Expected Value & Getting Paid

I, like the vast majority of you, really concentrate on carryover pools. Carryover pools are unique in this high takeout sport, because money is  added to a pool that can be many times over the takeout for the pool. This results in what gamblers call positive expected value - it's a roulette table with 30 landing spots that pays 35-1, it's a game of coin toss, where every 5th toss you get to play for free.

This, on the surface, might not sound like much to a casual player. They, often times, simply want to hit a ticket and cash a bet, regardless of the takeout, and see profit if they hit. They will - even if takeout is 50% - see a profit most times. You need to hit a ticket to cash.

But like everything in gambling, the devil is in the details.

Yes, winning on a given day is fun, but it's not the battle on that day that counts, it's the long, protracted war. The war is where we make the choice. It's where we as horseplayers can let takeout kill us, or define us.

I was going through my pick 5 bets recently, and I subset bets into pick 5's that I only played where there was a carryover pool in one of my ADW's (something that does not happen all that often with 50 cent bets). Some of these carryovers were at very small tracks where ticket sizes were small, some at larger ones where they were a bit bigger. Most of these tickets were of the spread variety, where my goal was to hit a ticket (not my usual style of play). In all instances I had a distinct advantage - upwards of 20% positive expected value.

Here's a subset of those results.

This is a good result. My ROI was 28%. That's great, right.

Well, sure, I made money. But here's where positive expectation comes into play.

Let's say I was not getting a 20% takeout advantage and these were zero takeout pools. In that case, my ROI drops to 8%, and I make only $598. Considering the hours I spent handicapping and watching these tracks - some tracks I knew nothing about - someone might want to sue me for paying myself lower than minimum wage.

But still, it was profit.

Now, what if I pay full takeout on those bets instead.

My $9,624 payoff isn't $9,624 anymore. With 20% takeout, even with my hit rate and ROI above average, it's $6,944.

Instead of making a couple of grand, I lose about $500.

That has nothing to do with my handicapping or "cashing a ticket". It has everything to do with takeout and expected value.

When you see a seasoned horseplayer mention expected value and "positive bets", that's what he or she is referring to. Sure the bet may be hard to hit, sure it make take a lot of work and a little luck. And yes, you might not hit a ticket for awhile. But, when you see a carryover, give it a look, because if you hit you're very likely to get paid. And getting paid in bets where low or no takeout is offered is usually what keeps us as bettors afloat in the long run, allowing our ADW accounts to holster the bullets we need to keep firing at this very difficult game.

Have a nice Monday everyone.