The Gambler Who Cracked the Horse-Racing Code

[Andy Asaro]

https://www.bloomberg.com/news/features/2018-05-03/the-gambler-who-cracked-the-horse-racing-code

Excerpt:

If everyday bettors found out that foreign computer nerds were siphoning millions, they might bring down the system

Excerpt:

Benter has few regrets. One relates to an attempt in the early 1990s to create a model for betting on baseball. He spent three summers developing the system and only broke even—for him, a stinging professional defeat. America’s pastime was just too unpredictable.

That failure, however, led to a second period of his career as lucrative as Hong Kong was. He worked with one of his baseball backers to start betting on U.S. horse racing. Parimutuel tracks are scattered around the country, and by the late 1990s it became easier to amass data on a lot of them. The U.S. business took off just as competition began eroding profits in Hong Kong. “There is a golden age for a particular market,” he said, fiddling with a stack of decommissioned casino chips. “When there aren’t many computer players, the guy with the best system can have a huge advantage.”

[PaceAdvantage]

This should be required reading for anyone who ever comes on here again and tries to tell us these whales are myths or that nobody can beat the game with an algorithm (they must be past posting), or whatever other nonsense people like to spout who can't fathom that smart folks with computers can absolutely make a killing at this game.

[JerryBoyle]

I'm not sure if I'm happy or deeply concerned that he's still betting and in the US...

[PaceAdvantage]

Alan Woods was a member here, by the way. His name on here was entropy (http://www.paceadvantage.com/forum/member.php?u=306).

[Mulerider]

Alan Woods was a member here, by the way. His name on here was entropy (http://'s/forum/member.php?u=306).

Well, I normally don't get involved in the personal stuff here but I will note that it's a shame Mr. Woods passed before having the chance to absorb LoneF's handicapping expertise.

Also, I didn't realize Benter was still involved with horse racing. I thought he was devoting all his time to his medical transcription company and philanthropy.

[jay68802]

Positive returns at the track.

[dilanesp]

https://www.bloomberg.com/news/features/2018-05-03/the-gambler-who-cracked-the-horse-racing-code

Excerpt:

If everyday bettors found out that foreign computer nerds were siphoning millions, they might bring down the system

Excerpt:

Benter has few regrets. One relates to an attempt in the early 1990s to create a model for betting on baseball. He spent three summers developing the system and only broke even—for him, a stinging professional defeat. America’s pastime was just too unpredictable.

That failure, however, led to a second period of his career as lucrative as Hong Kong was. He worked with one of his baseball backers to start betting on U.S. horse racing. Parimutuel tracks are scattered around the country, and by the late 1990s it became easier to amass data on a lot of them. The U.S. business took off just as competition began eroding profits in Hong Kong. “There is a golden age for a particular market,” he said, fiddling with a stack of decommissioned casino chips. “When there aren’t many computer players, the guy with the best system can have a huge advantage.”

Nice lesson for all the sports betting addicts I know from among the horseplayer and poker player populations.

If this guy couldn't find an edge betting baseball, you don't have one.

[PaceAdvantage]

I thought this was one of the scariest lines from the piece:

"Thirty-two years after he first arrived in Hong Kong, Benter is still betting on horses at venues around the world. He can see the odds change in the seconds before a race as all the computer players place their bets at the same time, and he’s amazed he can still win."

If Benter is amazed he can still win despite the all the CRWs pouring money in at the last second, that doesn't leave much hope for the rest of us, who aren't anywhere near Benter's level...

[jay68802]

I thought this was one of the scariest lines from the piece:

"Thirty-two years after he first arrived in Hong Kong, Benter is still betting on horses at venues around the world. He can see the odds change in the seconds before a race as all the computer players place their bets at the same time, and he’s amazed he can still win."

If Benter is amazed he can still win despite the all the CRWs pouring money in at the last second, that doesn't leave much hope for the rest of us, who aren't anywhere near Benter's level...

He can see odds change it the seconds before a race begins. And the average player is watching the odds change once every 15 seconds or so. Like the old saying goes "You have to spend money to make money".

[PaceAdvantage]

He can see odds change it the seconds before a race begins. And the average player is watching the odds change once every 15 seconds or so. Like the old saying goes "You have to spend money to make money".I didn't interpret his quote that way, but I knew at least one person would...:lol:

I see odds change in the seconds before a race begins...every single race I watch.

[jay68802]

I wasn't quite sure myself so I went with the fun way.:)

[lamboy]

it should be noted that his syndicate hit the Triple Trio after a 6 day carryover. When did they start betting into the pool? It's safe to assume they took a stab after the 3rd day's carryover which meant they bet and missed. Wouldn't they outlay a reasonable amount to hit it since they admittedly wanted to avoid the publicity? My point is - despite his considerable resources they still didn't connect so that leaves the rest of us dart throwers a chance to occasionally get a hit. Additionally, why did it take him this long to start exploring the impact of trainer changes??

[Denny]

If people have figured out how to beat the races, all the power to them.

Makes no difference to me whatsoever.

Adapt.

[Tom]

No one has proved to me that money is not pouring in after the gates open.
Or pouring out after.

[Andy Asaro]

He's profitable because of the enormous rebates he gets. My understanding that without the rebates he would have lost about 2% on average. I could be wrong but not mentioning the rebates in the article was malpractice IMO.

But he walked home with the money and that's all that matters when it's all said and done.

[GMB@BP]

who can't fathom that smart folks with computers can absolutely make a killing at this game.

I can fathom it and this article just reinforces what everyone is up against (probably hundreds of these syndicates now).

For the casual player though, why even bet into these pools?

Sounds like your saying "you can beat them, if ya join em". Certainly a value model of playing is dead for the casual player?

[dilanesp]

He's profitable because of the enormous rebates he gets. My understanding that without the rebates he would have lost about 2% on average. I could be wrong but not mentioning the rebates in the article was malpractice IMO.

So he was getting rebates when he was printing betting slips and physically walking them to the track?

He's a better handicapper than we are. He used powerful statistics to produce an edge. Meanwhile, on this board we discuss small sample meaningless stuff like the Curse of Apollo.

[Andy Asaro]

So he was getting rebates when he was printing betting slips and physically walking them to the track?

He's a better handicapper than we are. He used powerful statistics to produce an edge. Meanwhile, on this board we discuss small sample meaningless stuff like the Curse of Apollo.

I don't know what he was doing in the beginning.

[Denny]

No one has proved to me that money is not pouring in after the gates open.
Or pouring out after.

This, I WOULD have problem with.:mad:

This would be cheating.

But, is distinctly different than being a better player - like the guy in the article.

[GMB@BP]

I don't know what he was doing in the beginning.

certainly as the statistical edge has lessened with more syndicate competition and dwindling non professional players in the pool the rebate has had to make up for the loses.

I would imagine its much easier to write a algorithm to break even than it is to ensure say 10% profit.

[pandy]

So he was getting rebates when he was printing betting slips and physically walking them to the track?

He's a better handicapper than we are. He used powerful statistics to produce an edge. Meanwhile, on this board we discuss small sample meaningless stuff like the Curse of Apollo.

I'm not so sure he won all that money because of his handicapping skills. These syndicates have a lot of advantages over the average bettor, a big one being that they bet a ton of leveraged combinations in each race that they wager on. I know at the Meadowlands (harness) one syndicate bets about $400,000 a card, or an average of $40,000 a race. Once their program identifies one or more horses that are going off at favorable odds, it automatically scans all of the various exacta, trifecta, and superfecta pools and looks for overlays, then makes a whole bunch of "weighted" wagers including hedge bets that not only gives them a lot of chances to cash multiple tickets in the race, but also has big money on certain combinations that appear ripe. So if we wanted to try the same thing using our own handicapping skills and just using the odds board, we would have to have several people sitting at computers to try and get all the bets in at the last second and we would have to have at the very least several hundred thousands of dollars to start with. And if we started off with a few bad days, that would be the end of it.

So what I'm saying is, he has several big advantages, one, he has a huge bankroll, two, he's using a computer that places a ton of bets just in the last seconds.

Another advantage, he doesn't care if he has the winner. The problem most of us have is that we don't want to have a string of losers, we can't afford it, mentally, or financially. The syndicates are in it for the long run and so well bankrolled that they can get killed for a week or so and they'll just keep betting. Plus, since they play so many combinations, and bet a lot of higher odds horses, they have built in hedge bets. Most people can't afford to spread that much.

