FIRST: MY BIAS. I\'m a small player. I\'ll never get a rebate and I\'m fine with that. I\'m also fine with the idea of larger players getting rebates. What bothers me is how the influx of huge money is changing the game. I aspire to be a value player and I know I can\'t get there unless I have a good idea of what the final odds will be and am able to take them into account when I make a bet. Huge, late money makes that impossible.
SECOND: MY OBSERVATION. A lot of things are written about rebates and offshore players without any explanation of some facts that, it seems to me, are fundamental to an informed discussion. The people who contribute to this board seem like an informed bunch, so I\'m coming to you for some of those facts.
FINALLY: MY QUESTIONS
How does the purse account get funded? Does it make any difference to the purse account at the host track whether a bet is made on or off track?
What exactly is batch processing?
How late can a big offshore player make a bet? (If I were in that position, I\'d want to be allowed to cancel my bet until the gates open.)
What\'s wrong with closing the pools when the first horse loads? We can\'t all change our bets if a horse acts up in the gate, so why should anyone be permitted to?
I\'ll leave some of this to others, but--
I agree about the late flashes, \"batch\" betting, etc. There is no reason the pools should not close earlier, and be made secure.
There\'s an interesting panel discussion on rebates that can viewed at www.harnesstracks.com
Batch wagering is the current version of a computer wagering system based on brilliant mathematician Richard Epstein\'s 1967 book \"The Theory of Gambling and Statistical Logic.\" Though obviously skeptical that such persons exist, Epstein starts with the assumption of an excellent dopester who can access the real probability, as opposed to the subjective probability of the crowd reflected in pari-mutuel odds, that particular horses will win a specific race. In other words, a handicapper who is good at identifying overlays.
Taking the takeout(15% in those days) & the differences between real & subjective probabilities of each horse into account, Epstein\'s 1st step is to identify which horses merit a bet. In other words, dutching.
Armed with that information, Epstein\'s next step, the groundbreaking one, was to determine mathematically exactly how much should be bet on each overlaid horse, taking into consideration each horse\'s existing odds & how much the dopester\'s bets will impact those odds. In order to do the calculation, one needs to know the amounts in the pools, which is why batch wagerers wait until the last possible second to make their bets.
The only widely available exotics when Epstein wrote his book were the dd & quinella. Reportedly, one of the big HK syndicates hired an American computer/math genius, at $1 million per, to adapt Epstein\'s formulas so that they could be used for the exotic bets offered there. Beyer wrote an article on the subject after a visit, wondering why no one in the US was pursuing a similar strategy. Not too long after that, the so-called \"mystery man\" from So. Dakota was reported to be using the strategy, after having been given direct access to the pools by a Susan Bala led outfit which has since been accused of engaging in tax & other fraud. Direct access to the pools was supposedly discontinued as an unfair advantage(esp for tris) shortly after Monarchos won the Fla Derby.
Batch wagering continues at tracks, such as those in Calif, which do not have a post time(as opposed to race start) cut-off for wagers made through the Lewiston,Me hub, which processes a lot of the volume from offshore rebate shops.
As hoarsehorseplayer indicates, the panel discussion at the HTA/TRA conference(which Stan Bergstein describes in today\'s form & which can also be seen at hta.robertscomnet.com) is very interesting. The general mgr of Tampa offers a fairly detailed explanation of his decision to deny the signal to rebate shops which permit batch wagering. A discussion of whether & to what extent his explanation makes sense will have to await another day.
In the broad sense, \"batch wagering\" means multiple bets of large amounts being transmitted electronically in a way and in an amount of time they could not be done otherwise. How, why, when, and from where this is being done should be the subject of much investigation.
I would also point out the following (and may have done so here already, the last few weeks are a blur)-- if someone can hack into the system, they don\'t have to do it in the first 30 seconds of a race. All they have to do is what the BC pick 6 guys did, but in a more high tech way-- play 1 x all x all in a pick 3, and change the ticket electronically after the first leg, before the willpays are posted.
Thehoarseplayer and Mall -
I just listened to the panel discussion on rebates by the three track operators. It was illuminating. Thank you for pointing it out. Are the account wagering and bettor panels also worthwhile?
Thank you also to Mall for explaining batch wagering. I knew that kind of thing was going on, but didn\'t know it was called batch wagering.
I guess one of the problems with betting into a pool that includes a batch wagering player who is receiving a rebate (aside from the fact that he\'s undoubtedly a very good handicapper or he\'d be out of business quick) is that his large wagers will drive odds down to a level that is profitable for him (because of the rebate), but not for me.
Yeah, Bit Player, you have to win at the windows in order to win.
The rebate player can make a fortune by breaking even, or indeed, even losing on his bets.
