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Old 09-02-2022, 03:58 PM   #1
rubicon55
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Wagering Managment

Seeking general opinions based on your ROI. Does it make statistical sense when structuring exotic wagers to also include a handicapped favorite that is also a contender as a wagering hedge? I play mid and longshots but throw in a favorite sometimes to hedge the exotic play to try and cover losses. In your opinion is that a long-term losing wagering proposition, money burner? Does the data crunchers have an opinion?
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Old 09-06-2022, 06:22 AM   #2
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Seeking general opinions based on your ROI. Does it make statistical sense when structuring exotic wagers to also include a handicapped favorite that is also a contender as a wagering hedge? I play mid and longshots but throw in a favorite sometimes to hedge the exotic play to try and cover losses. In your opinion is that a long-term losing wagering proposition, money burner? Does the data crunchers have an opinion?
I am hardly a data cruncher, but I did crunch some of my own data. Not in this area however. I have posted before I like the idea of playing the value horse in the 2 hole(depending on the strength of the favorite from $10 to $20 with favorite on top) and about 3 to $4 with the favorite in 2 hole behind your value horse. Assuming you have access to all of you plays(adw) then you can easily write down all of your straight play and see how such a strategy pays off. Obviously if the favorite is 1/5 the exacta play would be about $20 If he is 8/5 or 9/5 maybe a $10 exacta. I would go with $3 to $4 with favorite on top and this assumes you you are betting the horse for about $20 win place. If you are betting $200 win place, bet 10 times as much. If you only bet win, I would definitely use this strategy as it will cover you a lot (turning a loser into a winner).

All that being said, that doesn't answer your question, but you sort of figure out the answer to your question. We know favorites have the highest roi, I am sure if you ask someone will give you what that number is. I would guess that they lose about 12 or 13% on the dollar. Typically exacta payoffs are usually fairly close in number to what a parlay would pay from the winner to the horse who comes 2nd. So if the winner pays $4 to win and you 9-1 lay comes back $5.40 to place we can expect the exacta to come back at around $20 to $22 for $2($21.60 would be the parlay payout). The key point I am making is that for these plays to be profitable long run you have to overcome the fact that a good portion of your payout is below fair value(the win portion on the favorite). Thus you have to have enough value on the place portion (the payout of your horse coming second to place) to show a profit long run. In order for that to be true you pretty much need a positive roi on your win place betting. If your horses are showing a positive roi just on the win side but not on the place side or if they are not showing a positive roi in either area, I am pretty sure that you exacta plays pairing with the favorite will reach a similar fate. I would be really surprised if you did better on place betting than win betting.

I still think it is a pretty good hedge play(given the proficiency of favorites) for keeping your confidence level up and lessening the variance(which is very importlant). In the example I gave above if you just bet 20 win/place you got back $54 for $40. Had you made the exacta play I suggested, maybe $15 and $4, you $59 play would have got back (assuming exacta came back $22 for $2) an extra $165. Considering about 40% of the time your horse comes 2nd the favorite will beat it and maybe in low 30's when you horse wins, the favorite will come 2nd, I like the play whether it is a long term money maker or not. Obviously if you hate the favorite, you don't have to make the play in that specific race. But track your own data and see what it tells you. One problem that sometimes comes up is that you don't bet the right favorite (the 3 is 8/5 and the 4 is 2-1 and then the late money flows in(around the far turn) and suddenly the 3 is 2-1 and the 4 is 6/5). In this case you have made a play with what turns out to be the 2nd favorite and the rest of the story you can figure out.

Anyhow hope this helps. This is a tough game. If you are beating it, I am fairly sure this strategy will not transform you into a loser and if you aren't I am just as sure this strategy will not transform you into a winner.
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Old 09-06-2022, 07:01 PM   #3
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Seeking general opinions based on your ROI. Does it make statistical sense when structuring exotic wagers to also include a handicapped favorite that is also a contender as a wagering hedge? I play mid and longshots but throw in a favorite sometimes to hedge the exotic play to try and cover losses. In your opinion is that a long-term losing wagering proposition, money burner? Does the data crunchers have an opinion?
What exotics is going to make a lot of difference. For horizontals, there might be some good propositions that include low odds horses.

But the biggest factor is going to be learning which favorites you should be betting for or betting against. I suggest that you set up a chart and mark every favorite as either Bet For or Bet Against. Once you get good at that determination, your exotics should fall into place fairly well.
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Old 09-07-2022, 10:26 AM   #4
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My vertical play resembles the OP scenario.

Given a neutral opinion on the favorite and a few viable contenders, I'll try to beat the favorite in the exacta. I'll take a deeper swing if I'm against the favorite or contention is deep.

I will hedge with a legitimate favorite. I require it to be on top of a deeper vertical, like the trifecta or superfecta, not with other favorites, with at least one good price keyed underneath. If it's not an overwhelming favorite or I like it, I may allow it in the place position of the super, preferably accompanied by several upset winners and even bigger prices underneath.

