Horses vs. Sports Handicapping

[Topcat]

This may sound a little heretical but how does horse race handicapping stack
up against sports betting. e.g. betting on football games, basketball etc. I'm evaluating this from a strict profit point of view not love of the game.

In the past I've never really tried to evaluate it since getting a bet down was something you had to do through a local bookie. But it does occur to me that sports betting has the advantage of being at worst a coin toss and best a profitable venture. With all the online betting getting a bet down is not longer a problem.

So has anyone evaluated this? Opinions?

And here is tougher one:
I'd also be interested in anyone who has looked at the profitability of
stock or commodity trading-vs. horse race handicapping. And yes, I know most day traders lose money but then so do the overwhelming majority of horse bettors and I've heard that Dick Schmidt has put horse racing on the back burner for now- to do day trading of commodities.

[midnight]

It doesn't compare or even come close. That's why it isn't attracting the young adults.

Most people have played baseball, football, and basketball, at least on the sandlot level. They can identify with the games. On the other hand, very few of them have actually participated directly in horse racing.

Athletes in sports are high-profile and recognizable. It's hard for most to visually tell one horse from another.

Sports have high mainstream media coverage. Racing doesn't.

From a recrational bettor's point of view, you can flip a coin when picking a game against the spread and hit 50%. Not true of horse racing. The "takeout" on a straight bet is about 4.5% (lay 11 to 10). Horse racing's takeout starts at 12% and can go over 30%. It's much easier to hit a three-team parlay (7-1 against) than to hit a Pick-Three.

The mainstream public considers sports to be honest, as in the games aren't fixed. Racing is generally considered to be the opposite.

From a professional's standpoint, it's easier to beat sports than it is racing. It's not easy by any means, but it's easier. I know a lot of players who used to make money at the horses, and who quit when the drugs started getting out of hand. Many of them now make money betting sports.

[Dick Schmidt]

Topcat,


What you heard is true, I am concentrating more on commodities day trading than on racing. I moved on not because of drugs or whales or any other percieved problem with the sport, but because I got bored. Racing is no harder today than it was 20 years ago, and you can win just as much as ever. Maybe more, and they'll pay you to play. One thing I have noticed about commodities is that they are much easier to do than racing ever was. The same effort is vastly more profitable, and it is such a huge game that there is essentially no limit to what you can "bet."

I'm still having fun day trading, but chances are I'll return to racing someday when I get tired of staring at a chart all day. I've left racing before when I got bored or burned out and have always come back. I tend to recycle both my hobbies and my jobs. When it stops being fun, time to move on.

Dick

P.S. Old bookie's maxim: "Never bet on anything that can talk."

[dav4463]

In horse racing you can still make a lot of money with a relatively small bet. In sports betting, you have to bet a lot to win a lot. I don't know anything at all about commodities.

[joeyspicks]

I agree Dick. First horse racing done correctly becomes pretty boring. Commodity trading can too (be boring)........... but it it much more profitable and a much bigger playing field.

Betting on sports....I dont know but it seems like "no leverage"...unless you were to parlay plays ? ?

[midnight]

In horse racing you can still make a lot of money with a relatively small bet. In sports betting, you have to bet a lot to win a lot. I don't know anything at all about commodities.

There are parlay bets in sports to take a small amount and make a larger one. Oddly, though, the "juice" on parlays (at least those that involve pointspread games) can get much higher than that on horse racing.

[garyoz]

Obviously the vigorish or "takeout" is less in sports betting, working out to about 5% (based on 10% on losing bets and assuming a coin toss betting line over the long run). IMHO, there is less efficiency in Sports Betting markets combined with the lower take-rate (which contradicts the idea of a coin-toss betting line). That is, it is easier to find overlays, either on a money line or spead line, than to find overlays in racing. I think that there still is uninformed public money in sports betting, but except for a few days, public money isn't around much in racing. Personally, sports betting just isn't as intellectually interesting to me as horse-racing.

