The Case For Fixed Odds(sort of)

[Redboard]

As has been mentioned here many times, nothing can be more frustrating that seeing your selection at 5-1 a couple of minutes before post, 2-1 at the bell, and then 7/5 rounding the turn. Sure, odds of the winner do go up sometimes but that’s rare, in my experience. Here’s my proposal: A track have one race a day with fixed odds. Let me explain. Instead of giving the track’s hotdog vendor a millisecond to spit out morning line odds, they hire a team of mathematicians, statisticians , computer scientists, horsemen and veteran handicappers to produce fixed odds, which contain the correct mathematical probabilities. Once we have these numbers manipulate as follows: the first two favs, cut in half, everybody else, cut 20%. Example:

Here were the betting odds of last years' BC Filly and Mare sprint.

Groupie Doll 3.00
Sweet Lulu 5.00
Dance Card 5.80
Book Review 6.10
Dance to Bristol 7.30
Judy the Beauty 9.60
Teddy's Promise 10.80
Ismene 13.00
Summer Applause 19.00
Starship Truffles 29.50
Great Hot-Brz 43.00
Renee's Titan 76.30


I’m going to divide each of these by .84 (assuming 16% takeout).

Groupie Doll 3.57
Sweet Lulu 6.00
Dance Card 6.9
Book Review 7.26
Dance to Bristol 8.7
Judy the Beauty 11.4
Teddy's Promise 12.9
Ismene 15.50
Summer Applause 22.60
Starship Truffles 35.1
Great Hot-Brz 51.2
Renee's Titan 90.8

Let's assume for this discussion that these are the actual mathematical probabilities that our panel of experts came up with. I will adjust these as mentioned:

Groupie Doll 1.8
Sweet Lulu 3.0
Dance Card 5.5
Book Review 5.8
Dance to Bristol 7
Judy the Beauty 9
Ismene 12
Teddy's Promise 10
Summer Applause 18
Starship Truffles 28
Great Hot-Brz 40
Renee's Titan 72

OK. As a horse player how would you bet this race if you saw these odds? You would toss Groupie Doll and Sweet Lulu immediately (if your computer software was correct). Right? (Groupie Doll did win) And since most races are won by one of the first two betting favs, and nobody will be betting the first two favs, the track could keep most of the handle half the time. In this example the track would be paying out odds of 1.8 not 3.0; and since less would have bet Groupie Doll, the track would be keeping 75% or more of the win pool, I would estimate. The track is essentially doing their own bookmaking, sometimes they win, sometimes they lose. That's life.


The bettors are happy because they know exactly what price they will be getting and don’t have to worry about last-second odds drop. How would you feel watching a tote board where the numbers don’t change? Ecstatic, right? The only fly in the ointment here is the condition of the negative win pool. What if some insider put $1 Million on Renee's Titan? Well the track could have fine print explaining that in a negative win pool situation, the entire handle goes to the winner and the track essentially has 0% takeout for that race. In that case Renee's Titan would pay whatever , maybe 5 or 10 or 20 to one. So we are not talking about completely fixed odds, let’s call them “firm” odds.
I know that OTB’s have experimented with fixed odds in the past, but what I’m proposing is different. If the track offers them, it would have the positive side-effect of telling the world that this is an honest game, something most of Joe Public doesn’t believe.
The place and the show pool, and all others, would remain pari-mutuel.

[DeltaLover]

As has been mentioned here many times, nothing can be more frustrating that seeing your selection at 5-1 a couple of minutes before post, 2-1 at the bell, and then 7/5 rounding the turn. Sure, odds of the winner do go up sometimes but that’s rare, in my experience. Here’s my proposal: A track have one race a day with fixed odds. Let me explain. Instead of giving the track’s hotdog vendor a millisecond to spit out morning line odds, they hire a team of mathematicians, statisticians , computer scientists, horsemen and veteran handicappers to produce fixed odds, which contain the correct mathematical probabilities. Once we have these numbers manipulate as follows: the first two favs, cut in half, everybody else, cut 20%. Example:

Here were the betting odds of last years' BC Filly and Mare sprint.

Groupie Doll 3.00
Sweet Lulu 5.00
Dance Card 5.80
Book Review 6.10
Dance to Bristol 7.30
Judy the Beauty 9.60
Teddy's Promise 10.80
Ismene 13.00
Summer Applause 19.00
Starship Truffles 29.50
Great Hot-Brz 43.00
Renee's Titan 76.30


I’m going to divide each of these by .84 (assuming 16% takeout).

Groupie Doll 3.57
Sweet Lulu 6.00
Dance Card 6.9
Book Review 7.26
Dance to Bristol 8.7
Judy the Beauty 11.4
Teddy's Promise 12.9
Ismene 15.50
Summer Applause 22.60
Starship Truffles 35.1
Great Hot-Brz 51.2
Renee's Titan 90.8

Let's assume for this discussion that these are the actual mathematical probabilities that our panel of experts came up with. I will adjust these as mentioned:

Groupie Doll 1.8
Sweet Lulu 3.0
Dance Card 5.5
Book Review 5.8
Dance to Bristol 7
Judy the Beauty 9
Ismene 12
Teddy's Promise 10
Summer Applause 18
Starship Truffles 28
Great Hot-Brz 40
Renee's Titan 72

OK. As a horse player how would you bet this race if you saw these odds? You would toss Groupie Doll and Sweet Lulu immediately (if your computer software was correct). Right? (Groupie Doll did win) And since most races are won by one of the first two betting favs, and nobody will be betting the first two favs, the track could keep most of the handle half the time. In this example the track would be paying out odds of 1.8 not 3.0; and since less would have bet Groupie Doll, the track would be keeping 75% or more of the win pool, I would estimate. The track is essentially doing their own bookmaking, sometimes they win, sometimes they lose. That's life.


