Odds to win Super Bowl racing industry wake up

[racenomics]

Originally Posted by thaskalos

The problem is that the gambler doesn’t care what the costs are of running a gambling game…he just cares about finding an affordable game to play. And horse racing has priced itself out of the current ultra-competitive gambling marketplace.

I am not a sports bettor, but I have a question… Wouldn’t the NFL have the sole rights to their product being gambled on, and make an agreement with the sportsbooks about how much of the profit they make from people gambling on NFL games, similar to how tracks and ADWs make an agreement on how mich of the take each side gets??? I don’t think that is the case. What am I missing?

[thaskalos]

Originally Posted by racenomics

I am not a sports bettor, but I have a question… Wouldn’t the NFL have the sole rights to their product being gambled on, and make an agreement with the sportsbooks about how much of the profit they make from people gambling on NFL games, similar to how tracks and ADWs make an agreement on how mich of the take each side gets??? I don’t think that is the case. What am I missing?

The part of the profit that the NFL takes from Fanduel comes entirely out of the pocket of Fanduel, and has nothing to do with the bettor. That’s the exact opposite of what happens in horse racing.

[alhattab]

Originally Posted by Poindexter

Competing with fan duel? Fan duel is in like 12 states right now. I would imagine a good portion of the Vegas sports betting money comes from California residents who don’t have legal sports betting. I don’t think Vegas needs to worry about competing at this stage of the game, but it is possible they are being proactive, anticipating more competition some time in the future. My guess is that their data tells them that the better pricing leads to more profits, but any big shot from the racing industry can make a phone call and find out the answer.

Competitive within their own market.

As for the other points re. bettors funding purses, one of the challenges today is that the horsemen don't really need the bettors. Their money comes from elsewhere, in many cases to an extreme degree. So in the short run the bet pricing and attractiveness has a much lower, and at many tracks near zero, relationship to wagering.

[Poindexter]

Originally Posted by alhattab

Competitive within their own market.

As for the other points re. bettors funding purses, one of the challenges today is that the horsemen don't really need the bettors. Their money comes from elsewhere, in many cases to an extreme degree. So in the short run the bet pricing and attractiveness has a much lower, and at many tracks near zero, relationship to wagering.

No. Vegas will gouge their customers wherever they think can get away with it. Dilane has already posted on that. Look at the futures market for the NBA to win the championship currently:

Boston +300 (.25)
Denver +400 (.20)
Milwaukee +450 (.18)
Clippers +650 (.13)
Philadelphia +1200 (.08)
OKC +1200 (.08)
Phoenix +1200 (.08)
Minnesota +1500 (.06)
Lakers +1600 (.06)
Knicks +2500 (.04)
Miami +3000 (.03
Indiana +3500 (.03)
Sacrament +3500 (.03
Cleveland +4000 (.025)
GS +4000 (.025)
NO +4500 (.02)

the rest have no chance and are inconsequential. But the above adds up to .32. Meaning you bet 132/100 or lose 32 out of every 132 or a takeout of 24.2 % and that doesn't even include the teams without a chance. The point is, as the field shortens they lower the takeout to draw in more money imo. But the racing industry is more than happy to run 4, 5, 6 horse fields and charge enormous takeouts on them.


Regarding your second paragraph, what does where the purse money comes from have to do with bet pricing and retail handle? That is non sensical.

[MJC922]

Originally Posted by Poindexter

No. Vegas will gouge their customers wherever they think can get away with it. Dilane has already posted on that. Look at the futures market for the NBA to win the championship currently:

Boston +300 (.25)
Denver +400 (.20)
Milwaukee +450 (.18)
Clippers +650 (.13)
Philadelphia +1200 (.08)
OKC +1200 (.08)
Phoenix +1200 (.08)
Minnesota +1500 (.06)
Lakers +1600 (.06)
Knicks +2500 (.04)
Miami +3000 (.03
Indiana +3500 (.03)
Sacrament +3500 (.03
Cleveland +4000 (.025)
GS +4000 (.025)
NO +4500 (.02)

the rest have no chance and are inconsequential. But the above adds up to .32. Meaning you bet 132/100 or lose 32 out of every 132 or a takeout of 24.2 % and that doesn't even include the teams without a chance. The point is, as the field shortens they lower the takeout to draw in more money imo. But the racing industry is more than happy to run 4, 5, 6 horse fields and charge enormous takeouts on them.


Regarding your second paragraph, what does where the purse money comes from have to do with bet pricing and retail handle? That is non sensical.