[thaskalos]

This should be required reading for anyone who ever comes on here again and tries to tell us these whales are myths or that nobody can beat the game with an algorithm (they must be past posting), or whatever other nonsense people like to spout who can't fathom that smart folks with computers can absolutely make a killing at this game.

Is that how you define Benter...as just a "smart guy with a computer"? :)

William Quirin and Dick Mitchell were also "smart folks with computers"...but they found the game too tough, and gave it up. And I dare say that 99.99% of the "smart folks with computers" are a lot closer to Quirin and Mitchell than they are to Benter...when it comes to "betting smarts".

I think it's unwise to use the few gambling geniuses out there as examples in the broad statements that we make. As the above article states...Benter would have probably made more money in the financial markets. No mere mortal he...

[dilanesp]

Is that how you define Benter...as just a "smart guy with a computer"? :)

William Quirin and Dick Mitchell were also "smart folks with computers"...but they found the game too tough, and gave it up. And I dare say that 99.99% of the "smart folks with computers" are a lot closer to Quirin and Mitchell than they are to Benter...when it comes to "betting smarts".

I think it's unwise to use the few gambling geniuses out there as examples in the broad statements that we make. As the above article states...Benter would have probably made more money in the financial markets. No mere mortal he...

He didn't make money in baseball.

I am convinced the average gambler significantly overestimates the actual number of profitable gambling opportunities.

There is very substantial evidence that in fact it is extremely difficult to "beat" the financial markets long term absent arbitrage or insider trading, and that people who do either don't advertise how they game the system or are just on the right side of the variance curve.

Hong Kong racing, as I think of it, is the perfect storm for this. I have gone to the races there. The pools are astronomical and there is tons of "dumb money" in the pools because Hong Kong is so wealthy and the culture is gambling-crazy.

I think this guy found just about the perfect outlet for his talent.

[pandy]

He didn't make money in baseball.

I am convinced the average gambler significantly overestimates the actual number of profitable gambling opportunities.

There is very substantial evidence that in fsct it is extremely difficult to "beat" the financial markets long term absent arbitrage or insider trading, and thst people who do either don't advertise how they game the system or are just on the right side of the variance curve.

Hong Kong racing, as I think of it, is the perfect storm for this. I have gone to the races there. The pools are astronomical and there is tons of "dumb money" in the pools because Hong Kong is so wealthy and the culture is gambling-crazy.

I think this guy found just about the perfect outlet for his talent.

Yes, I would imagine that the field and pool size at most North American tracks would make it tougher for him to profit, certainly compared to Hong Kong. Although there are similar syndicates here. I'm sure his computer system ranks the contenders and I would bet that it's top pick isn't much better than a good handicapper who uses pen and pencil. But it doesn't have to be good at picking winners, it just has to be good at spotting contenders who are exceptional value in the exotic pools. Again, any good handicapper can do the same thing, but you would have to have a large bankroll and a team to help you put the bets in quickly.

[thaskalos]

He didn't make money in baseball.

I am convinced the average gambler significantly overestimates the actual number of profitable gambling opportunities.

There is very substantial evidence that in fsct it is extremely difficult to "beat" the financial markets long term absent arbitrage or insider trading, and thst people who do either don't advertise how they game the system or are just on the right side of the variance curve.

Hong Kong racing, as I think of it, is the perfect storm for this. I have gone to the races there. The pools are astronomical and there is tons of "dumb money" in the pools because Hong Kong is so wealthy and the culture is gambling-crazy.

I think this guy found just about the perfect outlet for his tslent.

Yes, Benter made no money in baseball...but another much-publicized betting outfit was so successful in sports-betting that the entire sports-betting industry was shaken to its core as a result. Even "genius" has its limitations.

[GMB@BP]

Yes, I would imagine that the field and pool size at most North American tracks would make it tougher for him to profit, certainly compared to Hong Kong. Although there are similar syndicates here. I'm sure his computer system ranks the contenders and I would bet that it's top pick isn't much better than a good handicapper who uses pen and pencil. But it doesn't have to be good at picking winners, it just has to be good at spotting contenders who are exceptional value in the exotic pools. Again, any good handicapper can do the same thing, but you would have to have a large bankroll and a team to help you put the bets in quickly.

He doesnt have to profit though, he can even lose a little bit and still come out way ahead.

[dilanesp]

Yes, Benter made no money in baseball...but another much-publicized betting outfit was so successful in sports-betting that the entire sports-betting industry was shaken to its core as a result. Even "genius" has its limitations.

And Dave Singleman died the death of a salesman.

[thaskalos]

I am convinced the average gambler significantly overestimates the actual number of profitable gambling opportunities.


The "average gambler" is misguided about MANY things. Are we talking about "average gamblers" here?

[ldiatone]

plug his name on you tube and some videos about his work is shown.

[dilanesp]

The "average gambler" is misguided about MANY things. Are we talking about "average gamblers" here?

I mean most people who regularly gamble, whether or not they think of themselves as successful or skilled.

Most games are either unbeatable or not worth beating due to long variance curves or insufficient upside to justify time invested.

Those that are beatable are only beatable by a very small cadre of brilliant elite players with extensive mathematical knowledge, whose edge is often under constant erosion.

And one of the main attributes of that small cadre is they know better to assume their knowledge of the game that they beat will translate into an edge in a different game.

Finally, many people who believe they are in that cadre eventually go broke, sometimes multiple times.

[lamboguy]

No one has proved to me that money is not pouring in after the gates open.
Or pouring out after.you are right, there is a lot coming out of those pools after the races start.

[thaskalos]

I mean most people who regularly gamble, whether or not they think of themselves as successful or skilled.

Most games are either unbeatable or not worth beating due to long variance curves or insufficient upside to justify time invested.

Those that are beatable are only beatable by a very small cadre of brilliant elite players with extensive mathematical knowledge, whose edge is often under constant erosion.

And one of the main attributes of that small cadre is they know better to assume their knowledge of the game that they beat will translate into an edge in a different game.

Finally, many people who believe they are in that cadre eventually go broke, sometimes multiple times.

In this regard...sports betting is no different than any other form of gambling. The vast majority of the gamblers in general approach the game of their choice with undue optimism, while fully knowing that the mathematics of the game dictate that only a tiny percentage of them can win long-term. You say that most games are "unbeatable"...but the same could be easily said of most RACES. A poll-question was posted here a few years ago...asking about the relative "long-term success" of our collective group here. If I remember correctly...33% stated that they were long-term winners...33% said that they were "about even"...and only 34% admitted that they were long-term losers. And this, in a game where hardly ANY of us have ever run into even a single horseplayer who has proven himself to be a long-term winner. Isn't it obvious that the horseplayers are as misguided as anybody else?

If your argument is that a gambler has a better chance of "success" in horse-betting than he has in betting sports...then I must strongly disagree with you, But, of course...you are entitled to your opinions.

[Denny]

Thaskalos,

Most gamblers are lying. It's human nature to lie if you aren't winning.

It's probably closer to - less than 5% winning.

Maybe 10% breaking even - or close enough.

85% losing.

Just guessing, but, based on playing and observing for over 40 years, and I'm being nice.

(I'm in the last group most years, winning years are exceptions.)

[Parkview_Pirate]

He didn't make money in baseball.

I am convinced the average gambler significantly overestimates the actual number of profitable gambling opportunities.

There is very substantial evidence that in fact it is extremely difficult to "beat" the financial markets long term absent arbitrage or insider trading, and that people who do either don't advertise how they game the system or are just on the right side of the variance curve.

Hong Kong racing, as I think of it, is the perfect storm for this. I have gone to the races there. The pools are astronomical and there is tons of "dumb money" in the pools because Hong Kong is so wealthy and the culture is gambling-crazy.

I think this guy found just about the perfect outlet for his talent.

I'd agree with your general statement, and add that sometimes that "insider" or arbitrage edge ends up being the process that destroys the sport. Rebates have crushed the profitable or break even opportunity for many of the small players, and drove them from the game, even in Hong Kong per the rumors there. The impact on racing of rebates and lack of oversight shares some of the same characteristics as Amazon's canbilistic model, and is not sustainable.

[PaceAdvantage]

Thaskalos,

Most gamblers are lying. It's human nature to lie if you aren't winning.

It's probably closer to - less than 5% winning.

Maybe 10% breaking even - or close enough.

85% losing.

Just guessing, but, based on playing and observing for over 40 years, and I'm being nice.

(I'm in the last group most years, winning years are exceptions.)More than 85% are losing.

