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09-01-2020, 10:54 PM
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#16
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Registered User
Join Date: Jun 2020
Posts: 178
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Quote:
Originally Posted by Jeff P
To be fair, I don't think the author was saying their model was incapable of identifying positive expectancy on major race days - KY Derby, Belmont, Preakness, Breeders Cup, etc.
I think the author was simply saying they could not use d(EV) / d(bet size) = 0 for optimal bet sizing on major race days.
My guess as to why would be the same reason I can't use that (or similar) formulas for bet sizing on major race days.
Simply put:
If d(EV) / d(bet size) is in + EV territory as the horses are facing up to the gate on a major race day, the pools are so large, that in order for me to knock the odds down to the point where d(EV) / d(bet size) actually becomes zero:
I'd have to bet my entire net worth (many times over) on that one race.
How many times in a row can you say "I'm all in" before you tap out?
-jp
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Gambler's ruin.
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09-02-2020, 09:11 AM
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#17
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Veteran
Join Date: Feb 2018
Posts: 845
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Quote:
Originally Posted by Nitro
I also found some segments of the article (written I believe 8 years ago) very interesting especially when compared to similar content in a report authored by Bill Benter. From what I gather they did show a profit, but nothing compared to what Mr. Benter accomplished.
The segments I’m referring to are (both high-lighted in blue):
You might also want to consider what Bill Benter has personally stated on a similar topic. If you don’t recognize the name here’s a link:
http://www.worlds-greatest-gamblers....illiam-benter/
If you don’t respect his credibility, I would assume that you’re beyond his accomplishments and capabilities. So the significance of his comments (below) may be a moot point.
BTW in contrast to the section on “Offsetting the Public Odds” (above) and the last 2 sentences express exactly how Mr. Benter was able to achieve his success.
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The article posted by the OP was published only a few weeks ago. PlusEVAnalytics is a fairly prolific poster on twitter and appears on a decent number of podcasts. He's an actuary by trade but seems to still contribute fairly heavily in the gambling world. I suggest reading some of the other posts of his on his site, as they're equally if not more informative with regards to building models.
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09-02-2020, 09:16 AM
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#18
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Veteran
Join Date: Feb 2018
Posts: 845
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Quote:
Originally Posted by Jeff P
To be fair, I don't think the author was saying their model was incapable of identifying positive expectancy on major race days - KY Derby, Belmont, Preakness, Breeders Cup, etc.
I think the author was simply saying they could not use d(EV) / d(bet size) = 0 for optimal bet sizing on major race days.
My guess as to why would be the same reason I can't use that (or similar) formulas for bet sizing on major race days.
Simply put:
If d(EV) / d(bet size) is in + EV territory as the horses are facing up to the gate on a major race day, the pools are so large, that in order for me to knock the odds down to the point where d(EV) / d(bet size) actually approaches break-even territory:
I'd have to bet my entire net worth (many times over) on that one race.
How many times in a row can you say "I'm all in" before you tap out?
-jp
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Yep, I believe you're exactly right. The author is just saying that maximizing expected profit doesn't take in to account the size of the bettor's bankroll. On most races/race days, the pool is so small relative to his group's bankroll that they can use that formula without risking an outrageous % of their bankroll on any single bet type/race.
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09-02-2020, 09:18 AM
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#19
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Veteran
Join Date: Feb 2018
Posts: 845
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Quote:
Originally Posted by CBYRacer
Few points here:
1) They were beating the game with a computer algorithm + rebates. The article doesn't mention the level of rebates involved.
2) Their ROI was a skinny 3% and evidently not stable. How do we know that it wasn't the standard deviation of their model (and not the competition) that led to their demise? The author mentions competition but it could have just as well been that 3% was the best the model could achieve and just so happened to mean revert later on.
3) The examples of factors that the author was discussing were simplistic. I'm sure these were just illustrative. To model (or at least test) certain factors like pace dynamics, trainer / jockey level fixed effects and interactions, non-stationary track-level effects, etc. requires a deep understanding of handicapping plus the ability to program them in a non-linear way. Even with a team this can be very complex. Neural networks can help with feature selection and non-linearity, but you have to be careful with over-fitting. In my own experience, coming up with logical yet unique handicapping factors is the key but also very difficult.
Ultimately, a 3% ROI with a rebate is not going to cut it...unless your model is turn key and has no standard deviation
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You'd have to actually do the math or likely run some simulations, but my guess is that earning 3% on 100M turnover over 3 years, which is likely thousands if not tens of thousands of races, is not a statistical fluke. My guess is their model had legit positive expectation when accounting for rebates but the markets just got smarter over time.
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09-02-2020, 09:45 AM
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#20
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Registered User
Join Date: Jun 2020
Posts: 178
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Quote:
Originally Posted by JerryBoyle
You'd have to actually do the math or likely run some simulations, but my guess is that earning 3% on 100M turnover over 3 years, which is likely thousands if not tens of thousands of races, is not a statistical fluke. My guess is their model had legit positive expectation when accounting for rebates but the markets just got smarter over time.
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You're probably right.
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09-02-2020, 10:18 AM
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#21
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Registered User
Join Date: Mar 2005
Location: Queens, NY
Posts: 20,602
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That optimal bet size issue is one of the problems I think rarely impacts the typical player here unless he's playing a very small track. It's almost never comes up for me in a major stake.
