net pool pricing

[cnollfan]

Can someone who is mathematically inclined explain this phenomenon to the layman, i.e. me? There was $600k bet on Street Sense to show in the Jim Dandy today, but the other two horses who finished in the money paid more than $3 to show. Prior to net pool pricing, the show payoffs would have been $2.10 on all. How does this work?

[Ray]

Can someone who is mathematically inclined explain this phenomenon to the layman, i.e. me? There was $600k bet on Street Sense to show in the Jim Dandy today, but the other two horses who finished in the money paid more than $3 to show. Prior to net pool pricing, the show payoffs would have been $2.10 on all. How does this work?

even tho you are Cindy Noll fan ill share this with you anyway .>LOL J/K


NET POOL PRICING

The 30 percent withholding tax on foreign winning pari-mutuel wagers was eliminated by the United States to enable the large amount of money wagered outside the country to be commingled. For further expansion to occur, one of the requirements is to change to the tote calculating package that is most commonly used in the United States. This upgrade to Net Pool Pricing (NPP) enables U.S. tracks to deal with foreign tax rates and currency values.

http://www.nyra.com/Saratoga/Handicapping/NYRAWagering/NYRAWagering.shtml

[cnollfan]

Thanks!

[highnote]

From the same link above:

Q: Is Net Pool Pricing more susceptible to minus pools?
A: Due to the nature of the algorithm used in Net Pool Pricing on a split pool such as Place or Show, a heavy favorite will not drive the value down on the remaining runners as much as it does using the standard pricing method. This may result in the favorite paying $2.10 and the other horses paying more, which is generally more favorable to the betting public. The negative break is then attributed to the wager and that association who bet down the favorite

"...more favorable to the public." ??? That can't be true.

If the favorite will pay less under net pool pricing and the longshots more, how can that be more favorable to the public?

The public has bet more money on the favorite than on the longshots -- that's why it's the favorite. It seems to me a lower payoff on the public's betting choice is worse for the public.

I am missing something?

[DonBoy]

"...more favorable to the public." ??? That can't be true.

If the favorite will pay less under net pool pricing and the longshots more, how can that be more favorable to the public?

The public has bet more money on the favorite than on the longshots -- that's why it's the favorite. It seems to me a lower payoff on the public's betting choice is worse for the public.

I am missing something?I understood it to refer to a case where the favorite would pay $2.10 either way, thus the mention of "heavy favorite".

[highnote]

I understood it to refer to a case where the favorite would pay $2.10 either way, thus the mention of "heavy favorite".

I guess I need to see some examples. I suppose different scenarios will have different benefits.

[HorseRun]

i was told if 95% or more of the pool is bet on one horse to show, you have a free bet to make 5% on the rest of the field to show WITH NO RISK !!!!....does anyone know if this correct and/or TRUE and if so are we all missing the boat :confused:

[highnote]

i was told if 95% or more of the pool is bet on one horse to show, you have a free bet to make 5% on the rest of the field to show WITH NO RISK !!!!....does anyone know if this correct and/or TRUE and if so are we all missing the boat :confused:


Bill Ziemba (Dr. Z) wrote an academic paper about this called "Locks at the Racetrack".

When a horse takes that much show money, you can bet every horse in the race and guarantee a profit -- if you weight each bet correctly.

The problem nowadays is that with all the late money coming into the pools, you might not be able to get the weights correct.

[SMOO]

I can see how the longshot players do better when the heavy chalk hits the board, but how does it affect the payoffs when the heavy chalk runs out? I have not seen many boxcar numbers lately for the anti-bridgejumpers. :confused:

[gamester01]

Place bet calculation the old way.
Example
10,000 bet to place
4,000 on winner
2,000 on place horse

8500 after 15 % takeout

8500 - 4000 - 2000 = 2500/2 = 1250 for each horse

winner 1250/4000 = .3125 odds to dollar which is .30 after breakage
place horse 1250/2000 = .625 odds to dollar which is .60 after breakage

Give me an examplewith same numbers with Net pool pricing.
All explantions escape me.
Thanks

[stu]

To determine the proper net pool pricing, one needs to know the origin of each bet.