[steveb]

He's profitable because of the enormous rebates he gets. My understanding that without the rebates he would have lost about 2% on average. I could be wrong but not mentioning the rebates in the article was malpractice IMO.

But he walked home with the money and that's all that matters when it's all said and done.

B U L L S H I T

[Maximillion]

Not pretending to know what these guys are doing...but even a 2% loss at the volume they reportedly put thru the windows would still be very strong with just a modest rebate...and its not like they are cherry picking their spots.

[Andy Asaro]

B U L L S H I T

OK, he did it at retail takeout rates. Feel better?

[AltonKelsey]

More than 85% are losing.

I think he meant .85% were winning .

Seriously, depends on what sub group you're taking about. Very sharp players can and do win, good players might win, depends on how the wind blows, and average or worse players will probably lose.

[AltonKelsey]

Not pretending to know what these guys are doing...but even a 2% loss at the volume they reportedly put thru the windows would still be very strong with just a modest rebate...and its not like they are cherry picking their spots.

Of course, and none of that is news. The ability to play for break even or small loss is a great edge, assuming you can actually do it reliably. You're then playing for the rebate, not to 'beat the odds'.

[acorn54]

i read cx wong's book called "precision handicapping", he was and maybe still is a member of the benter gang. he mentions in his book that benter made 40 times his original bank roll over the course of the 5 years he started out betting in hong kong. i think for all the brainpower and work he did (benter), he earned every penny.

[steveb]

OK, he did it at retail takeout rates. Feel better?

i feel fine.
what i don't do, is state things i have no idea about as fact.

[Andy Asaro]

i feel fine.
what i don't do, is state things i have no idea about as fact.

I don't know him personally but I do know people with knowledge of his situation which is similar to how most teams operate. From what I know they churn hundreds of millions of dollars and get the highest rebates available.

The industry gave them the opportunity to maximize their profits by leveraging rebates and designing systems to basically break even with the rebates being their profits. I don't blame anyone for taking advantage of a system that lets them. I happen to live in a state that has a retention cap where the rebates or rewards are basically nothing. And I do think that the allowing one group to get huge rebates while already having a bankroll edge and a SKILL edge is killing the game. If they have a skill edge then they should be able to compete at retail takeout rates (which should be lowered by 5% to 7% for everyone). Not gonna grow the game with what is going on now in the United States. And I am talking about wagering in the United States which is parimutuel wagering.

If I'm wrong which is possible but unlikely then give me some facts.

[GMB@BP]

In a pari-mutual game rebates effectively set different prices for players betting on the same event.

Whether that is fair or not is up to each individual.

Did I mention I dont bet much anymore?

[lansdale]

I'm not sure if I'm happy or deeply concerned that he's still betting and in the US...

The last time I was in touch with Benter, in the early aughts, he was still iin HK but even then helping others to form teams in the U.S.. If you've looked at his paper or at the Bolton, Chapman paper on which his model was based, you know that none of this is rocket science -- the math is available to everyone, but not everyone has the ability to use it or the time/interest in building a handicapping model. Realize that if your model has been successful, you're already competing successfully against other people/teams using these methods.

[dilanesp]

Let me see if I can advance the discussion here.

Benter's success is being attributed to several things:

1. His handicapping skill.

2. The amount of dumb money in HK betting pools.

3. Rebates (and maybe not rebates).

4. Volume.

What can a person who doesn't have his skill, his access to the HK pools and possibly rebates, and his bankroll do then?

Well, there is one thing:

The sophisticated computer models of these guys spit out numerous betting opportunities every day, where the odds are slightly overlaid.

We, for the most part, can't do that here.

But what a casual player CAN do is identify occasional situations where things are way out of whack. Every once in awhile, you come upon a race where the public is just completely overbetting or underbetting something. It doesn't happen that often. But it does happen. That's the situation- and really the only one- where a small player has an edge. Every once in awhile a football spread is way out of whack, or a basketball spread.

If you don't have the sophisticated computer models, and you are not a 99th percentile handicapper, this isn't going to be every race Indeed, it may not happen at all for a week, or a month Because you don't have the statistical precision of Benter's computers, you can't accurately identify slight overlays. You have to wait for big ones.

What kills so many casual players is the inability to wait for these spots.

[LemonSoupKid]

Good post. I read that article and it seemed less about handicapping than computer arbitrage or any other sort of modern, more investment type technology.

[steveb]

I don't know him personally but I do know people with knowledge of his situation which is similar to how most teams operate. From what I know they churn hundreds of millions of dollars and get the highest rebates available.

The industry gave them the opportunity to maximize their profits by leveraging rebates and designing systems to basically break even with the rebates being their profits. I don't blame anyone for taking advantage of a system that lets them. I happen to live in a state that has a retention cap where the rebates or rewards are basically nothing. And I do think that the allowing one group to get huge rebates while already having a bankroll edge and a SKILL edge is killing the game. If they have a skill edge then they should be able to compete at retail takeout rates (which should be lowered by 5% to 7% for everyone). Not gonna grow the game with what is going on now in the United States. And I am talking about wagering in the United States which is parimutuel wagering.

If I'm wrong which is possible but unlikely then give me some facts.

he would receive rebates i am sure, but the rebates won't be the reason they are winning.
i don't know for sure about benter, but i know woods was winning more than just rebates, a lot more in fact.
it follows then, that if benter was better at it than the woods team(as i am led to believe), then it would be the same.

the morals of it are another subject, and personally,i am against them despite being a beneficiary in the long ago.
but businesses are entitled to favour their big customers i guess.
before i got rebates, i used to be offered all sorts of things, like boxes to major sporting events, and lots of other things.
i always knocked them back(mainly because i am an unsociable prick!), but did take the rebates that we negotiated, but i would still be in front without the rebates.
if i could win over and above the rebate, then they would have too, only infinitely more than me.

[dasch]

I'm trying find the part where he made even 0.1%($1 million) of the billion he has made on AMERICAN racing...hmm, let me read it again.......nope NOT there.

Trying to compare results from a racing jurisdiction where integrity and transparency are TOP priority vs what we have here in the United States is COMICAL.

[pandy]

Let me see if I can advance the discussion here.

Benter's success is being attributed to several things:

1. His handicapping skill.

2. The amount of dumb money in HK betting pools.

3. Rebates (and maybe not rebates).

4. Volume.

What can a person who doesn't have his skill, his access to the HK pools and possibly rebates, and his bankroll do then?

Well, there is one thing:

The sophisticated computer models of these guys spit out numerous betting opportunities every day, where the odds are slightly overlaid.

We, for the most part, can't do that here.

But what a casual player CAN do is identify occasional situations where things are way out of whack. Every once in awhile, you come upon a race where the public is just completely overbetting or underbetting something. It doesn't happen that often. But it does happen. That's the situation- and really the only one- where a small player has an edge. Every once in awhile a football spread is way out of whack, or a basketball spread.

If you don't have the sophisticated computer models, and you are not a 99th percentile handicapper, this isn't going to be every race Indeed, it may not happen at all for a week, or a month Because you don't have the statistical precision of Benter's computers, you can't accurately identify slight overlays. You have to wait for big ones.

What kills so many casual players is the inability to wait for these spots.


Hard to argue that. I bet sports for fun but I have to admit, several times a year I find a game that I absolutely love and feel the line is way off. If I only bet on those games I would be way ahead.

[pandy]

Good post. I read that article and it seemed less about handicapping than computer arbitrage or any other sort of modern, more investment type technology.


Arbitrage is a good word to explain it.

[steveb]

I'm trying find the part where he made even 0.1%($1 million) of the billion he has made on AMERICAN racing...hmm, let me read it again.......nope NOT there.

Trying to compare results from a racing jurisdiction where integrity and transparency are TOP priority vs what we have here in the United States is COMICAL.

i dunno about benter, but i did stuff for woods(time related) a long time ago.
they were already betting in countries other than hk.
in fact the first thing i did for them was to do with sth korea.
i don't think woods did australia when he was alive, but they certainly did(and very successfully) after he died(his duaghter victoria got control)
doubt that would be less involved than the usa, and in case they were going to give me usa data to do my stuff for them.
unfortunately he died first, but i would be confident they got involved at some stage, even if i had no part in it.

[steveb]

Arbitrage is a good word to explain it.

if that is what they did it might be a good word for it, but unless arbitrage means something different to what i think it does, then it's not.

[Dave Schwartz]

if that is what they did it might be a good word for it, but unless arbitrage means something different to what i think it does, then it's not.

What they are doing would not be called "arbitrage."

Steve is right.

