Friday, December 29, 2023

ADW & Distribution "Fixes" Aren't Complex, They're Made that Way

I think Mencken wrote "for every complex problem there's a simple solution that's wrong," and for the most part I think that's pretty sharp, especially when it comes to horse racing. We often, on twitter and elsewhere, reduce the complex to the simple, when the simple could never work. 

However, sometimes the problem itself is not complex, it's the system. And for those, the simple solutions can be the best fixes of all. 

I think most of the distribution problems in racing (i.e. ADW's) are mostly self harm, and for those there are some truly simple fixes.

One, the current practice of signal hoarding or side deals between tracks is a handle killer that's purely self inflicted. 

Big signals like those from NYRA and Churchill can be withheld from ADW's or are priced like a King's ransom for virtually anyone new. This shrinks the distribution end of the business, stuffs players into high cost, no rebate ADW's and the most perverse point - these players subsidize the teams. 

An "easy" fix for this clear - if you are a licensed ADW you should have access to every signal at the exact same price everyone else does. 

This simple solution opens up the market, and gives price sensitive players a place to play. Those players did have choice at one point, until this avenue was mostly closed due to these protectionist, short-sighted practices. 

This doesn't address the fact that the signal makers can still cut side deals with their own slice, but for the casual player it's a start. 

Once all signal fees are placed into an open market, the second fix happens - signal fees based on "blended takeout" goes the way of the do do bird, or for those born in post-Victorian times, New Coke. 

It's absolutely mind-boggling, with disparate bets and takeout rates, that signal fees are not based on these constructs. This fix could also pave the way for harder to hit bets moving up in juice, with lower to hit bets moving down, which would increase churn, theoretically at least. The market would become more efficient.  

Demonstrating more pain for a customer base is the self-harm the hoarding of replays has caused and that brings us to the third "fix" - a clearing house for replays, say via Youtube, is something whose time has come. 

Clicking an Equibase PP to a replay link and needing an account? 

Clicking a TimeformUS past performance for a replay and seeing "Sorry, the track doesn't allow us to show this thing you need for handicapping and to give us money" (I only partially made that quote up)?

Seriously, what are you thinking? The only way this makes sense is if you have a business goal to annoy people. 

Mencken's quote is probably correct in the broad context of horse racing. But why fixes like these aren't implemented isn't because the cookie recipe is too complex, it's that the cooks in the kitchen bake them that way. 

Have a nice Friday everyone. 

Monday, December 18, 2023

Gambling Gut Feels are Worth Something

 One of my first gambling posts on this blog about fifteen years ago was about Malcolm Gladwell's book "Blink":

In 1983 a gentleman brought a statue to a museum that he said was from 600 B.C. Of course, the museum took this claim with skepticism. The asking price was 10 million, and not one of these statues had surfaced in years. It was thought by experts and historians alike that they were all discovered. So, the science began. 

14 months later, after a battery of scientific testing, the museum said the statue was real. After it was purchased, when it was placed on display for experts to see, one watcher took one look at it and blurted out “I hope you didn’t pay much.” Another said, “there is something wrong here. I don’t know what it is, but there is something wrong.” All reported a subconscious, visceral reaction to the statue. They thought it was a fake, but they could not tell you why.

Later on through new testing, the statue was deemed in fact to be fake. The experts, through their unconscious competency, just knew. 

I was watching The Forward Progress channel last night for the upcoming week in football (if you bet football and don't watch this show, in my humble opinion you're missing out). This show looks at the early lines and Rob Pizzola and Clive Bixby give their thoughts on each of the early sides and totals.  

Rob - a seasoned line-watcher and football bettor - got to the Broncos-Patriots game and said, with regards to the 36.5 total, "this just feels too high to me."

He then said he had to do more work on the game, crunch numbers etc, but it still felt short. 

It felt short to me too (as an amateur football bettor; I don't trust my gut yet), and I immediately bet the under. It's already moved to 34.5. 

Rob "blinked" and his unconscious competency kicked in. 

In my original piece I tempered the use of "blink" in gambling, because frankly it can be dangerous. 

