Monday, February 28, 2011

Triumphant return to horse racing

Excuse me while I pat myself on the back. I'm as pleased as punch with myself. I've been working on the horsies for the last few months, testing some ideas, formulating theories. On Saturday I pulled myself from horsie hibernation and entered an online tournament that Equibase ran. Pick a horse for each of eight races. Mythological $2 bets are placed on each horse to win and place. Highest return at the end of the tournament wins.

Out of 2,101 entries I finished 54th. Seven of the eight horses I picked finished first or second. That tied me with seven others for most picks finishing in the top 2. The race I missed, the horse finished third.

Not like I was picking favorites either. I hit a 14-1 horse to place, the longest odds of a horse finishing 1st or second. I also hit a 7-1 to win, the second longest odds of the winning horses.

My ROI on the bets were 88%. Not too shabby.

Sorry to be all full of myself but I cannot tell you how much this boosts my confidence. I am very, very, VERY jazzed.

As I've been working on this, my oldest son, who is 16, has become interested in it as well. I've given him the Dick Mitchell books I have (classics in the field) and he has been learning well.

It is not easy to make money on the horsies. It's why people call it gambling. Take this tournament, for instance. Of the 2,101 people who entered, if all of us had actually made the wagers we had for the tournament where we bet our horse to win and place, how many of those people do you think would have made money by the end of the tournament? Think about it a sec. Your horse had to come in first OR second to win your bet. How hard could that be? So how many do you think? Half? A third? A quarter?

Less than a quarter of the contestants made money. Some considerations with that figure. First, this is a tournament. This isn't a bunch of buddies going to the track and throwing down some bets while having a day out. You have to be into the horsies to know about and enter tournaments. So these should be knowledgeable people.

HOWEVER, there are a percentage of tournament players who will tank the tournament in desperate attempts to win. You can do this by playing longshots. Unless the tournament caps the payouts (which serious tournaments do to prevent this kind of "gambling" nonsense. This one did not.), if you hit a 50-1 longshot, you win the tournament. So you have some folks doing that.

You also have some folks who will play the favorites, thinking that if they hit the majority of the races, they'll win. That's why these tournaments do win and place bets. Take, for example, the third race at Gulfstream on Saturday. The awesomely named Nacho Business (get it, Not yo' business?) placed paying $3.60 on a $2 place bet. If you're betting $2 to win and place, you shelled out $4 on Nacho Business and even though you "won" that pick, you lost forty cents for a -10% ROI.

So, as any successful horseplayer will tell you, it comes down to finding out where the greatest positive expectancy is. In the sixth at Gulfstream (this is where the tournament races were held), I had San Pablo as the biggest sure thing of the day. It pained me to take him as I knew he would be bet down (he was, he went off at 3-5 odds and wired the field to win). But to me it was a crapshoot for second and even though the payoff might be greater for a longshot to place, the expectancy wasn't there. Between the win and place bets, I made $5.60 on my $4 tourney bet. I wasn't going to get better than that on any of the other horses in that race. Sure enough, the horse that came in second paid $5 to place. If you have an 80% chance to make $5.60 and a 5% chance to make $5, which do you take?

Likewise, when I was going over the races with my son, I said to him, "If we were actually betting these races today, we would be loading up on Deal Making in the 7th. He has the best expectation of any horse running today assuming the odds stay close". The morning line on him was 12-1, he went off at 14-1, finished second by a head and paid $14.40 on a $2 place bet. With a quick look at the standings, that head made the difference from me being top 10 and maybe even winning. Had he won, it would have been around a $44 payout between the $4 win and place bets.

And that's why I've been trying to put the time in on this. It's hard to want to bet a 12-1 horse, a horse that hadn't raced since 2009, unless you have the confidence in your methodology to do so. So again, pardon my exuberance, but I hope you enjoyed the primer on wagering.

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