Here comes the AI

[Jeff P]

Originally Posted by andicap

That is one of the smartest things I have ever read on this board.
It explains why books will not move lines even when the preponderance of money is on Team A while well known sharps are on Team B.

In racing, knowing that stables are betting is irrelevant. What is critical is identifying the stables that win their bets.

One of the more interesting phone calls I ever had was with a (then) member of the CDN Board of Directors.

Somehow he ended up going on a rant about the whale teams.

He had a few choice words for them (no need for me to retype them here) and went on to explain that for all of the retail ADWs when settlement time came each month:

Their players collectively almost always had a net loss each month and the ADWs had to settle up with the host tracks by sending out EFTs or checks.

But for the two wholesale rebate houses (RGS and Elite) the money flowed the other way. Their players collectively almost always had a net win each month and the host tracks almost always had to transfer funds to the rebate houses.

He ended his rant with:

I've seen the money flow and It's not right.

They ALWAYS win. Every. Single. Month.

And that hurts the only people who SHOULD be winning. Our horsemen and the barns that bet.

His words not mine.


-jp

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[thaskalos]

He is right! Who are we, the general wagering public, to expect to win money in this game?

[ranchwest]

Originally Posted by thaskalos

He is right! Who are we, the general wagering public, to expect to win money in this game?

The whales are finding patterns in databases. If that's what you're doing, you're likely way behind. Meanwhile, there are longshots to be had every day. And, there are still some short priced horses that just require a properly structured wager.

[o_crunk]

Originally Posted by Jeff P

One of the more interesting phone calls I ever had was with a (then) member of the CDN Board of Directors.

Somehow he ended up going on a rant about the whale teams.

He had a few choice words for them (no need for me to retype them here) and went on to explain that for all of the retail ADWs when settlement time came each month:

Their players collectively almost always had a net loss each month and the ADWs had to settle up with the host tracks by sending out EFTs or checks.

But for the two wholesale rebate houses (RGS and Elite) the money flowed the other way. Their players collectively almost always had a net win each month and the host tracks almost always had to transfer funds to the rebate houses.

He ended his rant with:


His words not mine.


-jp

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I've done work for multiple tracks concerned with this money flow. This is accurate. But here's the thing - it's always been this way. It was this way 15 years ago when RGS was more active and larger than Elite. It's this way now.

What I think has happened during this time is a couple things. The teams have gotten more consolidated over time. It's all about the rebate. When we look at the settlements, with takeout they are losers. Obviously nowhere near the level of losing as the median retail player. But what is interesting to me is that I'm sure their rebate has increased during this decades long period but their win rate / ROI with takeout and sans the rebate, is pretty much the same as it was at the onset of computer teams. In some cases, their win rate is worse than it was 10 years ago.

So what does that tell me. The very worst retail players have left the game or aren't playing at the level seen in say 2005 through 2010-ish. What is left is a bit sharper, which cuts into the teams effectiveness and thus requires a bigger rebate to maintain their volume.

Another factor is simply the ratio of unplayable races now vs the onset of computer teams. Fields are smaller. The median race is 7 horses now and that 7 is closer to 6 than it is to 8. There is a significant portion of races that are 5 horses or less. Teams are required to play every race, which is something I don't hear many talk about when we hear about disadvantages of the teams. Sure, they get to bet last. Sure, they get massive rebates. But they also have to bet these races that are terrible betting propositions. And racing is producing a majority of terrible betting races these days compared to what this looked like even 5 years ago.

These factors have lead to tracks trying to throw a bone to the teams with the jackpot gimmicks and I'd say sans the Rainbow 6, that bone has largely disappeared. Jackpots aren't being bet by retail. And you are seeing tracks abandon them. But retail marketing still pushes people to the horizontals. Pick 5 handle is getting near 10% of total handle in the US. When you have unplayable races, you package them together and market that.

I also think a lot of people quoting stuff saying 60% of retail volume has left the game is just nonsense. Just look at the covid period. It simply isn't true. You can derive retail play through Oregon hubs and on track and that is at least 70% of total handle as the floor. Every single dollar of that handle is not teams.