[LemonSoupKid]

Spreading possibilities over the short term with only finite outcomes is essentially arbitrage

They weren't taking "stands" on positions.

To the common man, this is not handicapping. At all.

[zawaaa]

now we're headed off into poorly argued semantics https://forumserver.twoplustwo.com/images/smilies/rolleyes.gif

[Andy Asaro]

now we're headed off into poorly argued semantics https://forumserver.twoplustwo.com/images/smilies/rolleyes.gif

Right. Someone could just post a Computer Team rebate schedule. Not gonna happen

[zawaaa]

Benter's success is really about hard-work, organization, and most importantly; timing.

getting side-tracked about how they leverage rebates, is sorta missing the point; there's plenty enough time to rally against that elsewhere.

[PaceAdvantage]

To the common man, this is not handicapping. At all.Oh, it absolutely is...at its pinnacle.

It's the very ESSENCE of what handicapping should be. Assessing a horse's chances and betting as much as you can and still allow it to pay a higher price than it should if it wins.

[formula_2002]

This should be required reading for anyone who ever comes on here again and tries to tell us these whales are myths or that nobody can beat the game with an algorithm (they must be past posting), or whatever other nonsense people like to spout who can't fathom that smart folks with computers can absolutely make a killing at this game.

before I buy into the characterization of this "successful" bet I would want to know what was the expected return compared to the actual return.
Also consider cost for his possible previous attempts to win the pool.
I'll take a look to see if the data for that card is available

[JerryBoyle]

Spreading possibilities over the short term with only finite outcomes is essentially arbitrage

They weren't taking "stands" on positions.

To the common man, this is not handicapping. At all.

That is not arbitrage nor is what they do. Arbitrage implies generating a risk free profit from simultaneous buying/selling. It could maybe be considered stat arb, but even that is not exactly the same.

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.

*One exception might be for strategies such as the Dr Z method of using the win pool to find mispricings in the place and show pools. This is more akin to technical analysis or even stat arb

[dilanesp]

That is not arbitrage nor is what they do. Arbitrage implies generating a risk free profit from simultaneous buying/selling. It could maybe be considered stat arb, but even that is not exactly the same.

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.

*One exception might be for strategies such as the Dr Z method of using the win pool to find mispricings in the place and show pools. This is more akin to technical analysis or even stat arb

Yep.

If you ever look at a race and say "how is this horse 6 to 1? he should be 5 to 2. i am gonna bet him", you are doing the same thing Benter is, just on a less sophisticated and technological level.

[thaskalos]

Yep.

If you ever look at a race and say "how is this horse 6 to 1? he should be 5 to 2. i am gonna bet him", you are doing the same thing Benter is, just on a less sophisticated and technological level.

That's like saying that "if you've ever picked up and played a guitar, you are doing the same thing that Mark Knopfler does..." :)

https://www.youtube.com/watch?v=cJwJ11-pmxg

[dasch]

Last night I was working and had TVG on for the 2nd race from Sha Tin as the announcer said that a horse got pounded(this was IN THE GATE not AFTER the start or DURING the race, IN THE GATE) so it caught my attention and I watched the race. The horse that took all the late money showed nothing really and finished poorly. Out of curiosity I looked at the Hong Kong Jockey Club website for the chart and saw that the jockey was questioned after the race about the "unexpected" poor performance. I then looked at other races and in EVERY race ANY horse who didn't run the way expected the jockeys were ALL questioned by the stewards with full explanations made available to the public. Then depending on the situation these horses were put on Steward or Vets list before they can race again! This kind of integrity is 2nd to none IMO and after spending a RIDICULOUS amount of time over the years on American racing I am 90% sure I am going to walk away in favor of Hong Kong. I don't care if every horse I bet drops from 10-1 to 5-2 as long as it happens BEFORE THE RACE STARTS. I guess I have been so wrapped up in my work on American racing I really had no idea the integrity over there went this deep. Anybody who is frustrated will all of the BS in the USA with "supertrainers",odds changing during the race, etc, should take a look.

[Dave Schwartz]

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.


a 5-Star answer. :ThmbUp::ThmbUp:

[formula_2002]

That is not arbitrage nor is what they do. Arbitrage implies generating a risk free profit from simultaneous buying/selling. It could maybe be considered stat arb, but even that is not exactly the same.

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.

*One exception might be for strategies such as the Dr Z method of using the win pool to find mispricings in the place and show pools. This is more akin to technical analysis or even stat arb

this seems like a good time to say what I've been doing "lately"
"inefficiencies in the pool" yes , but i'm handicapping the pool basd on the bettors analysis of the horse's pp. i use the wps and exacta pools to establish weighted exacta pool bet sizes such that, in the long run, the exacta return of "your" horse over all (using my bet sizes) outperform the single bet return, beatig the track take out. a work in progess over at the "selection forum"

[classhandicapper]

If Benter is amazed he can still win despite the all the CRWs pouring money in at the last second, that doesn't leave much hope for the rest of us, who aren't anywhere near Benter's level...

I'm not buying that these guys have made the pools so efficient it's close to impossible to win.

IMO, there's no question the pools are way more efficient now than they were 30-40 years ago. The very late money has also made getting the right price more problematical.

Remember though, these guys are primarily using advanced statistics and computers. That's going to enable them to find inefficiencies in betting patterns and pools easier, weight factors better, and make better odds lines than someone using experience and intuition when it comes to playing MANY RACES.

However, they aren't going to do all the things that require subjective judgement better than everyone else in EVERY RACE. In fact, I would argue it's the opposite. Algorithms are good at some things, but they aren't good at making fine line judgments for situations where there are exceptions or limited data.

[dilanesp]

I'm not buying that these guys have made the pools so efficient it's close to impossible to win.

IMO, there's no question the pools are way more efficient now than they were 30-40 years ago. The very late money has also made getting the right price more problematical.

Remember though, these guys are primarily using advanced statistics and computers. That's going to enable them to find inefficiencies in betting patterns and pools easier, weight factors better, and make better odds lines than someone using experience and intuition when it comes to playing MANY RACES.

However, they aren't going to do all the things that require subjective judgement better than everyone else in EVERY RACE. In fact, I would argue it's the opposite. Algorithms are good at some things, but they aren't good at making fine line judgments for situations where there are exceptions or limited data.

And some angles are just not statistical.

For instance, if you know a jockey is likely to mess up in a specific scenario, that's not going to show up in the algorithm. Nor will sight handicapping.

[formula_2002]

how can one "buy into" claims that are not supported by the any facts?

[cj]

And some angles are just not statistical.

For instance, if you know a jockey is likely to mess up in a specific scenario, that's not going to show up in the algorithm. Nor will sight handicapping.

Jockey tendencies can certainly be analyzed and exploited. Could you give an example?

[Dave Schwartz]

I'm not buying that these guys have made the pools so efficient it's close to impossible to win.

IMO, there's no question the pools are way more efficient now than they were 30-40 years ago. The very late money has also made getting the right price more problematical.

Remember though, these guys are primarily using advanced statistics and computers. That's going to enable them to find inefficiencies in betting patterns and pools easier, weight factors better, and make better odds lines than someone using experience and intuition when it comes to playing MANY RACES.

However, they aren't going to do all the things that require subjective judgement better than everyone else in EVERY RACE. In fact, I would argue it's the opposite. Algorithms are good at some things, but they aren't good at making fine line judgments for situations where there are exceptions or limited data.


Great commentary. Your points are well made. :ThmbUp::ThmbUp:

Actually, they aren't going to do ANYTHING that requires subjective judgement.

What they are going to do is build large global models that push winners to the top.

So, extending upon your idea, one could concentrate on SMALL, LOCAL approaches and not always be bumping heads with the whales.

What I mean are approaches which specific to:
** Track
** Running Style
** Trainer

These are things which are very difficult to integrate into a large model.

[Prioress Ply]

Good thread with a lot of great posts.:headbanger:

[GMB@BP]

So, extending upon your idea, one could concentrate on SMALL, LOCAL approaches and not always be bumping heads with the whales.



Dave,

To follow up on this point, and I am not sure I have had this discussion on this particular board but as a smaller player I often wonder if it would make more sense to play a track (or circuit) with smaller pools that would not be as appealing to the large syndicated computer teams.

What is your thoughts on that?

[Dave Schwartz]

Dave,

To follow up on this point, and I am not sure I have had this discussion on this particular board but as a smaller player I often wonder if it would make more sense to play a track (or circuit) with smaller pools that would not be as appealing to the large syndicated computer teams.