If we don't use this correctly we can get into results bias, or confirmation bias, and we end up "trusting our gut" when we need analysis, because our gut isn't good enough. We also just might not be good enough to have a gut. 

Fifteen years later, however, I find myself swaying a bit more to the Gladwellian blink end.  

In a recent piece in HRU, the late odds shifts were examined, which are coming primarily from late CAW money. Seasoned players I speak with talk about how this doesn't look orderly and there are holes in the final odds. They have gut odds boards and the gut doesn't match the betting. They are right. 

I'm a huge numbers guy and have been for a long time. But in football, leaning on "blink" helps there too in my view. 

For me, there's nothing more fun in football than wondering if a young quarterback is going to be good or not so good. Looking at EPA per play, Jordan Love or Justin Fields or Bryce Young are being evaluated each week and have been for some time. Hell, pre-season Justin Fields was being talked about as an MVP bet. 

But don't we lose the "blink" of watching how they play the game when we are so married and dive so far into the numbers rabbit hole?

I got a clip pinged to me about Kirk Cousins, one of my favorites, primarily because everyone thought he stunk and I couldn't figure out why, because he looked pretty good to me. 

If you like comparing young quarterbacks, look at this three minutes of his first start. Washington was a mediocre team, the OL was meh, receiving core was okay, and the offense was built for a running QB, but he stepped in and let it fly.

If you watch a ton of football you know what a decent QB looks like. We don't need EPA/P, or CPOE, or aDot, we can "blink". Compare those throws in that link to what you've seen over the years from rookies, and that's what a potentially good QB making his first start should look like. It's more CJ Stroud, and less Justin Fields.

Being a student of gambling over the many years I am surprised I originally discounted using "blink". I believe if you know how to use it, and don't overuse it, it's something worth leaning on, whether it be for sports or horses. 

Have a nice Monday everyone. 

Wednesday, December 13, 2023

In Horse Racing it's Always Been About Doing the Doable

If you're on Horse Racing Twitter (or X, formerly known as twitter, or something) you've noticed big-time owner Mike Repole's new venture and quest to be Commissioner of All of Horse Racing. 

Being open and transparent is pretty cool, but reading the replies to his feed is a tremendous education into how much cat herding has to be done in this disparate, fractured sport. He's getting it from all sides. And probably 99% of what he hears is simply undoable.

From the horseplayer end, the cries to lower takeout are sincere, and certainly (in my view at least) just fine. Unless your parents let you drop math in grade three, you know the sport is priced indefatigably wrong. It's a complete mess. 

But Lowering Takeout in the Sport ™is one of those undoable non-starters, too. If they tried it in Russia, Putin probably couldn't make it happen, no matter how many people suddenly ate bad clams. 

The only avenue that's achievable in this realm that I see, is rebating. 

Twinspires, TVG/Fanduel, NYRA Bets and maybe a couple others who aren't already doing it, should be compelled to rebate action to any and all account holders. A 5% daily national blended rebate (they can go higher if they wish) is an immediate reduction in juice, but because this is done directly in ADW's it allows these companies to enhance their offerings, for those both inside and outside the sport. 

If there's ten million bet on a day, the next morning account holders have balances of $500,000 to play with, instead of zero dollars to play with. And if the sport tries to get on the lower takeout train, zero dollars to play with is exactly what will happen. 

I use the word "achievable" with little confidence, of course. These businesses could've done this 25 years ago and they haven't. However, if Repole does ever get some power, bringing a couple corporations aboard something that can be achieved at the flick of a switch seems a hell of a lot easier than committee meetings with dozens of state commissions, racetracks, and horsepeople groups until about 2045. 

Note --

Have we read anything funnier lately than Paulick's report that California wants purse subsidies from ..... Kentucky? It makes me wonder just how bad the horse racing lobby has been in the Golden State. California is a place that taxes anything that moves, and gives out the proceeds like it's a game show. And they're begging Kentucky for money?

It's about 12 years to the day where I read this quote from a California trainer after the takeout hike which he was for. "We have to get while the getting's good". If you're seeking cash from Kentucky, I suspect the getting is definitely not good anymore. 

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