The Gambler Who Cracked the Horse-Racing Code

[JerryBoyle]

Originally Posted by LemonSoupKid

Spreading possibilities over the short term with only finite outcomes is essentially arbitrage

They weren't taking "stands" on positions.

To the common man, this is not handicapping. At all.

That is not arbitrage nor is what they do. Arbitrage implies generating a risk free profit from simultaneous buying/selling. It could maybe be considered stat arb, but even that is not exactly the same.

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.

*One exception might be for strategies such as the Dr Z method of using the win pool to find mispricings in the place and show pools. This is more akin to technical analysis or even stat arb

[dilanesp]

Originally Posted by JerryBoyle

That is not arbitrage nor is what they do. Arbitrage implies generating a risk free profit from simultaneous buying/selling. It could maybe be considered stat arb, but even that is not exactly the same.

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.

*One exception might be for strategies such as the Dr Z method of using the win pool to find mispricings in the place and show pools. This is more akin to technical analysis or even stat arb

Yep.

If you ever look at a race and say "how is this horse 6 to 1? he should be 5 to 2. i am gonna bet him", you are doing the same thing Benter is, just on a less sophisticated and technological level.

[thaskalos]

Originally Posted by dilanesp

Yep.

If you ever look at a race and say "how is this horse 6 to 1? he should be 5 to 2. i am gonna bet him", you are doing the same thing Benter is, just on a less sophisticated and technological level.

That's like saying that "if you've ever picked up and played a guitar, you are doing the same thing that Mark Knopfler does..."

https://www.youtube.com/watch?v=cJwJ11-pmxg

[dasch]

Last night I was working and had TVG on for the 2nd race from Sha Tin as the announcer said that a horse got pounded(this was IN THE GATE not AFTER the start or DURING the race, IN THE GATE) so it caught my attention and I watched the race. The horse that took all the late money showed nothing really and finished poorly. Out of curiosity I looked at the Hong Kong Jockey Club website for the chart and saw that the jockey was questioned after the race about the "unexpected" poor performance. I then looked at other races and in EVERY race ANY horse who didn't run the way expected the jockeys were ALL questioned by the stewards with full explanations made available to the public. Then depending on the situation these horses were put on Steward or Vets list before they can race again! This kind of integrity is 2nd to none IMO and after spending a RIDICULOUS amount of time over the years on American racing I am 90% sure I am going to walk away in favor of Hong Kong. I don't care if every horse I bet drops from 10-1 to 5-2 as long as it happens BEFORE THE RACE STARTS. I guess I have been so wrapped up in my work on American racing I really had no idea the integrity over there went this deep. Anybody who is frustrated will all of the BS in the USA with "supertrainers",odds changing during the race, etc, should take a look.

[Dave Schwartz]

Originally Posted by JerryBoyle

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.

a 5-Star answer.

[formula_2002]

Originally Posted by JerryBoyle

That is not arbitrage nor is what they do. Arbitrage implies generating a risk free profit from simultaneous buying/selling. It could maybe be considered stat arb, but even that is not exactly the same.

What Benter does is most definitely handicapping - just at a much more rigorous, systemized level than the 1 man, pencil + paper shop. Something I see repeated on this board often is that these guys aren't handicapping, they're just finding "inefficiencies in the pool"* to imply that they're not handicapping. That IS handicapping. They're using fundamental information to predict the chance of a horse or combination winning, and then sizing bets appropriately.
Perhaps it's better to think of this horse betting as any other imperfect market. As PA said, Benter, and the rest of us, are looking for mispriced assets on which we can wager.

*One exception might be for strategies such as the Dr Z method of using the win pool to find mispricings in the place and show pools. This is more akin to technical analysis or even stat arb

this seems like a good time to say what I've been doing "lately"
"inefficiencies in the pool" yes , but i'm handicapping the pool basd on the bettors analysis of the horse's pp. i use the wps and exacta pools to establish weighted exacta pool bet sizes such that, in the long run, the exacta return of "your" horse over all (using my bet sizes) outperform the single bet return, beatig the track take out. a work in progess over at the "selection forum"

[classhandicapper]

Originally Posted by PaceAdvantage

If Benter is amazed he can still win despite the all the CRWs pouring money in at the last second, that doesn't leave much hope for the rest of us, who aren't anywhere near Benter's level...

I'm not buying that these guys have made the pools so efficient it's close to impossible to win.

IMO, there's no question the pools are way more efficient now than they were 30-40 years ago. The very late money has also made getting the right price more problematical.

