Where did all the horses go?

[thaskalos]

Originally Posted by HalvOnHorseracing

I did an article called Gambling, Skill and Millennials. I agree with what you said.
http://halveyonhorseracing.com/?p=2406

This is my own, personal definition of "gambling":

If a person places money at risk with the EXPECTATION of long-term gain...but WITHOUT knowing precisely when that "gain" will be realized...then he is GAMBLING, and not "investing".

The "winning" horseplayer and the "winning" poker player are both DECEIVING themselves when they call themselves "investors"...because they both admittedly play only with "money that they could safely afford to lose". And that proves conclusively that they acknowledge the "gamble" in their respective endeavors.

[HalvOnHorseracing]

Originally Posted by AndyC

If a person goes to the track with $250 they will play for 4 hours and bet maybe $250 to $400. A person goes to a casino and they are betting that much in an hour at the tables. Constant action, no waiting around.

Living in So Cal I see that just about every casino in San Diego county is currently expanding their casinos because gaming revenue is skyrocketing.

Given that less than 5% of bettors have an edge a wide menu is needed just to keep interest up. It's not the edge that thrills the players it's the action.

If you need that constant action, I guess either you wait for a simulcast day with 20 tracks running, or start pulling the slot handles. Losing your money faster doesn't appeal to everyone, and if you read my millennial article, it especially doesn't appeal to them.

I'm not sure what the wide menu is at a casino. Slot machines with different pictures on the wheels? After you get by slots, craps, blackjack, the poker room and some exotic games like pai gow, it's all just variations on the minimum bet.

I'm not going to challenge the statement that gaming revenue is exploding. Perhaps people were satisfying their urges in Vegas, but now have a local product to play at. But Vegas is losing gaming revenue each year and trying to replace it with secondary revenue streams (restaurants, e.g.)

[HalvOnHorseracing]

Originally Posted by thaskalos

This is my own, personal definition of "gambling":

If a person places money at risk with the EXPECTATION of long-term gain...but WITHOUT knowing precisely when that "gain" will be realized...then he is GAMBLING, and not "investing".

The "winning" horseplayer and the "winning" poker player are both DECEIVING themselves when they call themselves "investors"...because they both admittedly play only with "money that they could safely afford to lose". And that proves conclusively that they acknowledge the "gamble" in their respective endeavors.

Well, the glass is either half-empty or half-full based on your perspective. I've been successful enough as a horseplayer that I believe anyone can beat the game with the right approach, even if there is always an uncertainty big enough to call it a gamble.

[thaskalos]

Originally Posted by HalvOnHorseracing

Well, the glass is either half-empty or half-full based on your perspective. I've been successful enough as a horseplayer that I believe anyone can beat the game with the right approach, even if there is always an uncertainty big enough to call it a gamble.

Yes...you've BEEN "successful enough as a horseplayer". But...how confident are you that you will win money in this game THIS YEAR...or well into the more distant FUTURE?

The "past" isn't the "gamble". The FUTURE is where the gamble resides.

Let's say that you've spent your entire bankroll while renovating your home...and the "highly profitable" spring and summer-racing months find you without the "ammunition" necessary for your usual style of betting. Would you consider borrowing serious money in order to bet in "full-force"? And..if not...WHY NOT?

[whodoyoulike]

Originally Posted by Andy Asaro

When SB1072 was passed the TOC got a windfall for purses (Customer subsidized purse welfare). At the time they could have restructured the way purses are paid to help the smaller barns survive like making win 55% instead of 60%. They also should have had participation bonuses on a sliding scale. What happened is the most successful barns (10%) win 85% of the purse money. With that money they go out and by faster and more expensive horses while some barns have trouble buying feed. This is the direct fault of the TOC and Mike Pegram. They never represented all owners they represented the top 10% of Owners. Expenses are too high for the small barns to break through. People like Pegram, Baffert, et al who sit on the TOC executive board could care less about the small barns. They believe they're entitled to all the money.

We had a Triple Crown Winner recently. Where are all the fans/gamblers who were supposed to fall in love with horse racing? It was meaningless as far as growing the game.

From 2011: http://www.drf.com/news/raffetto-nam...d-troubled-toc

Excerpt:

When pressed on the issue by horseplayer Andy Asaro, Pegram said the takeout would not be lowered. "I'm not willing to take an 18 percent cut," Pegram said.
"This was about increasing purses and becoming competitive in California with other jurisdictions," Pegram said. "It was a collection of all horsemen that supported this bill. I know it's controversial. I understand."


In horse racing the best environment is one where people can work hard, improve their skills, and become successful. That is now harder than ever in California.

