whales?

[acorn54]

my two cents. what is fact is that people like peter benter, have assistants to place the bets.

http://www.cigaraficionado.com/webfe...ollar-Man_8366

allan woods (deceased) article above, will elaborate on the inner sanctum of the "whale operation".

[Dave Schwartz]

Originally Posted by ultracapper

Churn would be their game. If Dave's numbers are reliable, we're talking about 25-50% of annual handle in North America.

About $1 out of every $7 wagered is whale money.

Rules of thumb about tickets & wagering:
80-85% of all tracks (yes, they play PrM).
80-85% of all races at those tracks.
80-85% of all the pools in those races.

Typically multi-horse win bets, not so many place/show bets.

My estimates say that 17% of all exotic combinations are bet for some amount. Obviously, lots of variance here.

Track by track: Higher rebates draw more money. Thus a greater percentage of the pool at MNR or CT will be whale money than NYRA.

Obviously, the track's handle size has a huge impact on the bet size.

The greater the whale percentage (of the pool), the greater the percentage of money that shows up on the tote after the gate opens. My current estimates put this at a high-rebate track at around 74%, while at a low-rebate track it would be around 56-62%.

Last stat but it is a big one:

If you ask the question, "Did the winner's odds go up, go down, or stay the same from the first 0-minute odds flash you get numbers like these:"

1. Near-Zero Rebate Tracks (normal)
38% up, 20% same, 42% down

2. High Rebate Track:
17% up, 12% same, 71% down

(Note that this one is very fragile from track to track.)


STRATEGIES FOR THE BETTOR
===================
1. When to bet.
The first min=0 flash is plenty late enough, except for the post time abusers like CT. Must watch the horses get close to the gate then take next flash.


2. Which Tracks.
As a general rule, you are better off playing at a LOW-REBATE track because you will be playing against a lower pool pct of VERY SMART MONEY.


3. Do not use any kind of deep, regression analysis approach because that is what the whales do and you will wind up on many of the same horses. In the long run, they will crush you.


4. Whales (basically) play a "global system" with "local sub-systems." That is, they use approaches that are pretty much a single system, but have factors based upon local data such as post-position and pace analysis.

Thus, it would be a good idea to play something that is not in their wheelhouse. For example, some type of pace analysis that has a model customized for today's race.

Do not be so naive to think that using a "recent pace model" is going to do that. It won't. You will need something more creative.


5. Spot play systems can be good - if you can make them work.


6. Surprisingly, form analysis is relatively weak. If you are doing a good job with form, you will find that your A+ horses will either be bet down or outclassed at a high price.



I've got more of this stuff, but it is late.

I think this is such a good topic that I'll do a short podcast about it next week.


Feel free to ask questions.


Best to all,
Dave Schwartz

[Poindexter]

Originally Posted by Dave Schwartz

About $1 out of every $7 wagered is whale money.

Rules of thumb about tickets & wagering:
80-85% of all tracks (yes, they play PrM).
80-85% of all races at those tracks.
80-85% of all the pools in those races.

Typically multi-horse win bets, not so many place/show bets.

My estimates say that 17% of all exotic combinations are bet for some amount. Obviously, lots of variance here.

Track by track: Higher rebates draw more money. Thus a greater percentage of the pool at MNR or CT will be whale money than NYRA.

Obviously, the track's handle size has a huge impact on the bet size.

The greater the whale percentage (of the pool), the greater the percentage of money that shows up on the tote after the gate opens. My current estimates put this at a high-rebate track at around 74%, while at a low-rebate track it would be around 56-62%.

Last stat but it is a big one:

If you ask the question, "Did the winner's odds go up, go down, or stay the same from the first 0-minute odds flash you get numbers like these:"

1. Near-Zero Rebate Tracks (normal)
38% up, 20% same, 42% down

2. High Rebate Track:
17% up, 12% same, 71% down

(Note that this one is very fragile from track to track.)


STRATEGIES FOR THE BETTOR
===================
1. When to bet.
The first min=0 flash is plenty late enough, except for the post time abusers like CT. Must watch the horses get close to the gate then take next flash.


2. Which Tracks.
As a general rule, you are better off playing at a LOW-REBATE track because you will be playing against a lower pool pct of VERY SMART MONEY.