Place bet calculation the old way.
Example
10,000 bet to place
4,000 on winner
2,000 on place horse

8500 after 15 % takeout

8500 - 4000 - 2000 = 2500/2 = 1250 for each horse

winner 1250/4000 = .3125 odds to dollar which is .30 after breakage
place horse 1250/2000 = .625 odds to dollar which is .60 after breakage

Give me an examplewith same numbers with Net pool pricing.
All explantions escape me.
Thanks

[stu]

Can someone who is mathematically inclined explain this phenomenon to the layman, i.e. me? There was $600k bet on Street Sense to show in the Jim Dandy today, but the other two horses who finished in the money paid more than $3 to show. Prior to net pool pricing, the show payoffs would have been $2.10 on all. How does this work?

$2.10 Payouts and Minus Pools
Fans will notice that show pools with a heavy favorite that you would expect to return $2.10 for all three runners, now may pay significantly higher on the two non-favorite horses. This is because that even though the payout on the favorite is reduced to a number even farther below the minimum $2.10 payout, it still must return $2.10. But the other horses are not participating in the minus pool as they were under the Standard Pricing model.

In other words, the show pool is split into two pools: the show pool on the favorite and and show pool on the remainder.

If the favorite shows, the favorite pays $2.10 and the remaing x% is divided like a traditional place pool for the other two who show.

If the favorite doesn't show, the three runners pay to show what they did under the standard pricing.

The net result is that bettors shouldn't be scared out of the minor pools if the a bridgejumper bet on a different horse. This technically should lead to additional handle for the track over the old pricing model.

stu

[gamester01]

Example of Old way of mutuel calculation

Place pool

Pool total $10,000

Bet on winner 4,000

Bet on place horse 2,000

15% take out

Net after take out 8500

Less bet on winners 6000

----------

2500/2 = 1250 for each winner

1250/4000 = 0.3125 odds to dollar for place price of winner

1250/2000 = 0.6250 odds to dollar for place price of second horse

Could someone do this for NET POOL PRICING WITH SAME AMOUNTS

THE EXPLANATION’S EVERYWHERE ARE BAD.

[MakinItHappen]

Example of Old way of mutuel calculation

Place pool

Pool total $10,000

Bet on winner 4,000

Bet on place horse 2,000

15% take out

Net after take out 8500

Less bet on winners 6000

----------

2500/2 = 1250 for each winner

1250/4000 = 0.3125 odds to dollar for place price of winner

1250/2000 = 0.6250 odds to dollar for place price of second horse

Could someone do this for NET POOL PRICING WITH SAME AMOUNTS

THE EXPLANATION’S EVERYWHERE ARE BAD.

As was previously mentioned this example is somewhat simplistic in that it involves no foreign currency denominated wagers and no non-standard takeout rates, however, below is a reworked version of the mathematical example you provided, reflecting my understanding of the mechanics of net pool pricing.

The key point here is that separate pools are established for each winning horse and each horse's pool bears the burden of take-out $'s specifically associated with wagers on that horse. Under the old method, which was less equitable in my opinion, the burden of the gross take-out was shared equally by all winning horses. This is why the "non-bridgejump targets" in a minus pool can now show pay-offs in excess of $2.10, and why longer shots will now pay slightly higher and a favored horse slightly lower, than they would otherwise have under the old system.

Place pool

Pool total $10,000

Bet on winner 4,000

Bet on place horse 2,000

15% take out

Losers of 4000 less 15% takeout = 3400

Total Bet on winners 6000

----------

3400/2 = 1700 for each winner

1700 - 600 (4000 x 15%) = 1100 to the 1st place horse

1700 - 300 (2000 x 15%) = 1400 to the 2nd place horse

1100/4000 = 0.2750 odds to dollar for place price of winner

1400/2000 = 0.7000 odds to dollar for place price of second horse


Hope that helps!

Best of Luck Gamester and Everyone!

MakinItHappen

[gamester01]

MakinItHappen:
You are the man!
This was driving me crazy.

My money making bet is usually $50 on a horse in a bridgejumper race.
I bet on the horse, not the favorite, that is almost certain to be in the money.
Did get 2.10 mostly, some I lost on, a few good scores.
Now getting better than 2.10 when the favorite is in the money.

My best cash was one that paid 62.00 to show on a horse on the Friday before the 1997 Preakness at PIM. Forgot the name.

NET POOL PRICING MAKES THIS BET BETTER.

