Pick betting vs parlays (dont bet the parlay)

[formula_2002]

Pick betting vs parlays

For the novice among us. Pro’s need read no further.

In the case of a pick 3, the probability is measured by converting the odds in each leg and multiplying. For three horses winning at 3-1 the calculation looks like this.

Probability =(1/(odds+1)) x (1/(odds+1)) x (1/(odds+1))

=.25 x .25 x .25
= .0156
that converts to odds of (1/(.0156))-1
which = $63.10 pay off for a $1 wager in the pick 3 pool.
This represents the minimum value of the pick 3 (read further).

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A parlay on the three horses would have returned the following;
Wager $2 and returned $8.00
Wager $8 and returned $32.00
Wager $32 and returned $160.
Return for each initial dollar wagered =$160/$2 =$80.00.
Oh boy!! Bet the overlay and get $80.00 instead of $63.00

Axiom #1 “if it looks too good to be true it’s not true”

Adjusting the pick 3 calculation for “True probability”
Where true probability is defined by adjusting the final odds for track take-out.
At a 15% take out track True Probability for the pick three in the above example would change to;

True Probability = (.25x.85) x (.25x.85) x (.25x.85)
=.009595
that converts to odds of (1/(.009595)-1
which = $103 pay off for a $1 wager in the pick 3 pool.
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Conclusion:
In this example, a parlay bet can never return fair value because the return (in this case $80.00) can never be higher then the “True Probability” fair value)
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A separate pool bet (in this case a pick 3) can sometimes be greater then the “True Probability” fair value because the pick three is a separate pool from the win pool and you may get lucky.
Note:The “true probability” must further be adjusted by the standard deviation of the win pool odds and your own edge. See Dick Mitchell’s “Winning thoroughbred Strategies”. It may help you.

[ceejay]

An example is today's national P4. $2 parlay was $1725. $2 P4 was $5410.

[formula_2002]

and if I did the math right, the "fair value" for a $2.00 bet was

$39170

a bit of an underlay

[ceejay]

Originally posted by formula_2002
and if I did the math right, the "fair value" for a $2.00 bet was

$39170

a bit of an underlay
I think that you missed a decimal point.
My calculations:

Win %
Payout liklihood
3.80 52.6
17.80 11.2
21.80 9.9
21.40 9.3

0.526*0.112*0.099*0.093 = 0.000507
(1/0.000507) - 1.0 = 1971.21 :1 or $3944.44
So, $5410/$2 would be a 37% premium.

[formula_2002]

yep. you are correct...
but go 1 step further and adjust for the win pool take out and you should get a more accurate "fair value"
I dont dare do any more math today...

Joe M

[formula_2002]

After a good nights sleep, I just went to one of my homes pages where I have an interactive pick 4 calculator. I had forgotten I had one posted.
You can adust the payout results for your edge

for 0 edge the 1 dollar pay out is $1972 (as ceejay posted)

for a -15% edge the 1 dollar payout is $3778

http://globalwinningpicks.homestead.com/GLOBALWINNINGPICKSX.html

[formula_2002]

SAR MONDAYS PICK 4,
10.20
4.6
8.4
18.30

PAYED $46159 TO A DOLLAR

EVEN WITH A WIN POOL EDGE OF -15%, THE "FAIR VALUE" WAS

$21,79O , NOW THATS AN OVERLAY..BUT THERE WAS ONLY ONE WINNING TICKET SOLD. (8,4,9,6)

[Dick Schmidt]

The only advantage I can see to parlays is that you don't have to play consecutive races. Back when I was playing almost exclusively Pick-3s I used to encounter a card once in a while where I hated 4 or 5 races on the card. I'd parlay the one's that were left. Didn't pay as well, of course, but it beat getting my brains beaten in by FTS and European horses that I couldn't handle.

Dick


If thine enemy offends thee, giveth his child a drum.

[Skanoochies]

Another advantage to a parlay, is the late scratch. If you win two and parlay your money on the third leg, and your horse is scratched, you get your money back. Not so in win threes at a lot of tracks. You get transferred to the board favorite which you might not care for.:mad:

Skanoochies.:)

[takeout]

Originally posted by Skanoochies
Another advantage to a parlay, is the late scratch. If you win two and parlay your money on the third leg, and your horse is scratched, you get your money back.
Yeah, the late scratch thing would be a big plus for the parlay. Also being aware of late jock changes and all like that. I’ve often suspected that many of the comparisons favoring the Pick bets are probably overemphasized due to things like this that can’t or aren’t be factored in.

[formula_2002]

let me repeat it one one time.

a parlay bet can never return fair value because the return (in this case $80.00) can never be higher then the “True Probability” fair value)

:rolleyes:

a scratched parlay horse doe not offer MORE value, It provides for less loss!!!