The favorite dampens the payoff of an exotic. Why anchor the bottom of your play with the favorite, when you can beat it shallower, at a better value, with less risk? If I can win an exacta without the favorite, why would I try to hit the trifecta with the favorite dampening payoff on the bottom?

An underlay favorite to win is probably an underlay in the other pools, so I don't try to turn an underlay into an overlay with a clever vertical. But I will tilt into a short price to catch a clever pick underneath. Even if it's an underlay, it can buoy hit rate and give me the satisfaction of cashing my pick.

If I'm on the favorite, I try to play it lean, and not hedge against it.

I don't have enough of my own data to back up success or failure with this approach, but there's a lot of data-driven wisdom behind it.

One thing to keep in mind is that even with overlaid exotics, you can have long dry spells that look pretty ugly. You can properly bet a lot of 10/1 propositions going off at 12/1 and still lose a lot of money.

That's why I don't mind hedging a little with more likely contenders when I'm otherwise focused on more clever shots. I give myself a decent chance to win or minimize loss, with substantial upside.

I also tend to play every race I handicap, so I need to adapt accordingly. If you're playing races more selectively (as most agree you should), then you'd be less apt to hedge with neutral favorites, because you'd only be playing more lucrative races where you can beat the favorite.
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Old 09-07-2022, 10:32 AM   #5
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Another quick thought—my strongest opinion in a race is often a clever shot underneath, and ambivalence about the winner. This makes a favorite on top appropriate—perhaps dutched with other contenders.
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Old 09-07-2022, 11:56 AM   #6
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I've always liked the Mark Cramer "Exacta as place bet" when I have a longshot contender in a race with a decent favorite. Longshot to win and underneath the favorite in an exacta.
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Old 09-07-2022, 01:23 PM   #7
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thank you all for your observations, I can tell seasoned players responded and best of luck to you all.
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Old 09-07-2022, 01:31 PM   #8
rubicon55
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Originally Posted by Poindexter View Post
I am hardly a data cruncher, but I did crunch some of my own data. Not in this area however. I have posted before I like the idea of playing the value horse in the 2 hole(depending on the strength of the favorite from $10 to $20 with favorite on top) and about 3 to $4 with the favorite in 2 hole behind your value horse. Assuming you have access to all of you plays(adw) then you can easily write down all of your straight play and see how such a strategy pays off. Obviously if the favorite is 1/5 the exacta play would be about $20 If he is 8/5 or 9/5 maybe a $10 exacta. I would go with $3 to $4 with favorite on top and this assumes you you are betting the horse for about $20 win place. If you are betting $200 win place, bet 10 times as much. If you only bet win, I would definitely use this strategy as it will cover you a lot (turning a loser into a winner).

All that being said, that doesn't answer your question, but you sort of figure out the answer to your question. We know favorites have the highest roi, I am sure if you ask someone will give you what that number is. I would guess that they lose about 12 or 13% on the dollar. Typically exacta payoffs are usually fairly close in number to what a parlay would pay from the winner to the horse who comes 2nd. So if the winner pays $4 to win and you 9-1 lay comes back $5.40 to place we can expect the exacta to come back at around $20 to $22 for $2($21.60 would be the parlay payout). The key point I am making is that for these plays to be profitable long run you have to overcome the fact that a good portion of your payout is below fair value(the win portion on the favorite). Thus you have to have enough value on the place portion (the payout of your horse coming second to place) to show a profit long run. In order for that to be true you pretty much need a positive roi on your win place betting. If your horses are showing a positive roi just on the win side but not on the place side or if they are not showing a positive roi in either area, I am pretty sure that you exacta plays pairing with the favorite will reach a similar fate. I would be really surprised if you did better on place betting than win betting.

I still think it is a pretty good hedge play(given the proficiency of favorites) for keeping your confidence level up and lessening the variance(which is very importlant). In the example I gave above if you just bet 20 win/place you got back $54 for $40. Had you made the exacta play I suggested, maybe $15 and $4, you $59 play would have got back (assuming exacta came back $22 for $2) an extra $165. Considering about 40% of the time your horse comes 2nd the favorite will beat it and maybe in low 30's when you horse wins, the favorite will come 2nd, I like the play whether it is a long term money maker or not. Obviously if you hate the favorite, you don't have to make the play in that specific race. But track your own data and see what it tells you. One problem that sometimes comes up is that you don't bet the right favorite (the 3 is 8/5 and the 4 is 2-1 and then the late money flows in(around the far turn) and suddenly the 3 is 2-1 and the 4 is 6/5). In this case you have made a play with what turns out to be the 2nd favorite and the rest of the story you can figure out.

Anyhow hope this helps. This is a tough game. If you are beating it, I am fairly sure this strategy will not transform you into a loser and if you aren't I am just as sure this strategy will not transform you into a winner.
thank you poindexter, your stats is bearing out in my plays as well as there does not seem to be long term value playing the fav with the longshot every time but maybe I should use this as more of a spot play possibly combined with maybe jockey and trainer stats for added value.
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