Changing Betting Behavior is Tough. In North America, Maybe Even Impossible

The Premier of my province came on the tee vee the other day asking the Feds to suspend their carbon tax increases which have driven up the price of home heating and gasoline to super-high levels. For a province as poor as this (Maritime provinces are poorer than the poorest US state), it does have some appeal. 

The most interesting part of the speech for me, was when he talked microeconomics. He noted, correctly, that this province being very rural can not change its behavior. People can't bike to work, take the subway, install solar panels or buy electric cars. It's the land of trucks for winter, hauling in summer; chainsaws and driving; tractors for snow removal. This place just ain't built for it. 

Over in wagering land, Crunk has spoken a little about the new exchanges trying to break into sports betting (and before them, racing) land. They simply can't get any volume. This despite, just like the carbon taxes, there's an incentive (on price) to play them. How can this be?

In my view, there are some obvious explanations. 

Regular consumers are not as price sensitive as they think, and companies take full advantage of it. I can get cable, cell phone coverage and internet for $200 per month, but the person across the street - even if he or she knows they can get this value - gets swayed by "bundles" from the big guys, and pays $350. This, in subscription models, is known as stickiness. 

I see bettors "cashing out" a bet at their sportsbook at incredibly bad prices. They know they shouldn't, and an exchange could yield them hundreds or even thousands more at the end of the year, but they go on doing it. It's just too much trouble, and the stickiness is too favorable. We see similar with rebated ADW's versus the big dogs. 

I think it's immutable truth at this point - lots and lots of casual bettors don't care a whole about price. 

I see there's a difference, however, between my province moving hell and earth to change chainsaw behavior and your average bettor who can change by line, website or ADW shopping : The infrastructure to enable those who may want to change is not mainstream or available enough. 

The rebated ADW doesn't have Churchill (they know all too well what they're doing when they withhold signals... they're like a big telco); the exchange is tied up in red tape in state after state. You or I can not click a button to cash out at $180 proceeds instead of $155 with any ease whatsoever. 

To be clear, there are people who do this regularly - the high volume, professional or semi-professional player. ITP does this. Many others do, including people in Australia who have many accounts for horse racing, and shop for best prices on exchanges and bookmakers. These mediums have grown from a paltry amount of volume to many billions. This fact is exacerbated, likely, because of the love of win betting downunder, compared to here. 

I believe the infrastructure will not change appreciably, certainly for horse racing, but likely for sports betting, too. And with that, I doubt the casual fan changes either. For the future of betting games in North America I think that portends less innovation, and in the end less overall growth, if any. 

Unlike my snow removal tractor and chainsaw neighbors, casual bettors can pivot on price and medium if they really wanted to, but they haven't and likely won't very much at all. And this industry, whether it be sports betting or racing, isn't going to do anything that gives them a push. 

Have a really nice Wednesday everyone. 

If There's a Track that Could Use Insideharness.com, it's Mohawk

I texted a friend who is a very seasoned player last week and asked a simple question I've asked a million times. 

"Anything to look into at Mohawk?"

The response - "It's so hard to know who is trying."

Mohawk, like we've seen at several harness tracks in the new age of harness racing, has been one of the "wait until next week" tracks. Bad post, not an ideal scenario, we might be able to drop and be 1-5, we should just wait until next week.

This has happened a lot in the sport, even in the olden days (i.e. 10 or 15 years ago), when it comes to half mile track racing. Punishing a horse from the 8 who could win just wasn't done a whole lot, because in seven days the horse could get a good post and try for the win. But nowadays it has, in my view (and the view of many, like my friend above) changed to include even mile or 7/8's ovals. 

Earlier this summer the Meadowlands, in their quest to combat this phenomenon, partnered with Insideharness.com, and track owner Jeff Gural asked participants to sign up, and share insight. There, 60 to 80 comments a night by trainers and/or drivers, give some details into the horse's intent. Even simple words like "bad post", or "missed time" tend to help guide customers through the murky morass we've seen in the sport. They can be helpful. 

Over at Mohawk, which is on insideharness.com, there's been no such push. Trainers like Chantal Mitchell post in studious fashion, and a few others have from time to time, but it's pretty much a ghost town. 

