (35.98%, ROI 0.11)
4% drop: 171 horses, 27 wins (15.79%, ROI 0.26), 55 places (32.16%, ROI -0.13)
5% drop: 83 horses, 7 wins (8.43%, ROI -0.20), 25 places (30.12%, ROI -0.23)

ROI of 25%-35%, not too bad in my opinion. I want to be one of them :D .

[HUSKER55]

nice find! :ThmbUp: :ThmbUp:

[glengarry]

If you worry that problem of insider money is so profound in the US, you can bet in Hong-Kong. I am collecting odds 9, 7, 5, 3, 1 minutes before the start and final odds in four pools (win, place, quinella and quinella place) in order to measure precisely the extent to which professional syndicates affect odds. I can report that although final odds are more precise than latest odds (that you can see, react and place your bet), syndicates' effect on odds is mild; professional syndicates today have approximately same edge over general public as Benter's program had over general public 20 years ago. So my conclusion is that there are no "insiders" in Hong-Kong who have much better information than public.

Isn't the takeout in Hong Kong around 17%? Plus, they post vet records. Seems like a better deal than the U.S. Has anyone reading the board been to the races there? If it's anything like the old OTB in NY's Chinatown, I don't know if I can deal with it. I couldn't handle a room full of Chinese men chain smoking Kools and hollering at each other in Cantonese. Imagining 20,000 people doing that is just plain frightening.

[barn32]

Party people, I found them!!!!!!!!

I was thinking about the results and how it is strange that syndicates lose money and I remember one thing that Benter said in his paper: optimal amount to bet usually is surprisingly small in comparison with total pool size. I also remember I read somewhere that when Benter would make his bet his money would constitute about 2% of the total pool size. Bingo!!! I realized that "late money" can be divided into 2 groups.

First group is compulsive gamblers with deep pockets. They would place a bet on a hunch, or because they like name of the horse or because they own the horse. These guys are rich and want to hit it BIG, so they bet huge sums of money.

Second group is the professional syndicates we are interested in. They would not place huge bet because they concerned not to harm their odds. So, how do we find them? I decided to compute stats for horses with small drop in the odds, in other words I discarded all the horses that had drop in win odds 6% or more. The results were:

1% drop: 394 horses, 62 wins (15.74%, ROI 0.14), 132 places (33.50%, ROI -0.04)
2% drop: 324 horses, 55 wins (16.98%, ROI 0.24), 114 places (35.19%, ROI 0.04)
3% drop: 264 horses, 46 wins (17.42%, ROI 0.35), 95 places (35.98%, ROI 0.11)
4% drop: 171 horses, 27 wins (15.79%, ROI 0.26), 55 places (32.16%, ROI -0.13)
5% drop: 83 horses, 7 wins (8.43%, ROI -0.20), 25 places (30.12%, ROI -0.23)

ROI of 25%-35%, not too bad in my opinion. I want to be one of them :D .Have you done something similar for any American tracks? I think those results would be interesting as well.

[thaskalos]

In American racing...the final odds are revealed as the horses are rounding into the stretch.

[ultracapper]

Now that's funny. 6-1? No, you get 4-1 and like it.

[cashmachine]

Have you done something similar for any American tracks? I think those results would be interesting as well.
I did not - I don't have data...

[cashmachine]

For 0%-4% drop statistics was even more bold (5% is cutoff):

0% drop: 320 horses, 56 wins (17.50%, ROI 0.23), 108 places (33.75%, ROI -0.01)
1% drop: 311 horses, 55 wins (17.68%, ROI 0.24), 107 places (34.41%, ROI 0.01)
2% drop: 241 horses, 48 wins (19.92%, ROI 0.40), 89 places (36.93%, ROI 0.13)
3% drop: 181 horses, 39 wins (21.55%, ROI 0.60), 70 places (38.67%, ROI 0.27)
4% drop: 88 horses, 20 wins (22.73%, ROI 0.70), 30 places (34.09%, ROI -0.03)

Think about this ROI: 70%, 60%, 40%... these guys really know what they are doing...

[Robert Goren]

Now that's funny. 6-1? No, you get 4-1 and like it.You won't see that happen often in American racing. But you do see is 6/5 turn into 4/5. and 2/1 turn into 8/5 or 3/2. 6/1 almost always go up if they go any where after the bell at least major tracks. That is assuming that you bet enough yourself to cause the drop.

