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Old 09-26-2014, 10:40 AM   #1
OverlayHunter
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Bet Sizing

If a bettor typically wagers $100 to win into the large pools of Southern California and New York and only wagers horses anticipated to go off between 6:1 and about 20:1, that $100 wager has only a very slight impact on the tote odds. That same $100 wager at a minor track can move the tote odds down significantly.

Assuming for the sake of this question that the very late money that appears after most of us have wagered helps and hurts the bettor’s odds about equally over time, is there a formula that can help determine the optimal bet size at the tracks with smaller pools?

In other words, is there some mathematical way to roughly determine the bet size between the $2 minimum and the $100 that the bettor is comfortable with that will produce the maximum return to the bettor on a successful win wager?
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Old 09-26-2014, 01:02 PM   #2
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For my purposes, since I base wager sizes on the disparity between a horse's tote odds and the fair odds that I assign to the horse, I would use whatever consistent fraction of the full optimal wager size (as given by the formula (P-S)/(1-S), where P and S represent the decimal winning percentages corresponding to the horse's fair odds and tote odds, respectively) that most commonly resulted in an amount that was within my designated "comfort zone".
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Old 09-28-2014, 01:59 PM   #3
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Maximize Expected Value When Bets Move Line

Gentlemen,

This thread (especially, post 13 [Aaron Brown]) Maximize Expected Value When Bets Move Line may prove of interest...

John
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Old 09-28-2014, 05:55 PM   #4
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Quote:
Originally Posted by jfdinneen
Gentlemen,

This thread (especially, post 13 [Aaron Brown]) Maximize Expected Value When Bets Move Line may prove of interest...

John
My initial take on the point being made is that it seems similar to previous wagering strategies I've read about where the inclusion of a horse with a high probability of winning (even if that horse by itself is slightly underlaid) in a group wager with overlaid horses can result in a higher expected return than if the underlaid horse were excluded.
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Old 09-29-2014, 11:23 AM   #5
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Overlay Markets And Multiple Selections

Overlay,

You are correct. See Overlay Markets And Multiple Selections for equivalent argument with respect to the Kelly Criterion.

John
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Old 10-02-2014, 05:26 AM   #6
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Thanks for the insights, guys.
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Old 10-02-2014, 11:47 AM   #7
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Quote:
Originally Posted by Overlay
My initial take on the point being made is that it seems similar to previous wagering strategies I've read about where the inclusion of a horse with a high probability of winning (even if that horse by itself is slightly underlaid) in a group wager with overlaid horses can result in a higher expected return than if the underlaid horse were excluded.
My research has pretty much confirmed this. As a multi-horse win bettor, and a superfecta bettor, I have found that ignoring a lower priced horse, who you grade well, and is a definite contender under your own grading system, costs you more in the long run. Even if sometimes that horse wins but you have a negative return for the race, you lose less long term, in those circumstances than when you leave it off the ticket completely.

Of course this is contingent on you having a very good grading system. Otherwise, you may find that your average win prices and hit rates don't combine to produce long term profit.
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Old 10-18-2014, 04:12 PM   #8
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A crude first step might be to look at the average pool size at each track, take a look at the median payoff of your winners and do the math to see how much $100 win bet is likely to move your odds. It's a valid concern, at small tracks and at higher odds you can damage the ROI on longer priced horses pretty easily. A more elegant solution would involve custom code to monitor the pools and bet late with good estimates for what the pool will total from 0 MTP to the final odds. Code is definitely king in juggling this type of thing and he who bets last is really the only joker in the game who actually gets fixed odds as they know exactly what any horse will pay given their 'potential' wager. I don't even want to think about who's is paying who to have that luxury of their wagers being tied directly to the 'end of festivities button' however money being what it is I'm sure it's one more thing that has been bought and paid for without our knowledge.

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Old 10-18-2014, 06:33 PM   #9
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Thanks, MJC, a good piece of logic to throw into the mix.
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Old 10-19-2014, 10:48 AM   #10
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Quote:
Originally Posted by Overlay
My initial take on the point being made is that it seems similar to previous wagering strategies I've read about where the inclusion of a horse with a high probability of winning (even if that horse by itself is slightly underlaid) in a group wager with overlaid horses can result in a higher expected return than if the underlaid horse were excluded.
Assume I have some live 10-1 shot I think should be the 2nd choice and think the 8/5 favorite is the most likely winner, but a modest underlay. I will almost always include that favorite on my tickets. I might include him on top also because the expected ROI is usually still positive if I am right about the value on the 10-1 shot.

If the 8/5 was a dramatic underlay, then I'd toss him on top for sure, but possibly still consider him underneath.
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Old 10-19-2014, 12:45 PM   #11
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Quote:
Originally Posted by classhandicapper
Assume I have some live 10-1 shot I think should be the 2nd choice and think the 8/5 favorite is the most likely winner, but a modest underlay. I will almost always include that favorite on my tickets. I might include him on top also because the expected ROI is usually still positive if I am right about the value on the 10-1 shot.

If the 8/5 was a dramatic underlay, then I'd toss him on top for sure, but possibly still consider him underneath.
I agree, it really depends on the prices of all the horses you are considering betting. IMO, one low priced horse, among one or more mid to high priced horses can still offer value, if the field is large enough. In a smaller field, not so much, because too many people will have all the others covered in the exotics. I would say an 8 horse field would be the minimum for such a situation.

Sometimes the exacta will actually offer better value than the tri or super, due to the relatively cheaper cost of the smaller base bet tris and supers allowing more coverage by more people, when $2 is the exacta minimum base bet while the tri is $0.50 and the super is $0.10, for example. And, of course, the exacta pool is almost always larger also.

In win betting multiple horses, one must avoid prices in the sub 1/1 ranges, unless you have that horse calculated as an overlay. An underlay in that case would probably be better left off the ticket. One can accept a slight loss if the underlay wins, but not a larger loss due to an extremely low price on the underlay.
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