What is your thoughts on that?

Yes, lots of thoughts.

First, you're looking at it backwards. The percentage of whale money is much higher at small tracks because the rebate is so much higher.

Sure, they bet less, but they bet a greater percentage of the pool.

Think of it like you are walking into a poker room.

There are two games, both with 6 players and the same rules.

Table A: Lower rake, populated by 3 strong players.

Table B: Higher rake, but no sharks.

I would suggest that B would be an easier table to beat.


Same with racing.

My experience is that my ROI is better at tracks with little or no rebate. An added benefit is that a greater percentage of the time the winner's odds go UP in the winner's circle.


Dave

[classhandicapper]

Dave,

To follow up on this point, and I am not sure I have had this discussion on this particular board but as a smaller player I often wonder if it would make more sense to play a track (or circuit) with smaller pools that would not be as appealing to the large syndicated computer teams.

What is your thoughts on that?

I bet on mule races. :lol:

I can't bet a lot of money because the pools are tiny, but I see inefficiencies all the time between the exotic pools and win pool. It's not easy to exploit because the late swings are so huge, but I doubt any whales are in those pools.

[GMB@BP]

Yes, lots of thoughts.

First, you're looking at it backwards. The percentage of whale money is much higher at small tracks because the rebate is so much higher.

Sure, they bet less, but they bet a greater percentage of the pool.

Think of it like you are walking into a poker room.

There are two games, both with 6 players and the same rules.

Table A: Lower rake, populated by 3 strong players.

Table B: Higher rake, but no sharks.

I would suggest that B would be an easier table to beat.


Same with racing.

My experience is that my ROI is better at tracks with little or no rebate. An added benefit is that a greater percentage of the time the winner's odds go UP in the winner's circle.


Dave

Do you know what tracks have the worst rebates, in general?

I would imagine lower take would usually mean less rebate but honestly its a pure guess on my part.

[cj]

Do you know what tracks have the worst rebates, in general?

I would imagine lower take would usually mean less rebate but honestly its a pure guess on my part.

It has to do with takeout but also signal fees. The best tracks have the highest signal fees so generally the worst rebates.

[classhandicapper]

Jockey tendencies can certainly be analyzed and exploited. Could you give an example?

They probably have good jockey data, but I'd wonder if they have any data on which jockeys, trainers, and owners pick up on biases quickly and adjust and vice versa.

To get that refined, you'd have to watch a specific circuit closely enough to have good bias notes and be able to observe who seems to be riding aggressively to avoid a negative bias or to take advantage of a favorable one. I don't keep information like that either, but from time time I make mental notes. That's the kind of thing that's probably not useful often enough for them to care, but if you have 10 things like that you might have the beginnings of a portfolio of info with value.

[cj]

They probably have good jockey data, but I'd wonder if they have any data on which jockeys, trainers, and owners pick up on biases quickly and adjust and vice versa.

To get that refined, you'd have to watch a specific circuit closely enough to have good bias notes and be able to observe who seems to be riding aggressively to avoid a negative bias or to take advantage of a favorable one. I don't keep information like that either, but from time time I make mental notes. That's the kind of thing that's probably not useful often enough for them to care, but if you have 10 things like that you might have the beginnings of a portfolio of info with value.

I don't doubt there is still stuff that can be found and used. I do it myself.

The kind of stuff you mention could be programmed, at least somewhat. If somebody is good at noting biased tracks, and I do think that can be automated, it isn't too hard to test the rest. Jockeys that are good on biased tracks, not good, even specific types of biases and at specific tracks.

Again, I'm not saying it is being done, but it certainly could be done.

[Maximillion]

I don't doubt there is still stuff that can be found and used. I do it myself.

The kind of stuff you mention could be programmed, at least somewhat. If somebody is good at noting biased tracks, and I do think that can be automated, it isn't too hard to test the rest. Jockeys that are good on biased tracks, not good, even specific types of biases and at specific tracks.

Again, I'm not saying it is being done, but it certainly could be done.

If you were to automate something like a biased track ,what would be your ballpark guess as to percentage of races or days that would get flagged as such?

[cj]

If you were to automate something like a biased track ,what would be your ballpark guess as to percentage of races or days that would get flagged as such?

Probably varies by track. First, you'd have to decide what constitutes a bias. Some tracks have long term biases, as in more or less speed favoring than average. It can get really complicated.

For example, track A could really favor speed, track B more fair, so shipping between the two would be one type of bias. Then there are short term biases that crop up everywhere at times. It can get really complicated.

That said, with a good programmer, it could all be done. I would look for days/tracks that show up in the top and bottom 10 or 15% personally.

[GMB@BP]

Probably varies by track. First, you'd have to decide what constitutes a bias. Some tracks have long term biases, as in more or less speed favoring than average. It can get really complicated.

For example, track A could really favor speed, track B more fair, so shipping between the two would be one type of bias. Then there are short term biases that crop up everywhere at times. It can get really complicated.

That said, with a good programmer, it could all be done. I would look for days/tracks that show up in the top and bottom 10 or 15% personally.

I would imagine they have teams that analyze all this stuff.

One guy reviews trips and they input an adjustment for that,

Another guy reviews workouts and they input for that.

Maybe another guy gets to know the barns and talks to people, they could input for that.

etc etc

[Maximillion]

Probably varies by track. First, you'd have to decide what constitutes a bias. Some tracks have long term biases, as in more or less speed favoring than average. It can get really complicated.

For example, track A could really favor speed, track B more fair, so shipping between the two would be one type of bias. Then there are short term biases that crop up everywhere at times. It can get really complicated.

That said, with a good programmer, it could all be done. I would look for days/tracks that show up in the top and bottom 10 or 15% personally.
'
Thanks.

[cj]

I would imagine they have teams that analyze all this stuff.

One guy reviews trips and they input an adjustment for that,

Another guy reviews workouts and they input for that.

Maybe another guy gets to know the barns and talks to people, they could input for that.

etc etc

That is what I think too. I think many are underestimating what can be done with a team that does nothing but horse racing.

[GMB@BP]

That is what I think too. I think many are underestimating what can be done with a team that does nothing but horse racing.

Very well capitalized as well, would be very easy to get information with money to spend.

[classhandicapper]

If you were to automate something like a biased track ,what would be your ballpark guess as to percentage of races or days that would get flagged as such?

I have speed/closer bias automated, but I don't think it can be automated really well.

For example

If the rail is bad, quite a few speed horses will probably wind up on the rail and do poorly.

If it it's a closer track, quite a few speed horses will probably wind up on the rail and do poorly.

The algorithm looks at the result.

Was it a dead rail or a closers track or both.

That's going to take an analysis of how the speed horses off the rail did, how the closers on the rail did, what the paces were, how good the horses were etc..

What about horses that spent some time inside and some time outside?

What about if only on section of the track is bad (like the turn)?

My algorithm spits out degree of bias (1 or 2 standard deviations away from the norm will get flashed), sample size, and confidence level, but I override it plenty of times after I analyze the races.

IMO, it's probably not best to think in terms of there being a bias with some certainty. It's probably better to think in terms of probability because the evidence will sometimes be mixed or limited.

I look at the evidence and instead of just saying it was a bad rail, I might say it's 80% the rail was bad, and 40% it was really bad. Then you could always watch how the horses do next time and adjust.

[dilanesp]

Jockey tendencies can certainly be analyzed and exploited. Could you give an example?

Forty Niner being sent in the Preakness

[dilanesp]

I bet on mule races. :lol:

I can't bet a lot of money because the pools are tiny, but I see inefficiencies all the time between the exotic pools and win pool. It's not easy to exploit because the late swings are so huge, but I doubt any whales are in those pools.

No, but I hear mules bet on whale races.

[Dave Schwartz]

It has to do with takeout but also signal fees. The best tracks have the highest signal fees so generally the worst rebates.

As usual, I second what CJ said. :ThmbUp:

In fact, most large players' rebates are directly tied to what the ADW would make minus what they get to keep.

classhandicapper
They probably have good jockey data, but I'd wonder if they have any data on which jockeys, trainers, and owners pick up on biases quickly and adjust and vice versa.

To get that refined, you'd have to watch a specific circuit closely enough to have good bias notes and be able to observe who seems to be riding aggressively to avoid a negative bias or to take advantage of a favorable one. I don't keep information like that either, but from time time I make mental notes. That's the kind of thing that's probably not useful often enough for them to care, but if you have 10 things like that you might have the beginnings of a portfolio of info with value.