3. Do not use any kind of deep, regression analysis approach because that is what the whales do and you will wind up on many of the same horses. In the long run, they will crush you.


4. Whales (basically) play a "global system" with "local sub-systems." That is, they use approaches that are pretty much a single system, but have factors based upon local data such as post-position and pace analysis.

Thus, it would be a good idea to play something that is not in their wheelhouse. For example, some type of pace analysis that has a model customized for today's race.

Do not be so naive to think that using a "recent pace model" is going to do that. It won't. You will need something more creative.


5. Spot play systems can be good - if you can make them work.


6. Surprisingly, form analysis is relatively weak. If you are doing a good job with form, you will find that your A+ horses will either be bet down or outclassed at a high price.



I've got more of this stuff, but it is late.

I think this is such a good topic that I'll do a short podcast about it next week.


Feel free to ask questions.


Best to all,
Dave Schwartz

Can you post a list of the high rebate tracks they frequent and the low rebate tracks that they are not as involved with.

Also #6 make no sense to me. Did you word it wrong or am I missing something.

[P Matties Jr]

Originally Posted by VigorsTheGrey

The devil is in the details of how this is really accomplished...
What are the specific methods, goals...? You would need a full time accountant and tax person on your employee list...$200 into 50,000 different pools...? Why do this...? for what reason...?

The majority of the whales discussed here are approved by the tracks and the tote companies. They have their own code, like a track or OTB would, for settlement. They have direct access to the tote, so they can calculate right up to the second and they batch bet right before the race closes. I believe it's 100 bets a second but that could have changed. Some of them have an employee that scans for a mistake bet, because you can have a situation like that $20,000 bet at Buffalo Raceway, but it happens very rarely. Their bets are a series of hedges to lose at a percentage less than their rebate. For example, if you bet 20Million with 10% percent rebate, you obviously get 2 million back. So, if you lose 1 million through the windows, you actually make 1 million, but these guys are looking for way less percentages than that. Peanuts, just as long as it's profit. Most of have them have no heart. If they stop winning for a day or two, even after skimming for years, they pull the plug and regroup, but it's never far off that they can't get it working again. They actually have seemed to get better as time has progressed. Money reinvested and technology have likely played a big part in that.

They are in ALL the pools but more so in the verticals and the WPS, than the horizontals. The lesser the denomination for the minimum, the more they can manipulate to have a bigger edge. With only a few exceptions who work hard to keep them out, they are in EVERY race at EVERY track, thoroughbred, harness and greyhound. There's almost no opinion involved, it's almost all money value corrections. They could have every horse open in a race, and still win, if the pools are bet wrong. Their best situations are when they can be completely against a horse or two.

Just like Pace Advantage said, there is a lower tier than those big groups that operate similarly but not as direct. These models are usually slightly better at handicapping and less like the newer wall street hedges or the old school Benter types, but not all of them.

Since the beginning of rebates, tracks have been eating away at the percentages of rebates for the regular players. If it wasn't for these groups, rebates would be almost non existent. The breakdowns have been laid out to the corporations. It's like clockwork. Everybody gets their cut, similar to a slot machine. With that said, the regular whales and every day players have been hit over and over again, while these groups are still operating at the very high end rebates. If the tracks or states cut them, they understand the "whales" go out of business, and the handle drops, immediately.

This is the lower takeout argument in a nutshell. Rebates are the ONLY way to lower the takeout for the regular player, but this is what exists when you do it.

[ultracapper]

Hopefully Dave will post in this thread when he has scheduled the podcast. It will be very educational for me.

[NorCalGreg]

Originally Posted by acorn54

my two cents. what is fact is that people like peter benter, have assistants to place the bets.

http://www.cigaraficionado.com/webfe...ollar-Man_8366

allan woods (deceased) article above, will elaborate on the inner sanctum of the "whale operation".

Very interesting article--thanks for posting

[castaway01]

Originally Posted by VigorsTheGrey

The devil is in the details of how this is really accomplished...
What are the specific methods, goals...? You would need a full time accountant and tax person on your employee list...$200 into 50,000 different pools...? Why do this...? for what reason...?

The goal is to make a profit after rebates. They do it because they make a profit after rebates. Dave and Paul break it down in great detail, and the various links provided do as well.

