Enlightening (and scary) article on CAWs

[o_crunk]

Originally Posted by MJC922

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.

From what I've seen, it doesn't work like "they are focusing on 2 or 3 live ones". They are betting all of them to a degree. I had 5,000+ races of tote hub data. There were just a handful out of that dataset where the total Elite return was $0 when they were in the win pool, literally maybe 20 races out of 5,000. In looking at what I had - what the total was they wagered in the pool and the total return and the matching it up with the win payoffs, it suggested they are betting all of them to different degrees, probably for different reasons if we were to look at the exposure in the other pools. They never clobber a win pool. Only bet above 20% of the entire pool 23 times out of 5,523 races. The median ROI in the win pool over those races was -0.1256 on the dollar. More than half the time they are losing quite a bit in that pool before the rebate. Only 578 races out of that sample did they double their money in the win pool.

But even if we take the lower level view, it still doesn't add up, particularly when the more egregious ones are taken into account. These are your 8/5 to 3/5 droppers that people really complain about. That would mean every single last dollar from the teams is going in one direction to one horse. They don't bet like that.

But maybe things have changed since I last looked. This was in 2019/2020. I don't discount that possibility since change is constant, especially for winners.

What seems most plausible to me is that covid brought even more money online to ADWs and less from the track. Someone earlier in the thread was saying 1/3rd is ADW. It's way more than that now. Just at the Oregon hub, 2/3rds of every dollar bet on US racing is through there and that hub doesn't include *all* the ADW handle. And as we've seen with some of the more recent ADW stuff (FD all/all supers, FD serving up 70 cent P5s instead of the 50 cent base increment, etc), I don't discount the ADW adopting the Robinhood model of selling their order flow, meaning they are holding their customers bets and dropping them at the host at the off. And now that everything is online, everyone is waiting to bet at the last minute. It's hard to imagine there used to be a world where you had to stand in a line for a teller to make sure you didn't get shut out. Now, you and literally every one else betting a race can wait, even with the video lag, and make your bets within the last 30 seconds before off remotely. And depending on who you bet with, that money is definitely not hitting the pool until it has already closed.

Any way you slice, the teams can't be the only reason for the odds drops. They don't bet enough and even if we are taking the word of Dan Ross in the article that they are consistently winning before the rebate (which I don't, I suspect this tidbit comes from Pat Cummings who was tweeting this same FBP stuff 6 months ago), there is definitely no reason for them to be in the win pool at that point and slamming horses. The win pool is a loss leader / volume builder for them, gets them the rebate. They get nothing out of making -EV bets even if they win.

[MJC922]

Originally Posted by o_crunk

From what I've seen, it doesn't work like "they are focusing on 2 or 3 live ones". They are betting all of them to a degree. I had 5,000+ races of tote hub data. There were just a handful out of that dataset where the total Elite return was $0 when they were in the win pool, literally maybe 20 races out of 5,000. In looking at what I had - what the total was they wagered in the pool and the total return and the matching it up with the win payoffs, it suggested they are betting all of them to different degrees, probably for different reasons if we were to look at the exposure in the other pools. They never clobber a win pool. Only bet above 20% of the entire pool 23 times out of 5,523 races. The median ROI in the win pool over those races was -0.1256 on the dollar. More than half the time they are losing quite a bit in that pool before the rebate. Only 578 races out of that sample did they double their money in the win pool.

But even if we take the lower level view, it still doesn't add up, particularly when the more egregious ones are taken into account. These are your 8/5 to 3/5 droppers that people really complain about. That would mean every single last dollar from the teams is going in one direction to one horse. They don't bet like that.

But maybe things have changed since I last looked. This was in 2019/2020. I don't discount that possibility since change is constant, especially for winners.

