Current State of the Game

[Seabiscuit@AR]

The Current State of the Game is this

A Horse called Sunline has a 33.33% chance to win so its correct odds are 2-1

Average Joe punter has been studying the game hard and watching the races closely. Average Joe is a newbie though so not confident yet and never bets more than $10 a race so Average Joe gets no rebates. Average Joe does the form for this race and decides that Sunline looks the horse to beat in this race and with tote odds of 3-1 and 1 minute to post time decides those odds are fair enough and backs Sunline for $10

Meanwhile the Rebate Syndicate's computers are crunching their numbers and their computers decide also that Sunline is the horse to beat. They also correctly conclude that Sunline is a 33.33% chance to win. They are receiving a 10% rebate on win bets at this track. This means they can bet Sunline down to 1.80-1 and still profit as their final payout with rebate added back is better than 2-1. Betting it down to 1.80-1 is better for them as they can bet a lot more money than if they only bet it down to 2-1. As the last horse enters the gate they send in their big bets with the aim of a final price for Sunline of 1.80-1

Sunline does the business on the track and wins the race easily. The Rebate Syndicate weight their bet perfectly and Sunline's final odds are 1.80-1

Final wash-up is as follows

Average Joe did the form correctly but will only receive 1.80-1 when he needed 2-1 long term to break even on this bet. Long term this bet is a -6.67% ROI losing bet for Average Joe. If he places $1 million worth of these bets he loses over $66000

The Rebate Syndicate did the form correctly and they receive final odds of 2.08-1 (1.80-1 plus 10% rebate). They were able to bet thousands to win as they knocked the price down to 1.80-1. Long term this bet is a +2.67% ROI profit maker for the Rebate Syndicate. If they place $1 million worth of these bets they win over $26000

Average Joe did nothing wrong when it comes to doing the form. But if this process continues he will be broke long term while the Rebate Syndicate makes a fortune. The whole scenario is very unfair on Average Joe. As a losing player he will never build up the confidence to increase his bets to get a big rebate like the syndicate. But even if he does this the syndicate will likely increase their bets further as the pool increases as with the Triple Crown races. When the pools get really big the syndicate just up their bets to 200K if need be so that they always get bigger rebates than Average Joe. I don't see any way for Average Joe to break this cycle

Sure occasionally Average Joe might find a bet that the syndicate does not have and so find a profitable ROI bet. But with the syndicate employing dozens of full time analysts and computer modellers these opportunities will be few and far between and Average Joe is better off spending his time doing other things

[thaskalos]

Originally Posted by Seabiscuit@AR

The Current State of the Game is this

A Horse called Sunline has a 33.33% chance to win so its correct odds are 2-1

Average Joe punter has been studying the game hard and watching the races closely. Average Joe is a newbie though so not confident yet and never bets more than $10 a race so Average Joe gets no rebates. Average Joe does the form for this race and decides that Sunline looks the horse to beat in this race and with tote odds of 3-1 and 1 minute to post time decides those odds are fair enough and backs Sunline for $10

Meanwhile the Rebate Syndicate's computers are crunching their numbers and their computers decide also that Sunline is the horse to beat. They also correctly conclude that Sunline is a 33.33% chance to win. They are receiving a 10% rebate on win bets at this track. This means they can bet Sunline down to 1.80-1 and still profit as their final payout with rebate added back is better than 2-1. Betting it down to 1.80-1 is better for them as they can bet a lot more money than if they only bet it down to 2-1. As the last horse enters the gate they send in their big bets with the aim of a final price for Sunline of 1.80-1

Sunline does the business on the track and wins the race easily. The Rebate Syndicate weight their bet perfectly and Sunline's final odds are 1.80-1

Final wash-up is as follows

Average Joe did the form correctly but will only receive 1.80-1 when he needed 2-1 long term to break even on this bet. Long term this bet is a -6.67% ROI losing bet for Average Joe. If he places $1 million worth of these bets he loses over $66000

The Rebate Syndicate did the form correctly and they receive final odds of 2.08-1 (1.80-1 plus 10% rebate). They were able to bet thousands to win as they knocked the price down to 1.80-1. Long term this bet is a +2.67% ROI profit maker for the Rebate Syndicate. If they place $1 million worth of these bets they win over $26000