I think it's half of 24%. I don't think it's a bad idea you're on about as far as the number of horses. I think there's some logic to it. You could have 14 horse fields and up at 19% and then deduct 1% for each horse less than that? Match-up bets then one horse vs another horse would be at 7% which is very close to the one I bet offshore which was two evenly matched horses at -115. It's whatever is optimum, so maybe it's not a 19% cap, I don't pretend to know that magic number but the idea of a variable takeout that has some basis in the number of horses/combinations doesn't seem illogical to me at first glance. Someone chime in and school me on money line, I've only bet one in my life so far but looking forward to more.

[Poindexter]

Originally Posted by MJC922

I think it's half of 24%. I don't think it's a bad idea you're on about as far as the number of horses. I think there's some logic to it. You could have 14 horse fields and up at 19% and then deduct 1% for each horse less than that? Match-up bets then one horse vs another horse would be at 7% which is very close to the one I bet offshore which was two evenly matched horses at -115. It's whatever is optimum, so maybe it's not a 19% cap, I don't pretend to know that magic number but the idea of a variable takeout that has some basis in the number of horses/combinations doesn't seem illogical to me at first glance.

The math is different. When betting a game where both teams are -130, if you bet both teams, you would be betting 260 and getting back 230. You would lose
30/260 bet or 11.5% (or you can look at if you bet 2 different games at -130 and went 1-1)

With the odds Vegas is offering I put up the break even percentage on each team. You multiply that decimal by 100 and you have the amount needed to bet on each team to get back 100. For the sake of ease I rounded off so it is a little off (for instance if you bet 13 to win on the clippers at +6.50 you only get back 97.50 and not 100) but the round off error should not be significant. So basically you have to bet $132 to get back $100. Thus you lose $32 on $132 bet or the 24% I mentioned.

[MJC922]

Originally Posted by Poindexter

The math is different. When betting a game where both teams are -130, if you bet both teams, you would be betting 260 and getting back 230. You would lose
30/260 bet or 11.5% (or you can look at if you bet 2 different games at -130 and went 1-1)

With the odds Vegas is offering I put up the break even percentage on each team. You multiply that decimal by 100 and you have the amount needed to bet on each team to get back 100. For the sake of ease I rounded off so it is a little off (for instance if you bet 13 to win on the clippers at +6.50 you only get back 97.50 and not 100) but the round off error should not be significant. So basically you have to bet $132 to get back $100. Thus you lose $32 on $132 bet or the 24% I mentioned.

Thanks for clarifying.

[alhattab]

Originally Posted by Poindexter

No. Vegas will gouge their customers wherever they think can get away with it. Dilane has already posted on that. Look at the futures market for the NBA to win the championship currently:

Boston +300 (.25)
Denver +400 (.20)
Milwaukee +450 (.18)
Clippers +650 (.13)
Philadelphia +1200 (.08)
OKC +1200 (.08)
Phoenix +1200 (.08)
Minnesota +1500 (.06)
Lakers +1600 (.06)
Knicks +2500 (.04)
Miami +3000 (.03
Indiana +3500 (.03)
Sacrament +3500 (.03
Cleveland +4000 (.025)
GS +4000 (.025)
NO +4500 (.02)

the rest have no chance and are inconsequential. But the above adds up to .32. Meaning you bet 132/100 or lose 32 out of every 132 or a takeout of 24.2 % and that doesn't even include the teams without a chance. The point is, as the field shortens they lower the takeout to draw in more money imo. But the racing industry is more than happy to run 4, 5, 6 horse fields and charge enormous takeouts on them.


Regarding your second paragraph, what does where the purse money comes from have to do with bet pricing and retail handle? That is non sensical.

Pricing on sports futures is one example and does align w/your narrative I believe i.e., if the payout suggests a sufficient return players will tolerate a higher price. Agree with other post (I believe Dave) in the racing world where pricing follows similar logic.

Regarding the source of purse funding, there is no mutuality of interest between the producer and the consumer. The horsemen don't need the bettors, there is no incentive to produce a competitive/quality product. So the horsemen can charge the retail customer whatever the please without having to worry about the irrelevant horseplayer demand. The horseman top line depends not on handle but on casino revenues and in some cases state subsidy or other sources of purse money.

[Poindexter]

Originally Posted by alhattab

Pricing on sports futures is one example and does align w/your narrative I believe i.e., if the payout suggests a sufficient return players will tolerate a higher price. Agree with other post (I believe Dave) in the racing world where pricing follows similar logic.

