Enlightening (and scary) article on CAWs

[thaskalos]

Sometimes we horseplayers, in referring to horse racing as "our favorite game", make the mistake in thinking that this is somehow "OUR game"...and some sort of "injustice" is committed against us when we are disrespected or "discriminated against", in some way. The truth, of course, is that this ISN'T "our game"...this is a game which belongs and is run by an industry which considers us to be just CUSTOMERS, to put it nicely.

In any capitalistic society, the business owners are allowed to run their own businesses in any way that they deem most profitable for themselves...and the most that the customers can do to in voicing their displeasure is to vote with their feet, and their wallets. I don't blame the horse racing industry for embracing the computer mega-bettors, at our expense. They realize that the mega-bettors have big pockets, while the rest of us are running dry...so they are doing what they feel is most financially beneficial for themselves. This is what "capitalism" is all about, IMO. I do, however, blame the common horseplayer, who doesn't realize when he is beat, and who continues to beat his head against the "irresistible force"...even as he is being disrespected every step of the way.

[thaskalos]

Originally Posted by classhandicapper

OK, next question.

If I had the technological skill to develop the tools necessary to access the pools the same way would I be permitted to use them and gain the same access?

If "No", I see your point and agree.

If "Yes", I feel like too bad on me if I can't or don't do it.

Maybe I'm a little crazy, but I don't tend to think in terms of "what's best for me". I tend to think in terms of what's fair so that the winners are determined by merit. I'm a reasonably bright guy that's been working hard at this game for close to 5 decades. I admit those guys are better than me overall. So I either have to continue to get better, find the holes in their game or too bad for me.

It takes more than "technological skill" to access the pools in the same way that the computer groups do...you also need PERMISSION. And you don't have it...while they do.

[classhandicapper]

Originally Posted by thaskalos

It takes more than "technological skill" to access the pools in the same way that the computer groups do...you also need PERMISSION. And you don't have it...while they do.

That was my question.

If I did have the technology could I get the access (permission)?

In my travels at DRF I met a couple of MIT math/software wizzes looking to sell some of the software capabilities they used for their own betting that they felt DRF could use for marketing information.

Upper management at DRF was interested in the marketing. I was more interested in their betting which they claimed was wildly profitable across the country. A big part of what they did was pool related. In fact, it's not bragging to say it was obvious I knew WAY MORE about handicapping than they did. They got access to pool data somehow, but I have no idea if they had superior access. I don't think they were lying about the profits.

[MJC922]

Originally Posted by o_crunk

From the article:

Experts recently told the TDN that the most successful CAW players can consistently win at an average rate of around 92%. At that win rate, a 13% rebate (for example) would see the player enjoy a 5% profit margin.

According to wagering reports reviewed by the TDN, that win rate is an undercount. These reports show how Elite Turf Club players can win at an average rate in excess of 105%, even before their rebate from Elite is factored in. At this rate, the profit margin would be much better than many investment accounts.

There is no timeframe given. While it's completely believable to me that over any random, shorter duration timeframe, a CRW that works like Elite could pull 105%, in aggregate over a period of say a year, I'd bet very heavily against that.

The math is pretty simple. The more you bet, and Elite in aggregate together was only ~15% of the California handle, the harder it is to approach breakeven. I say only 15% because the reporting the last couple years has suggested Elite in aggregate is 30% or 40% of total handle, which always seemed like BS. Nobody can bet 40% and break even. The math does not work even with a rebate approaching no takeout.

At 15% of total handle, 105% feels do-able to me. It would mean they are likely doing less in the straight pools and are slaves to variance of the harder horizontal exotics, where they likely receive the best rebate. Factor in a chalky and low field size circuit like California, and I'd totally believe them smashing the P4/P5 type bets over a long period.

There's a couple things I took away from this article.

One is that most people believe that Elite is a bunch of different teams but as the article explains, one Elite team bet a whole bunch one year and then another team got a better deal and they bet a whole bunch the next year while previous team's handle shrunk. To me, it boosts the theory that there is no 15 different teams. It's all one team.

The other thing I took from this article is the odds drops which have wholly been attributed to CRW teams. When you dig into the data made available, the teams are 15% of handle. There is way more money 15% of any given win pool that is moving these late odds drops. Way more. So I think people need to update their priors on that one.