Classic,

What you've mentioned is precisely what I was saying in my Global vs Local comment.

What the Whales (and anyone doing big data analysis) do right is just that: they analyze large amounts of data and they do it very well.

What they don't do well is adapt to change and variance. The idea of building models and metrics that are geared towards small models fall into the area of "local optimization."

In other words, while they are logically very aware of the outside post position bias at Turfway Park, and they might even be able to quantify that the bias gets stronger in the winter, it is probably outside the scope of their analysis to notice a shift over the last 10 days, or to notice that early horses should be penalized more than late horses when they run inside.

I (and many of my HSH users) are doing well based upon "subset data." That is, modeling subsets of local databases.

HUH?

We build specialized and specific models based not only upon track-surface-distance but also early pace pressure and individual running styles.

HUH AGAIN?

Our model looks like:

*** Track-Surface-Distance like this race
*** Pace Pressure like this race
*** What does it take for an E horse to win?
*** What does it take for an EP horse to win?
*** What does it take for an P horse to win?
*** What does it take for an S horse to win?


The whales simply CANNOT do that because it is a constant adaptation process.


Last analogy:

We're fighting an army that is much larger than us. Guerrilla warfare is the only way we can win. We have to be small (in terms of data) and fast (in terms of ability to change).


Dave

PS: re: Mule races... nothing would surprise me but I doubt it because (to my knowledge) there is no big data solution.

[classhandicapper]

We build specialized and specific models based not only upon track-surface-distance but also early pace pressure and individual running styles.

HUH AGAIN?

Our model looks like:

*** Track-Surface-Distance like this race
*** Pace Pressure like this race
*** What does it take for an E horse to win?
*** What does it take for an EP horse to win?
*** What does it take for an P horse to win?
*** What does it take for an S horse to win?
The whales simply CANNOT do that because it is a constant adaptation process.


I love it.

I'm making a huge investment of time to really tear this game apart and build personal metrics, but it's a very slow process. Even when I get something up and running well, I immediately come up with ways to make it better. In the end though, I still see the "exceptions" and know there are limits on what I can "program". That why I still feel that no matter how much the whales dominate the pools in general, they are going to keep leaving holes to exploit.

[jay68802]

I look at this way. It is sort of like what I have done in real estate. I started out by owning 1/2 of a duplex. It took a long time to be able to turn that little investment into a business. I was a small operator because of limited $. The computer teams start with 10 duplexes. A big advantage. It took about 40 years for me to get where I am now. If I would have started with 10 duplex's I would own 15 times the amount of property that I have now. Right now I do not even have what the computer teams started with. And I was lucky, in that I avoided some downturns in the economy. Tough game to grow in, but it can be done with a good plan and some luck.

[Dave Schwartz]

I love it.

I'm making a huge investment of time to really tear this game apart and build personal metrics, but it's a very slow process. Even when I get something up and running well, I immediately come up with ways to make it better. In the end though, I still see the "exceptions" and know there are limits on what I can "program". That why I still feel that no matter how much the whales dominate the pools in general, they are going to keep leaving holes to exploit.

Bright Shiny Objects - The biggest stumbling block of all.

[jay68802]

Keep it simple, stupid. The approach I am developing now. no more shiny objects for me.

[Hoofless_Wonder]

Forty Niner being sent in the Preakness

Although Pat Day gave many horses horrible rides, if memory serves he was riding to orders when Woody Stephens determined that Winning Colors wasn't going to get an easy lead. With comments in the news articles in the DRF leading up to the 1988 Preakness, it was no surprise what happened.

Jockey tendencies are a bit of a wild card, but still can be useful. Some are better at the gate, some have a better sense of pace, some know how to get a better trip on turf, etc.

Day was a nightmare for me, and I was really pleased to see him retire. His horses were so often underlays at OP or AP, and only when he went to the big circuits could you get any value. And then it was a crap shoot whether he'd give the horse a decent ride. He wasn't as good a judge of pace as some of his peers, and more of a finesse rider. He seemed to excel at getting horses to relax and getting good trips when he had the best horse. On paper, "Day on" was always good for a five length improvement. He gave Theatrical some awesome rides - not so much with Easy Goer.

And he must have had a great agent, since he got so many live mounts. He was also a fine gentleman (and probably still is), and a great ambassador for the sport. I also have to give him a tip of the hat for beating his personal demons and drug problems. A lot of jockeys couldn't do that.

[dilanesp]

Although Pat Day gave many horses horrible rides, if memory serves he was riding to orders when Woody Stephens determined that Winning Colors wasn't going to get an easy lead. With comments in the news articles in the DRF leading up to the 1988 Preakness, it was no surprise what happened.

Jockey tendencies are a bit of a wild card, but still can be useful. Some are better at the gate, some have a better sense of pace, some know how to get a better trip on turf, etc.

Day was a nightmare for me, and I was really pleased to see him retire. His horses were so often underlays at OP or AP, and only when he went to the big circuits could you get any value. And then it was a crap shoot whether he'd give the horse a decent ride. He wasn't as good a judge of pace as some of his peers, and more of a finesse rider. He seemed to excel at getting horses to relax and getting good trips when he had the best horse. On paper, "Day on" was always good for a five length improvement. He gave Theatrical some awesome rides - not so much with Easy Goer.

And he must have had a great agent, since he got so many live mounts. He was also a fine gentleman (and probably still is), and a great ambassador for the sport. I also have to give him a tip of the hat for beating his personal demons and drug problems. A lot of jockeys couldn't do that.

I will never forget the ride he gave me on Unbridled in the BC Classic. Post 14, start on the turn, and Day managed to save all the ground.

[cato]

A question for Dave S and/or anyone else who has knowledge of da whales -

Based primary on the giant profits reported with regard to Bentner and Woods for betting in Hong Kong it seems that they were making a decent positive ROI and not simply relying on rebates; whereas most of the stuff i've read about the US whales is that they mainly rely on their rebates to get them in the profit zone.

Is that correct and if so why are they more profitable in HK than the US?
The obvious reasons (to me) include -

a more honest game in HK, including
better regulation of (or no) drugs
published post race interviews with jockeys and trainers
bigger fields
fewer races
larger pools (harder to move the odds)
controlled and closed pool of horses that race on a regular basis
more additional information, including vet treatments, etc.

What else explains it, assuming the premise is true? Part of what started me on this path was a discussion in the article about Bentner, a relative necomer to computer programming and statisitcs (although admittedly very smart) who was able to put together a computer program that was profitable almost from the beginning (although Bentner did have some extra time to work on it while he was trying to win and raise enough money to get back to HK). Additionally it sounds like the first algrythm considered approximately 20 data points. That does not seem overly demanidng on the software programming side of things - heck

I'll bet all of the programs sold in the US have that many or more points to analyze and sythesize but none of them have aproached bentner's success (at least that i am aware of)

Best, Frank

[BCOURTNEY]

A question for Dave S and/or anyone else who has knowledge of da whales -

Based primary on the giant profits reported with regard to Bentner and Woods for betting in Hong Kong it seems that they were making a decent positive ROI and not simply relying on rebates; whereas most of the stuff i've read about the US whales is that they mainly rely on their rebates to get them in the profit zone.

Is that correct and if so why are they more profitable in HK than the US?
The obvious reasons (to me) include -

a more honest game in HK, including
better regulation of (or no) drugs
published post race interviews with jockeys and trainers
bigger fields
fewer races
larger pools (harder to move the odds)
controlled and closed pool of horses that race on a regular basis
more additional information, including vet treatments, etc.

What else explains it, assuming the premise is true? Part of what started me on this path was a discussion in the article about Bentner, a relative necomer to computer programming and statisitcs (although admittedly very smart) who was able to put together a computer program that was profitable almost from the beginning (although Bentner did have some extra time to work on it while he was trying to win and raise enough money to get back to HK). Additionally it sounds like the first algrythm considered approximately 20 data points. That does not seem overly demanidng on the software programming side of things - heck

I'll bet all of the programs sold in the US have that many or more points to analyze and sythesize but none of them have aproached bentner's success (at least that i am aware of)

Best, Frank

Benter and Woods did as well as they did because they went through all the maturity stages of professional handicapping and they did not stop after Stage 1.

Stage 1: Horse selection strategy and approach - Possibilities
Stage 2: Bet optimization strategy and approach - Probabilities
Stage 3: Wagering strategy and approach (using 1 and 2) - Profitability

Most individual players cannot have a reasonable conversation past Stage 1. Benter built a multinomial logistic regression model and learned how to exploit it to correctly size wagers from their selection process, then further added the wagering strategy (a modified kelly approach) based on positive expectations from the runners to construct the tickets. This generated a profit, it wasn't the selection process alone. Stages 2 and 3 require sophisticated mathematical skills and software. This is the difference between the minnows and the sharks.