Regarding the source of purse funding, there is no mutuality of interest between the producer and the consumer. The horsemen don't need the bettors, there is no incentive to produce a competitive/quality product. So the horsemen can charge the retail customer whatever the please without having to worry about the irrelevant horseplayer demand. The horseman top line depends not on handle but on casino revenues and in some cases state subsidy or other sources of purse money.

I am well aware of this and the reason I use the word charity in my very many posts on the subject. Just because currently the game has enough of this charity to survive, doesn't mean that will be the case in 5 years or 10 years or 20 years. Imo, the best way to continue to get these sweetheart deals, is to have a sport that is relevant. As fewer and fewer people care about the sport, and the competition gets more and more relevant in society, what is the motivation for this charity to continue. Ultimately, down the road, the game of horse racing will not be significant enough to warrant any charity. So as I have stated numerous times over the years, why not use some of this charity to have a package deal, one that rewards horsemen with better purses (which has been the rule from day 1) and two that brings the pricing in this game to a level that allows the consumer (the horseplayer) to actually want to continue participating in this game and ultimately allows the game to grow. Instead the industry just rewards a microscopic percentage of consumers (caw and other highly rebated bettors) at the expense of all other consumers. As a result most other consumers have left the game and continue to leave the game and this industry does absolutely nothing the change that. Since the Caw needs fish to feed, this industry is extremely limited in what they can do to maintain handle. So when you say that the horsemen do not need bettors, that is 100% wrong and that is the reason this game will die. They have pretended that they don't need bettors for many years but that has been an absolute and complete failure.

In case you missed it the first time I posted, this is a post from another thread:



I have looked over horse racing handles since 1990. They are as follows. I am just going to present them in 5 year intervals to 2015 and then present 2023. The first figure will be actual handle and the second figure is what that handle should equate to in 2023 numbers (according to an inflation calculator). Figures are in billions:

1990:10.208, 23.784
1995: 11.224, 22,48
2000: 15.042, 26.624
2005: 15.376, 23.986
2010: 12.076, 16.096
2015: 11.290, 14.564
2023: 12.984


So there you have it up until the year 2000 horse racing was on the rise. Fairly steady through 2005 (rebates were in their infancy during this stage) and then boom. 30% drop from 2005 to 2010, 10% further drop from 2010 to 2015, and another 10% drop from 2015 to 2023. Now the part of the equation we don't know is what percentage of the volume was caw at each of these data points. I am guessing that it was around 5% of total handle in 2005 and I would not be shocked if it was as high as 40% today.

But bottom line is that since 2000 (23 years) we have saw handle go from
26.624 billion in todays dollar to 12.984 in todays dollar. Moreover in 2000 Caw/heavily rebated players, I am not even sure if they had entered the picture yet, but if they had, they made up 2% of the pool max. Today if they make up (lets be conservative) 1/3rd of the pool, that accounts for 4.328 billion. So from 2000 to 2023 non heavily rebated bettors went from 23.5 billion to 8.6 billion. That is a 63.4% drop. We know that Caw is being rebated at levels far greater than they were. So there is little reason to think that without corrective action that the next 23 years will not have at least an equally as dramatic negative effect (I actually think it is closer to 15 years than 23 years this time around). So that would mean todays 8.6 Billion in 2023 dollars would drop to 3.15 Billion in 2023 retail dollars. So by my conservative estimation, in 46 years 2000 to 2046, when not looking at heavily rebated dollars (retail) the racing industry is on course to go from 23.3 billion in 2023 dollars to 3.15 Billion in 2023 dollars. Of course with that heavy drop off in retail volume comes heavy drop offs in many other revenue streams for this industry.

[classhandicapper]

I don't think the decline is all CAW related. The recession in 2008 hit handle hard and it never really recovered in real terms. These things are almost never exclusively all one thing or another, but it's pretty obvious from the data that the recession was a factor. A segment of the population is still doing really well, but the segment most likely to gamble on horses is not and hasn't been for a number of years.

[Poindexter]

Originally Posted by classhandicapper

I don't think the decline is all CAW related. The recession in 2008 hit handle hard and it never really recovered in real terms. These things are almost never exclusively all one thing or another, but it's pretty obvious from the data that the recession was a factor. A segment of the population is still doing really well, but the segment most likely to gamble on horses is not and hasn't been for a number of years.

