How Often is the Favorite an Overlay?

[maddog42]

Just this past weekend I bet a horse that was 5/2 at the 3 minute mark. This was the lowest odds I had bet a straight win bet in a long time. I felt he should have been even money. His odds later went to 7/5 and I was disappointed even though he was slow getting out of the gate and still won.
My weakness has always been the lower odds horses. My line on them is often wrong. How often are they overlays? 20% of the time? 5%? Never? Just how often do you bet on Favorites and still consider them an Overlay?

[HUSKER55]

when a horse gets bet-down that much you gotta figure one of three things. The horse is REALLY that good or the field is crappy or there is the third possibility which is everyone has missed something in the past performances.

If your pick is a legitimate contender then the odds will go down after the hubs close. Everyone gets burned like that. Nature of the beast.

[bets]

Often you here the comment "I wont bet a horse if its under my price"


So you rate a horse Even money that starts 6/5 final odds, meaning its a overlay and a bet.

But given these two examples which is the true overlay and bet?

Example 1) 5/2 to Even money

vs

Example 2) 3/5 to 6/5

[Magister Ludi]

~15%

[ReplayRandall]

How often is the favorite an Overlay?~15%

Thanks ML. So, How often is the favorite an Underlay?.......I'm thinking ~30%.

[classhandicapper]

I always thought the best way to approach this would be to identify all the races where you absolutely hate the favorite. Assuming some level of skill, those bad favorites should lose way more than the track take. That means the remaining favorites would lose less than the track take. By refining that process in a positive direction next, you should be able to get fairly close to break even on the remaining favorites and possibly even eek out a very small edge. I never took this to a logical conclusion. If I hate the favorite, I just bet against it. If I like the favorite, I typically pass unless I have a value oriented opinion elsewhere in the race to hook up.

[maddog42]

I always thought the best way to approach this would be to identify all the races where you absolutely hate the favorite. Assuming some level of skill, those bad favorites should lose way more than the track take. That means the remaining favorites would lose less than the track take. By refining that process in a positive direction next, you should be able to get fairly close to break even on the remaining favorites and possibly even eek out a very small edge. I never took this to a logical conclusion. If I hate the favorite, I just bet against it. If I like the favorite, I typically pass unless I have a value oriented opinion elsewhere in the race to hook up.

I like your logic. Something similar has been rolling around in my noodle for a long time. To carry your logic a little further. I be believe you would have to be track specific and very picky and current on the favorite percentage at your track. Eliminating the favorite (not just playing "beat the favorite") has always been a valuable skill. You eliminate so much "dumb pool money" that it can become profitable. Steve Fierro has written and published some stats about betting against legitimate favorites. He talks about it being a true Money burner.

[classhandicapper]

Steve Fierro has written and published some stats about betting against legitimate favorites. He talks about it being a true Money burner.

I also think betting against legitimate favorites is a very tough game to play.

[thaskalos]

I always thought the best way to approach this would be to identify all the races where you absolutely hate the favorite. Assuming some level of skill, those bad favorites should lose way more than the track take. That means the remaining favorites would lose less than the track take. By refining that process in a positive direction next, you should be able to get fairly close to break even on the remaining favorites and possibly even eek out a very small edge. I never took this to a logical conclusion. If I hate the favorite, I just bet against it. If I like the favorite, I typically pass unless I have a value oriented opinion elsewhere in the race to hook up.
I have always suspected that what the comprehensive handicapper would call "bad favorites" would probably outperform the "deserving favorites" ROI-wise. I don't have extensive data to back up my assertion...but I do know that the favorites who are "dead-on-the-board" underperform significantly. That fact should balance out somehow...NO?

If the obvious choice underperforms when ignored on the board...then shouldn't the "undeserving" choice - that receives surprising attention on the board - warrant a closer look?

[maddog42]

I have always suspected that what the comprehensive handicapper would call "bad favorites" would probably outperform the "deserving favorites" ROI-wise. I don't have extensive data to back up my assertion...but I do know that the favorites who are "dead-on-the-board" underperform significantly. That fact should balance out somehow...NO?