Good points. Re: the bold portion, I think AndyC* concluded something similar while you were gone. The TOC really doesn't care about the betting horse players.

* In case AndyC and others think I'm name dropping, I remember his post a while back mentioning just how much influence and the focus of the TOC in Cali. At the time there was an effort by other owners to start another owners group.

What happened to that one because there were a couple of well known owners who wanted to improve Cali racing?

[acorn54]

Originally Posted by HalvOnHorseracing

Well, the glass is either half-empty or half-full based on your perspective. I've been successful enough as a horseplayer that I believe anyone can beat the game with the right approach, even if there is always an uncertainty big enough to call it a gamble.

there's alot more to growth of money. there is the difficulty of getting ones's capital to grow at a reasonable rate, with reasonable effort.
i think anyone would be hard pressed to argue that the venue of capital input into the parimutuel pools is not more difficult for growth of one's money, than say the vanguard index fund, where one can just put money into the fund and forget about the money, and get a return of 9 percent.
with payouts on horseracing you have TRIPLE taxation

1-dime breakage

2-capital gains

3-takeoout

with an ira your money will grow tax free, plus you will get dividends

you only get taxed once on ira money

[thaskalos]

Originally Posted by acorn54

there's alot more to growth of money. there is the difficulty of getting ones's capital to grow at a reasonable rate, with reasonable effort.
i think anyone would be hard pressed to argue that the venue of capital input into the parimutuel pools is not more difficult for growth of one's money, than say the vanguard index fund, where one can just put money into the fund and forget about the money, and get a return of 9 percent.
with payouts on horseracing you have TRIPLE taxation

1-dime breakage

2-capital gains

3-takeoout

with an ira your money will grow tax free, plus you will get dividends

you only get taxed once on ira money

True. But the horseplayer is looking for a much greater return than just 9% annually. A modest 1.10 ROI is enough to DOUBLE the ambitious player's bankroll...in a mere THREE MONTHS, or even LESS. And I've seen several posters here who've boasted of an ROI much higher than 1.10

[dilanesp]

Originally Posted by HalvOnHorseracing

Going broke isn't hard no matter what sort of bettor you are. All you have to do is bet when you don't have an edge. I don't think amount is critical. Betting $2 or $200 isn't important as long as you are betting a horse with odds higher than its probability of winning. It's that calculation that is tough, but less tough than calculating the edge in a complicated exotic.

Well, no. Risk of ruin (the statistical term for going broke) increases not only based on the the size of your skill deficit (i.e., not simply that you don't have an edge, but how far from having an edge you are), but also the variance of the game, and the size of the bankroll, of course. It is entirely possible to go broke betting a game that you have an edge in (happens to poker players all the time) simply because the player runs bad and/or is inadequately rolled. And in contrast, in a high variance game, it can take a very long time for results to converge on the mean, which means it is possible to beat the game or stay afloat for a very long time without having an edge. (The classic example of this is the stock market-- according to the efficient markets hypothesis, nobody likely beats the market except by using inside information or arbitrage, but of course plenty of people have outperformed the market for substantial lengths of time, because there's so much variance in the financial markets that it's possible to get lucky and run good for a very long period of time.)

And the key point about horse racing is that any game with live animals has a ridiculous amount of variance. Which increases risk of ruin. Exotic bets increase the variance (any outcome that depends on two high variance events happening will have greater variance than an outcome dependent on the occurrence of a single such event) further, thereby increasing risk of ruin even more.

[Tom]

Originally Posted by Track Phantom

Thanks Mark. I know it's a tough situation and working with a short deck. I wish you and all of the people at MNR the best of luck. I've supported MNR for years with my wagering dollars and continue to do so. As the product improves and the races become more intriguing, my handle will rise up with it.

I am sure there are reasons.
But I don't care what they are.
If I go to a restaurant, and they are out of potatoes, out of beer, out of steak.........I don't care. I go elsewhere.

I am the customer. I am all that matters.
Unless someone else is paying my way.

[HalvOnHorseracing]

Originally Posted by thaskalos

Yes...you've BEEN "successful enough as a horseplayer". But...how confident are you that you will win money in this game THIS YEAR...or well into the more distant FUTURE?

The "past" isn't the "gamble". The FUTURE is where the gamble resides.

Let's say that you've spent your entire bankroll while renovating your home...and the "highly profitable" spring and summer-racing months find you without the "ammunition" necessary for your usual style of betting. Would you consider borrowing serious money in order to bet in "full-force"? And..if not...WHY NOT?