From a high level it may not seem like 15% would do it although if we were to look at it from a low-level and consider that 15% would be coming in the very last betting cycle and only then on a subset of horses they've identified to be 'live' (which is what typically? let's say maybe 2-3 horses out of the 8?) I can see where under those conditions substantial odds volatility would show up while the race is in progress. There are also barns undoubtedly betting so late the general public would be very hard pressed to react to it but the teams may be able to still get in last. I dunno, like I said non-issue for me anymore because I use projected odds and knew 6-5 on Fierceness 20 minutes to post. I'm good with that. Not an overlay, just probably trading dollars for me but for them it's what they live for given the rebate.

[ScottJ]

Originally Posted by classhandicapper

OK, next question.

If I had the technological skill to develop the tools necessary to access the pools the same way would I be permitted to use them and gain the same access?

If "No", I see your point and agree.

If "Yes", I feel like too bad on me if I can't or don't do it.

Short answer : No.

Long answer : I have built models based on Wall Street datafeeds (Reuters, Bloomberg and similar) using Python, C/C++, and R for 30+ years.

I have tried on two occasions (during 2020, pandemic research, and again in 2022) to secure access to wagering hub or similar API for accessing pool information in real-time (Amtote, racing offices and more). Not only have those requests ended in flames where e-mail chains just die, but I have not been able to obtain an API or data specification describing how the underlying data is transmitted or interpreted. Forget about the runtime code, I cannot get any documentation.

This tells me several things.

First, this is not information which can be obtained by the average gambler. My guess is that the protocol was never meant to be opened to the public and likely has inherent flaws or outright risks if disclosed. (For example, an ill-defined protocol that is not well self-protected could easily crash if a rogue submission were to be made.)

Second, since there is no API document in any language that has been published as far as I know, it is hard to assess what is the exact nature of the data to be made available - performance, breadth, details.

Third, this means that access is not just run by the business groups (like Elite and others), but by the tote system operators themselves. I suspect this interface was not actually "planned" and "designed", but was made available on a ones and twos basis as evidenced by the number of members in the Elite Turf Club.

[ScottJ]

Originally Posted by thaskalos

In any capitalistic society, the business owners are allowed to run their own businesses in any way that they deem most profitable for themselves...and the most that the customers can do to in voicing their displeasure is to vote with their feet, and their wallets. I don't blame the horse racing industry for embracing the computer mega-bettors, at our expense. They realize that the mega-bettors have big pockets, while the rest of us are running dry...so they are doing what they feel is most financially beneficial for themselves. This is what "capitalism" is all about, IMO. I do, however, blame the common horseplayer, who doesn't realize when he is beat, and who continues to beat his head against the "irresistible force"...even as he is being disrespected every step of the way.

Let's say you owned a candy store that sold 100,000 pieces of penny candy last year for cash in-flows of $1,000.

Because of changes in your business model, you decide to focus on clients who have bigger pockets to pay for candy. So, you decide to stock only one piece of the same candy for the year and put a $1,000 price tag on it. Now, you know that practically, you would never sell that piece of candy, but hey, you would only need to sell one in the whole year.

Exclusively, looking through the prism of total revenue ($1,000) leads you to some egregious business decisions when you do not understand the composition of your constituency (oligopsony). When you cast your business model so far down the path of few purchasers (players), you have economic ruin.

[ScottJ]

Originally Posted by classhandicapper

They got access to pool data somehow, but I have no idea if they had superior access. I don't think they were lying about the profits.

More likely, they had access to historical pool information against which models were built although I might be talking out of turn. Were they seeing live pools or manually recreated data?

[Poindexter]

What truly astounds me is that the idiots in charge (and they truly are idiots) are so busy worrying about what deal they give to team a and what deal they give to team b…… meanwhile anyone who plays the game recreationally cannot find the exit doors fast enough.

I am honestly torn. I love this game so much, that I want it to succeed, but the decision makers are so deserving of failure that I want it to fail.

Interestingly enough, somewhere in the article he mentions that one team will dominate another team with a real small advantage in pricing. Yet the decision makers see no problem with giving a 16 percent rebate in some pools to the Caw and meanwhile the recreational bettor gets no rebate. Gee, I wonder why nobody goes to the races anymore? So perplexing!

[JustRalph]

Originally Posted by thaskalos

Sometimes we horseplayers, in referring to horse racing as "our favorite game", make the mistake in thinking that this is somehow "OUR game"...and some sort of "injustice" is committed against us when we are disrespected or "discriminated against", in some way. The truth, of course, is that this ISN'T "our game"...this is a game which belongs and is run by an industry which considers us to be just CUSTOMERS, to put it nicely.