[castaway01]

Originally Posted by Poindexter

Can you post a list of the high rebate tracks they frequent and the low rebate tracks that they are not as involved with.

Also #6 make no sense to me. Did you word it wrong or am I missing something.

Pretty sure Dave is saying that their top skills are not in handicapping but in taking advantage of pool inefficiencies to grind out a profit through wager structuring.

[DeltaLover]

Almost no factual data exist about "whales", so I perceive them more like a myth rather than reality.

I am not saying that in horse racing big bettors do not exist. They do exist as in other other kind of gambling. Yes, they exists and like any other gambler they finally end up losing heavily. What I do not believe is that they posses some type of a betting model (like for example the naive Benter's paper about multinomial logit) that allows them to beat the game in a consistent basis.

[VigorsTheGrey]

Originally Posted by P Matties Jr

The majority of the whales discussed here are approved by the tracks and the tote companies. They have their own code, like a track or OTB would, for settlement. They have direct access to the tote, so they can calculate right up to the second and they batch bet right before the race closes. I believe it's 100 bets a second but that could have changed. Some of them have an employee that scans for a mistake bet, because you can have a situation like that $20,000 bet at Buffalo Raceway, but it happens very rarely. Their bets are a series of hedges to lose at a percentage less than their rebate. For example, if you bet 20Million with 10% percent rebate, you obviously get 2 million back. So, if you lose 1 million through the windows, you actually make 1 million, but these guys are looking for way less percentages than that. Peanuts, just as long as it's profit. Most of have them have no heart. If they stop winning for a day or two, even after skimming for years, they pull the plug and regroup, but it's never far off that they can't get it working again. They actually have seemed to get better as time has progressed. Money reinvested and technology have likely played a big part in that.

They are in ALL the pools but more so in the verticals and the WPS, than the horizontals. The lesser the denomination for the minimum, the more they can manipulate to have a bigger edge. With only a few exceptions who work hard to keep them out, they are in EVERY race at EVERY track, thoroughbred, harness and greyhound. There's almost no opinion involved, it's almost all money value corrections. They could have every horse open in a race, and still win, if the pools are bet wrong. Their best situations are when they can be completely against a horse or two.

Just like Pace Advantage said, there is a lower tier than those big groups that operate similarly but not as direct. These models are usually slightly better at handicapping and less like the newer wall street hedges or the old school Benter types, but not all of them.

Since the beginning of rebates, tracks have been eating away at the percentages of rebates for the regular players. If it wasn't for these groups, rebates would be almost non existent. The breakdowns have been laid out to the corporations. It's like clockwork. Everybody gets their cut, similar to a slot machine. With that said, the regular whales and every day players have been hit over and over again, while these groups are still operating at the very high end rebates. If the tracks or states cut them, they understand the "whales" go out of business, and the handle drops, immediately.

This is the lower takeout argument in a nutshell. Rebates are the ONLY way to lower the takeout for the regular player, but this is what exists when you do it.

There is something very fishy in all of this....
First, you are say that these whales are approved by the track and tote companies, have direct access to totes, and wager electronically (basically cashless until some future time when things are settled)...That the whales are in the vast majority of pools regularly and are taking advantage of pool wagering "imbalances" to legally skim money with little or no risk, presumably through some sort of computerized, light speed operation TIED INTO the totes and tracks (who accommodate the whales by giving them rebates, even though the skim is working to drain money from them...what the tracks are doing is giving the whales a lower take-out rate through rebates to push money through the windows, so the track can get its take-out, and paying whales a service fee to do this...all on the backs of the regular bettors....if this is true...does anybody wonder anymore what is wrong with racing...? And then the whales must pay taxes on this because I'm hopeful that the IRS considers this a legit business...?

