Sunday, September 14, 2008

Fair Odds and Becoming a Winning Player

It's probably a cool time to chat about fair and board odds. I have heard a few times today from people (after the fact) that we have to concern ourselves with picking winners, and we will be winning players. We know that is not the case; picking ROI positive winners is the only way to make money. But we had two examples of a lot of this chatter today: With Dewey in the CTC and Big Brown in the Monmouth turf.

Big Brown was sure to be overbet. There was no question he would because weekend bettors bet reputation, not fact. Fair 3-5 shots, or 1-5 shots, are reserved for open length winners, doing what they always do, with no question marks. They have to 1) Run their race, with a good post/pace scenario 2) Have no physical question marks and 3) Have beat similar fields handily, under similar conditions. Big Brown clearly had several question marks: He lost the Belmont while being pulled up and he won his last on dirt, by a smidgen under a heavy drive. He was changing surfaces, as well, and the turf course was wet, something he had never raced on. Every large player was looking to bet against Big Brown today, and suck up the public cash who would be going long on him for what the horse did in previous starts. He had less than 27% of the place pool and 30% of the show pool. Souvenir win tickets I guess. Cannon fodder for us.

For an analysis of what a handicapper does in this instance, have a look at this post here on Stanford Wong's Sharps Sports Betting site. This player has Big Brown's fair odds at 2-1. That is about right considering some of the question marks. Amateurs would call him nuts after the fact. The horse was 3-5 and won fairly easily. But whomever would say that is not a winning player, and never will be. Picking winners is inconsequential.

For evidence that this type of betting is the way to win, check the player (a man named Dunbar who is a long time player and does some work on Vegas radio for horse racing) in that posts' public record. He has about a 21% ROI from making public picks over the last seven years. With say a rebate of 5%, which he can get at many places, that pops him up to 26%. On betting $750,000 a year, which is not hard to do when you are winning (you can start with a $2,000 bankroll and do that easily with that ROI) he would be a winning professional player. His yearly tax free income at that rate would be $195,000 a year.

Anyone think he is dumb for betting against Big Brown, eventhough he lost?

Very similar happened with Dewey. He won: "Free money at 6-5" I read on a couple of chat boards. Well it was a terrible bet at those odds, and if you bet him, you have to rework your analysis because you do not want to pick winners, you want to pick ROI positive winners. Take this simple exercise to achieve some sort of value. Say you think with a fair post and a return to form he runs to his Hambo line when he beat Crazed by a half length, he is even money. Then add uncertainty for him bouncing back on that messy track, which should take you up to 2-1. Then add the trip and post factor (a 0.8 impact value for post ten), and the fact that he is planning to go off the pace, or possibly be hung, because drivers are not as scared of him this week. That moves you up to 3 or 4-1. Then add the whole odds line, giving two horses that have beat, or almost beat him some value because they are the ones with the best posts. You end up with 5 or 6-1 fair odds. When you look at that dispassionately you can easily see why betting this horse at 6-5 was as bad, or worse than betting Big Brown at 3-5. They both won, but as a bettor who cares? Betting against those horses are what we have to lick our chops over. Or we're shark feed for documented winning bettors like Dunbar.

I hope that is a good illustration on value, with two of the days big races; and how players who try and make a living at the game handle their betting decisions with those types of races.

I will continue with a few more of these thoughts in a future post. When I spoke last month about how I met a professional bettor at the Hambo conference I was in contact with him and he sent me his book. It relays many of these thoughts in a really neat way. It's a cool betting book and I will review it when I am done and have some time.

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