Fixed Odds Wagering

[Poindexter]

Originally Posted by TrifectaBox

Nice to see at least some folks here get it .



And here's a tidbit from someone who knows a little about betting on horses

Karl Broberg

@KarlBroberg


Fixed-Odds Wagering for years many have dreamed about it but the maximum wager allowed will be so small because of the venues they are going to start it off with they won’t be able to prove concept. If there is no max wager they will get crushed

Your point is what? How does Brobergs post differ from what I posted earlier in this thread. Your quoting Castaways post as the Caw is the reason fixed odds wagering cannot work. The CAW is doing just fine with the status quo. They don't need fixed odds wagering to print money and I am certain that the racing industry will have no problem keeping them out of fixed wagering pools. The other alternative is that they eliminate rebates and then the Caw will actually have to earn their income. The problem for fixed odds wagering is not going to be the CAW. The problem is going to be what I stated earlier. Juiced up horses, or other unknown live horses that often win.

[Sheffwed]

Originally Posted by the little guy

Perhaps educating yourself on the purse issues in the UK because of how little bookmakers contribute from their handle would educate you at least a little bit.

A little knowledge is a dangerous thing.

yes indeed

maybe read my post and you'll see I suggested we do on course bookmakers with a system that takes out at the same rate as is taken by the track which would be an improvement over the UK model

but of course your need to be cynical overrides the necessity of actually reading anything

[TrifectaBox]

Never said the caw was the reason fixed odds is problematic.



I simply agreed with his take on how the prices are set. The notion that they are getting their plays off the public's early wagering is ridiculous.

[the little guy]

Originally Posted by Sheffwed

yes indeed

maybe read my post and you'll see I suggested we do on course bookmakers with a system that takes out at the same rate as is taken by the track which would be an improvement over the UK model

but of course your need to be cynical overrides the necessity of actually reading anything

it's a fantasy, and you know it. Nobody on earth would be dumb enough even if it got state approval...which is also a pipe dream.

Ideas are only "good" if there is some basis in reality. The truth is our tote system offers far better opportunities than the UK bookmaking operation. Perhaps if more tracks would adopt NYRA's policy of cutting off CAW play in the WPS pools with two minutes to post, and also restricting their play more than they currently due, things would improve for the players. Hey, there's a realistic idea. Run with it. Feel free.

[Jeff P]

I think all anyone need do is look at the action taken by the on-track bookmakers at Monmouth the past few seasons:

As soon as the starting odds for the horses in a race are made available price discovery takes place.

The lines move in reaction to the money coming in.

What I noticed historically is the early bird gets the worm:

1. The bulk of the bad lines (where fixed odds on a winning horse pays off at a premium vs. parimutuel odds on the same horse) are scooped up early on in the betting.

2. If, a few minutes before the race off, parimutuel odds are higher than fixed odds for a horse, the parimutuel odds on that horse will take late money and auto-correct almost every single time (not unlike double and pick-3 will pays.)

Someone jump in and correct me if things have changed since I noticed this.


-jp
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[Jeff P]

And yes Andy,

Keeping them out of the win pool the last few minutes is a good thing for the rest of us.

Although if a whale team really sees a horse as a likely overlay I doubt they would just 'sit this one out.'

I know I wouldn't.

I'd trickle the money in over several minutes armed with a fair estimate about final pool size (and still get rebates.)

Wouldn't surprise me if they just bet earlier when they have a strong opinion.


-jp
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[Nitro]

Originally Posted by classhandicapper

I understand how incorporating the crowd's odds into your model helps you create a more accurate odds line, but I don't understand how it helps you win.

Someone explained it to me one time and it made a little sense, but I can't remember what the thinking was.

Why anyone would want to incorporate an artificially created odds line model directly into the genuine tote odds is beyond me. I don’t believe that Benter used this type of approach when he introduced the public odds into his algorithm. He thought that the most significant upgrade to his algorithm was when the Hong Kong Jockey Club made their betting odds available to the public. The information provided was a game-changer because he no longer had to calculate the odds from scratch. All he needed to do was refine the odds offered by the club. This change brought him $3 million during the next year.

Creating the odds model from scratch would have to be tested over hundreds of races to first and foremost check its overall validity in terms of producing reliable and consistent results without necessarily initially combining it with the actual odds movement. Apparently, there are many who choose to develop such models. I personally see no purpose for this procedure unless specifically weighted variables play some significant role of importance that others might not consider.

I would think that only if the odds model is somewhat successful that at least a comparison with the real time odds might be justified. Even then attempting to produce individual winners through this process seems unlikely because there are no points of reference made between each of the betting interests in a race.

If you would like to think of the real time odds in terms of being your only guide, then I would suggest that rather than referencing an artificial odds model that you try using 3 other things instead:
1) The Morning Line – Good or bad it attempts to compare each of the entries to one another to provide their winning potential. Of course, whenever there’s a scratch or a track condition change it will affect this line.