With the head scratching betdowns to 2-5, form reversals, and my friend who doesn't seem to have a clue who "might be trying tonight", Mohawk has been at times completely bizarre to wager the last year or so (I have stopped completely). If there's a track built for insideharness, it's probably the Campbellville oval. It'd be nice to see a Gurallian push there, as we've seen at the Meadowlands. 

Notes - 

Parx has always been a bit odd, in my view. The slots-infused purse track was reticent to reduce usurious takeout in the past, and today announced a change to their menu. They don't have one jackpot pick 5 but two! It seems like a track that takes one step forward and two steps back. Or maybe even three. 

We complain about races taken off the turf late, but in the NFL this happens, too. Nathan Peterman was supposed to start for the Bears on Sunday because the listed starter hurt his ribs in warm ups. The line moved a full 2 points, and I expect thousands of DFS teams were subbing. But out trotted Trevor Simean instead. What a miraculous healer. The big difference of course is that the NFL doesn't depend on gambling to survive like racing does. But I did find it a bit comical. 

Rich Strike lost this weekend. I just thought you'd want to know. Poor Rich Strike. 

Charles Simon is back on twitter again. I wondered if Elon Musk banned him for his view that Flightline was smart to retire from racing. Then I realized Elon is for free speech, even if it's for opinions as wrong and horrible as that was. So it must have been something else. Welcome back though Chuck!

Enjoy your Monday everyone. 

There's All Kinds of Handicapping Biases

As seasoned bettors, arguably nothing befalls our selection process more than biases. They are truly a pox on our house. 

I woke up this morning to see headlines blaring, "Kirk Cousins Shuts Down Prime Time Stigma" as he went 30 for 37 for 299 yards in a win over the New England Patriots last night. 

There's a whole lot of bias going on with most headlines nowadays, and I guess this is just one of many. But, let's break it down. 

Selection Bias

This deadly bias is where we see what we want to see, or alternatively, repeat what others are seeing (because we don't do the work). 

We see a "prime time" 11-18 record or watched a few games and saw a bad performance or two from Cousin Kirk, and we heard it on talk radio. He sucks under the lights! It has to be true, right? 

Here are a couple of Cousin's Prime Time game stats. 

36 for 49 for 422 yards, 3TD's 0 INT 

41 for 53 for 449 yards, 3TD's 0 INT 

His teams lost both those games. 

Overall, Cousins in early games throws for 260 yards per game with a QBR of 100.3 with a record of 46-31. In Prime Time he throws for 272 yards per game with a QBR of 95.9; which makes sense because national games (or playoffs) the team is likely facing a tougher opponent/defense which results in a lower QBR (and does for every QB). 

Since 2014, he ranks 9th in QBR in Prime Time, just ahead of  another QB who captained 7-9 type teams for most of his career, Matt Stafford. 

Over in horse racing land, we can see this bias a lot with rider or driver changes. We select the time the rider change worked to remember, but forget the times it didn't. It can cause us to come to some really bad conclusions. 

This, as we notice in horse racing, is the "I see what I see with my own eyes, so don't tell me anything else" bias. The problem is, our eyes remember things selectively. We should not do that. 

Recency Bias

This is one I think we do much better with in horse racing than sports radio narratives do. We often discount the performance of a horse's last race, where they don't. 

Cousins played earlier this year in Prime Time and was ineffective, probably due to a 55% pressure rate, where few signal callers do well. But it was there. It was the last game in people's minds, so last night's performance becomes an outlier, probably due to our next bias. 

Results Bias

This is an ugly one. If New England didn't have a TD called back, Cousin's performance last night might be a loss, adding to the negative record. It's another game in the "he stinks" column. Mike Florio over at Pro Football Talk will have written a story about it already. 

Results bias is at play with everything we do in horse racing. I have a friend who has been doing woeful at Mohawk, however, he hit a couple tickets lately. Those results don't mean much, other than the random, and nothing can be concluded from them. He should, and will, tread lightly, despite the result. 

We've heard it before - it's the process, not the result. We can hit something without a good process, but we can't be fooled by it, because the process matters infinitely more. 

Last up - Confirmation Bias

This too is another dandy. And it causes many of us a lot of trouble. 

I don't know how many angles I thought were right, that over time were not, but I stuck with them far too long. 

"Look at that, see I told you!" We tend to believe what we want to believe. 