[lamboguy]

Originally Posted by P Matties Jr

The majority of the whales discussed here are approved by the tracks and the tote companies. They have their own code, like a track or OTB would, for settlement. They have direct access to the tote, so they can calculate right up to the second and they batch bet right before the race closes. I believe it's 100 bets a second but that could have changed. Some of them have an employee that scans for a mistake bet, because you can have a situation like that $20,000 bet at Buffalo Raceway, but it happens very rarely. Their bets are a series of hedges to lose at a percentage less than their rebate. For example, if you bet 20Million with 10% percent rebate, you obviously get 2 million back. So, if you lose 1 million through the windows, you actually make 1 million, but these guys are looking for way less percentages than that. Peanuts, just as long as it's profit. Most of have them have no heart. If they stop winning for a day or two, even after skimming for years, they pull the plug and regroup, but it's never far off that they can't get it working again. They actually have seemed to get better as time has progressed. Money reinvested and technology have likely played a big part in that.

They are in ALL the pools but more so in the verticals and the WPS, than the horizontals. The lesser the denomination for the minimum, the more they can manipulate to have a bigger edge. With only a few exceptions who work hard to keep them out, they are in EVERY race at EVERY track, thoroughbred, harness and greyhound. There's almost no opinion involved, it's almost all money value corrections. They could have every horse open in a race, and still win, if the pools are bet wrong. Their best situations are when they can be completely against a horse or two.

Just like Pace Advantage said, there is a lower tier than those big groups that operate similarly but not as direct. These models are usually slightly better at handicapping and less like the newer wall street hedges or the old school Benter types, but not all of them.

Since the beginning of rebates, tracks have been eating away at the percentages of rebates for the regular players. If it wasn't for these groups, rebates would be almost non existent. The breakdowns have been laid out to the corporations. It's like clockwork. Everybody gets their cut, similar to a slot machine. With that said, the regular whales and every day players have been hit over and over again, while these groups are still operating at the very high end rebates. If the tracks or states cut them, they understand the "whales" go out of business, and the handle drops, immediately.

This is the lower takeout argument in a nutshell. Rebates are the ONLY way to lower the takeout for the regular player, but this is what exists when you do it.

i have no problem with these computer players getting a point or two better rebate than myself, i have no problem with them getting back some of their breakage. my problem is the access they have into the pools that i can't get if i stood on my head. if everyone had that very same access the computer boys would be out of business no matter what their rebate is.

[AlsoEligible]

Originally Posted by VigorsTheGrey

And then the whales must pay taxes on this because I'm hopeful that the IRS considers this a legit business...?

Yeah, for the couple of them that are based in the US, sure. The vast majority are off-shore players (or at least under the umbrella of an off-shore "corporation"), so no IRS involvement.

[PaceAdvantage]

Originally Posted by VigorsTheGrey

Are they win bettors...vertical or horizontal players...rebate junkies or arbitrage mongers...is pool scooping their primary tactic, etc...

They are on anything and everything in which they believe they are getting a positive expectation wager.

[PaceAdvantage]

Originally Posted by lamboguy

i have no problem with these computer players getting a point or two better rebate than myself, i have no problem with them getting back some of their breakage. my problem is the access they have into the pools that i can't get if i stood on my head. if everyone had that very same access the computer boys would be out of business no matter what their rebate is.

Except 99% of the people who, if given access to the pools, would have no clue what to do with it.

And what access to you actually think they get? They don't get some special private line that updates odds for them more quickly then you see on the tote board. You realize that, right? Their data gets updated at the same rate as yours or mine at the ADW....simply because there IS NO DATA to update until the money actually moves into the pools, and that relies on the rate at which all the simulcasting centers transmit their data into the main pool. There IS NO WAY to get "more up-to-date" data because it all depends on when and how often the money moves from around the world into the combined pool, which is then displayed on everyone's screen.

Or do you think they get some super-secret Trifecta data that lets them see all the combos and payouts? No...they don't.

What they get is like what the wall street guys get who are allowed to park their servers closer to the exchange...they get faster access...but they are getting the same data you or I get through our ADWs...there is no "secret data" that they are getting.

You could scrape the same data they get off the ADW.

Someone correct me if I'm wrong, as I'm sure you will.

[AndyC]

Originally Posted by AlsoEligible

Yeah, for the couple of them that are based in the US, sure. The vast majority are off-shore players (or at least under the umbrella of an off-shore "corporation"), so no IRS involvement.

Are you saying that most whales are not US citizens and that they don't live in the US? A US citizen regardless of where he/she places the bets is subject to US tax on winnings. Using an off-shore corporation as an umbrella would not change their tax situation.