Monday, May 29, 2023

World Famous Super Spectacular Blog Vol 9 - When Churn Works (and Doesn't Work), Transparency Can Be Scary, Pitching Horses Off Bad Lines, Gural Minds the Store, & Are New York OTB's Back?

Welcome to the World Famous Super Spectacular Blog! 

Last week was a record traffic one for the blog, but it was also a record for spam hits. To all of the real readers like Chip Reinhart, movie star Ryan Reynolds movie star Ray Cotolo, and I mighta saw one of the Beulah twins' IP's this week - I thank you profusely. 

To the bots, I thank you as well because I don't weed out spam hits when I send the total traffic reports to all of my advertisers. 

Let's get it going on this lovely Monday!

Last week we snipped a short conversation between ITP and Bucky about how racing prices the hard-to-hit bets lower than the win pool, and this is antithesis to other games; skill or otherwise. Tony Z chimed in on it as well. 

I'd like to explore this a little more, if I may. 

When a track offers out a 12% pick five it indicates a churn rate of about 7, meaning each dollar bet should be rebet around seven times. But, we know this is not the case for a couple of reasons. 

First, a hard to hit bet can payoff to few people instead of many, and the higher payouts can suck money out of bankrolls. For instance, most lose, and for the lucky few casual players who do hit a $3,000 or $4.000 pick 5 usually some money is withdrawn and this drains some churnable money.

Second, if the teams are playing these wagers (and covering things smaller players can't) your average Joe or Jane's takeout rate is not in actuality 12% but can probably be as high as 30%, 40%, or even 50% in some cases. The big guys are hitting at high rates, the little guys at deviations less.  

The result of this is kind of obvious. The teams churn at higher rates, the lower cohort does not. The devil is in the details and if we plotted these cohorts on a graph and sent it to a business analyst, he or she would likely conclude we have an unhealthy ecosystem. 

Flipping over to win betting at 12% juice, we have a different paradigm. The big players would still win more, but there would be less of a gap between them and the smaller player. Your average player would churn much closer to seven times and be more of an equal participant in the parimutuel landscape. 

Now, we have other issues as well, like the integrity of the win pools with late odds drops - it's hard to bet size in a mathematically sound way without knowing the final odds. And that's why, in my view, the promise of fixed odds (if done correctly) is so tempting. However, despite the problems with the win pools, they're much better than (as ITP noted) 'herding people into hard to hit bets at 12%', and acting like we're doing them a huge favor. 

I think the betting ecosystem in Australia is the closest to optimal that I've seen. 

Downunder, a large majority of handle year after year is bet into the win pools - in figure 1 this is represented by fixed, exchanges, as well as about half of the TAB wagering. Via the exchange medium regular players can find about an 8% takeout rate, resulting in a churn multiple of around 12. 

This, I believe, is one reason why Aussie handle is so high and growing. They've made the game palatable not through an unchurnable 12% pick six gimmick that breaks weekend warrior bankrolls, but an eight percent good old-fashioned win bet that everyone can play. 

It's nice to see people thinking outside the box, but as David put it on twitter, not every idea is automatically a good idea. 

6 horse field racing "leagues" to drum up interest? I just don't know. Even some people outside the sport don't seem exactly thrilled. 

On the flip side, and maybe this makes more sense - Bacon hints this is some sort of idea linked to a reality show series. 

I dunno, I'm having trouble connecting dots here, so I'll just take a pass. 

Meanwhile, Asaro made a provocative post pontificating that horse racing should move to states where there are low taxes, less intervention and a lower cost of living. In a high cost industry with day rates going up and horse owners (and even some successful trainers) losing money, it makes logical sense. 

But what state has the things Andy is looking for? Texas, and they're currently in a fight with HISA rules while racing in front of a few barn cats with no handle. Racing issues cross state lines faster than a Burt Reynolds in a Trans-Am. 

I saw the weirdest thing this week, a 12-1 morning line horse at Belmont was taking a beating in the offshores at 7-2. It's something we'll see from time to time, but not often especially with Aragona lines. I sensed something was up, but when I checked double projections in the race before, the horse was..... about 12-1. Usually this results in an odds line fix, but there the horse was, still at 7-2. 

The board opened and the horse was, you guessed it, 12-1. 

He closed at 12-1 and came 8th. 

Like I said, it was very strange. 

Gural's Meadowlands' team investigated a payoff into the last race last week at the Big M, and Sturman says that he's glad someone is minding the store. When this happens in racing, it often feels like the lights are on but no one is home, but not at the M. Hey, at least they're trying. 

My Neilson ratings are huge when I mention Irad, so here's this week's. Johnny V chats with him, but the jury is still out. Also, for my bot traffic, Russian Emporer won a nice grade one race in Hong Kong. 

DeRosa ran the May trainer numbers and looking at my bankroll it appears I bet Ness and McPeek a lot. Speaking of DeRosa, he went through his betting numbers with Beemer this week. 

This week, former twitter CEO Jack Dorsey tweeted "Whoever controls the media controls the mind". If the PTP Monday Blog is the horse racing media, and ergo I control the industry mind, please lower the takeout. 

Are we at the point where any tweet about Baffert is about as welcome as a porcupine at a nudist camp? 

Pat over at the TIF writes that pre-race inspection reports should be made public before the Triple Crown races. He illustrates how it's done in other countries, so this isn't new, but would be new to North America. 

We often see the downside fear used in the sport for any change of policy; for example exchanges were criticized because someone out there might bet a horse to lose (like people don't do that already by betting another horse). In this case they likely fear the worst if something bad happens to a horse who is cleared to run. 

It's probably a worry that's not too far off base, but in the end, I figure you're either transparent or you're not. 

I find it interesting (in harness or the runners) to get into the mind of the connections when their horse ran terrible last out. Sometimes the horse misses time because something was physically wrong. Sometimes it's a shrug of the shoulders because the trainer has no clue why, and they reenter at a regular interval. And sometimes it was something explicable or easily fixed, and we see a quick wheelback. 

These are horses in my database off terrible lines, right back in within 14 days, no work (with a couple of other factors) and at 3-2 or lower (for the last half year or so). 

So, I'd go with "explicable or easily fixed" with this subset. 

These are horses we may pitch because of the last line (we clearly aren't wanting a horse like this keyed in a pick 5 at a short price where we can't see an odds board), and we might be right logically. But man, when they are bet - at least lately - they're in serious #theyknew territory. 

Chuck's pod talked about the malaise the modern player feels with handicapping and wagering the game in this day and age. I too feel the sport has to do something because it seems we're at some sort of tipping point. I have malaise on top of malaise lately and it saddens me because this is such a great game. 

Dutrow's back. And in a twist, the horses came from a barn in a trouble spot.  

This ain't no food blog, Lord knows I am the wrong person for that, but when Garnet takes a picture of a Famous Woodbine Roast Beef Sandwich, it makes the editor's cut. 

Greg Schuler's tweet last week talked about harness racing as a "club sport" and it made it to print!

Happy life to Jessica!  May you two hit many winners. 

** Last Up - New Advertiser Alert **

Having a high traffic blog like I have, you have some important readers that aren't even Russian and this can mean $$$. 

The head of NYRA emailed this week - 

"PTP, I'd like to get our OTB system going again, so can I please advertise to your hundreds of thousands of readers on the Super Spectacular Blog© ?"

I said, "anything for you buddy", and here we are (hat tip to Paceadvantage for this old time favorite). 

Thanks for reading the Memorial Day edition of the Super Spectacular Blog. 

As always, be nice on twitter, enjoy your week, and go cash some tickets. 

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