Okay lets go from 2010 to 2023. I have no idea what the caw/heavily rebated bettors volume was in proportion to handle in 2010, but let's call it 12%. So in 2010 the handle(all figures in 2023 dollars) was 16.1 Billion. In 2023, the handle was 13 Billion. That is about a 20 % drop in 13 years. of the 16.1 billion 88% would have been retail handle in 2010 so the retail handle in 2010 would have been 14.17 billion. In 2023, 2/3ds (and I am probably being very generous here) is retail, so that equates to a retail volume of 8.6 Billion. So that would mean that from 2010 that retail volume dropped from 14.17 billion to 8.6 billion. But assuming the heavily rebated bettors made up 12 of handle back in 2010 and 33.3% in 2023, then you have to consider that their effect on the pool is a lot more dramatic today then it was back then. 10 years ago I had to argue with people why it wasn't the same as airline mileage, now your seasoned pros (you listen to the bet with the best podcasts) are saying how diffiicult this game is with the computer players. So from 2010 to 2023 or 13 years this game probably lost almost 40% of its retail volume. Because the caw effect is so much greater now, and there is so much more competition now, it is a fairly safe bet that the next 40% dip will not take 13 years this time around. Now obviously I am guestimating the numbers the best I can. I don't think anyone outside the industry know the exact percentage of heavily rebated play in 2010 or 2023. But whatever the true numbers are, the future of this game is perilious at best and that is the point I am trying to drive home.

The decision makers in this industry have the exact numbers and can make with pinpoint accuracy the types of projections I just made. They choose to sit on their hands and blame everything but the obvious (at least imo). It really isn't my problem. I will play the chasing carryover game and very small recreational play as long as they survive. Most horsemen, I can care less about. They are greedy m-fers who care about themselves and don't care about the people who support the sport. They rank up their with a sports superstar being asked for an autograph from a 12 year old kid, and telling the kid to go f... off. When they have to transition to working elsewhere, don't come looking my way for sympathy. But the industry is a lot deeper than that. Employs a lot of people, involves a number of industries and involves the care and love of a lot of horses. When all that comes crashing down, it is not going to be pretty.

[MJC922]

If I recall correctly the onset of late odds volatility was right around 1999-2000. One wonders how much the projected odds if made available to the public would've kept the game afloat over the past 25 years. Post-2000 I myself wasted literally years with models being unworkable due to late odds volatility. It is not until the past few that I've been able to get a firm grip on projected odds at which point things turned around dramatically for the better, at least in my case the game is pretty much what it was before 2000 as far as I can tell, as long as you're able to go the projected odds route.

[Poindexter]

Originally Posted by MJC922

If I recall correctly the onset of late odds volatility was right around 1999-2000. One wonders how much the projected odds if made available to the public would've kept the game afloat over the past 25 years. Post-2000 I myself wasted literally years with models being unworkable due to late odds volatility. It is not until the past few that I've been able to get a firm grip on projected odds at which point things turned around dramatically for the better, at least in my case the game is pretty much what it was before 2000 as far as I can tell, as long as you're able to go the projected odds route.

You use to work long days when you were betting horses for a living. Now you are busy with a career. Are you saying that in attacking NYRA part time in2022 and 2023 you were able to reach similar return from an roi perspective. That would be absolutely amazing. Also for transparency purposes, how many days a week are you playing and do rebates or rewards play no part, a small part or a big part of these returns.

[alhattab]

Originally Posted by Poindexter

So when you say that the horsemen do not need bettors, that is 100% wrong and that is the reason this game will die. They have pretended that they don't need bettors for many years but that has been an absolute and complete failure.

Not wrong in the short run, but possibly in the long run. Maybe we will go back to the days when horsepeople just ran against each other and bet amongst themselves save for select big days like the KY Derby.

[MJC922]

Originally Posted by Poindexter

You use to work long days when you were betting horses for a living. Now you are busy with a career. Are you saying that in attacking NYRA part time in2022 and 2023 you were able to reach similar return from an roi perspective. That would be absolutely amazing. Also for transparency purposes, how many days a week are you playing and do rebates or rewards play no part, a small part or a big part of these returns.

Honestly I can't be 100% sure of it. It's more of the way it feels and to me it feels very similar to what it was like then, i.e. if the time is put in it should be do-able. I'd be pretty confident about the 10% ROI anyway. I just checked my amwager account and over the past two years worth of wagering on doubles my ROI is +13.6%. So doubles being doubles are grindy (unlike pick sixes) I think it's a decent enough indicator that I'd have a fair chance at maintaining the +10% ROI from the old days. I could immediately sense how much different things were as soon as I started using projected odds.

In NY I don't get much of a rebate on amwager, maybe 1%? It doesn't amount to much. I'm not playing at all lately, like I said for me to play 'right' requires just too much time. At this point of the year I'm only willing to dive that deep on an occasional weekend. Spring is usually a good time so I might ramp up and get more serious about weekend play in April-June.