In any capitalistic society, the business owners are allowed to run their own businesses in any way that they deem most profitable for themselves...and the most that the customers can do to in voicing their displeasure is to vote with their feet, and their wallets. I don't blame the horse racing industry for embracing the computer mega-bettors, at our expense. They realize that the mega-bettors have big pockets, while the rest of us are running dry...so they are doing what they feel is most financially beneficial for themselves. This is what "capitalism" is all about, IMO. I do, however, blame the common horseplayer, who doesn't realize when he is beat, and who continues to beat his head against the "irresistible force"...even as he is being disrespected every step of the way.

Wow! Great post!

This is why I quit playing. I feel the same way. I only play on big days for fun and when on vacation etc. You are absolutely on target.

[Robert Fischer]

These guys will use every possible valuable edge that they can get away with, or buy there way in.

To not use an edge only happens when the technology is truly impossible.

RARE = Track says "no".
A few general pool restrictions, and cosmetic rules aside.

NEVER = CAW/CRW doesn't exploit an advantage due to strong moral or sporting considerations.

Including pool info, inside info, working with tracks to design cards/multi-race-sequences, psychic lucky numbers, etc...

If you see an out of town barn riding a leading jock for a rare mount... and he's ml fav... and 15mtp you check will-pays and he's 2nd choice... and with 1mtp you read the exacta probable and our horse is relatively cold (3rd 4th choice to contending rivals) on the exacta matrices...

That scares me away from the horse!

Now they race and he gets third late stretch.
"Exacta is light" grumble the rail birds, internet, and the Simulcastoffs...

Doesn't mean that this leading jock or handlers are carrying out the sale of inside info.

I just don't bet (on a horse. Once in a while against) when I see red flags or when I simply lack insight into what is driving the market on significant horses (such as shorter priced favs &contenders).

[racenomics]

Originally Posted by JustRalph

Wow! Great post!

This is why I quit playing. I feel the same way. I only play on big days for fun and when on vacation etc. You are absolutely on target.

This is your chance to get back in! No CAW at Lone Star and Sam Houston TB because you can’t bet them out of state

[classhandicapper]

Originally Posted by ScottJ

More likely, they had access to historical pool information against which models were built although I might be talking out of turn. Were they seeing live pools or manually recreated data?

I asked a lot of questions at that meeting. They gave us some information, but not the kind of details I was trying to get from them out of self interest.

From what I gathered, it was a self learning system that used both pool and handicapping information, but the pool information seemed to be more significant. They talked a bit about betting patterns. It almost had to be a live feed of some sort but I don't know how timely it was.

What they described to us was a little mind boggling.

Once it was ready, they basically flipped an on switch, the software automatically started picking up all the required information, started making automated bets, and was learning as it went along. It was operating at both major and small tracks on huge total volume.

They were joking about not even paying attention to the results until the next day.

Their pitch was that they understood betting patterns so well, DRFBets and DRF PPs and other products could be targeted, marketed and developed way better.

I'm not sure why it wasn't pursued by the CEO because he was interested. I asked him a few times. Maybe it was cost or one of the financial guys didn't like it.

[TrifectaBox]

Not sure why there is always such confusion about pool access


Realtime price distribution is trivial to achieve in 2024.



They choose not to do it , for whatever economic or nefarious reasons.



I repeat, this is only part of the 'edge' the CAW have. And it may not be the biggest part. Rebate and data mining, and who knows what other information is a much bigger part of their edge.





This seems to be an unpopular view, but I am pretty certain of it.

[Maximillion]

Originally Posted by classhandicapper

I asked a lot of questions at that meeting. They gave us some information, but not the kind of details I was trying to get from them out of self interest.

From what I gathered, it was a self learning system that used both pool and handicapping information, but the pool information seemed to be more significant. They talked a bit about betting patterns. It almost had to be a live feed of some sort but I don't know how timely it was.

What they described to us was a little mind boggling.

Once it was ready, they basically flipped an on switch, the software automatically started picking up all the required information, started making automated bets, and was learning as it went along. It was operating at both major and small tracks on huge total volume.

They were joking about not even paying attention to the results until the next day.

Their pitch was that they understood betting patterns so well, DRFBets and DRF PPs and other products could be targeted, marketed and developed way better.

I'm not sure why it wasn't pursued by the CEO because he was interested. I asked him a few times. Maybe it was cost or one of the financial guys didn't like it.

The question would then be why are they even bothering with the DRF...why not just use it themselves no?

[classhandicapper]

Originally Posted by Maximillion

The question would then be why are they even bothering with the DRF...why not just use it themselves no?

I asked the same question.

I can't remember the exact answer. It was a number of years ago. But it was something along the lines of the info they could provide to DRF was not the same info they used for gambling. It was a byproduct of the work they were already doing for gambling. I guess they wanted to make even more money.