Fair Pick 4 Payout/Win Parlay

[Track Phantom]

Is it accurate to say a win parlay is the best way to determine if a pick 4 paid well or not? Assuming that to be true, the main question is if the comparable win parlay uses a base of .50c, $1 or $2? (This also assumes the pick 4 payout is based on a .50c base).

I was comparing pick 4 payouts to the same payout for a win parlay starting with .50c base. I'm finding that the pick 4 payouts are typically 40% - 75% higher. It feels like I'm not doing this correctly.

[RunForTheRoses]

Originally Posted by Track Phantom

Is it accurate to say a win parlay is the best way to determine if a pick 4 paid well or not? Assuming that to be true, the main question is if the comparable win parlay uses a base of .50c, $1 or $2? (This also assumes the pick 4 payout is based on a .50c base).

I was comparing pick 4 payouts to the same payout for a win parlay starting with .50c base. I'm finding that the pick 4 payouts are typically 40% - 75% higher. It feels like I'm not doing this correctly.

It does seem a little high but that is how I would computer. If first leg paid $8 I would begin the parlay with $2 (based on 50%). You should get a premium as takeout is only once. If big favorites lose it can also pay a premium. 40-75 seems a little high though.

[cj]

Originally Posted by Track Phantom

Is it accurate to say a win parlay is the best way to determine if a pick 4 paid well or not? Assuming that to be true, the main question is if the comparable win parlay uses a base of .50c, $1 or $2? (This also assumes the pick 4 payout is based on a .50c base).

I was comparing pick 4 payouts to the same payout for a win parlay starting with .50c base. I'm finding that the pick 4 payouts are typically 40% - 75% higher. It feels like I'm not doing this correctly.

That sounds right to me.

[thaskalos]

Originally Posted by Track Phantom

Is it accurate to say a win parlay is the best way to determine if a pick 4 paid well or not? Assuming that to be true, the main question is if the comparable win parlay uses a base of .50c, $1 or $2? (This also assumes the pick 4 payout is based on a .50c base).

I was comparing pick 4 payouts to the same payout for a win parlay starting with .50c base. I'm finding that the pick 4 payouts are typically 40% - 75% higher. It feels like I'm not doing this correctly.

Isn't the 4-race parlay subjected to 4 separate takeout deductions...whereas the pick-4 is deducted from only once? Given that consideration...how can the pick-4 not pay considerably more?

[AndyC]

Originally Posted by Track Phantom

Is it accurate to say a win parlay is the best way to determine if a pick 4 paid well or not? Assuming that to be true, the main question is if the comparable win parlay uses a base of .50c, $1 or $2? (This also assumes the pick 4 payout is based on a .50c base).

I was comparing pick 4 payouts to the same payout for a win parlay starting with .50c base. I'm finding that the pick 4 payouts are typically 40% - 75% higher. It feels like I'm not doing this correctly.

In a 4 race parlay if the pool started at $100,000, with a 16% takeout, you would have $84,000 left after the first race, $70,560 after the second, $59,270 after the third and $49,787 after the fourth.

In a P-4 with 1 takeout, using 20%, you would have $80,000 left after 4 races giving an expected payoff of 1.60X the parlay. ($80,000/$49,787)

[Track Phantom]

I figured takeout is what was skewing it. So, what would you suggest in order to determine if the pick 4 was fair? I always thought the win parlay was the answer.

[cj]

Originally Posted by Track Phantom

I figured takeout is what was skewing it. So, what would you suggest in order to determine if the pick 4 was fair? I always thought the win parlay was the answer.

I never really understood the comparison. Were people betting 4 race win parlays before the Pick 4? Just because a P4 pays more doesn't mean it was a good bet. It just means it was better than a 4 race win parlay.

[Track Phantom]

Originally Posted by cj

I never really understood the comparison. Were people betting 4 race win parlays before the Pick 4? Just because a P4 pays more doesn't mean it was a good bet. It just means it was better than a 4 race win parlay.

True. But we all question whether the pick 4 (or 3, or 5) payout was fair. I was trying to find a way I could illustrate that.

[cj]

Originally Posted by Track Phantom

True. But we all question whether the pick 4 (or 3, or 5) payout was fair. I was trying to find a way I could illustrate that.

It is probably the best we have. As AndyC showed though it isn't about paying just more. The 1.6 he calculated is probably a good starting point.

[AndyC]

Originally Posted by Track Phantom

I figured takeout is what was skewing it. So, what would you suggest in order to determine if the pick 4 was fair? I always thought the win parlay was the answer.

Recompute the final odds of each horse to no-takeout odds and then compute a parlay. For example fair odds on an even money horse at a track with 16% win takeout would be 1.38/1. After takeout 42% losers/42% winners = 1/1. Without takeout it is 58%/42% = 1.38/1

Of course the above is all predicated on the belief that the final odds are a fair representation of probability.

[Track Phantom]

Originally Posted by AndyC

Recompute the final odds of each horse to no-takeout odds and then compute a parlay. For example fair odds on an even money horse at a track with 16% win takeout would be 1.38/1. After takeout 42% losers/42% winners = 1/1. Without takeout it is 58%/42% = 1.38/1

Of course the above is all predicated on the belief that the final odds are a fair representation of probability.

I just want to be directional correct. Do you think multiplying the .50c win parlay x 1.6 would get me there? Thanks for your help, by the way.

[AndyC]

Originally Posted by Track Phantom

I just want to be directional correct. Do you think multiplying the .50c win parlay x 1.6 would get me there? Thanks for your help, by the way.

The 1.6 is good for the takeout percentages I used but the number really depends on the tracks you play.