I see Kirk Cousins with happy feet (I might too, as he's seen over 20% pressures in his career playing behind some bad lines), behind in game trying to make something happen as lots of 8-8 team QB's do, and throwing some woeful passes. It confirms to me that he's no damn good. But by doing that I miss some very, very good passes and performances. 

I see a horse who is 0 for 15 who lost a few photos where I bet that is a no trying nag. When in effect we should be unbiased enough to know the horse was just being beat by faster horses. 

If we look for a confirmation of our bias we will find it. We will absolutely find something that confirms our belief. But it doesn't mean we're right. 

In sports land we can hear a lot of noise, because talk radio and talk twitter needs to fill time. I'm old enough to remember when Peyton Manning was a choker because of his early playoff record; LeBron, is he a "winner"; is Eli better than Peyton because he has more "rings" (how laughable was that one). Ovechkin can't win a Cup.

Like with most things, the extremes never tell a story. The horse we bet, is what the horse is; from his races and past performance lines. There's little mystery surrounding him or her. 

There's not much mystery in Cousin Kirk. He's no Dan Marino or Aaron Rodgers, but if it's dark outside, he's no Nathan Peterman either. 

Have a great weekend everyone. 

Promising and Overdelivering, Like Frenchy

Back in the 1970's in the northern tundra there was a guy in town who everyone knew, Frenchy Clouthier.

Frenchy dropped out of school early and became a mechanic, and he could fix pretty much any machine in a jiffy. He also had a propensity for being a bit of a daredevil on these machines; cars, trucks, bikes or at a place perpetually under snow cover, snowmobiles. 

One day word was getting around that Frenchy was going to do something pretty wild. Right in the middle of town he was going to cross the river - not a small river, a fairly big one - in his suped up snow machine. 

Now, this might've not been the biggest story ever in January, because the ice was four feet thick. But he was planning to do this in July when the river was, well, a river. 

A grade school friend and I got a ride from one of our parents because we had to see this spectacle. We had no idea how Frenchy was going to pull this off. We set ourselves up on the bank in a good spot, along with most of the town. 

Right on cue Frenchy barreled down the hill in his ski-doo, reaching blazing top speeds; gravel and sand flying everywhere. We held our breath, wondering if Frenchy was going to end up, metaphorically, crashing into Arnold's chicken stand. 

The machine's skis hit the water, and instead of plunging directly into the depths of the cold river, sinking both man and beast down to the bottom, something amazing happened. Frenchy and the snowmobile just kept going. And going and going. He reached the bank on the other side, and waved to whatever-many incredulous locals. 

When in my real life over the last twenty years I give a seminar on under promising and over delivering, I sometimes talk about Frenchy. That man surely could deliver. 

In the sport of horse racing I don't think we've ever had an underpromise. And really, who is promised what can differ, sometimes in an opposing way. 

We promise horsepeople they can qualify a horse in 45 days which is good for them, but it's injurious to bettors. 

We promise dreams about lasix free racing, but that goes against the trainer you sold your bleeder to because the horse can't go without the drug.  

We promise uniform rule books, and then we don't deliver adjudicating or the calling of these rules consistently because we treat them like guidelines. 

It's Newton's Law of Motion - we put forth something with a promise, but an equal and opposite reaction from another fiefdom pays the price, which always results in an under deliver. This sport's promises are a paradox. 

Racing, I have always believed, should have always played a whole lot of small ball. It needs to promise what can be achieved and do that one small thing well by overdelivering. Then do more of them. There is no doubt in my mind it can be done - with ADWs, track rules, consistent judging, myriad things. However, I think the culture is so broken and so overcome with the fiefdoms, and arguments, and intransigence, it can't embrace it. 

Business is at times one of the most pure, simple vocations. If you are telling customers you're going to cross a river, you need to make sure you get to the other side. 

Have a great Monday everyone. 

Racing's Forever A/B Testing Problem

I was listening to a twitter spaces last week, and I think it was Keith Bush (@thoreval) who brought up the concept of properly testing takeout rates to receive actionable data. That's a good question. 

I was reminded of these testing questions just this past week when training for a revamp of a tech platform - you know, new stuff from the smart people. The sales team and engineers had been working on it for tens of thousands of man hours costing millions and millions of dollars, and when it was released, it was met with a thud. At the training session I thought there was going to be a riot. There was no feedback loop, no preliminary testing, nothing was nimble, it was just built as an end product.  