You\'ve made the point, & I\'ve disagreed with you, on a number of occasions, though not recently. According to the Tampa GM, in 2003 batch wagering accounted for $7.4 million in bets, & those making the bets received back $8 million, which is a very impressive 8% roi, which gets even more impressive when the rebate is added in. However, given the amount bet one presumes that someone who was able to hack into or otherwise cheat the system would do quite a bit better than that. I also doubt they would target the pk3 or pk4, since the obscenely confiscatory takeout on those bets at Tampa is 25.9%. The fact that a track which is imposing such a takeout is being heralded in some quarters as sticking up for the average bettor by closing down the rebate shops shows how crazy the debate over the issue has already become.
I just got done reading the article on rebates in the Bloodhorse. Bill Nader discussed the large increases in handle after the takeout was reduced most recently. If this is in fact the case why do they not \"tinker\" with the takeout percentage on a more regular basis to find where they can maximize handle? As long as handle increases enough to cover losses on the takeout end isn\'t this good for the track and the customers? This isn\'t a retorical question.
I\'m with Mall on this issue. Focusing on past-posting is a mistake.
First, if it is happening, it would have to be happening sporadically. The pattern of one outlet winning consistently on 1 x All x All (x All) Pick-3\'s (and Pick-4\'s) would be too easy to spot.
Second, by focusing on that issue, you give the industry an easy response: it\'s not happening. How can you prove otherwise?
I think the better approach is to focus on the inequity of giving an unfair advantage to a few large players who are a disuptive influence on the odds.
I always thought that NYRA\'s system of letting only on-track wagers be made after the first horse loads (or was it after post time?) made sense. It gave on-track customers the last look at the odds. Giving them this edge would help offset the many disadvantages of betting at the track (don\'t get me started) and would encourage people to bet on-track. My guess is that NYRA dropped the policy because it was costing them handle from large bettors (although I haven\'t read that anywhere).
Another proposal that one often reads (from the NTRA players panel for example) is to address late and after-the-start odds drops by shortening the update cycle. That\'s just silly. From what I\'ve learned today about batch betting, the rebate shops are going to make their computer-driven bets in the last cycle no matter how short it is. Shortening the cycle (and giving them more updated pool information) is only going to make their tactics more effective. After the race has started, I don\'t care whether I see the final odds in one minute or three. My money is already down.
Frankly, I\'m skeptical that all that\'s involved here is some clever math and the ability to batch.
Maybe its all about the rebate, and breaking even, or making a small amount net. Still, you have to have a handicapping method that is valid and can be applied by computer. Unless these guys have a room full of TG users handicapping 100 races a day.
Without getting into specifics, I would not be surprised to find that there is more of an \'edge\' here than they will admit too.
I\'m off to read that panel discussion, maybe I\'ll learn something.
Mall -
One way to describe the Tampa Bay Downs approach is that they\'ve decided they can make more money by fleecing the customer themselves than by selling the right to do so to someone else.
In a similar vein, when Oaklawn announced that they had cut off some of the batch-betting rebate shops, they also publicized it as a protect-the-customer move. They mentioned, however, that they had first offered the signal to the rebate shops at a higher price. Only when the rebate shops declined to pay more did Oaklawn cut them off.
The equation changes somewhat if only part of the batch wagering was cheating. If you really wanted to do this and not get caught, you would spread it out over lots of plays at lots of tracks to not affect any price too much, and you wouldn\'t care what the takeout was since you were locked.
It would be interesting to see what the return was on pick 3\'s and 4\'s as opposed to the other bets. If it is no better, it\'s not going on.
Some of the commentary in that symposium is just too funny. These guys seem to think that someone actually winning at the track is a threat to their business model.
Never realized they considered themselves the same as a Casino operator in that respect. No wonder the best players are always treated so shabbily.
One of the things that I thought was interesting was that the rebate players Tampa cut off were making most of their money by exploiting inefficiencies in the exacta pools. That leads me to think that I should start being more discriminating about jumping into those pools. I\'m kind of casual about using exactas in lieu of place bets as \"savers\" when I like a longshot.
\"Inefficiencies in exacta pools?\" I have to interpret that to mean payouts that don\'t return fairly and that they bet other exactas in those pools that provide more value. Maybe RTF over Value Plus would be an \"inefficient exacta\"?