Average Joe did nothing wrong when it comes to doing the form. But if this process continues he will be broke long term while the Rebate Syndicate makes a fortune. The whole scenario is very unfair on Average Joe. As a losing player he will never build up the confidence to increase his bets to get a big rebate like the syndicate. But even if he does this the syndicate will likely increase their bets further as the pool increases as with the Triple Crown races. When the pools get really big the syndicate just up their bets to 200K if need be so that they always get bigger rebates than Average Joe. I don't see any way for Average Joe to break this cycle

Sure occasionally Average Joe might find a bet that the syndicate does not have and so find a profitable ROI bet. But with the syndicate employing dozens of full time analysts and computer modellers these opportunities will be few and far between and Average Joe is better off spending his time doing other things

Very good summary...IMO. Average Joe is not necessarily being "outplayed" by the whales...it's just that the betting outlets have allowed the whales to have more access to the wagering pools than Average Joe -- or even Above-average Joe -- has. The whale is plugged into the system and allowed to place his wagers at the last possible second...which is something that Average Joe is unable to do.

[Billnewman]

Originally Posted by Seabiscuit@AR

The Current State of the Game is this

A Horse called Sunline has a 33.33% chance to win so its correct odds are 2-1

Average Joe punter has been studying the game hard and watching the races closely. Average Joe is a newbie though so not confident yet and never bets more than $10 a race so Average Joe gets no rebates. Average Joe does the form for this race and decides that Sunline looks the horse to beat in this race and with tote odds of 3-1 and 1 minute to post time decides those odds are fair enough and backs Sunline for $10

Meanwhile the Rebate Syndicate's computers are crunching their numbers and their computers decide also that Sunline is the horse to beat. They also correctly conclude that Sunline is a 33.33% chance to win. They are receiving a 10% rebate on win bets at this track. This means they can bet Sunline down to 1.80-1 and still profit as their final payout with rebate added back is better than 2-1. Betting it down to 1.80-1 is better for them as they can bet a lot more money than if they only bet it down to 2-1. As the last horse enters the gate they send in their big bets with the aim of a final price for Sunline of 1.80-1

Sunline does the business on the track and wins the race easily. The Rebate Syndicate weight their bet perfectly and Sunline's final odds are 1.80-1

Final wash-up is as follows

Average Joe did the form correctly but will only receive 1.80-1 when he needed 2-1 long term to break even on this bet. Long term this bet is a -6.67% ROI losing bet for Average Joe. If he places $1 million worth of these bets he loses over $66000

The Rebate Syndicate did the form correctly and they receive final odds of 2.08-1 (1.80-1 plus 10% rebate). They were able to bet thousands to win as they knocked the price down to 1.80-1. Long term this bet is a +2.67% ROI profit maker for the Rebate Syndicate. If they place $1 million worth of these bets they win over $26000

Average Joe did nothing wrong when it comes to doing the form. But if this process continues he will be broke long term while the Rebate Syndicate makes a fortune. The whole scenario is very unfair on Average Joe. As a losing player he will never build up the confidence to increase his bets to get a big rebate like the syndicate. But even if he does this the syndicate will likely increase their bets further as the pool increases as with the Triple Crown races. When the pools get really big the syndicate just up their bets to 200K if need be so that they always get bigger rebates than Average Joe. I don't see any way for Average Joe to break this cycle

Sure occasionally Average Joe might find a bet that the syndicate does not have and so find a profitable ROI bet. But with the syndicate employing dozens of full time analysts and computer modellers these opportunities will be few and far between and Average Joe is better off spending his time doing other things

What also can happen in your scenario is multiple racing syndicates at the same moment say 20 seconds before decide to slam the 2/1 shot. Average Joe changes his mind while standing in line and decides he likes the 3rd choice at 7/2 and bets his $10 feeling $35 return is fair. When the gates open and the horses run the first quarter, the last flash on the tote says the 2/1 shot goes down to 6/5 and Joes horse jumps to 9/2 and wins. And Joe says to himself that was a nice bonus.