The more noise you have, the more insular you are, the more complex the decision making tree, the more cooks in the kitchen, is (and always has been) inversely correlated to accomplishing your testing goals. 

Meanwhile for a complete shock to the system at the other extreme, I log onto twitter last night, where I see people talking about how twitter is now broken. I don't know if that's true or not, but this loop is certainly the diametrical opposite. 

Musk buys twitter, seemingly thinks of a few things to test on the way to work, and an hour later the engineering team has it out to the world of 200 million or so users. There's real-time feedback, and they can reverse the change after a sandwich at lunch. The team keeps going in a game of whack-a-mole, or shuts it down completely and tries something new. All of this is done transparently. 

This type of testing has never been done in human history in this way. Early on, there's ample evidence it's stupidity, and maybe it's a certainty business books we geeks read for fun will conclude so. But since we have no test-case for comparison, who the hell knows.  

Racing, as we all know, doesn't have a single person owning the entity. And, with its built-in protectionism this sport is not even approaching my training session company in terms of testing and feedback of policy change.  Achieving an A/B test on lasix, or takeout, or track off-times, or a hundred or a thousand others things to do with wagering is where ITP responds with his laughing Mike Tyson gif - it's not happening. 

This is a fascinating world and change is happening in real-time right in front of our mugs. It'll be written and spoken about for generations. What a time to be alive. 

But racing's forever A/B testing problem ensures it won't be a part of it; the good parts, or the bad. It's simply stuck in its lane. It can't change from blinkers to an open even if it wanted to. 

Have a nice weekend everyone. 

  

Election Wagering Recaps

Happy Wednesday everyone!

Another night of election wagering is completed - or not really completed, as the country who brought us the loom, the tractor, the hulu hoop and the iPhone takes days and days to count ballots - and it was about as advertised. It's really, really hard to bet properly now. 

With early voting, state by state differences in the counting of votes, and shifting demographics and opinion (Florida is red and so is Ohio now), it was terribly difficult to form mathematical based decisions. One thing I do know, and this has happened and probably will continue to, fading a narrative wins money. 

People getting home from work and moving the markets heavily against Democrat candidates were Joe Kennedy shoe shine boys giving stock tips. That's always good to fade, and if you did, you were in great shape before any vote was counted. In fact, you could've made some decent money, because the R's were overbet. 

But, and this is an issue for us folks who actually want to get a bet down - it was hard to get a bet down. One site I use was 404 errored for hours. There is a obviously a market for betting these elections - 404 errors because of too much traffic means offer more of it, not less. If some exchange somewhere did this properly, like Betfair did long ago on theirs where you could get a $50,000 bet filled, they'd probably do 100 million or more in handle. But sadly, it's 1991 out there, and 404 errors still happen. 

Luckily (although there's still counting going on) I did get a wager down against Kari Lake in Arizona at plus 400 right before a 404, so that might give me some pocket change when all is said and done, but it's close. 

As for my betting results, I played fine, and since it was harder to get a bet down, and I didn't feel comfortable, I didn't spend much. I got great CLV on Oz at +150, who ended up -200. I don't mind losing good bets. I bet a couple of longshots that got bit by vote ticket splitting, small, so that was meh. I took some value on the D in Nevada a few weeks ago, and she looks like she might pull it out by a hair. I got beat in a house race that I thought was a slam dunk, so that was bad. 

Polling error did bite me, where I am close to losing a great CLV bet of a margin in Iowa. The books moved it down 3 points after I bet, and I am still teetering right on the edge. Again, great CLV, but possibly a bad result. 

Hell, this is a night when the New York Times "needle" went down for an hour for track maintenance. Why? Because they programmed this remarkable piece of machinery (it truly is programmed amazingly well, so kudos) fat-fingered with Louisiana as Democrat. Strange things happen when betting elections. 

Last up, when you get into the weeds of betting one thing doesn't escape me - this political business is cutthroat, dirty and in some ways disturbing at its highest levels. But other than looking at numbers I did watch some coverage. I saw a picture of a successful businessman running for Congress with his beaming mom -  a mom who escaped Saigon in the 70's. I saw a clip of a woman running who was homeless and strung out on every drug in the book, change her life and run for a seat in Pennsylvania. 