[kenwoodallpromos]

I understand in most ***sports betting you bet against the house and they adjust the betting price based on probability of winning. Sort of like the old bookie racing betting used to be- house can lose. You just have a few basic betting options and more or less all over-under win-or-lose with not much real profit even with a big underdog due to betting a spread. Easy to play.
In ***commodities or stocks there is not set "odds" because it is not a para-mutual or a house-adjusted system- your profit depends a lot on more outside money coming in. I guess in a way there can be an over-under type bet in a sense. You have the least control for considering outside forces at work, but everyone can profit if enough new money comes in and you can even profit by a larger "pool" bet WITH you!
***In para-mutujal betting there has to be a takeout and a set amount of losing; but the biggest advantage I see in race betting is that you profit directly fron your skill and knowledge and you know there will always be people betting with less adeptness than yourself and a large variety of bets, races, and tracks to choose from, all with good potential profit value (I.E., my pick for Flower Alley to show). All you have to do is be discriminating and makes bets based on what you are best at. In racing you have more opportunity to "pick your shots" and I think it has the smallest capital outlay required. You can bet more often and have more free advice to choose from and better opportunity for free learning than sports or market betting. You do not have to wait all day or for 3 hours to get the results.
For all the above reason, race betting is more exciting and the best oppolrtunity to profit if you apply yourself and exercise control. :ThmbUp:

[garyoz]

I understand in most ***sports betting you bet against the house and they adjust the betting price based on probability of winning. :


Bettings lines move in response to the amount of money bet on one side or the other. The objective is to have an equal amount of money bet on both sides at a given point spread or money line spread. The transaction then becomes risk free for the House. The line is based upon the public's perception of the probability of winning (just like horse racing--except the vig is lower). Just about all betting is risk free for the house in horse racing, except for minus pools and when there is a guaranteed pool size.

[Topcat]

Thanks all for the responses.

I have to agree with Dick that:

"One thing I have noticed about commodities is that they are much easier to do than racing ever was. The same effort is vastly more profitable, and it is such a huge game that there is essentially no limit to what you can "bet."


Now I have not made any real time large "wagers" in commodities but I have in stocks and currency trading and I have to say that Dick is on the money here-pun intended.

The "wager" size does not become a major factor as it does in horse racing and there is a lot more available in terms of resources. The biggest difference may be that in stocks you are playing with a positive expectation game-of course in the short run we know that isn't necessarily true.

I do find that a lot of the skills and learning in horse race handicapping are transferable-especially in regard to trading temperament and discerning what is real and what is BS out there-a lot of the financial sites look like a bad horse racing tout site-lots of exclamation points and lots of dubious claims.

For me the two horse race handicapping and financial trading are not incompatible but complimentary. Hmmm. maybe from now on I should just look at every losing horse racing wager as financial tuition.

[skate]

coarse it all depends, but for my money i'll go #1-horse racing

#2 stock market
#3 sports betting.

sports betting is the easier if you are just flipping coins.
but if you try to get into racing, you 'll find it is not just flipping coins.


i jumped on Capstone (cpst) in the market, about $1.20 one month ago, but ive been following it for about 5 years.

in sports, for me to do good, i follow the money, but it is not just that easy. that in itself(i follow money,gottat know when) tells me you need some info not available.

with horses it is just the opposite, i go where the money aint.

[Overlay]

Bettings lines move in response to the amount of money bet on one side or the other. The objective is to have an equal amount of money bet on both sides at a given point spread or money line spread. The transaction then becomes risk free for the House. The line is based upon the public's perception of the probability of winning (just like horse racing--except the vig is lower). Just about all betting is risk free for the house in horse racing, except for minus pools and when there is a guaranteed pool size.

To me, that's the real downside of sports betting as compared to horse racing. The ability of the house to adjust the betting line to even out the amount bet on the favorite and the underdog makes each bet an automatic toss-up (before the vig is figured in). Add to that the fact that you're betting against someone who sets point spreads for a living, and it's enough to make anyone look elsewhere for ways to invest their wagering dollar.

As accurate as the collective judgment of the general public is in setting pari-mutuel odds in horse racing over any large sample of races, there will always be individual instances where the public underestimates a horse's winning probability. And even if there is no value to be found in the win pool, there are also exotic wagers to consider. I prefer to find and capitalize on those opportunities.

[kenwoodallpromos]

One similarity I personally find between race and sports betting is if you keep good records on the overall trends and what causes them it may help.
I read that in the NFL playoffs in the 1970's the underdogs held an overall advantage. In the last 10 or so years the home team has had a definitive advantage. I assume because of expansion, not sure.