Remember though, these guys are primarily using advanced statistics and computers. That's going to enable them to find inefficiencies in betting patterns and pools easier, weight factors better, and make better odds lines than someone using experience and intuition when it comes to playing MANY RACES.

However, they aren't going to do all the things that require subjective judgement better than everyone else in EVERY RACE. In fact, I would argue it's the opposite. Algorithms are good at some things, but they aren't good at making fine line judgments for situations where there are exceptions or limited data.

[dilanesp]

Originally Posted by classhandicapper

I'm not buying that these guys have made the pools so efficient it's close to impossible to win.

IMO, there's no question the pools are way more efficient now than they were 30-40 years ago. The very late money has also made getting the right price more problematical.

Remember though, these guys are primarily using advanced statistics and computers. That's going to enable them to find inefficiencies in betting patterns and pools easier, weight factors better, and make better odds lines than someone using experience and intuition when it comes to playing MANY RACES.

However, they aren't going to do all the things that require subjective judgement better than everyone else in EVERY RACE. In fact, I would argue it's the opposite. Algorithms are good at some things, but they aren't good at making fine line judgments for situations where there are exceptions or limited data.

And some angles are just not statistical.

For instance, if you know a jockey is likely to mess up in a specific scenario, that's not going to show up in the algorithm. Nor will sight handicapping.

[formula_2002]

how can one "buy into" claims that are not supported by the any facts?

[cj]

Originally Posted by dilanesp

And some angles are just not statistical.

For instance, if you know a jockey is likely to mess up in a specific scenario, that's not going to show up in the algorithm. Nor will sight handicapping.

Jockey tendencies can certainly be analyzed and exploited. Could you give an example?

[Dave Schwartz]

Originally Posted by classhandicapper

I'm not buying that these guys have made the pools so efficient it's close to impossible to win.

IMO, there's no question the pools are way more efficient now than they were 30-40 years ago. The very late money has also made getting the right price more problematical.

Remember though, these guys are primarily using advanced statistics and computers. That's going to enable them to find inefficiencies in betting patterns and pools easier, weight factors better, and make better odds lines than someone using experience and intuition when it comes to playing MANY RACES.

However, they aren't going to do all the things that require subjective judgement better than everyone else in EVERY RACE. In fact, I would argue it's the opposite. Algorithms are good at some things, but they aren't good at making fine line judgments for situations where there are exceptions or limited data.

Great commentary. Your points are well made.

Actually, they aren't going to do ANYTHING that requires subjective judgement.

What they are going to do is build large global models that push winners to the top.

So, extending upon your idea, one could concentrate on SMALL, LOCAL approaches and not always be bumping heads with the whales.

What I mean are approaches which specific to:
** Track
** Running Style
** Trainer

These are things which are very difficult to integrate into a large model.

[Prioress Ply]

Good thread with a lot of great posts.

[GMB@BP]

Originally Posted by Dave Schwartz

So, extending upon your idea, one could concentrate on SMALL, LOCAL approaches and not always be bumping heads with the whales.

Dave,

To follow up on this point, and I am not sure I have had this discussion on this particular board but as a smaller player I often wonder if it would make more sense to play a track (or circuit) with smaller pools that would not be as appealing to the large syndicated computer teams.

What is your thoughts on that?

[Dave Schwartz]

Originally Posted by GMB@BP

Dave,

To follow up on this point, and I am not sure I have had this discussion on this particular board but as a smaller player I often wonder if it would make more sense to play a track (or circuit) with smaller pools that would not be as appealing to the large syndicated computer teams.

What is your thoughts on that?

Yes, lots of thoughts.

First, you're looking at it backwards. The percentage of whale money is much higher at small tracks because the rebate is so much higher.

Sure, they bet less, but they bet a greater percentage of the pool.

Think of it like you are walking into a poker room.

There are two games, both with 6 players and the same rules.

Table A: Lower rake, populated by 3 strong players.

Table B: Higher rake, but no sharks.

I would suggest that B would be an easier table to beat.

Same with racing.

My experience is that my ROI is better at tracks with little or no rebate. An added benefit is that a greater percentage of the time the winner's odds go UP in the winner's circle.


Dave

[classhandicapper]

Originally Posted by GMB@BP

Dave,

To follow up on this point, and I am not sure I have had this discussion on this particular board but as a smaller player I often wonder if it would make more sense to play a track (or circuit) with smaller pools that would not be as appealing to the large syndicated computer teams.

What is your thoughts on that?

I bet on mule races.

I can't bet a lot of money because the pools are tiny, but I see inefficiencies all the time between the exotic pools and win pool. It's not easy to exploit because the late swings are so huge, but I doubt any whales are in those pools.