As dirty and annoying the highest levels can be, the grassroots is wonderful, and we're lucky to live in countries where that can happen. 

As always thanks for reading. Back to horse racing this week. Have a super Wednesday!

Evolution of Election Betting Mirrors Other Betting Markets, Like Horse Racing

"Pssst, a friend of mine was at Philadelphia Park last month and this shipper was large off a no chance trip, can you go to Belmont and bet me $50?

The horse was 9-1, because the Andy Serling of the day just saw a horse moving up in class with an average running line and Beyer. Belmont Slim, who sells tip sheets outside the south entrance, has the horse nowhere. It's nice to have an edge on a $20 mutuel. 

Now, of course, everyone sees that shipper because we can call up a race replay. We know the horse, the trainer's stats, and just about everything else. David Aragona made the horse 3-1 in the morning line and picks him. The live, supposedly sneaky wise guy horse is 2-1. It's just the way the betting market evolved. 

With tonight's mid-term election upon us in the US, we see a whole lot of the same thing. 

In 2004, for example, the Andy Serling of the day was the "election person" on the TV networks. This person was telling you Florida, between John Kerry and George Bush was "too close to call" an hour into the results, when it in fact wasn't. But with not much to go on, and no professional teams betting elections, the masses bet that opinion. For people who were digging deeper, like our friends betting that long-ago Philly Park shipper, there was gold in those hills. George Bush was 4-5 in Florida, when he should've been 1-9. 

This election was quaint, not quant. Rumors of a leaked exit poll being bet by big money on one exchange, Tradesports, but not on another at Betfair. Oh, the good old days, when bookies made the Giants -7.5 in New York, and -6.5 a couple hundred miles down the road. 

Time after time, from 2000 onwards to, say, around 2018, we saw quite a bit of that in elections. The rudimentary was bet, the nuanced was not; holes were not plugged by money; efficiency was a concept, not a reality. 

Then, with markets attracting more and more money, and election predictions being a thing for the public quants, information and opinion got a whole lot smarter. 

In 2022, we're not having to beat the 2004 analyst spewing silly narratives, we have to beat the New York Times needle (which is good), or others benchmarking and modeling with infinitely more precision (and in election betting, importantly less passion or bias). 

There are certainly more flies in the ointment today compared to yesterday. Early voting, mail-in voting and how it's counted by state all have to be looked at in a deep way. This allowed us to bet Joe Biden in Pennsylvania at +400 late election night in 2020. Until the rest of the country catches up to places like Florida who built a proper system, these edges will pop up. 

But, like that Philly Park shipper who aired and paid $20, it's nothing like 15 or 20 years ago. As betting markets mature, their predictive nature gets better and better. It's that way in horse racing, and it's that way in elections, too. It's kinda that way in all betting markets. 

If you're playing tonight, enjoy the evening. Despite the top line numbers and sentiment, I am sure there are edges to be had. Hoping you're on the right side of them. 

Have a nice Tuesday everyone. 

Bye Bye Flightline & Other Notes

Another Breeders' Cup has been run, and it appears it was well received (as it usually is).  The collection of talent each year is fantastic, and deep fields (generally) keep us engaged and on our horseplaying toes. 

The star of the show was Flightline, the John Sadler trained superstar, who after six starts has headed to stud. Both the former - "he's a superstar" - and latter - "off to stud" - has generated a lot of discussion. 

Best ever talk always seems to filter its way through the chatterverse (we're fans after all), and there is a real recency bias to it. Arrogate was jaw dropping ...... and so was American Pharoah, Ghostzapper or <insert another horse here>. In terms of sheer brilliance and speed I suppose Flightline could be the fastest horse in memory, but that's a matter of opinion. I do know he would've been 1-5 in the Sprint, Mile or Classic this year, and that's certainly saying something. We should be able to judge him better at the end of 2023, as he builds his body of work. 

It does strike your average fan as curious that a horse would retire after so few races, especially when they see multiple millions to race for in Dubai, at Gulfstream in the Pegasus, next year's $6M Classic, or at the LIV Golf type event in Saudi Arabia. 

It also is somewhat perplexing that a sport who seemingly pays so much attention to breakdowns would breed horses who race so infrequently. But as we all know, there is more money in not racing than racing, and if you're a fan of this sport, you've embraced a lot of lip service and this is old hat. 