[RXB]

PID R2 on Monday a horse went to the gate at 8/1, actually blipped up to 9/1 as they loaded... but the final odds were 7/2. (It won.) Welcome to the new reality.

[Some_One]

So why play PID then?

[Stillriledup]

Originally Posted by Seabiscuit@AR

The Current State of the Game is this

A Horse called Sunline has a 33.33% chance to win so its correct odds are 2-1

Average Joe punter has been studying the game hard and watching the races closely. Average Joe is a newbie though so not confident yet and never bets more than $10 a race so Average Joe gets no rebates. Average Joe does the form for this race and decides that Sunline looks the horse to beat in this race and with tote odds of 3-1 and 1 minute to post time decides those odds are fair enough and backs Sunline for $10

Meanwhile the Rebate Syndicate's computers are crunching their numbers and their computers decide also that Sunline is the horse to beat. They also correctly conclude that Sunline is a 33.33% chance to win. They are receiving a 10% rebate on win bets at this track. This means they can bet Sunline down to 1.80-1 and still profit as their final payout with rebate added back is better than 2-1. Betting it down to 1.80-1 is better for them as they can bet a lot more money than if they only bet it down to 2-1. As the last horse enters the gate they send in their big bets with the aim of a final price for Sunline of 1.80-1

Sunline does the business on the track and wins the race easily. The Rebate Syndicate weight their bet perfectly and Sunline's final odds are 1.80-1

Final wash-up is as follows

Average Joe did the form correctly but will only receive 1.80-1 when he needed 2-1 long term to break even on this bet. Long term this bet is a -6.67% ROI losing bet for Average Joe. If he places $1 million worth of these bets he loses over $66000

The Rebate Syndicate did the form correctly and they receive final odds of 2.08-1 (1.80-1 plus 10% rebate). They were able to bet thousands to win as they knocked the price down to 1.80-1. Long term this bet is a +2.67% ROI profit maker for the Rebate Syndicate. If they place $1 million worth of these bets they win over $26000

Average Joe did nothing wrong when it comes to doing the form. But if this process continues he will be broke long term while the Rebate Syndicate makes a fortune. The whole scenario is very unfair on Average Joe. As a losing player he will never build up the confidence to increase his bets to get a big rebate like the syndicate. But even if he does this the syndicate will likely increase their bets further as the pool increases as with the Triple Crown races. When the pools get really big the syndicate just up their bets to 200K if need be so that they always get bigger rebates than Average Joe. I don't see any way for Average Joe to break this cycle

Sure occasionally Average Joe might find a bet that the syndicate does not have and so find a profitable ROI bet. But with the syndicate employing dozens of full time analysts and computer modellers these opportunities will be few and far between and Average Joe is better off spending his time doing other things

I think the 2 things that you failed to mention in this writeup are:

1) If Average Joe (AJ) determined that a certain horse deserves to be 2-1 and the horse goes off at 8-5, you're assuming that the horse wouldn't be 8-5 if nobody got rebates. But, isn't it possible that the horse was really an 8-5 shot and AJs calculations were off a little bit and the proper market price was really 8-5 and not 2-1?

2) When a horse who is supposed to be 2-1 (according to any handicapper who determines this) goes off at 8-5, that means another horse goes UP in price. So, what if there are 2 horses in the same race that deserve to be 2-1 and one of them gets hit down to 8-5, maybe in a perfect world, the other 2-1 will become value at 5-2.

[Stillriledup]

Originally Posted by thaskalos

Very good summary...IMO. Average Joe is not necessarily being "outplayed" by the whales...it's just that the betting outlets have allowed the whales to have more access to the wagering pools than Average Joe -- or even Above-average Joe -- has. The whale is plugged into the system and allowed to place his wagers at the last possible second...which is something that Average Joe is unable to do.

Take a look at the Del Mar Pick 5 pool with 100 minutes to post. Yes, 100. The pool is already almost 100k. That means to me, that "average joes" could care less about waiting till the last second or even waiting till the horses step on the track. Why in tarnation would you bet a pick 5 with 100 minutes to post?

So, i'm not really buying that too many people care about waiting till the horses are loading to bet. Most people have their bets in already.

