Refund Those Bets (Maybe With Fixed Odds)

The sun is out here in the tundra and life is, well not good, we're still kind of all locked down (the vernacular, it's not really), but it's not too bad. And lunch time is upon me and I am bored so I thought I'd share some drivel. 

Matt wrote what I thought was a tremendously good piece about Baffert today in the DRF. The whole opinion column is good but in one paragraph, he brought up the PETA complaint whereby they are asking for the results of the Derby to be paid out like Medina Spirit was DQ'd. I won't even go there; it's a non-starter, but it did get me thinking. 

If fixed odds wagering was mainstream and legal, many of the entities bet taking would do just that - pay your Mandaloun tickets as if he won. We've seen this tons of times before as a marketing vehicle, with fights that are poorly judged, or whatever. In the pari-mutuel pools this is impossible. 

I am not a huge fixed odds proponent or opponent, but I do think they add value to the business. Yes, the DraftKings' of the world might kick me out if I am hot, but there are shared wallets with sports betting that need access to this sport; the sport needs outlets to push it to others who will not sign up with a Twinspires account. And yes, just possibly, it does need the singular entity that can say, "here's your DQ money, customer", when the real pari-mutuel business can't or won't. 

Notes - 

I don't know if it's Baffert, fatigue, just me, or what, but the Preakness itself as a betting day (and race) feels horribly muted on the social media channels this year. I have not even opened the PP's. It's definitely somewhat weird, if we truly are yawning, because TV ratings will be through the roof. It'll be BINGO. 

There are inflation ruminations all over the place this past couple of weeks. For a society under the age of 40 that has never really seen it, it must be like watching an episode of the Munsters. The smart money says this is a blip, but what if this inflation is truly cost-push? What's it do for the horse business? Maybe someone sharp out there can tell us what happened in horse racing from 1975-1982 during the big inflation years. 

The Big M cards are heating up for harness watchers as is customary each May. The biggest change this year is the influx of Canadian horses and drivers due to lack of vaccines (and new waves) north of the border. For those who wonder what cards would look like if harness racing consolidated its dates, this is a little taste of it I suppose. Make no mistake, the cards are getting very good. 

The TIF set of articles on wagering and wagering integrity were the bomb. Very interesting. If you have not read all the parts I'd recommend. 

Have a great weekend everyone. 

"Use Defensively" (Not a Baffert Column)

There's something going on in horse racing today, but I have not really followed it. Instead, I've been thinking about two words we hear so often in betting this game: "Use Defensively". 

"Here are 112 reasons why I hate this 6-5 shot, but I am going to use him defensively"

"That horse should be used defensively"

"I might use her defensively"

I get what they mean, I really do, but I find this phrase usually results in me making a 345-12347-234-1239 pick 5 ticket. 

This concept is at work in verticals as well. We'll hate a chalk - the three horse who is 6-5 - and we love the two, so we want to enter the superfecta pools in a pretty big way. We might construct a ticket that looks something like this:

2-58-58-1458; 58-2-58-1458. We may even throw the 3 for 4th. 

Then, time after time, we see the final ticket we press look like this:

2-358-358-13458; 358-2-358-13458

Yep, we just had to use the 3 horse "defensively", even though the only reason we wanted to bet the race in the first place is because we hate the three horse. 

In my view, this is simply prospect theory, loosely defined as "faced with a risky choice leading to uncertain gains, individuals are risk-averse, preferring solutions that lead to lower expected utility, with a higher certainty".

In my non-economics doctorate plain spoken horseplayer terms: We're scared shitless to lose a ticket. 

I get the whole idea of using a spread when we're uncertain and "using a horse defensively", but my goodness, it might be the most misunderstood, overused, negative ROI term in horseplaying. If we want to beat the game, we should stop letting it rule us.  

Notes:

Everyone's friend (no not Mattress Mack) the indefatigable Jason Beem is (unofficial title, I think) King of Grants Pass Downs and it opens this evening. Take a look if you're interested. I think Buck Swope will be simulcasting the event live from his basement in his underwear. Details can be found on Beem's ubiquitous twitter feed. 

It fascinating to me how multi-leg exotics have taken over the game. On Saturday, this happened to several of us - the Willis Kid and Gabe Prewitt much more than me. It was a massive miss in a pick 5 where we leaned on a $140 winner as an "A" horse. We're all whining we lost money, but yes, we had a $140 horse as an A horse. $40 win each nets us over $5k; throw a $4 ex and $2 tri, another $10k or something. But we had to just play - and whine - over missing a pick 5. 

Decent interview with Tony Zhou on Beem's podcast (I kind of feel like Jason's publicist with two mentions in these notes, but so be it). Tony is one of the sharper folks out there, in my opinion. 

Last up, Baffert got a positive in the Derby. 

Have a nice Monday everyone. 

Public Cappers Cap for the Boss

Unless you are off the twitter grid (God bless you), you've no doubt witnessed the feud of the month(s) between ITP and some public racing handicappers and racing analysts.  It has not been unentertaining. 

ITP, profiled here in the antithesis of an average-quick-hit-interview-with-an-owner-or-breeder, clearly makes sound and logical points. Namely, why are you giving out negative EV bets, because your and the sports' future depends on helping your customers win more money (and those suggestions do the opposite). 

The comeback - again with some validity - is about making sure your customers have a better chance of winning that sequence or day, by giving them higher hit rate outs. They don't care if their tickets will pay 70 cents on the dollar long term. 

It's been like this forever, of course. Your newspaper handicapper would get a raise with a 37% hit rate, fired with a 18% one, even if the latter was $1.07 after crunching the numbers. 

The difference (chasm) between the two points of view lies, in my opinion, on a pretty simple fact. 

ITP is offering suggestions to help the customer beat the game. The public handicapper is offering advice to cash a ticket. The former is the sole reason you and I and everyone who may be attracted to the game do so; the latter is following a dogma that has existed for generations. 

What dogma? A dirty little secret (that's really not one in this business to anyone who follows it) is that the racetracks have never been focused on you making money. This statement is not even debatable. If it wasn't true, takeout would be lower and/or rebates would be more readily accessible. Where's yours?

With a focus that's not on you, many public track handicappers have no choice in the matter. When you see them offering a spread ticket with chalks, telling you absolutely positively without question should be taking a 74% takeout jackpot ticket, or using all three favorites in the first leg of the double, they're handicapping for their bosses. 

I don't want to paint a broad brush, so I'll make that clear. I believe there are several excellent racing analysts giving out gems of wisdom, presenting some good ideas and that do their homework. They do want you to win, and coming to work is more than just a paycheck to them. But they're the outliers; they're the ones bucking the trend. And they're the ones quietly nodding that ITP is making a strong point. 

Have a nice weekend everyone.