It comes up once in awhile when I play mule races at the CA fairs. I simply know if I want to put more than $100 into a race, I have to split it among multiple pools. I don't bother to do any calculations because I know whatever price I'm looking at with 1 minute to go will change a bunch on the final flash regardless of what I do. I just don't want to help it along by betting it all to "win' or all in 2 exacta combinations.
__________________
"Unlearning is the highest form of learning"
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09-02-2020, 10:39 AM
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#22
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Registered User
Join Date: Jun 2020
Posts: 37
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So is the conclusion that unless you have inside information, this is a fools game to expect to make money long term. Like Vegas, the odds and takeout are against you? Just asking for a friend.
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09-02-2020, 11:09 AM
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#23
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Join Date: Mar 2001
Location: Reno, NV
Posts: 16,908
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Quote:
Originally Posted by Hues10
So is the conclusion that unless you have inside information, this is a fools game to expect to make money long term. Like Vegas, the odds and takeout are against you? Just asking for a friend.
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No disrespect meant, but I'm not sure how you came to this conclusion as a result of this thread.
The core of this discussion is to be found in the comparison to "early" Benter. A key point in his modeling was to start with the tote board and then (mathematically) add the value of the public error in his factors.
Yes, this is a gross over-simplification. BTW, over time, Benter's tote impact became smaller and smaller as he did a better job of integrating factors.
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09-02-2020, 02:05 PM
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#24
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Registered User
Join Date: Jun 2020
Posts: 178
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Quote:
Originally Posted by Dave Schwartz
No disrespect meant, but I'm not sure how you came to this conclusion as a result of this thread.
The core of this discussion is to be found in the comparison to "early" Benter. A key point in his modeling was to start with the tote board and then (mathematically) add the value of the public error in his factors.
Yes, this is a gross over-simplification. BTW, over time, Benter's tote impact became smaller and smaller as he did a better job of integrating factors.
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Don't you think though Dave that a 3% return for a highly sophisticated, well-capitalized betting syndicate with a significant rebate begs the question whether the average player can be successful in this game?
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09-02-2020, 02:27 PM
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#25
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Registered User
Join Date: Aug 2020
Posts: 14
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The word "rebate" keeps coming up. What % break are these syndicates getting? Are they literally calling track management and basically asking for a break on the take out? It seems to me this type of thing would have to be regulated and not just a personal decision.
It's my personal opinion that a regulation should be made nationally that no take out should be greater than 15%. Tracks would have to adapt! Charge more for admission! Charge more for online access to live racing! This industry needs to get more creative and get everyone a better rate. But if so many of these tracks are being given money through other gaming resources, why is so little of that being passed back to the people making the wagers?
Last edited by Jeffwb; 09-02-2020 at 02:28 PM.
Reason: Typo
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09-02-2020, 02:42 PM
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#26
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Join Date: Mar 2001
Location: Reno, NV
Posts: 16,908
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Quote:
Originally Posted by CBYRacer
Don't you think though Dave that a 3% return for a highly sophisticated, well-capitalized betting syndicate with a significant rebate begs the question whether the average player can be successful in this game?
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Of course.
Anything on the plus side (even after rebate) can be leveraged.
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09-02-2020, 02:50 PM
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#27
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Registered User
Join Date: Jan 2006
Posts: 28,540
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Quote:
Originally Posted by CBYRacer
Don't you think though Dave that a 3% return for a highly sophisticated, well-capitalized betting syndicate with a significant rebate begs the question whether the average player can be successful in this game?
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I read James Quinn's new book...and he says that a 15% ROI in this game is readily attainable...even WITHOUT a sophisticated betting syndicate or a rebate.
https://www.amazon.com/Complete-Hand...s%2C175&sr=1-1
__________________
Live to play another day.
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09-02-2020, 03:01 PM
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#28
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Registered User
Join Date: Mar 2005
Location: Queens, NY
Posts: 20,602
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Quote:
Originally Posted by thaskalos
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That's probably true if you focus on 1-2 tracks or a certain type of race and are willing to sit around all day passing races hoping to find one potential error large enough to tempt you. I have no problem with that approach, but it's damned hard to get enough money through the windows to matter that way.
__________________
"Unlearning is the highest form of learning"
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09-02-2020, 03:31 PM
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#29
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Registered User
Join Date: Jun 2020
Posts: 37
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No disrespect taken. As a COVID-19, nothing else to do, Gamble to pass the time person, it seems i have no chance of winning on betting. As someone who has a group of analysts and back race data galore To eke out a return of 3% because of rebates, the average Joe does not stand a chance. Not knocking it, it is entertainment. Like Vegas gambling. You will lose over time.
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09-02-2020, 04:10 PM
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#30
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Veteran
Join Date: Feb 2018
Posts: 845
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Quote:
Originally Posted by Hues10
No disrespect taken. As a COVID-19, nothing else to do, Gamble to pass the time person, it seems i have no chance of winning on betting. As someone who has a group of analysts and back race data galore To eke out a return of 3% because of rebates, the average Joe does not stand a chance. Not knocking it, it is entertainment. Like Vegas gambling. You will lose over time.
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Keep in mind that the teams earning large rebates are not trying to maximize ROI, they're trying to maximize total profit. If they're making 10-15%, they might be leaving money on the table. However, for smaller bettors who pick and choose spots, you'd probably expect a larger ROI, smaller profit.
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