The bettors are happy because they know exactly what price they will be getting and don’t have to worry about last-second odds drop. How would you feel watching a tote board where the numbers don’t change? Ecstatic, right? The only fly in the ointment here is the condition of the negative win pool. What if some insider put $1 Million on Renee's Titan? Well the track could have fine print explaining that in a negative win pool situation, the entire handle goes to the winner and the track essentially has 0% takeout for that race. In that case Renee's Titan would pay whatever , maybe 5 or 10 or 20 to one. So we are not talking about completely fixed odds, let’s call them “firm” odds.
I know that OTB’s have experimented with fixed odds in the past, but what I’m proposing is different. If the track offers them, it would have the positive side-effect of telling the world that this is an honest game, something most of Joe Public doesn’t believe.
The place and the show pool, and all others, would remain pari-mutuel.


I would rather have multiple bookies offering their lines providing them with the ability to move them as the betting goes on. This is nothing new and has been going of for centuries and presents the best paradigm for the bettor and the bookie alike. Going forward with this model, the role of the race track changes, as it is converted from a gambling provider to an athletic even organizer who leaves the gambling part of the game to specialized parties who know better..

[Dark Horse]

Just offer exchange betting. Buy and sell at any price you want.

[Dave Schwartz]

As much as I like the idea of fixed odds, exotics go away without parimutuel.

[AndyC]

As much as I like the idea of fixed odds, exotics go away without parimutuel.

No reason you can't have both.

[Some_One]

Betfair has it you can place bets through the US, UK and Aus totes from their site. Exotics aren't that big in the UK, but in Aus, you have all the usual exotics through the tab.

[davew]

thats a great idea, but what happens when there is a negative pool? less than no money for the track and purses?

even though it is an interesting idea, there will be people who have a 'better' line than presented and exploit it - similar to sports.

[thespaah]

As much as I like the idea of fixed odds, exotics go away without parimutuel.
:ThmbUp:

[thespaah]

No reason you can't have both.
Then the tracks would have to set up a second betting system. In one, the track has the bettors wagering among themselves.
The other, the track is acting as a bookmaker.
it is probably doable. However, there would be costs involved that the tracks would have to be able to justify and then make sure they will realize a positive ROI.

[green80]

Let's have it where you can bet fixed odds or paramutual. Advantage to the win-place-show bettors with fixed odds. I think the exotics would be best paramutual.

[zico20]

I love the concept of fixed odds every race. But one potential problem I see is the increase in horses being dumped a couple of races in a row then when these so called math experts put the horse at 5-1 the horse goes ahead and wins while the inside connections put 10,000 to win (smaller track) or 100,000 to win (major track). Just think what would happen at a track like Fairmount where the favorite has normally 3000 in it. A sure thing at 2-1 instead of 1-5 would be a recipe for disaster for the track. I would be ok with that, but I see a ton of so called fixed races ahead.

Now if it were only one race a day and nobody knew in advance which race til close to the start of the races then it could work. But then there could be ways around that also.

[Some_One]

No bookmaker will take that much on a mickey mouse track, don't assume you will be able to get unlimited money bet with a bookie. Also don't assume you'll get better odds, while watching the TVN Aussie feed, they show how the fixed odds move and for small tracks, the effective takeout at the beginning is around 30% and move closer to the 15% area at post time, bookies aren't stupid and won't expose themselves to a huge liability at a small track. But say Melbourne Cup, then yes you'll get large amounts in/

[zico20]

No bookmaker will take that much on a mickey mouse track, don't assume you will be able to get unlimited money bet with a bookie. Also don't assume you'll get better odds, while watching the TVN Aussie feed, they show how the fixed odds move and for small tracks, the effective takeout at the beginning is around 30% and move closer to the 15% area at post time, bookies aren't stupid and won't expose themselves to a huge liability at a small track. But say Melbourne Cup, then yes you'll get large amounts in/

The original post said the track acts as the bookie. He said sometimes they win, sometimes they lose. So I was assuming the track would handle any bet, just like with a million dollar show bet. The track doesn't limit show wagering. They can not allow it, but they don't limit how much you can bet to show.

[green80]

They could use a moving odds line much like the books do on sports. You bet a horse at 5 to 1, you get 5 to 1. Too much action on that horse, he is 4-1, 3-1, whatever. The line adjust as you get closer to post as the action comes in, just like the paramutual odds, the difference being you get the price you got your bet in at.

[Some_One]

The original post said the track acts as the bookie. He said sometimes they win, sometimes they lose. So I was assuming the track would handle any bet, just like with a million dollar show bet. The track doesn't limit show wagering. They can not allow it, but they don't limit how much you can bet to show.

Oops, sorry my bad then, it would be a mistake for the track to do it, I think it's a mistake for them to run the totes now, let third parties do it, as you see in the UK and Australia, they do a much better job of promotion and incentives (i.e. if your horse finishes second, get a free bet/refund)

Edit: Should also add in that while on track at Flemmington and Rosehill, every bookie had a laptop with the Betfair market up, probably to catch early moves and to lay off all their action.