[Seabiscuit@AR]

Stillriledup

for the purposes of my example you can simply assume that 2-1 is the break even price. There is no need to consider that maybe 8-5 was the correct price

The points behind my example were this

1. In a world of big rebates, a player with no rebates (or small rebates) can exhibit the same selection skills as a big rebate syndicate yet go broke at the same time as the rebate syndicate makes a fortune. Betting the same horses can send you broke thanks to the gap in price created by the rebate. If the rebate is 10% then the ROI on the bet might be +5% for the syndicate and -5% for the non rebate player. Or it could be +3% for the syndicate and -7% for the non rebate player. With big rebates it is very easy for the non rebate player to get "gapped" and fall below 0% ROI with their bets at the same time as the big syndicate makes big bets at a positive ROI

2. Given the time and resources available to the syndicate with their full time form analysts, the number of positive ROI bets missed by the big syndicates is likely to be very small. So the amount of profit playing these bets is going to be very small as your turnover will be very small (which again means no rebates for this player)

[castaway01]

Originally Posted by Stillriledup

Take a look at the Del Mar Pick 5 pool with 100 minutes to post. Yes, 100. The pool is already almost 100k. That means to me, that "average joes" could care less about waiting till the last second or even waiting till the horses step on the track. Why in tarnation would you bet a pick 5 with 100 minutes to post?

So, i'm not really buying that too many people care about waiting till the horses are loading to bet. Most people have their bets in already.

The Pick 5 is obviously different because you aren't waiting to see toteboard odds. Your bets in the 4th leg won't change before the first race, whether it's 10 minutes or 100 minutes.

Also, the facts are that 70% of the money is wagered in the last minute or two before post. It doesn't matter whether you "buy it" or not. Track the pool size at 10, 5, and 2, and 0 minutes to post time and you'll see that's when the money is bet. So you're factually wrong.

[AndyC]

Originally Posted by Seabiscuit@AR

Stillriledup

for the purposes of my example you can simply assume that 2-1 is the break even price. There is no need to consider that maybe 8-5 was the correct price

The points behind my example were this

1. In a world of big rebates, a player with no rebates (or small rebates) can exhibit the same selection skills as a big rebate syndicate yet go broke at the same time as the rebate syndicate makes a fortune. Betting the same horses can send you broke thanks to the gap in price created by the rebate. If the rebate is 10% then the ROI on the bet might be +5% for the syndicate and -5% for the non rebate player. Or it could be +3% for the syndicate and -7% for the non rebate player. With big rebates it is very easy for the non rebate player to get "gapped" and fall below 0% ROI with their bets at the same time as the big syndicate makes big bets at a positive ROI

2. Given the time and resources available to the syndicate with their full time form analysts, the number of positive ROI bets missed by the big syndicates is likely to be very small. So the amount of profit playing these bets is going to be very small as your turnover will be very small (which again means no rebates for this player)

I agree that scenario #1 would happen in the highly unlikely event that a bettor exactly mirrored what a syndicate bet. The takeaway from your example is to not bet like a syndicate. Find areas or betting opportunities that require information unavailable to the syndicates.

You greatly overestimate the abilities of the syndicates. If you are looking for positive ROI bets where they are focusing then there are probably slim pickings.

[jahura2]

Please excuse me if this question is naive but doesn't the above scenario encourage average Joe to stick with horizontal bets? i.e. p3 and p4? I am an average Joe but many on this board recommend WIN bets only. If I am up against the syndicates regarding WIN bets aren't exotics my better option?

[Poindexter]

Originally Posted by AndyC

I agree that scenario #1 would happen in the highly unlikely event that a bettor exactly mirrored what a syndicate bet. The takeaway from your example is to not bet like a syndicate. Find areas or betting opportunities that require information unavailable to the syndicates.

You greatly overestimate the abilities of the syndicates. If you are looking for positive ROI bets where they are focusing then there are probably slim pickings.

The point is that if rebates weren't in the game, these whales would not be knocking a 2-1 fair value from 5-2 to 9/5 there would be no benefit in doing so. They would have to leave a profit margin so they would likely knock the 5/2 down to 2.2 or 2.3. Joe public is now being rewarded with a long term profit instead of a loss if they handicap well.