Could this horse have moved the needle if he raced for years? 

Although I am never one for "saving the sport" talk, because in my view that's silly, I surmise he could have helped. 

Would boxing be more popular today if it stuck with its historical structure, where great boxers were known and fight all comers at regular intervals? Surely it would be. People get to know a certain boxer, and love him or hate him, you pay for that pay per view, or head to a nearby bar to watch. It drives eyeballs and revenue and keeps us engaged with the sport. What they did with boxing will be studied in business books for five hundred years and it won't be in a good way. 

But it's how the business works. Breed horses, get black type, make a whack of money, and invest the money into more horses. Or in Mattress Mack's case, into more horses, and sponsoring every racing event or venue known to man. 

Regardless, Flightline was introduced to a few million people for a shade over two minutes on Saturday in prime time. And then he was gone. 

Notes:

I had a very unmemorable BC at the betting windows. I usually catch something, but all I caught was a draining bankroll. This unlike Will Nefzger, who parlayed a strong opinion on Elite Power into riches. I thought that was a superior key, because not only was Jackie's Warrior the key, B tickets were including (primarily) Kimari, who was a fairly strong second choice in the betting offshore the whole week. When you pitch the top two, you get paid. 

Will threaded the needle on his other choices, but it shows the power of leveraging a strong opinion. Will didn't want back ups with Jackie's Warrior, he wanted a $10 pick 6 with a horse a lot of people weren't using. It illustrates the concept well - instead of betting $200 win on Elite Power, or a $200 double of Elite Power with Malathaat - he punched a pick 6. Just like we would not bet a defensive $200 win saver on Jackie's Warrior or Nest, there's no need to in the pick 6 either in this particular case. Well done. 

Chuck Simon has been on fire on twitter the last few days. Gotta love him. 

The BC morning lines are a tough job. I thought Nick Tammaro did some good work. Seriously, is there a more thankless job than morning line maker in this sport?

I pitched Modern Games. He couldn't cross the Atlantic twice and win. Until he did. 

The NBC feed was built for the fan at home, because damn, if you bet the exotics in the Classic you were left guessing. Coincidentally, when a horse was leading by several at the Meadowlands the last few years they'd do the same thing - zoom in on the winner. But they asked some bettors what they thought, they complained, and now we get the pan shot. NBC probably should do that, too. 

I think there's no such thing as a wise-guy horse anymore. And really, this year's wise guy horses were all no good anyway. One anti-wise guy horse - Wonder Wheel - knocked me out. They win a lot of the time, and I'll probably continue not having them. 

Thoughts with Dave Litfin. I hope he got to watch some of the races. 

Making Harness Bettable Again by Enforcing Simple Rules

There's an election going on in the States, and one of the big issues is crime. 

I wonder if the usual plays out - one party is too cold, but the other one is too hot and suddenly we see people in jail for 20 for stealing a pack of gum three times. The pendulum often swings too far, in both directions. 

Over in harness racing, we see about the same thing when it comes to enforcing the rules on the books. 

On one side of the border we have the Meadowlands, which (rightly!) worked hard on the racing rules to enforce the closing of holes. However, like the three strikes and you're out folks, it looks like this has gone too far. Holes should be allowed for the free flow of racing, and to be used for cover, or to get a horse out of the way so you can pull first over, not simply closed just because every hole has to. 

Meanwhile in Canada, Woodbine Entertainments Bagdad Bob-Sgt Shultz routine of "There is no problem, and I see nothing" is the other end of the spectrum. 

The hole giving at Mohawk has been almost comical; a Monty Python skit, with horses. 

Just this past week or so I saw a driver want to give a leading driver a hole so badly, he choked the horse down. On another occasion, a non-regular was completely screwed when another driver leaned so far back to give the leading driver (with ironically a horse who was awful and backed into him) a hole, the race looked like some sort of pig wrestling competition. 

At the Meadowlands things are too hot, at Mohawk things are too cold. That's probably too soft, things at Mohawk are positively glacial. 

People might say that Ontario has slots, so who cares. Maybe they're right. Just sign the checks and don't worry about how badly the product has degraded.  

But for those who actually want to gamble on it - I hear these strange beings are called "customers" - we might want to do something about it, no?

Have a nice Tuesday everyone.