You can just simply focus on making your selection process unique from the selection process of the sharks, such that you don't land on the syndicate horses. This increases an individual players chance at returning a profit versus the syndicated teams. Players should at a minimum dabble in Stage 2 and Stage 3 if possible. You cannot refine and re-refine Stage 1 Ad nauseam into a profitable approach, although this is the curse of 97% of all horse players, the hamster wheel of eternity.

[PaceAdvantage]

It also helped IMMENSELY that Benter & Woods were one of the FIRST to enter the market...they didn't have much if any competition doing what they were doing.

Now that a lot of others have caught on, I'm guessing it's not as profitable as it was initially...even in Hong Kong.

[Dave Schwartz]

Is that correct and if so why ARE they more profitable in HK than the US?
The obvious reasons (to me) include -

a more honest game in HK, including
better regulation of (or no) drugs
published post race interviews with jockeys and trainers
bigger fields
fewer races
larger pools (harder to move the odds)
controlled and closed pool of horses that race on a regular basis
more additional information, including vet treatments, etc.

First, the word should be WERE, not ARE. Those guys have been gone from HK for a long time.

The story I have, from two guys who both worked for Benter in the 1980s, I hear that he was making around 6%. As BCourtney said, they had very little competition.

BTW, when you meet people in Asia or Australia involved in racing "the Benter way," it seems that they all worked for Benter at one time or another. This is what originally caused the competition to form: smart guys who knew it could be done either going out on their own or finding an angel investor.

Side story...

Every time I'd get a call from some new group who was starting up, looking for experienced horse racing developers, the first question they'd ask was, "Do you program in FoxPro?"

FoxPro is a long-nearly-dead d-Base clone (https://en.wikipedia.org/wiki/FoxPro) that is still hanging on by a thread. Perhaps it has even made a little progress in recent years.

This is a trickle-down result because Benter used FoxPro.

To hear the Asian programmers talk about it, they all stole a copy of Benter's program when they left. (I actually had a copy myself at one time, but it was so simple that I just did not see the value.)

Benter's software was very high on things like time-decayed variables, especially things like finish position and class levels.

Remember that HK is an enclosed horse community (i.e. no shippers except for invitational races). This makes for a very distinctly class-sensitive system, with weight imposts being a huge part of the classes.

That is, win a race, go up in class or carry significantly more weight at this level. Much like Greyhound racing in the US.

Back then, Benter also "gathered his own data."


Back to meaningful stuff.

The story that I heard was that the new competitors were cutting into Benter's advantage. Remember that it does not take new winners using the same/similar approach to take your ROI down. It just demands an increase in people who wind up on the same horses for whatever reason.

The ROI dropped from +6, to +4, then +2. After that, if I recall correctly, things began to unravel much faster. Benter being a really bright guy, decided to hang it up when it got to +1%.

As for these questions...

a more honest game in HK, including
better regulation of (or no) drugs
published post race interviews with jockeys and trainers
bigger fields
fewer races
larger pools (harder to move the odds)
controlled and closed pool of horses that race on a regular basis
more additional information, including vet treatments, etc.

All the above probably contributed to the Perfect Storm created by Benter.

No real idea about the "honesty."

Bigger fields certainly helped, but with the favorites winning in the 40s (even with large fields) there certainly was a high level of "best horse wins."

When I was working in Japan, my client, who was the money handler for a large player - "whale" by our standards and terminology. (His job was to make deposits or withdrawals from each track agent's betting money; everything was cash.)

He was also known to make large wagers of his own on some of the same races he bet for his boss. (This was an automatic firing offense.)

I asked him, "What is the largest bet you ever made on a horse race with your own money?"

Very sheepishly, he said, "Not that much." When I pressed him, he continued with his embarrassed attitude and finally, took out his calculator to figure the exchange rate.

$20,000 USD is what he said. I was pretty impressed because I can tell you that I've never made a single bet anywhere near that. My largest bet ever was $2,400 spread over 3 horses (and my hands were shaking).

I asked if the horse won. He said it did. "What did it pay?"

"$117 was his response."

WHAT!

Well, that was for a $5 unit, but still, that is the equivalent to $46.80!

So, yes, pool size matters.


Dave

PS: BTW, when we speak of "Asian Racing," remember that the people involved are ALL westerners. Only once did I ever meet a team employee that was not round-eyed and he was a translator.

[Parkview_Pirate]

I will never forget the ride he gave me on Unbridled in the BC Classic. Post 14, start on the turn, and Day managed to save all the ground.

Yes, that was Day at his finest. It helped to have the best horse too, which Unbridled was on Derby Day as he rolled by Summer Squall (and Day) with ease.

In the BC Classic I ended up making a small bet on Ibn Bay, but did have a saver Q with Unbridled, but thought his outside post (and Day) would result in a tough trip. My mistake. Great call by Durkin ("Ibn Bay is STILL there!") and a great race.

*******

Dave, excellent response on HK racing and the side story. It's definitely a closed system, and highly regulated. Considering their purse structure vs. handle, they must funnel a lot of money towards the plant, supervision and the like (although HK is an expensive place to live).

For some reason, it sticks in the back of my mind that takeout may have gone up there too over the years, which of course would affect everyone's returns. But I'm not sure about that.

[BCOURTNEY]

It also helped IMMENSELY that Benter & Woods were one of the FIRST to enter the market...they didn't have much if any competition doing what they were doing.

Now that a lot of others have caught on, I'm guessing it's not as profitable as it was initially...even in Hong Kong.

Yes, when you fly around in a little Cessna plane in the US from track to track hauling in a computer the size of a briefcase to place bets until the pools can't sustain your wagers any longer and you have to head to the gambling capital of the world being first is a good thing.

[BCOURTNEY]

Side story...

[INDENT]Every time I'd get a call from some new group who was starting up, looking for experienced horse racing developers, the first question they'd ask was, "Do you program in FoxPro?"

FoxPro is a long-nearly-dead d-Base clone (https://en.wikipedia.org/wiki/FoxPro) that is still hanging on by a thread. Perhaps it has even made a little progress in recent years.

This is a trickle-down result because Benter used FoxPro.


Hi Dave, on the historical piece, I believe originally they had obscure pick like operating system then moved to Revelation (a database which is a type of post-relational database known as a multi-value database) Then later outgrowths (from people that used to work there from the HK teams) were rewritten in Foxpro after converting all the code and databases, converting from Revelation to Foxpro or DBase was quite common in that period of time.

Does that sound right or conflict with your understanding? Maybe we should query Benter himself, fun history here.

[dilanesp]

It also helped IMMENSELY that Benter & Woods were one of the FIRST to enter the market...they didn't have much if any competition doing what they were doing.

Now that a lot of others have caught on, I'm guessing it's not as profitable as it was initially...even in Hong Kong.

+1

Indeed, this is true about just about every successful investment or gambling or business strategy.

Success attracts others who do the same thing, which then cuts the profitability over time.

[dilanesp]

Yes, that was Day at his finest. It helped to have the best horse too, which Unbridled was on Derby Day as he rolled by Summer Squall (and Day) with ease.

In the BC Classic I ended up making a small bet on Ibn Bay, but did have a saver Q with Unbridled, but thought his outside post (and Day) would result in a tough trip. My mistake. Great call by Durkin ("Ibn Bay is STILL there!") and a great race.

*******

Dave, excellent response on HK racing and the side story. It's definitely a closed system, and highly regulated. Considering their purse structure vs. handle, they must funnel a lot of money towards the plant, supervision and the like (although HK is an expensive place to live).

For some reason, it sticks in the back of my mind that takeout may have gone up there too over the years, which of course would affect everyone's returns. But I'm not sure about that.

Ibn Bay was a great pick and you really deserved to win that (and would have if Day hadn't given his horse that amazing trip).

[Dave Schwartz]

Hi Dave, on the historical piece, I believe originally they had obscure pick like operating system then moved to Revelation (a database which is a type of post-relational database known as a multi-value database) Then later outgrowths (from people that used to work there from the HK teams) were rewritten in Foxpro after converting all the code and databases, converting from Revelation to Foxpro or DBase was quite common in that period of time.

Does that sound right or conflict with your understanding? Maybe we should query Benter himself, fun history here.