For me the debate about CRW is largely disingenuous mostly because the people debating have no idea of the whole picture. You need market making for parimutuel racing to even exist in the US at this point. The teams are market making. The retail player isn't going to play every race and play every pool. But these teams can. If you gave the retail player the same tools as the teams, they would still lose at the same level they are now. The teams are simply playing a different game than the retail player.

As far as AI which is the subject of this thread. The teams advantage is parsing the betting data way more than the handicapping data. AI isn't going to do much there. I have to think teams are doing neural net machine learning. This is labor intensive and requires a lot of time and compute to deploy. I do wonder if it's even worth it for them in the handicapping realm when their advantage is betting against the retail player. Their lines don't have to be super great to be successful but at the same time, it's an advantage that no one else is going to have. That has an upfront cost no matter how much machine learning tools are becoming cheaper and easier to deploy.

[Nitro]

Originally Posted by o_crunk

I've done work for multiple tracks concerned with this money flow. This is accurate. But here's the thing - it's always been this way. It was this way 15 years ago when RGS was more active and larger than Elite. It's this way now.

What I think has happened during this time is a couple things. The teams have gotten more consolidated over time. It's all about the rebate. When we look at the settlements, with takeout they are losers. Obviously nowhere near the level of losing as the median retail player. But what is interesting to me is that I'm sure their rebate has increased during this decades long period but their win rate / ROI with takeout and sans the rebate, is pretty much the same as it was at the onset of computer teams. In some cases, their win rate is worse than it was 10 years ago.

So what does that tell me. The very worst retail players have left the game or aren't playing at the level seen in say 2005 through 2010-ish. What is left is a bit sharper, which cuts into the teams effectiveness and thus requires a bigger rebate to maintain their volume.

Another factor is simply the ratio of unplayable races now vs the onset of computer teams. Fields are smaller. The median race is 7 horses now and that 7 is closer to 6 than it is to 8. There is a significant portion of races that are 5 horses or less. Teams are required to play every race, which is something I don't hear many talk about when we hear about disadvantages of the teams. Sure, they get to bet last. Sure, they get massive rebates. But they also have to bet these races that are terrible betting propositions. And racing is producing a majority of terrible betting races these days compared to what this looked like even 5 years ago.

These factors have lead to tracks trying to throw a bone to the teams with the jackpot gimmicks and I'd say sans the Rainbow 6, that bone has largely disappeared. Jackpots aren't being bet by retail. And you are seeing tracks abandon them. But retail marketing still pushes people to the horizontals. Pick 5 handle is getting near 10% of total handle in the US. When you have unplayable races, you package them together and market that.

I also think a lot of people quoting stuff saying 60% of retail volume has left the game is just nonsense. Just look at the covid period. It simply isn't true. You can derive retail play through Oregon hubs and on track and that is at least 70% of total handle as the floor. Every single dollar of that handle is not teams.

For me the debate about CRW is largely disingenuous mostly because the people debating have no idea of the whole picture. You need market making for parimutuel racing to even exist in the US at this point. The teams are market making. The retail player isn't going to play every race and play every pool. But these teams can. If you gave the retail player the same tools as the teams, they would still lose at the same level they are now. The teams are simply playing a different game than the retail player.

As far as AI which is the subject of this thread. The teams advantage is parsing the betting data way more than the handicapping data. AI isn't going to do much there. I have to think teams are doing neural net machine learning. This is labor intensive and requires a lot of time and compute to deploy. I do wonder if it's even worth it for them in the handicapping realm when their advantage is betting against the retail player. Their lines don't have to be super great to be successful but at the same time, it's an advantage that no one else is going to have. That has an upfront cost no matter how much machine learning tools are becoming cheaper and easier to deploy.

Thank you for offering a much clearer and realistic picture of the betting population and how they impact and are affected by the game.
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[Poindexter]

Originally Posted by o_crunk

I also think a lot of people quoting stuff saying 60% of retail volume has left the game is just nonsense. Just look at the covid period. It simply isn't true. You can derive retail play through Oregon hubs and on track and that is at least 70% of total handle as the floor. Every single dollar of that handle is not teams.

Please explain. If racing handle has indeed dropped 50% adjusted for inflation and caw money went from 5% to 30%, that is a reduction of over 60% reduction in retail volume.

10 billion base (just for ease) .5 billion CAW and 9.5 Billion rest.