[yak merchant]

I'll leave commodities and trading out of this discussion as I'm not qualified to even give an opinion. However, when it comes to the differences between Pari-mutuels and Sports betting I’ll try to keep my dissertation under 100 pages. As far as I’m concerned sports betting is easier game to beat, but the question is to what extent. If you are in the top 0.25% of horse betting professionals you may make a better living and go through less ups and downs than the professional sports bettor. But by far Joe average guy has a MUCH better chance of making money in the long run with sports betting. Between the low vigorish (pinnacle offers as low as -105) and the advent of betting exchanges such as betfair and mansion exchange pushing that number even lower, the math behind the probabilities of being able to beat the game is pretty one sided in favor of sports betting. Not to mention sports betting lends itself to money management and discipline much better than that of the races. You do not have to wait until minutes before the event to make the bet to ensure you’ll get a return representative of the risk. Even if you are a very skilled handicapper, until you master the game time decisions and judgement calls of when to bet “overlays” and when to lay off “underlays” (or have automated software) you’ll never make money betting into an outrageous takeout.

There are a few advantages to Horseracing. First and foremost is the number of "events" you have an opportunity to wager against and probably more importantly gather data against for future analysis. There are only basically a couple of hundred NFL games a year, offering basically two bets; a side and a total. Baseball and basketball offer more betting events but still not in the order of the pari-mutuel games’ every day recurring opportunities. Second is the the ability to easily get data and the correlation of the data to the final result of the event. The ability to download past performances, charts and analyze them with one of a thousand software packages is pretty much unique to the American Thoroughbred game. Getting data such as internal fractions for European horseracing is pretty much impossible, and it came to be pretty self-evident while I was in London that the only people that have that information are the people that make the odds. There are a few data services for sports, and even a few software packages that attempt analyze the data, but most of them are pretty simplistic and often use only final scores to do the handicapping.
While we all know that things such as track variants and abnormal paces’ skew the final times of horse races, and often make the analysis of the participants very difficult, the clock and the past performances will almost always give you a better picture of the event when compared to boxscore and the final score of a football game.

The main reason sports betting is as almost as tough (if not tougher for some people) to beat as the races , comes down to one simple thing, and that is in-game randomness and the effect that not only that has on today’s outcome but more importantly on your ability to analyze data from that game for future predictions.

If someone handed you sheet that every day told you exactly how fast each horse was going to run that day in every race, you’d hit at a clip that could only be imagined and you could probably retire within a few years if not months. Yes there would be crazy paces and a few bad trips that cause you to lose a few, but you’d be a ticket cashing machine. Now take that same scenario and apply it to say a football game, even if you knew the exact strength of the teams on that single day, before the game even started. You could probably only pick the winner against the spread only around 60% of the time. Between the pointspread equalizing the playing field, and the ability of one or two random events to decide the outcome of the game, the sports event is basically chocked full of Bad Trips, always changing the outcome, and making the analysis of the strengths of the teams after the fact almost impossible. The average NFL game has the total set somewhere around 37 points, one play in which a cornerback falls down can add 7 points just like that. So it’s very possible 18% of the final score is because of 1 mistake, or the equivalent of a horse taking one bad step making him come in 30 lengths behind. Baseball teams routinely lose with many more hits their opponent, and often with half their outs that were screaming line drives right to outfielders. The final score of a football game, can be almost completely independent of the true strength of the teams in certain cases. Yes thing such as Turnovers, Yards Per Carry, and Yards per Completion do help in the analysis, but there is probably no other sports which could be classified as more of a complex system when it comes to analysis. 22 moving parts with another 7 blind old men masquerading as officials making thousands of judgement calls per game.

Some sports to lend themselves to analysis better than others though. Here is some simple breakdown of the big Four sports, in order of hardest (for me) to beat to easiest.

Hockey, 30 teams 82 games.
Low number of scores therefore 1 mistake can easily affect the outcome, very dynamic game, decent data available, but as I’m about as redneck southern as they come I would not even begin to know how to break down the data and turn it into information.

Football, NFL 30 teams 16 games, College 110 teams 11 games on avg

Low number of scores per game, scary dynamic. As for data, boxscores have been available for years, NFL now has play by play outcomes, college football about 40% of games have play by play. Correlation between statistics, final outcomes and true strength of teams is poor to say the least, especially in college football where strength of opponent can wreak havoc on any type of statistic comparison

Basketball, NBA 30 Teams 82 games, College 300 teams 30 games (average 85% have posted lines)

High number of scores per game so one or two mistakes won’t always affect the outcome very dynamic, boxscores and play by play for NBA, boxscores for NCAA. Correlation between statistics and final outcomes higher than with football. College basketball lines are probably the softest posted.