I don't want to give away my financial position, but capitalization is not an issue. But the answer is that if I was having to choose between paying the rent and playing the ponies, the rent wins. I would probably confine myself to either cutting way back on my bets or doing something like not playing most of the year and playing Saratoga in my normal way unless things were really desperate.

However, there were times in my life when I had to depend on winning at the track to have enough income. Thankfully I've been lucky I never defaulted!

[thaskalos]

Originally Posted by HalvOnHorseracing

I don't want to give away my financial position, but capitalization is not an issue. But the answer is that if I was having to choose between paying the rent and playing the ponies, the rent wins. I would probably confine myself to either cutting way back on my bets or doing something like not playing most of the year and playing Saratoga in my normal way unless things were really desperate.

However, there were times in my life when I had to depend on winning at the track to have enough income. Thankfully I've been lucky I never defaulted!

I don't want you to give away your financial position...and I am not suggesting that you are undercapitalized. I was speaking hypothetically.

The point that I was trying to make is that what we are doing is GAMBLING, and not "investing"...because we are not taking out loans to finance our play. There is an inherent RISK in what we do...and this causes us to take certain safety precautions during our play. They call that "gambling"...IMO.

[classhandicapper]

Originally Posted by thaskalos

It isn't necessarily true that the exotics have "greater volatility" than the win-bets. With the 10-cent supers and the 50-cent trifectas currently offered...the "average player" could spread out enough to control the "volatility" inherent in exotics wagering. In fact...I think the vast majority of the exotics bettors started betting the exotics because they couldn't handle the "volatility" associated with win-betting.

If you are spreading enough to reduce the volatility of exotic wagering so it's equal to win betting you are eliminating the attraction of exotics to those novice players - which is to make a score.

If I bet $100 win on a 7/2 shot and someone else bets a load of combinations for $100 and winds up getting 7/2, the volatility is the same, but why bother?

[HalvOnHorseracing]

Originally Posted by dilanesp

Well, no. Risk of ruin (the statistical term for going broke) increases not only based on the the size of your skill deficit (i.e., not simply that you don't have an edge, but how far from having an edge you are), but also the variance of the game, and the size of the bankroll, of course. It is entirely possible to go broke betting a game that you have an edge in (happens to poker players all the time) simply because the player runs bad and/or is inadequately rolled. And in contrast, in a high variance game, it can take a very long time for results to converge on the mean, which means it is possible to beat the game or stay afloat for a very long time without having an edge. (The classic example of this is the stock market-- according to the efficient markets hypothesis, nobody likely beats the market except by using inside information or arbitrage, but of course plenty of people have outperformed the market for substantial lengths of time, because there's so much variance in the financial markets that it's possible to get lucky and run good for a very long period of time.)

And the key point about horse racing is that any game with live animals has a ridiculous amount of variance. Which increases risk of ruin. Exotic bets increase the variance (any outcome that depends on two high variance events happening will have greater variance than an outcome dependent on the occurrence of a single such event) further, thereby increasing risk of ruin even more.

The thing about horseracing is that your competition is the guy standing next to you at the rail. Which is to say it is pretty much a truism that the if there are winners, the highest probability is that they will be some combination of the best handicappers and best bettors.

While I said going broke is easy, and on any given day the guy betting trifectas based on his kid's birthdays can be a winner, in the long run for the best players to lose would take severe bad luck or lots of mistakes (like betting when you are on tilt or betting when you have no advantage or betting a lot to make a little).

The last point I'll make is that a certain percentage of the variance can be overcome by the more skilled player. You can't necessarily overcome a crappy ride, but you can know that Jockey X can't hold a horse on a line around the turn. The difference between horseracing and poker is that once you become a superior poker player, if you play in big events, you often wind up playing against your equals in terms of playing skill, in which case luck (or variance) and player strategy (like knowing how and when to bluff) becomes a much larger determinant of how well you finish. But in horseracing, the percentages are not fixed in the same way they are in poker, which means skill at calculating overlays is at a huge premium. The market is only really efficient a third of the time, and by definition any non-favorite that wins must have been an overlay. Horseracing is harder than poker, but the potential for payoffs that far exceed true odds is also higher.

[acorn54]

Originally Posted by thaskalos

True. But the horseplayer is looking for a much greater return than just 9% annually. A modest 1.10 ROI is enough to DOUBLE the ambitious player's bankroll...in a mere THREE MONTHS, or even LESS. And I've seen several posters here who've boasted of an ROI much higher than 1.10

i can agree with what you say taskalos. the 65 million dollar question is does a person want to utilize their much greater share of time to get that uncertain chance that they will get 1.10. its a VERY big question of oppy cost on the part of the player.

[Lose The Juice]

Isn't the thread title an old Pete Seeger song?