Based off of what do you claim he is overestimating the ability of the whales?
Every article I have seen about them leads me to believe they are that sharp.

The bigger question is how does a game grow, when Joe Public is given a menu of one undervalued horse after another? Sure there are a few guys on this board that can overcome and even a couple that thrive with the Whales, but they are the rare exception....and this game isn't going to grow if you need a skill set that off the charts to do well or to even hold your own.

[Poindexter]

Originally Posted by jahura2

Please excuse me if this question is naive but doesn't the above scenario encourage average Joe to stick with horizontal bets? i.e. p3 and p4? I am an average Joe but many on this board recommend WIN bets only. If I am up against the syndicates regarding WIN bets aren't exotics my better option?

It is actually a good question, and I tend to lean that direction myself. I have no idea exactly what tools they have at there disposal. In this day and age it would not surprise me if they had the software capable of reading every combination bet and exploit those pools just as vehemently as they attack all the others. I sure do not trust that the racetracks have this info protected. I guess if so interested you can run a study of "live" horses that win and see if they are being hit hard in the pick 3 and pick 4 pools(in other words if a horse gets pounded from 4-1 to 8/5 and runs off-was he an 8/5 shot in the pick3's/pick4;s ending that race. Sounds like a lot of work to me, but it might answer your question. At the very least I am sure they are using win, exacta and daily double pools to help formulate their wagers in these pools.

[thaskalos]

Originally Posted by Poindexter

The point is that if rebates weren't in the game, these whales would not be knocking a 2-1 fair value from 5-2 to 9/5 there would be no benefit in doing so. They would have to leave a profit margin so they would likely knock the 5/2 down to 2.2 or 2.3. Joe public is now being rewarded with a long term profit instead of a loss if they handicap well.

Based off of what do you claim he is overestimating the ability of the whales?
Every article I have seen about them leads me to believe they are that sharp.

The bigger question is how does a game grow, when Joe Public is given a menu of one undervalued horse after another? Sure there are a few guys on this board that can overcome and even a couple that thrive with the Whales, but they are the rare exception....and this game isn't going to grow if you need a skill set that off the charts to do well or to even hold your own.

Every entity in the game is primarily interested in fattening their wallets. The horseplayers are the only ones interested in "growing the game"...because a healthy mutuel pool is the only means by which they can realize their own goals. The tracks and the horsemen couldn't care less where their profits are coming from. They would just as easily hope to grow their casino business, instead of the game.

[Stillriledup]

Originally Posted by Seabiscuit@AR

Stillriledup

for the purposes of my example you can simply assume that 2-1 is the break even price. There is no need to consider that maybe 8-5 was the correct price

The points behind my example were this

1. In a world of big rebates, a player with no rebates (or small rebates) can exhibit the same selection skills as a big rebate syndicate yet go broke at the same time as the rebate syndicate makes a fortune. Betting the same horses can send you broke thanks to the gap in price created by the rebate. If the rebate is 10% then the ROI on the bet might be +5% for the syndicate and -5% for the non rebate player. Or it could be +3% for the syndicate and -7% for the non rebate player. With big rebates it is very easy for the non rebate player to get "gapped" and fall below 0% ROI with their bets at the same time as the big syndicate makes big bets at a positive ROI

2. Given the time and resources available to the syndicate with their full time form analysts, the number of positive ROI bets missed by the big syndicates is likely to be very small. So the amount of profit playing these bets is going to be very small as your turnover will be very small (which again means no rebates for this player)

I think that if an Average Joe has the selection skills of someone who is good enough to win, he will win. The "profit" that the rebate players get is after the fact profit, the profit doesn't come out of the takeout. In other words, if the SA win takeout is 15.43 percent (or whatever it is currently) that takeout is how the odds are determined. If 100k is bet into a win pool at SA, they give back 84,570. Now, you did allude in an earlier example of having just 2 races per meet that were "Rebate free". But if the races were rebate free, and the win pool was 100k, the takeout still remains the same, so Average Joe is betting into a pool where the comeback is 84, 570. There's no difference for the Average Joe whether or not that 84,570 is being bet by rebate players or little old ladies from Pasadena.