2) The Opening Odds line – This may be more telling because it’s the start of real time betting. A quick comparison between this line and the M/L may offer some immediate significance. As the betting cycle progresses changes at certain intervals prior to post time from this line to the real time odds on each entry can also offer some subtle yet insightful betting trends in one direction or another. Some observers believe that any lowering of an entry’s odds is a clear indication that the horse is considered a “live” bet.

3) Nearing the Closing Odds – As the betting cycle is winding down an odds changing trend among the entries can very often be observed. This may lead to pointing out which entries deserve some consideration.

All this empirical information should only be contemplated based on the size of the Win betting pool being followed. Common sense tells us that the smaller sized pools will very often cause wide fluctuations in the odds movement during the entire betting cycle. In any case, always keep in mind that it takes a lot more money to change an entry’s odds as post time approaches because the Win pool has already accumulated a lot more money.

When trying to find the best entries of interest to play, this entire scenario is extremely limited because only one betting pool is being monitored: The Win pool. During any typical betting cycle there are many other pools involved. A true tote analysis digests all that information in real time and attempts to rigorously scrutinize the psychological aspects of those making the wagers. The results are viewed as specific betting patterns that occur at various betting intervals prior to post. These patterns can vary from race to race and even track to track. Once someone familiarizes themselves with them it becomes much easier to weed out the entries of interest and very often leads to finding one or two primary selections. Then the Win pool comes into play because we’re not using it to make a selection. We’re using it simply as a barometer to determine if the odds value of the chosen entries of interest will produce the profit we’re looking for based on the type of bet being considered.

BTW there very well might be many sophisticated betting syndicates, but their attempts to profit is based on the same outsider information that’s available to most players. The so-called visibly “live” entries are more often than not contrived from insider betting based on any number of things like physicality and of course their general intentions. I don’t know about anyone else, but I would rather know which entries will be trying to win.
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[the little guy]

Originally Posted by Jeff P

And yes Andy,

Keeping them out of the win pool the last few minutes is a good thing for the rest of us.

Although if a whale team really sees a horse as a likely overlay I doubt they would just 'sit this one out.'

I know I wouldn't.

I'd trickle the money in over several minutes armed with a fair estimate about final pool size (and still get rebates.)

Wouldn't surprise me if they just bet earlier when they have a strong opinion.


-jp
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They do pretty much “sit it out” because their algorithm relies on last second decisions based on prices and pool size. I think you are applying the way you or I would look at it to an algorithm that works in a completely different way. They will be all over the place trying to scrape value wherever it exists.

[BarchCapper]

TLG brought up a very relevant point about purse structure in UK and fixed odds bookmakers not contributing enough, hence smaller purses overall. Structure there appears to fund purses with ~1/3 from the racecourses themselves (admissions, etc.), ~1/3 from the media rights, and ~1/3 from wagering.

Australia is a country whose model I'd like to know more about (always have, going back to the great Ray Kerrison when he was brought to the NY Post by Rupert Murdoch right around the time I started high school and started getting that paper on my way home from school in Manhattan). The country appears at first glance to have struck a healthy balance between parimutuel and bookmakers. Purses seem to be solid there and on the upswing, and not just at top level. Bettors have some protection on the bookmaking side with "minimum bet" laws in the various Australian states - bookmakers being required to accept wagers from any individual bettor up to a certain amount of potential payoff. For example - a $1,000 minimum bet law means a bettor could wager $100 on a 10-1 horse, and the bookmaker is required to take the wager. Regular winners don't see their accounts closed, although they don't get any of the promotions bookmakers frequently offer. If these things are all the case, I would love to see this model expand beyond that continent.

[Nitro]

Just a quick clarification: Prior to Benter's introduction of the public odds to his algorithm this was stated:

By 1988, he returned to Hong Kong with an algorithm that had twenty racing variables and was able to split the real odds of a horse. So, if a bookmaker had the horse odds at 3.50, but the model calculated that it should be 2.80, he would bet on that edge. This strategy brought him around $600k within a year, but it still wasn't enough.

Originally Posted by Nitro

Why anyone would want to incorporate an artificially created odds line model directly into the genuine tote odds is beyond me. I don’t believe that Benter used this type of approach when he introduced the public odds into his algorithm. He thought that the most significant upgrade to his algorithm was when the Hong Kong Jockey Club made their betting odds available to the public. The information provided was a game-changer because he no longer had to calculate the odds from scratch. All he needed to do was refine the odds offered by the club. This change brought him $3 million during the next year.
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[Sheffwed]

Originally Posted by the little guy

it's a fantasy, and you know it. Nobody on earth would be dumb enough even if it got state approval...which is also a pipe dream.