If the obvious choice underperforms when ignored on the board...then shouldn't the "undeserving" choice - that receives surprising attention on the board - warrant a closer look?

If you are referring to lukewarm favorites who have ALL the positives: trainer,
speed rating, hot jockey but are still 2/1, when they probably should be 6/5 then I see your point. If not, please clarify....

[maddog42]

So much of what I do is look for "bouncy" favorites. I am certainly no expert, but I've found out that I don't have to be right very often.

[classhandicapper]

I have always suspected that what the comprehensive handicapper would call "bad favorites" would probably outperform the "deserving favorites" ROI-wise. I don't have extensive data to back up my assertion...but I do know that the favorites who are "dead-on-the-board" underperform significantly. That fact should balance out somehow...NO?

If the obvious choice underperforms when ignored on the board...then shouldn't the "undeserving" choice - that receives surprising attention on the board - warrant a closer look?

If I understand you, you are looking at it from the perspective of overall line making. I understand what you are saying. That could easily be true.

What I am referring to is situations where I believe I know something about a horse that either the pubic generally does not build into the odds properly or that is generally not well understood. I'm expecting the odds to be "X". They are "X". I think "X" is wrong.

[Dave Schwartz]

My numbers would indicate that the favorite is overlayed about 20% and underlayed about 65%. The other 15% the public has it just about right.

[cutchemist42]

Tough to say, the last one I truly thought was an overlay even at 2/1 in the Holy Bull.

[cutchemist42]

http://www.netcapper.com/TrackTractsArchive/TT020420.htm

[Robert Goren]

How Often is the Favorite an Overlay?
In a win pool of any size, the answer is almost never in the final odds. The whales keep correcting the odds on favorites and near favorites until they are not profitable without rebates, but profitable with them. In order to get an overlay on a favorite, you would have find something they are not accounting for. Good Luck with that. Maybe you might find a surface bias before they do, but you won't have it for long.

[Cratos]

Just this past weekend I bet a horse that was 5/2 at the 3 minute mark. This was the lowest odds I had bet a straight win bet in a long time. I felt he should have been even money. His odds later went to 7/5 and I was disappointed even though he was slow getting out of the gate and still won.
My weakness has always been the lower odds horses. My line on them is often wrong. How often are they overlays? 20% of the time? 5%? Never? Just how often do you bet on Favorites and still consider them an Overlay?
To each his/her own, but I never think of overlays or underlays with respect to what the public decides.

However I do have minimum betting odds of 3-1 for my wagers and I only bet win; and I do not bet exotics at all.

What I am getting at is that you should set your own betting odds and hopefully your handicapping will coincide wih those odds.

[bets]

How Often is the Favorite an Overlay?
In a win pool of any size, the answer is almost never in the final odds. The whales keep correcting the odds on favorites and near favorites until they are not profitable without rebates, but profitable with them. In order to get an overlay on a favorite, you would have find something they are not accounting for. Good Luck with that. Maybe you might find a surface bias before they do, but you won't have it for long.


The whales overbet the wrong horses to, making other horses value.

[bets]

However I do have minimum betting odds of 3-1 for my wagers and I only bet win; and I do not bet exotics at all.

What I am getting at is that you should set your own betting odds and hopefully your handicapping will coincide wih those odds.

So what is the minimum odds you need to bet a horse you have 3-1?

[Cratos]

So what is the minimum odds you need to bet a horse you have 3-1?
The minimum odds are 3-1 closing odds on the toteboard.

However in some rare cases the odds has dropped below my 3-1 odds threshold after I placed my bet.

[bets]

The minimum odds are 3-1 closing odds on the toteboard.

However in some rare cases the odds has dropped below my 3-1 odds threshold after I placed my bet.

What i meant to ask was, if you were offered fixed odds, what odds would you need to get, to place a bet on a horse you priced 3-1?

[thaskalos]

The minimum odds are 3-1 closing odds on the toteboard.

