Figuring Actual Profits

[bullet32]

Hello All!

I love this board! I'm a "newbie" to racing and have found it extremely educational!

I have a question. (Which might be better asked using an example):

Say that trying2win, Figman, hurrikane, Sufferindowns, and 96 co-bettors like Horse #1. They each place their bets to Win, and the Win Pool totals $1,000 at post-time. Horse #1 wins! and each bettor collects $5.00 per each $2.00 bet. Now, I'm still testing, so I don't bet. But my system DID pick Horse #1. I look at the race results/payouts and know that, had I bet, I would have profitted $3.00 on a $2.00 bet.

(Or WOULD I have?)

Say that, just prior to post, I had walked up to the window and plunked down $1,000 to win on Horse #1. The pool total has now doubled to $2,000, with just one more bettor (me).

Here's my question: Would the payout on each $2.00 bet go UP (due to the larger pool), go DOWN (due to the added bettor), or, more or less, remain the same?

In other words, when I look at past payouts to figure profit/loss, can I reasonably assume that -- had I bet -- I would have won AT LEAST the reported payout? And if not, how do I figure what the payout would have been had I placed a bet (of any amount)?

I realize that my question is probabely incredibly naive, but I do need to know the answer in order to continue testing.

Thanks so much for your help!
bullet32

[cj]

Your payoff would be less assuming a decent size bet. In your example, substantially less.

CJ

[Lefty]

Horse #1 would have to pay less than $4.00 because over half the money is on HIM.

[BillW]

bullet32,

Basically the winners split up the losers wagers in proportion to the size of their win bets.

If 2 people bet $2 ea. on the winner and 3 people bet $2 ea. on the loser for a total of $10. The track takes $2 (approx. for takeout, actually 17%-18% on win bets in most places) and the 2 winners split the $4 left in proportion to the ammount they bet. In this case the split would be equal, $2 ea.

If one person bet $4 to win and the other bet $2 in the above scenerio, the guy betting the $4 would get 2/3 of the $4 in losing bets because he bet twice as much as the other guy.

In your scenerio where you bet $1000 to equal the already existing win bets, the losing bets remained the same therefore you would be entitled to receive 50% of the losing bets. The payout would go down because the pie is the same size but being split up among more people.

Hope this helps (sorry for getting so verbose),

Bill

[ranchwest]

Your proportion of the pool would be so large that you would knock the payout down from $5.00 to about $2.40 on a $2.00 ticket, maybe even less. Parimutuel wagering is based on returning the pool less the track's takeout to those who placed the winning wager. The fewer winning wagers in $2 increments, the more a wager pays. With more winning wagers in $2 increments, the wager pays less.

If you're planning on wagering $10 win tickets, you're probably seldom going to affect the payout at all. If you're planning on $1000 wagers, you'll affect the payout almost every time.

[hurrikane]

I'll try to expand...or confuse. It's a fine line.

there is 1,000 in the win pool for all bettors.
4 of us bet 2 to win on the 1 horse.
if he wins the 4 of us split $1000. (forget track take and breakage for now. so we get 250 each

you bet 1000. that is 500 $2 tickets. the pool is now $2000
there are now 504 winners in the pool and we get just under $4 for the win. On the tote you would have see the odds drop from
99-1 (the tote doen't handle 3 digit numbers) to 1-1 or even money. You would get a little under 2000 (about 1920 I think).

I'm guessing you are wondering when does your bet change the odds. Someone here can give you the exact math..but basically you take the win pool add your money and divide by the number of tickets out on your horse. This become important if you are betting smaller tracks where the win pool may only be 5K. You get to the class 'A' tracks and the pools are very large..your 1000 is pretty safe.

[rrbauer]

Setting aside takeout, the example of a $5 payoff from a $1000 win pool would require that $400 was bet on the winner.

$1000 pool - $400 bet = $600 payout pool divided by $400 bet equals odds of 1.5 times 2; plus 2 equals $5 for the payout on a $2 bet.

Now bet an additional $1000 on the same horse and you have a $2000 pool with $1400 bet on the winner. $2000 - $1400 = $600 payout pool divided by $1400 bet equals odds of .42 times 2; plus 2 equals $2.84 (before breakage) for the payout on a $2 bet.

There would never be a time when betting an additional $1000 to win on a horse would increase the payout on that horse if it wins if everything else remained equal.

[Dick Schmidt]

Bullet,

Many years ago, I had a friend who did a big study on this. He concluded that a bet of 1% of the win pool would drop the price on horses under 10-1 about 20 cents on average. Sometimes, of course, a $2 bet will drop the horse, while other times $500 may not move it. He was studying mostly larger tracks and pools, but it seems to hold up most places. The longer the price, the less it takes to move them.


Word of advice: this is the kind of question that concerns new players and is ignored by most pros. Like the "How much can you earn in a year?" question that is so popular with those who have yet to make a dime at the track. Your time would be much better spent learning who to bet, and leave the question of how much is too much to the day when you are actually impacting totes. By then you will have enough of a "feel" for betting that you'll know how much you can bet with a quick glance at the toteboard.


Dick

P.S. As far as I know, my friend who did this study never made a bet over $20.

[Rick]

My rule of thumb is that 1/2 of 1% is pretty much always safe to bet without affecting the pool. Not that I'm a large bettor, but I have bet into some very small pools before. It's especially important in dog racing and also in jai alai sometimes. But, if you're betting with a bookie you just have to worry about whether he'll stay in business and pay anything at all. A place like eHorse that allows $300 bets into $10,000 pools on any horse up to 175-1 odds seems to me to be taking a significant risk. Dick, please don't bankrupt them before I make my share.

[bullet32]

Thanks to all who took the time to reply. You gave me just the information I needed.

Have a Wonderful Day!

bullet32

[Suff]

Its called ParaMutual wagering....

Para meaning "For"

Mutual meaning "all"

We are all betting against one another..... $10,000 bet on a horse, track takes 15% (at NYRA), $8500 will be disbursed to any and all persons holding a win ticket on that horse. If 1000 people hold a ticket, the horse will pay roughly $4.00 ($4.00 X 1000 people holding a $2.00 ticket). If JUST ONE MORE person were to bet that horse for even $5.00, the payoff would theoreticallly go down.. Because the track now has to pay 1001 people. We're all betting against one an another.