Ideas are only "good" if there is some basis in reality. The truth is our tote system offers far better opportunities than the UK bookmaking operation. Perhaps if more tracks would adopt NYRA's policy of cutting off CAW play in the WPS pools with two minutes to post, and also restricting their play more than they currently due, things would improve for the players. Hey, there's a realistic idea. Run with it. Feel free.

Nobody on earth, other than the UK, Ireland and Australia

You know, small jurisdictions

[mountainman]

I think one or two earlier posts perhaps conflate "inside" money and "smart" money. They aren't always synonymous OR easily distinguished from each other-especially at smaller tracks.


When a natural 2-1 shot scores at 6/5, we often can attribute the "underlay" to computer programs and rebates. Or, then again, was the horse actually a legitimate 6/5 chance which somebody identified as such? I know which version MY ego and precious equanimity prefers.

And what about the consternating flip side of surprisingly low favorites? The horse we like, that is, that drifts much higher than expected in the betting. One guy's overlay is another's "dead on the board," and knowing when to duck and when to stand your guns (slightly mixed metaphor?) makes all the difference.

And again, the ego stands close at hand. It's one thing, after all, for a likeliest winner to get pounded below our expectations, quite another when the mysterious "they" contemptuously ignore, to the tune of 10-1, a runner we expected about half that price on. That dilemma hits closer to home.

A scene from "The Color of Money" come to mind. The one in which an aging Fast Eddie teases Vincent's neophyte girlfriend and would be manager about whether to accept proposed bets from strangers. "With Vincent you should..except sometimes you shouldn't," he says. "It can be very hard to know who is hustling who."

(Now I am cranking up "Werewolves of London.)

[the little guy]

Originally Posted by mountainman

A scene from "The Color of Money" come to mind. The one in which an aging Fast Eddie teases Vincent's neophyte girlfriend and would be manager about whether to accept proposed bets from strangers. "With Vincent you should..except sometimes you shouldn't," he says. "It can be very hard to know who is hustling who."

The girl at the bar is a friend of mine.

[classhandicapper]

Originally Posted by Jeff P

I think all anyone need do is look at the action taken by the on-track bookmakers at Monmouth the past few seasons:

As soon as the starting odds for the horses in a race are made available price discovery takes place.

The lines move in reaction to the money coming in.

What I noticed historically is the early bird gets the worm:

1. The bulk of the bad lines (where fixed odds on a winning horse pays off at a premium vs. parimutuel odds on the same horse) are scooped up early on in the betting.

2. If, a few minutes before the race off, parimutuel odds are higher than fixed odds for a horse, the parimutuel odds on that horse will take late money and auto-correct almost every single time (not unlike double and pick-3 will pays.)

Someone jump in and correct me if things have changed since I noticed this.


-jp
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I know you are talking about fixed odds, but my experience on the exchange was exactly the same after the first couple of months of ridiculous overlays.

The smartest people started arbitraging and taking away all the significant inefficiencies between the exchange and the track. They must have been doing it with technology because if a very attractive price did appear on the board, it was removed faster than I could react manually. Still, if I wanted 3-1 and 3-1 was available early on the exchange, I could lock it in and not worry about late money coming in at both the track and on the exchange taking both down to 5/2 or 2-1.

[classhandicapper]

I don’t believe that Benter used this type of approach when he introduced the public odds into his algorithm. He thought that the most significant upgrade to his algorithm was when the Hong Kong Jockey Club made their betting odds available to the public. The information provided was a game-changer because he no longer had to calculate the odds from scratch. All he needed to do was refine the odds offered by the club. This change brought him $3 million during the next year.

We all know what he said, but that doesn't quite explain what the underlying value advantage of doing it that way was.

On one level it's an admission that no one has ALL accurate relevant information and handicapping insights. There may be significant things built into the prices that are not in your model no matter how brilliant and informed you are. It could be other handicappers using different information or with insights your don't have, connections, clockers or other insiders etc...

What it sounds like he was doing was starting with the public odds and then tweaking them to reflect factors his research indicated were overrated or underrated by the public.

That sounds a lot like what a lot of serious players do now without a computer model.

ex

I have a horse that was on a dead rail at AQU in his last start. The time before that he got bumped just after the start, dropped back to last, but drew no comment in the chart. Today he's shipping to FG where it's less likely anyone is going to know about those trips.

If that's the case, I am not overly interested in making an exact odds line because I think I have information that won't be reflected in the public odds properly. If they make him 3-1 in that field, he's probably worth 2-1. If they make him 8-1 he's probably worth 5-1 and so on.

Benter probably just studied many factors carefully looking for value oriented insights and was weighing them all via computer better than a person can. Other than that, I still don't understand the advantage of incorporating the odds into your own line.