Sounds right to me. When I got to it, everything was pretty much FoxPro. (That was 2002.)

[cato]

Thansk to everyone for your responses on my questions.
All very interesting.

The thing that struck me was that i got the impression that the computer program(s) they started with and had success with (in HK) were not necessarily the complex unicorn program and machine i had always envisioned. As Dave said, it was simple. Yet they were wildly succesful.

And yes they were the first in HK.

It seems to me that there were a group of people in the US who were the first users of computer programs in the 80s and perhaps you could take that injto the early 90s and many of those programs and machines would have the same or greater computing power than what Bentner was using. Yet the success in the US was fleeting (at least that is my understanding and was my experience) - so i look to the differences between HK vs US racing (some of which i put in my original post) as one of the explanatuions.

BCCourtney had some interesting observations but surely some folks in the US had explored levels 2 and 3 as noted in bccourtneys post.

thanks again.

[dasch]

Last night I was working and had TVG on for the 2nd race from Sha Tin as the announcer said that a horse got pounded(this was IN THE GATE not AFTER the start or DURING the race, IN THE GATE) so it caught my attention and I watched the race. The horse that took all the late money showed nothing really and finished poorly. Out of curiosity I looked at the Hong Kong Jockey Club website for the chart and saw that the jockey was questioned after the race about the "unexpected" poor performance. I then looked at other races and in EVERY race ANY horse who didn't run the way expected the jockeys were ALL questioned by the stewards with full explanations made available to the public. Then depending on the situation these horses were put on Steward or Vets list before they can race again! This kind of integrity is 2nd to none IMO and after spending a RIDICULOUS amount of time over the years on American racing I am 90% sure I am going to walk away in favor of Hong Kong. I don't care if every horse I bet drops from 10-1 to 5-2 as long as it happens BEFORE THE RACE STARTS. I guess I have been so wrapped up in my work on American racing I really had no idea the integrity over there went this deep. Anybody who is frustrated will all of the BS in the USA with "supertrainers",odds changing during the race, etc, should take a look.

I didn't realize when I posted this that there had been discussions about Hong Kong for about 3 years so this was nothing new to most of the people here. I really don't have time to read everything so I have to be selective and I really had no idea. I can say after watching and betting the last week and a half I continue to be impressed. Some new things to me and maybe to others:

1)A rider who caused trouble in a race was IMMEDIATELY suspended for a week(2 racing days) and fined HK$100k(about $13kUS). Has ANY rider EVER been fined $13k here in the USA?

2)The scale they use to weigh out the jockeys is digital and CLEARLY visible. Why does the USA only use scales where its hard to tell anything precisely?

3)No morning line(which i think is great), BUT you can see the money and odds of EVERY HORSE in EVERY race as soon as betting opens the day before! Why do the USA tracks hide this information until the previous race has been declared official?

I have only played 3 days and my ROI is over 500% which of course won't continue but I have doubled my bet amounts already and have been more and more impressed with what I see. I don't data mine or have an algorithm like the big teams do so I feel I am not competing for those dollars and I am(based on the odds movement) less than 20% of the time on one of their same horses. I love that they color code the odds so you can see when horses are bet down significantly(20% or 50%) even after the race or the next day.

[acorn54]

correct me if i am wrong but according to mr wong at one point he was the modeler for the program that the benter team used. however he state not all that they did was by statistics. they hired what are called "video formers" that video tape the races and observe and use "subjective" approaches to horses during the running of the races. also they hired "insiders" that got the poop on what was going on trackside. also mr wong states in the book he authored, that some things are better done without a computer in his experience. namely the form of the horse. he also states some popular, what he considers, misconceptions among many experienced horse bettors.
in any event for answers to alot of questions people may have regarding these "syndicates" as mr. wong called the benter team i highly recommend the book as a well worth read. mr. wongs credentials are that he was a former actuary. he also won honors in a math event of high status that they hold in hong kong.

[Unicorn]

There is definitely patterns and angles in racing you can figure out with time spent in front of a computer. Iv'e figured out some stuff with foreign racing, but most the time I think US wagering is a bit more difficult. That is probably the next step that I'll try to conquer. For now though I'm going to stick with what is working. I don't see how anyone can have the time to spend 24 hours on a computer all day race after race. As of this year I'm focusing on what Iv'e profited on. I do go to the track occasionally, but not as much as I use to. There are too many distractions at the track and not enough information available to me that is more beneficial then sitting at home on my computer.

[HalvOnHorseracing]

This should be required reading for anyone who ever comes on here again and tries to tell us these whales are myths or that nobody can beat the game with an algorithm (they must be past posting), or whatever other nonsense people like to spout who can't fathom that smart folks with computers can absolutely make a killing at this game.

One of the things about t-breds is that there are times it's one factor (SAR-Mdn-Turf-2YO-Chad Brown trains) and times when you have to go deeper. It used to be (Pletcher-dirt-2YO-Mdn-6F), although it was not his year in 2018. I've caught my share of races when the was a bias that the crowd hadn't jumped on, or when the horse met one of the angles I know about. Read this. Even though it's from 2014 it's worth the time.

http://halveyonhorseracing.com/?p=170

[DGroundhog]

I'm not so sure he won all that money because of his handicapping skills. These syndicates have a lot of advantages over the average bettor, a big one being that they bet a ton of leveraged combinations in each race that they wager on. I know at the Meadowlands (harness) one syndicate bets about $400,000 a card, or an average of $40,000 a race. Once their program identifies one or more horses that are going off at favorable odds, it automatically scans all of the various exacta, trifecta, and superfecta pools and looks for overlays, then makes a whole bunch of "weighted" wagers including hedge bets that not only gives them a lot of chances to cash multiple tickets in the race, but also has big money on certain combinations that appear ripe. So if we wanted to try the same thing using our own handicapping skills and just using the odds board, we would have to have several people sitting at computers to try and get all the bets in at the last second and we would have to have at the very least several hundred thousands of dollars to start with. And if we started off with a few bad days, that would be the end of it.

So what I'm saying is, he has several big advantages, one, he has a huge bankroll, two, he's using a computer that places a ton of bets just in the last seconds.

Another advantage, he doesn't care if he has the winner. The problem most of us have is that we don't want to have a string of losers, we can't afford it, mentally, or financially. The syndicates are in it for the long run and so well bankrolled that they can get killed for a week or so and they'll just keep betting. Plus, since they play so many combinations, and bet a lot of higher odds horses, they have built in hedge bets. Most people can't afford to spread that much.

Specifically regarding scanning the superfecta pool for overlays - how does that happen, exactly?

A superfecta is a scanned pool. The combinations wagered by various outlets are unknown to the host track until after the results are entered. Only the amount wagered is known prior to that.

After the results are entered and the race is calculated a 'scan' is sent to each outlet betting into the host track. Every site wagering on them sends a response with how many winning combinations were wagered. Only then can the payoff for the superfecta calculated.

This sometimes causes a 'tote delay' if a scan is not received because a link has dropped or the scan process has crashed. WPS, Exacta and Trifecta prices are calculated immediately since all combos are transmitted in real time. It would seem impossible to find overlays in a superfecta pool.

Even analyzing overlays in trifecta pools would be unlikely unless a special connection to the host tote system was available. A few years back at Gulfstream it was revealed some 'high roller' off site outfit had a special connection into the tote system that would have allowed this - but after that incident I don't know of this ever occurring. Not impossible, but unlikely. I don't know of any track offering Trifecta probables to the general public and it should not be allowed to any group of high rollers. That would be a big problem if it were true. (I may be wrong on this one. It's just not convenient to show Trifecta probables but technically it is possible.)

In short, if you don't want some computer geek conglomerate analyzing overlays and auto betting them accordingly, play the Superfecta pool. You are probably safe even betting the Trifecta pool - although technically it would be possible - I just don't think it is occurring regularly (and it shouldn't happen at all).

[Half Smoke]

this is another fun story from 2001 about a crushing whale - Ernie Dahlman -

he has a different approach

the story says he put between $10 and 18 million into the pools and in a good year earns about $700K with a 3 or 4% edge

don't know if he's still at it



https://www.nytimes.com/2001/06/03/magazine/the-wizard-of-odds.html

[davew]

an interesting video on Bentor and history from early blackjack days

How This Man Profited $1 Billion Betting on Hong Kong Horse Races

https://www.youtube.com/watch?v=efBG1YfuNhg

[picojim]

https://www.youtube.com/watch?v=4B0mGYZqElo

[citygoat]

More money in the pool means a chance to win more money