http://www.ms.unimelb.edu.au/documen...AlexThesis.pdf
October 18, 2013
"Abstract:
In this paper we discuss a way to construct a strategy of betting that can generate abnormal returns in horse race betting markets. Using the theory of discrete choice models and Generalised Additive Models one can build a model to predict the probability of a given horse winning a given race. The paper further discusses the Kelly betting system as a way of exploiting estimates of winning probabilities so to generate abnormal returns."
Recent research led me to click on the above document and I decided to share it here. The formulas are way above my pay grade but I grasp some of the theory and why these calculations may be made in real life applications. It seems there are very many. I reviewed to page 30 before moving to the applied theory in Chapter 11.
I cannot tell if we are still on the hampster wheel with these ideas or not. I thought some folks here might be interested in taking a look.