I also have cashed nicely on long shots that have a sharp odds drop
about 5-10 minutes before post. The odds then climb back.
Someone is betting somewhere on this.
Otherwise, I am a chalk eater.
I also like horses that are favorites in the show pool but not favs in the win pool. This works very well.

GAMESTER... Thanks again

[vikingrob]

Place bet calculation the old way.
Example
10,000 bet to place
4,000 on winner
2,000 on place horse

8500 after 15 % takeout

8500 - 4000 - 2000 = 2500/2 = 1250 for each horse

winner 1250/4000 = .3125 odds to dollar which is .30 after breakage
place horse 1250/2000 = .625 odds to dollar which is .60 after breakage

Give me an examplewith same numbers with Net pool pricing.
All explantions escape me.
Thanks

Based on 15% takeout at all sites and US dollars only:

Net pool: $8,500
Net value of wagers on winner: $3,400
Net value of wagers on place horse: $1,700
Profit to be split: $3,400 - $1,700 each to first and second place horses.

Total available to pay wagers on winner: $5,100
Total available to pay wagers on place horse: $3,400

$5,100 / $3,400: 1.5000 per $1 net value of wager
$3,400 / $1,700: 2.0000 per $1 net value of wager

The key thing is with a 15% takeout, a wager with a face value of $1 is treated as a wager with a net value of 85¢. A $2 ticket would be treated as a wager with a net value of $1.70.

$2 payouts with 15% takeout:

$1.70 net * 1.5000 = $2.55 (broken to $2.40)
$1.70 net * 2.0000 = $3.40

[vikingrob]

Multiple sites, multiple breakage schemes, multiple currencies (Mods: please delete all the text from post #17. Thanks.):

Site 1: 15% takeout, USD, dime breakage ($2.10 per $2 minimum)
Site 2: 17% takeout, USD, New York breakage
Site 3: 20% takeout, CAD, nickel breakage, 1 CAD = 1.025 USD

Total bet to place: Net $25,050 USD
Site 1: $10,000 USD (net $8,500 USD)
Site 2: $15,000 USD (net $12,450 USD)
Site 3: $5,000 CAD (net $4,100 USD)

Bet on winner: Net $9,585 USD
Site 1: $4,000 USD (net $3,400 USD)
Site 2: $5,500 USD (net $4,565 USD)
Site 3: $2,000 CAD (net $1,620 USD)

Bet on place horse: Net $5,014 USD
Site 1: $2,200 USD (net $1,870 USD)
Site 2: $2,800 USD (net $2,324 USD)
Site 3: $1,000 CAD (net $820 USD)

To be divided: $10,451 - $5,225.50 to each

Net payouts to bettors of winner: $14,810.50
Net payouts to bettors of place horse: $10,239.50

$14,810.50 / $9,585.00 = 1.5452
$10,239.50 / $5,014.00 = 2.0422

Site 1 payouts per gross USD:
Winner: 1.30
Place horse: 1.70

Site 2 payouts per gross USD:
Winner: 1.25
Place horse: 1.65

Site 3 payouts per gross CAD:
Winner: 1.20
Place horse: 1.60

[racefinder2]

This has gotten me to thinking....
On these heavy show bets, wouldnt the track have a vested interest in seeing this kind of horse run out of the money so as to avoid the 'minus pool' ?

Also, the net pool pricing method seem to make betting to place or show a better bet than it used to be, as long as youre not betting a heavy favorite.
Is it only the NY tracks that are doing it(or announcing it)?, thanks in advance.

[vikingrob]

This has gotten me to thinking....
On these heavy show bets, wouldnt the track have a vested interest in seeing this kind of horse run out of the money so as to avoid the 'minus pool' ?

Also, the net pool pricing method seem to make betting to place or show a better bet than it used to be, as long as youre not betting a heavy favorite.
Is it only the NY tracks that are doing it(or announcing it)?, thanks in advance.

Minus pools are absorbed by the sites shere the bets on the heavy favorite were placed. Under gross-pool pricing, the deficiency would be absorbed by the host. (This is part of the reason why NYRA Rewards, for instance, gives no credit toward rewards for bets that win and pay $2.10.)

Most tracks have made the switch - even some of the smaller tracks. (I manually calculated a show pool at the Woodlands and found that they were using net-pool pricing.)