However in some rare cases the odds has dropped below my 3-1 odds threshold after I placed my bet.

Do you take the size of the field into consideration when you are setting your "minimum odds"...or is this 3-1 threshold applied across the board? There are some very short fields out there, and 3-1 seems a little too strict in those cases...no?

[thespaah]

Just this past weekend I bet a horse that was 5/2 at the 3 minute mark. This was the lowest odds I had bet a straight win bet in a long time. I felt he should have been even money. His odds later went to 7/5 and I was disappointed even though he was slow getting out of the gate and still won.
My weakness has always been the lower odds horses. My line on them is often wrong. How often are they overlays? 20% of the time? 5%? Never? Just how often do you bet on Favorites and still consider them an Overlay?
6 1/2 times out ten....33% is roughly the average pct of winning favs nationwide

[bets]

Tbh i really don't understand why players set restrictions like, not betting horses unless they get 3-1 4-1 etc.

[Robert Fischer]

Tbh i really don't understand why players set restrictions like, not betting horses unless they get 3-1 4-1 etc.

In some ways it's very limiting, in others it offers specialization.

[thaskalos]

Tbh i really don't understand why players set restrictions like, not betting horses unless they get 3-1 4-1 etc.
Not all players create their own odds line when they handicap. Sometimes they just select a solid-looking horse...and wonder if it's worth betting or not. That's when the minimum odds threshold is needed.

[classhandicapper]

Tbh i really don't understand why players set restrictions like, not betting horses unless they get 3-1 4-1 etc.

Years ago I used to play horses between 6/5 and 2-1 when I thought they offered good value, but when I reviewed my results year to year I typically lost a little money. So I stopped playing them. The only exception is when I think the price is crazy attractive (which is pretty much never). Maybe I would do better now because I know more, but I doubt it.

[bets]

If you are a overs and unders bettor, meaning you're setting lines and BETTING TO VALUE-LINE ODDS.

Your thinking will be that you need to bet over your own rated price, which means, if you rate a horse, lets use decimal odds for simplicity, say $4 and are offered $4.25, which means your getting overs and its a bet.

Bettors are misguided by thinking $4 is some kind of minimum odds threshold.

But the truth is they are only making .06 ROI on that particular bet.

Their own price is $4 and lets say the finale odds are 4.25

Which is roughly a ROI of around 6% $0.24

Now we know that $2 horses win more than $3 and $3 horses win more than $4 and so on.

So why not bet horses at a lower price, when they will win more often than the longer priced?

bettors are tricked into thinking the longer the price the more value they are getting when in fact the value is only what overs you get over your own set price.

For example if you rate a horse $2 and secure 2.15 you are making 7% ROI

So betting a horse at 2.15 when you have it rated $2 or betting a horse at $4.25 when you have it rated $4 will return you basically the same ROI of around 6% and 7% going of the these examples.

So why not bet more horses at shorter prices, since they win more often than longer priced horses?

The $4 some like to use as the finale odds they wont bet under is actually misguided IMO.

[classhandicapper]

I think the issue is that it's difficult for many people to be precise in their win probability estimate when they are evaluating solid short priced horses. It seems to be easier to evaluate live horses in the mid range or longer odds area. The minimum odds rules have no basis in theory. Theoretically there are overlays at 1/5, 2/5, 3/5 etc.... Minimum odds rules are just a concession to practical experience.

[bets]

I think the issue is that it's difficult for many people to be precise in their win probability estimate when they are evaluating solid short priced horses. It seems to be easier to evaluate live horses in the mid range or longer odds area. The minimum odds rules have no basis in theory. Theoretically there are overlays at 1/5, 2/5, 3/5 etc.... Minimum odds rules are just a concession to practical experience.

Isn't it the same thing? no matter the price of the horse

$8 or Even money?

If they are working on say 10% overs for a $8 horse, meaning 8.80 is required to place a bet, same applies for a even money horse 2.20 is required to make it a bet.

If they want to use 20% instead of 10% than for a $8, 9.60 is required, while a for a Even money horse 2.40.