Baseball, 30 teams 162
Low number of scores, data is prevalent, Easiest game to analyze as is almost linear and the most granular event (pitch) can be analyzed. Not easy to make money by any means, but you can build a system to analyze the data and ensure a long run advantage.

Now to address two posts

Bettings lines move in response to the amount of money bet on one side or the other. The objective is to have an equal amount of money bet on both sides at a given point spread or money line spread. The transaction then becomes risk free for the House. The line is based upon the public's perception of the probability of winning (just like horse racing--except the vig is lower). Just about all betting is risk free for the house in horse racing, except for minus pools and when there is a guaranteed pool size.

While this is often true, and maybe was the norm back in the days prior to computers, but often these days the house doesn’t want even money on a game. I wish your statement was true, as beating the public and where they push the line would be a lot easier than beating Vegas and where they set the line. I would agree on a lot of games where the public expectations are in line with the probabilities of the outcome, or if Vegas in unsure of where the public money will go, they may hang a line they think will get 50-50 action. But they often don’t adjust the line too far regardless of public money in fear of getting middled which is the ultimate fear of the bookmaker But in many cases, the lines maker’s know that if they hang a certain line, they will get a majority of the money on TEAM A and the probabilities of team B covering in the long run are greater than 50% (often a lot greater). Vegas takes a stand on many games each week. They don’t win them all, but they do win more than they lose, creating profits a lot higher than if they were to get even action on every game.


To me, that's the real downside of sports betting as compared to horse racing. The ability of the house to adjust the betting line to even out the amount bet on the favorite and the underdog makes each bet an automatic toss-up (before the vig is figured in). Add to that the fact that you're betting against someone who sets point spreads for a living, and it's enough to make anyone look elsewhere for ways to invest their wagering dollar.

As accurate as the collective judgment of the general public is in setting pari-mutuel odds in horse racing over any large sample of races, there will always be individual instances where the public underestimates a horse's winning probability. And even if there is no value to be found in the win pool, there are also exotic wagers to consider. I prefer to find and capitalize on those opportunities.

No offense, but the first part of your post makes no sense. If vegas did adjust lines to even out the amount of money on both sides on every game (which they don’t), then how does the public perception of game in any way or form make that bet an automatic toss up? It would be the absolute opposite, as the public moving the line would create value as the actual outcome of a game has nothing to do with the line. Plus you have the advantage the line moves don’t affect you if you bet before they move the line. If you could bet on a horse that was 6-1 at 10 MTP and get a guarantee that you were getting 6-1 would that be better than seeing the gates open and it jump to 5-2? You make a bet at Ohio State -7 you don’t find out at kickoff that your ticket is really Ohio State -10. As far as the the second part of the post, you are somewhat correct that the public does make more mistakes than the linesmaker, and linemakers are scary, but they do make mistakes, and often set lines off of your mythical toss up number in order to curb or increase money on one side of the game. So just as in horse racing you don’t bet games that don’t offer value. And in the long run while the public may make more mistakes pre-vigorish the difference between laying
-105 on a game and a 15% to 25% takeout is more than enough to compensate for the tighter setting of lines by Vegas.

So bottom line is this. From a math perspective, Sports betting is much easier to beat, Now that being said, being really good or more importantly being a professional can be done for both. The difference from my perspective is this; to be successful at sports betting you either a) Have to basically just know the teams you are betting like the back of your hand or b) Figure out ways to capture data that is either unavailable or hard to get for the public and roll your own power ratings, or basically follow the path of the horseracing professionals before racing data become prevalent electronically. So while sports betting may be easier to beat mathematically, the fact that you can go buy a 100 to 1000 dollar software program download a dollar file and go wager on horses you’ve never see run and have a real shot of making money is the difference. With a good software program, some good money management, and a little experience you can make money at horse racing with basically little or no other time investment . While with sports betting you either have to basically watch sports non-stop all season (and have lots of experience) or make a commitment and spend enormous amounts of time developing software to get data very few other people have, then develop your own algorithms to analyze very dirty data.

Filibuster over.