20 years later

5 billion base 1.5 Billion Caw 3.5 Billion rest.


Rest has dropped 6 billion over 9.5B. That is over 60%. So if you are saying that 60% of retail volume has not left the game, what stat is wrong? the 50% afi drop in handle, the percentages bet by Caw 20 years ago or the percentage bet by caw today. Because if all 3 stats are correct the game has lost over 60% of all non caw money.

[thaskalos]

O_crunk says that the computer teams are "required to bet every race", and that puts them at a disadvantage because they have to deal with all the crappy races that we have today...whereas the rest of us can afford to pick-n-choose. And this leaves me wondering:

What is it that obligates these mega-wagering computer teams to bet their money on today's "crappy races"?

[Dave Schwartz]

Originally Posted by thaskalos

O_crunk says that the computer teams are "required to bet every race", and that puts them at a disadvantage because they have to deal with all the crappy races that we have today...whereas the rest of us can afford to pick-n-choose. And this leaves me wondering:

What is it that obligates these mega-wagering computer teams to bet their money on today's "crappy races"?

I've never heard of such a requirement.

In fact, I've actually had an opportunity to play some races alongside one particular group and they did not play every race.

They do play about 85% of them.

And there are requirements about minimum handles.

That's why they play in Dec-Jan when they often lose.

[Nitro]

Originally Posted by thaskalos

O_crunk says that the computer teams are "required to bet every race", and that puts them at a disadvantage because they have to deal with all the crappy races that we have today...whereas the rest of us can afford to pick-n-choose. And this leaves me wondering:

What is it that obligates these mega-wagering computer teams to bet their money on today's "crappy races"?

The question becomes how is a “crappy” race even determined and from whose viewpoint is that evaluation being established? I can see it from a handicapping or tote analysis. But based on how these teams attack the game from a selection and betting perspective I’m not sure how they evaluate the potential profitability in each race. With their buckshot gambling approach, do they even care?

[Jeff P]

Yes, I think they do care.

You use a "par" value in your tote analysis right?

Not terribly difficult to create a number (think of it as a par if you like) that captures the essence of intrinsic betting value in a race.

The Breeders Cup comes to mind when I think of races with high betting value.

Think of a race with a twelve horse field where contention runs deep. A race where almost all of the runners are entered to win, there's not much in the way of separation numbers-wise among among the horses, and you can make a legitimate case for maybe 6, 7, or 8 of the 12 runners as win candidates.

If you are going to put a number on it, such a race would score out near the upper end of your scale - maybe 100.

If you have a good fundamental model (like the whale teams) it's likely you are going to have multiple win overlays and lots of individual overlaid exacta combinations. And even though you don't have access to amt wagered on the individual combinations - I'm guessing you will submit lots of tri and super combinations that you suspect are overlays.

This type of race carries a degree of difficulty. But when one of your win overlays wins, and the right horses fill out the vertical exotics - the amount you collect in this type of race more than makes up for the degree of difficulty.

I'm guessing this is the type of race serious players (including the whale teams) throw the most handle at.

At the other end of the spectrum you have races like today's AQU R3.

Originally carded as a field of 7, scratched down to a field of 3, and won by the 1-2 favorite (which oddly enough) might have actually been an overlay for some players depending on their fundamental model:

It's not the type of race most serious players are going to throw a lot of handle at.

It's also the type of race that immediately comes to mind (at a major track) when I read or hear the phrase 'a crappy race.'

If you are going to put a number on a race like that it would score out at the low end of your scale (maybe 2 or 3.)

Point is if you put your mind to it you can create a number that captures the essence of pretty much anything.

Including the intrinsic betting value in a race.



-jp
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[Nitro]

Originally Posted by Jeff P

Yes, I think they do care.

You use a "par" value in your tote analysis right?

Not terribly difficult to create a number (think of it as a par if you like) that captures the essence of intrinsic betting value in a race.

The Breeders Cup comes to mind when I think of races with high betting value.

Think of a race with a twelve horse field where contention runs deep. A race where almost all of the runners are entered to win, there's not much in the way of separation numbers-wise among among the horses, and you can make a legitimate case for maybe 6, 7, or 8 of the 12 runners as win candidates.