Weather they can price the horses correctly or not doesn't make a difference, its just seems a better cushion betting a $8 than a $2.

[classhandicapper]

Isn't it the same thing? no matter the price of the horse

Weather they can price the horses correctly or not doesn't make a difference, its just seems a better cushion betting a $8 than a $2.

In theory it's all the same. But for some people (including me) it's very hard to tell the difference between a legitimate even money shot and a 6/5 or 7/5 shot.

[Dave Schwartz]

In theory it's all the same. But for some people (including me) it's very hard to tell the difference between a legitimate even money shot and a 6/5 or 7/5 shot.

... Just as it is difficult to tell the difference between 5/1 and 6/1.

A common mistake that players make is by allowing a gigantic margin of error they think this correct the problem.

Example: A player says, "I make this horse 3/1 but I will not bet him unless he is 6/1 or higher."

The mistake is in assuming that the horse had a 25% chance to win to begin with.

My point is that without research to verify that YOUR 25% horses really win 25% consistently and across all odds ranges nullifies your efforts.

[bets]

... Just as it is difficult to tell the difference between 5/1 and 6/1.

A common mistake that players make is by allowing a gigantic margin of error they think this correct the problem.

Example: A player says, "I make this horse 3/1 but I will not bet him unless he is 6/1 or higher."

The mistake is in assuming that the horse had a 25% chance to win to begin with.

My point is that without research to verify that YOUR 25% horses really win 25% consistently and across all odds ranges nullifies your efforts.



Exactly people often say this but setting lines is not a easy caper, but that said many still do it, and i'm not saying its wrong to do it, as obviously its the only way to learn, but i often see guys setting lines as Dave said far to often, if you mark a horse 3-1 but I will not bet him unless he is 6/1 or higher than you simply don't know what you are doing regarding setting lines.

When you mark a horse 3-1 that means you should be prepared to back him at say 10% 15% when overs and lay him when 10% 15% when unders.

[Dave Schwartz]

But, Mr. Bets, what is the alternative?

(Herein lies the problem. NOT making a line does not solve the problem, does it?)

[bets]

But, Mr. Bets, what is the alternative?

(Herein lies the problem. NOT making a line does not solve the problem, does it?)

IMO you should make a line to learn, not just to learn how to price but it also teaches you more about each horse, but some handicappers are either good at setting lines or not no matter how long they do it, and if not should stick to other aspects of handicapping instead.

Now given what i have said all along in this thread, you do not need to know how to set a line to win in this game, that's the amazing thing about this game.

And even though i said you should back overs and lay unders, this also has flaws although it is the best and most profitable way one should bet.

If i price a horse 6/5 that starts even money, sometimes this bet at even money though unders to my rated price is a very profitable investment.

When sports bettors or any other different code players talk about setting lines kelly betting and other stuff compared to horse betting...although both a gambling, to me personally its like a car mechanic discussing how to fix a car motor with a airplane mechanic, horse handicapping and betting is nothing like the other betting codes, but the other betting codes are very similar to each other.

[Cratos]

So what is the minimum odds you need to bet a horse you have 3-1?

What you would want is the “best of it”. Therefore the probability (the minimum odds) of the fixed odds should be better than the desired 3:1 odds.

For example, if you were to bet $1 at 10:1 odds where you would win $10 on the outcome of a coin flip, you would be getting "the best of it" because your random probability would be 50% to win and you should always make the bet and this is assuming you are rational and risk-neutral with linear utility curves and have no preferences implying no tendency to strongly prefer avoiding losses to acquiring gains.

[barn32]

My numbers would indicate that the favorite is overlayed about 20% and underlayed about 65%. The other 15% the public has it just about right.Re These two factors: Overlayed 20%--Underlayed 65%

Do these two categories have dissimilar factors?

In other words, if these two categories have 25 similar factors (jockey, weight, post, last fraction, early speed or whatever) but 7 dissimilar factors, could not those 7 dissimilar factors be exploited?