[xfile]

And here is tougher one:
I'd also be interested in anyone who has looked at the profitability of
stock or commodity trading-vs. horse race handicapping. And yes, I know most day traders lose money but then so do the overwhelming majority of horse bettors and I've heard that Dick Schmidt has put horse racing on the back burner for now- to do day trading of commodities.

I trade stocks but not day trading. I look for good potential 'turn around' companies and new growth companies. Made good money the last 3 years with this hobby. I read Baron's every week and watch a few hours of Bloomberg everyday. :cool:

[PaceAdvantage]

Yak, great post! Thanks for taking the time to write it for us!

[Topcat]

Yak,

Thank you-well thought out post.

One questin for you-in your experience what is the largest bet you can get down in sports betting? Or what is the largest you can get down without moving the line?

Thanks

[Valuist]

Sports betting is much more of a grind it out type deal. In racing you can hit a big score; in sports betting, the outrageous vigs on parlays make those sucker plays on anything bigger than a 3 teamer. I also think most who bet sports have no idea of what they should expect; they see those ridiculous ads that claim 70-75% ATS when the pros in the business actually shoot for 55% to 60%, knowing full well that over 1000 plays, there is virtually no chance at hitting greater than 600 (probably let alone 580).

[yak merchant]

Yak,

Thank you-well thought out post.

One questin for you-in your experience what is the largest bet you can get down in sports betting? Or what is the largest you can get down without moving the line?

Thanks


Topcat depends on the sport and how respected you are. A 10,000 bet from a customer they belive is square will not move the line but a 1,000 bet from someone they consider a sharp might move the line more than you would think possible. Alot of the offshore sports books have internet limits and then phone limits, so if you are a big player alot of places you have to call in your bets. In Vegas the limits depend on the casino, but usually somewhere around 10k on NFL sides, 5k on Baseball, College football and NBA. Totals are usually lower. Most of the syndicates in Vegas hire runners to sit in a casino and bet for them. Pinnacle is taking large wagers these days. 30k on Baseball, 20k on NFL, 10k on College foots. Kind of makes me nervous as it reminds me of the Aces Gold days. Supposedly there are illegal bookmakers around the country that will take astoundingly large wagers, that dwarf anything vegas and offshore will take. I wouldn't feel too good you feel about collecting one of those though, as if you won enough money it might be cheaper for you to have a car accident.. So basically to answer your question. In Vegas you could easily get 30 to 60k down on a game with a little help from runners before the line reacted. (I hear you can phone bets in if you are a Nevada resident, but I'm not sure of the limits) Offshore you can probably get 20k to 50k down on a game depending on the sport, but you really have to start worrying about Aces Gold part II if you have that kind of money offshore. Unfortunately, all things I don't have to worry about at this point and time.

[garyoz]

Excellent post Yak Merchant. Sometimes I think that we believe it is easiest to make money in the "investment" alternative that we know least well. All of them have the potential to be a black hole for time consumption. As Milton F. used to say "There is no such thing as a free lunch." Over the long term it there is a way to profitability it likely involves hard work and too much time. I was an analyst on Wall Street for more than a decade (High Yield Bonds). There is nothing easy about financial analysis and making money in the securities market. The good thing about working in the business is that you were getting paid to do the hard work.

[Overlay]

Plus you have the advantage the line moves don’t affect you if you bet before they move the line. If you could bet on a horse that was 6-1 at 10 MTP and get a guarantee that you were getting 6-1 would that be better than seeing the gates open and it jump to 5-2? You make a bet at Ohio State -7 you don’t find out at kickoff that your ticket is really Ohio State -10.

Great post, and thanks for correcting my earlier misstatement. (I wish racing had fixed-odds betting like sports. Tom Ainslie wrote wishfully about that years ago, and he didn't think it would be difficult to implement.) To me, sports betting seems to reward early decision-making (before the collective wisdom of the public has kicked in), whereas racing rewards waiting as long as possible before betting (if you're looking for value rather than just trying to pick the winner), and to me, waiting longer allows for more informed wagering decisions. I guess that's the point I was really trying to make.

[Niko]

Mr. Schmidt;

I've mainly stuck to stocks but in a thread who knows when I believe you had boughten some of Larry Williams material. Was there any book or program of his that you found particularily helpful in making money. Or is there someone else that helped point you in the right direction. I've been getting a lot of new programs lately and am ready to take a look at something new.