What seems most plausible to me is that covid brought even more money online to ADWs and less from the track. Someone earlier in the thread was saying 1/3rd is ADW. It's way more than that now. Just at the Oregon hub, 2/3rds of every dollar bet on US racing is through there and that hub doesn't include *all* the ADW handle. And as we've seen with some of the more recent ADW stuff (FD all/all supers, FD serving up 70 cent P5s instead of the 50 cent base increment, etc), I don't discount the ADW adopting the Robinhood model of selling their order flow, meaning they are holding their customers bets and dropping them at the host at the off. And now that everything is online, everyone is waiting to bet at the last minute. It's hard to imagine there used to be a world where you had to stand in a line for a teller to make sure you didn't get shut out. Now, you and literally every one else betting a race can wait, even with the video lag, and make your bets within the last 30 seconds before off remotely. And depending on who you bet with, that money is definitely not hitting the pool until it has already closed.

Any way you slice, the teams can't be the only reason for the odds drops. They don't bet enough and even if we are taking the word of Dan Ross in the article that they are consistently winning before the rebate (which I don't, I suspect this tidbit comes from Pat Cummings who was tweeting this same FBP stuff 6 months ago), there is definitely no reason for them to be in the win pool at that point and slamming horses. The win pool is a loss leader / volume builder for them, gets them the rebate. They get nothing out of making -EV bets even if they win.

Fundamentally, with half the field being overlays to various degrees and half the field underlays to various degrees once we apply takeout to that 'reality' there can't possibly be more than between 1 to 3 overlays in the average race, can we agree on that? Frankly the third is probably breakeven or negligible, right? I mean that's just logic.

I'm not saying some races here and there don't have more than 1-3, certainly in the derby with a huge field there will be more than 3 but in the average race. Sure, I can walk up in an 8 horse field and mattress mac a 90-1 shot so then we will have 7 overlays, let's nevermind that, let's talk about the average race with the 1-3 overlays.

What could be done is to dutch those overlays and then turn around and give back those calculated profits by hedging some of the underlays to various degrees to the point where the end result is no longer a profit on the overlays but a break even on the group. Then the rebate check arrives at the end of the month and makes it all good.

That's the only way I can possibly see the scenario occurring as you describe it where they demonstrate cashing every race no matter who wins. The other pools are going to be played the same way, they know what the percentages look like for every horse to finish underneath in every slot. That would come from a very large historical DB.

[classhandicapper]

There is empirical evidence of less volatility in the late WIN odds since the CAWs were prevented from betting WIN late at NYRA. That suggests they were having an impact.

[Poindexter]

If there is any truth to Mr. Crunks’ assertion that the caw uses the win pool as a tool to drive up betting volume and not to actually make money, than what logical reason would there be for every racetrack in America to not have an 8 percent takeout sans rebate in the wps pool. The Caw could essentially still do what he claims they are currently doing (building their volume to exploit other pools) meanwhile the entire customer base would have an opportunity to play racing at a very competitive takeout. It would be business as usual for the caw and the racing industry in every other pool.

[lamboguy]

Originally Posted by Poindexter

If there is any truth to Mr. Crunks’ assertion that the caw uses the win pool as a tool to drive up betting volume and not to actually make money, than what logical reason would there be for every racetrack in America to not have an 8 percent takeout sans rebate in the wps pool. The Caw could essentially still do what he claims they are currently doing (building their volume to exploit other pools) meanwhile the entire customer base would have an opportunity to play racing at a very competitive takeout. It would be business as usual for the caw and the racing industry in every other pool.

first of all, i don't believe for 1 second that the CAW doesn't bet and make money on the win pool...the second part with a reduced takeout on a meaning pool like the win pool would actually generate more business for the race track and would probably be a very smart thing to do. i know there are probably good reasons whey they don't, but they should try to overcome the obstacles in the way of doing just that.

[VeryOldMan]

There are some very sharp posts in this thread.

I had one of the sharpest posters I've ever encountered here explain to me that the CRW crew's rebates can allow them to bet down the odds to a point where they can make a profit with their rebate - and casual bettors like me, without a rebate, will lose money. My negative .05 EV bet is their positive .05 EV bet, e.g. Has stuck with me for years.

[Robert Fischer]

Originally Posted by 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.

It doesn't seem sustainable.

[Robert Fischer]

They occasionally misprice horses.

I don't care if it's "The Public" or "The Caw".
Same game... Have accurate insights & opinions...
Do not put the cart before the horse.



**CAWs are wrong less often, yet still make observable mistakes.