If you are going to put a number on it, such a race would score out near the upper end of your scale - maybe 100.

Point is if you put your mind to it you can create a number that captures the essence of pretty much anything.

Including the intrinsic betting value in a race.
-jp

Based on a so-called team Win betting scenario wouldn’t the PAR value you described then just be the potential profit margin of a 6, 7, or 8 entry Dutch Win bet? (the intrinsic betting value in a race).

I know when playing the large 12 to 14 horse fields in HK that even a 3 Entry Dutch Win can be reasonably profitable with proper scrutiny. However, I only play that way when the realized potential profit margin exceeds my O.A. hit frequency %.
I recently posted an example from a race in HK where the tote analysis only indicted that following entries were of interest: #3 @ 9/1, #8 @ 5/1, and #9 @ 4.5/1

The Dutching Calculator indicates a profit margin of 123% which was a definite play because my hit frequency is 65%.

        LOW	MID	HI	TOT   TOT 	PRF %
ODDS    4.5	5.0	9.0	BET	PRF	
$RET    $11	$12	$20			
$BET    $20	$18	$11	$49	$61	123%
RET     $110	$110	$110			

I just can’t fathom how a Dutch Win bet using twice as many (or more) entries could consistently produce reasonable profits over the long haul particularly because of the limited number of entries found in Stateside races.
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[classhandicapper]

Originally Posted by thaskalos

O_crunk says that the computer teams are "required to bet every race", and that puts them at a disadvantage because they have to deal with all the crappy races that we have today...whereas the rest of us can afford to pick-n-choose. And this leaves me wondering:

What is it that obligates these mega-wagering computer teams to bet their money on today's "crappy races"?

I don’t know, but I’m going to guess that in order to meet the handle requirement for their huge rebates they can’t afford to skip many races. In fact, I would guess they occasionally have to throw a little money through the windows with no edge or an expected loss just to meet their handle requirement.

That’s a different game than someone like me who is at the other extreme. I only bet 2 races today, but they were the best races I could find given my insights.

[Aerocraft67]

If it's true that the CAWs have to play every race, that suggests the track management is a little smarter than we generally give them credit for. It sounds like a plausible bargain. CAWs get the sweetheart rebate. They can minimize their losses on bad races and make up for it on more lucrative events. Tracks get reliable handle for races that otherwise wouldn't deserve much.

Not sure that's a revelation for the individual player, or something we should be particularly thankful for. But it's a downside CAWs would have to endure, and certainly more reason to avoid poor betting races.

Not that it lets the industry off the hook to card good races. At some point, there's a proportion of poor betting propositions that even the whales can't overcome.

[Scamper]

AI chat gpt:

I asked the following question and got an immediate answer.


Is early speed important in sprint thoroughbred races?

Early speed can be important in sprint thoroughbred races, as it can give a horse an advantage in terms of positioning and the ability to control the pace of the race. In a sprint race, horses are running at their maximum speed over a short distance, so a horse that can break quickly from the gate and establish a clear lead may be able to conserve energy for the final stretch and hold off challengers.

That being said, it's not always the case that the horse with the fastest early speed will win the race. Other factors such as stamina, track conditions, jockey strategy, and the ability to accelerate in the final stretch can also play a significant role in determining the outcome of a race. So while early speed can be an advantage, it's not a guarantee of success in sprint thoroughbred races.

[Poindexter]

Originally Posted by Scamper

AI chat gpt:

I asked the following question and got an immediate answer.


Is early speed important in sprint thoroughbred races?

Early speed can be important in sprint thoroughbred races, as it can give a horse an advantage in terms of positioning and the ability to control the pace of the race. In a sprint race, horses are running at their maximum speed over a short distance, so a horse that can break quickly from the gate and establish a clear lead may be able to conserve energy for the final stretch and hold off challengers.

That being said, it's not always the case that the horse with the fastest early speed will win the race. Other factors such as stamina, track conditions, jockey strategy, and the ability to accelerate in the final stretch can also play a significant role in determining the outcome of a race. So while early speed can be an advantage, it's not a guarantee of success in sprint thoroughbred races.

That is pretty impressive. Anyone who uses it, can you ask the question

"Are rebates good or bad for the growth of horse racing". I just want to know if the ai is as smart as I am.