I know theres sharp cookies that play these value angles. I just can\'t get wrapped up in them, probably because I\'m not that smart, but to me the game will always first and foremost be about identifying winners on performance rather than odds. Which is not to say that I don\'t glance at the payout probabilities and bet because they are generous, but I\'ll only do that if I\'ve at least come up with a horse I think has winning performance potential. I\'m not a big place and show bettor, but I\'ve discovered the computer does the payout calculation for you and I made a couple of place and show bets Saturday based upon the probables. To my chagrin the odds changed late and cut my payout in half. But if you\'re looking for value in straight bet pools this computer betting is a new tool for it. But, I can\'t count the number times I\'ve seen big money come down and get lost on horses that made no sense. I don\'t believe in \"smart money\". The only smart money I know of is that which I bet and its not always smart. My problem when I go bad is that I\'m over selective. I\'ve lost tri\'s when I\'ve keyed a 20-1 winner and didn\'t go \"all\" for third. I\'ve done it many times, though not at 20-1. I\'ve bet straight tris heavily of A-B-C and not bet A-C-B. I get that confident in my ability sometimes and I pay for it. I\'m good at the handicapping part and sometimes poor at the money allocation part. Its what makes it all so interesting. However, value is an important factor and I\'ve come to have greater regard for it since visiting here. If it were only about the science of value however, I\'d have nothing to do with it. Theres no romance in a selection that only considers fair payouts.
Post Edited (03-15-04 04:24)
My guess is that they\'re talking about exacta prices that are out of line with the win prices of the horses involved.
For example, Horse A might be 3/1 in the win pool, but someone armed with a computer (and complete, last-minute exacta pool info) might find that, by playing all of the exactas with Horse A on top the right number of times, they can guarantee themselves a payout of $1,000 (if Horse A wins) for only $200, effectively getting 4/1 on Horse A through the exacta pools. If the exacta pools were in line with the win pools (a so-called \"efficient\" market), the exacta prices on Horse A would be lower, so that they\'d have to pay $250 to get $1000.
It\'s easy to imagine why exacta prices would be screwy. There\'s just too much information to process, espcially with large fields (the GM said Tampa has an average field size of 10), so I assume that bettors follow some shared strategies that result in exacta prices yielded by those strategies being too low, and other prices being too high. I\'ve never looked closely for patterns, but I have noticed, for example, that exactas where a trainer\'s uncoupled entry runs 1-2 tend not to pay very well.
You\'re right that there\'s no romance in this kind of stuff, but people betting big dollars aren\'t in it for the romance.
I refer to that as an \"perfecta underlay\". I look for them, but don\'t see them with great frequency and odds change so suddenly late now its too hard for me to keep track of. Its a betting windfall kinda like the figure horse where its worst figure beats the best figure of all of its rivals in the race. I think Beyer calls that one an \"Omni Fig\". The key of course is cashing that bet...lol
Funny indeed, in the sense that the presentations expose the peculiar logic of racetrack executives. As Boscar & BitPlayer pt out, when all is said & done Berube at Tam shut off the two rebate shops because they won money in 2003. The way Berube sees things, it\'s okay to win a few bets, but if & only if the winner then proceeds to \"churn\" his or her winnings back into the pools at the industry avg of 7 times.
A single yr doesn\'t necessarily prove anything, & my reading leads me to believe that more often the complaint is the one voiced by Mitchell of WO, namely that rebate players are losing less than others. As stated in JB\'s letter, one of the arguments against doing business with bookmakers is the possibility that they will quit taking your action if you are too successful. Tampa(& maybe FG & Oak) demonstates that bookmakers are not the only ones willing to do so, which is not the same as saying that batch wagering is fair to the avg bettor. It\'s not, for reasons which have already been alluded to & a host of others which deserve separate consideration.
Another oft-repeated argument of those in favor of rebates is that players are price sensitive. If that\'s true, then what explains the fact that Tam, whose outrageous takeout rates are 18.9% for st wagers, 22.5% for the dd,e&qui, & 25.9% for everything else, has already experienced a $40 million increase in handle this yr?
Of course, if you buy into Berube\'s absurd logic, Tam in effect \"reduced\" its takeout w/o changing these percentages when he shut off the 2 rebate shops. As idiotic as that sounds, it pales in comparison to Mitchell\'s argument that lowering the take hurts the avg bettor because he would win more, which he would then proceed to churn & lose, leaving him worse off than he would have been if he had lost his money in the 1st place.
I agree with both players & owners(& by extension horsemen) when they argue that they have been & are getting screwed. The way I see it, these presentations offer some interesting insights in the mindset of those who are responsible for administering the screwing.
Frankly, from the tone and \'insight\' expressed by most racetrack execs, I suspect they would be hard pressed to find permanent employment in a real job. Thus, we are blessed with these nincompoops.
On the other matter, I can say with some degree of expertise, that shopping for \'overlaid\' exactas is NOT what the boyz are doing. Try it sometime, and to paraprahase the old commercial, you\'ll \'wonder where the money went\'.