[Hoofless_Wonder]

Cashmachine - thanks for posting the info on the HK pools. Very interesting. I would have guessed that the sharper the drop, the higher the hit rate, but that's not true at all. The strike rate is far lower than I would have guessed as well.

I think your theory on the syndicate moving the pools in a smaller way makes perfect sense. And the ROI is staggering. On top of their rebates, and like many have stated on the forum, "Life is good when being a whale!"

[Stillriledup]

For 0%-4% drop statistics was even more bold (5% is cutoff):

0% drop: 320 horses, 56 wins (17.50%, ROI 0.23), 108 places (33.75%, ROI -0.01)
1% drop: 311 horses, 55 wins (17.68%, ROI 0.24), 107 places (34.41%, ROI 0.01)
2% drop: 241 horses, 48 wins (19.92%, ROI 0.40), 89 places (36.93%, ROI 0.13)
3% drop: 181 horses, 39 wins (21.55%, ROI 0.60), 70 places (38.67%, ROI 0.27)
4% drop: 88 horses, 20 wins (22.73%, ROI 0.70), 30 places (34.09%, ROI -0.03)

Think about this ROI: 70%, 60%, 40%... these guys really know what they are doing...

I'm a little confused at what you're posting...are you saying that no horse who wins ever goes up in price in the last flash?

[cashmachine]

I'm a little confused at what you're posting...are you saying that no horse who wins ever goes up in price in the last flash?
No, I did not say that. We all know sometimes horse's odds go up with the last money but horse still win. We were discussing the idea that "late money" - those money that make odds change AFTER BEGINNING OF A RACE - are "smart money". Like, the hypothesis was that if horse's odds dropped by a huge amount after beginning of a race, it means that "EVIL THEM" knew something about the horse that you did not know and acted. The surprise was that whoever "THEY" were who caused huge drop in odds, they are not too smart. Smart people bet relatively very modest money.

[thaskalos]

Smart people bet relatively very modest money.

You learn something new every day...

[cashmachine]

You learn something new every day...
I meant: "in comparison to the total pool size" :). Keep in mind that average win pool size in HK is about USD $3mil., so we are still talking about tens of thousands dollars.

[cashmachine]

Now that's funny. 6-1? No, you get 4-1 and like it.
No, I think idea is different. If you had odds 6 to 1 and they dropped 4 to 1 (HUGE drop), it means that "deep pockets" hit your horse, and you cry because of huge drop in odds AND the fact that those people not very smart as well. If your odds dropped from "6 to 1" to "5.9 to 1", then you happy, because "smart money" liked your horse AND they did not harm you that much.

[Stillriledup]

If a 6-1 shot goes to 4-1 "at the quarter pole" it just means that the person who expected 6-1 was being unrealistic and 4-1 was really the proper market value.

When a "real life" 4-1 shot is sitting up there at 6-1 with the gate loading, don't think you're the only one who senses that this horse is an overlay and don't get mad at other people for being "As good as you".

[thaskalos]

If a 6-1 shot goes to 4-1 "at the quarter pole" it just means that the person who expected 6-1 was being unrealistic and 4-1 was really the proper market value.

When a "real life" 4-1 shot is sitting up there at 6-1 with the gate loading, don't think you're the only one who senses that this horse is an overlay and don't get mad at other people for being "As good as you".
What about when my 6-1 shot is 6-1 all through the race...and the odds change to 3-1 as my horse is being photographed in the winner's circle. Am I allowed to get mad then?

[HUSKER55]

NOOOOO! i AM THE ONE THAT GETS TO DO THAT! :D :D

[raybo]

What about when my 6-1 shot is 6-1 all through the race...and the odds change to 3-1 as my horse is being photographed in the winner's circle. Am I allowed to get mad then?

After all these years of reading posts here, I think SRU gets mad quite often, and not just when his 6/1 changes to 4/1 or 3/1 after the race has started. As a matter of fact, he seems to be mad and complaining most of the time - LOL.

[thaskalos]

After all these years of reading posts here, I think SRU gets mad quite often, and not just when his 6/1 changes to 4/1 or 3/1 after the race has started. As a matter of fact, he seems to be mad and complaining most of the time - LOL.

Yes...he gets mad most of the time. But he wants to be the only one... :)