Bill Finley\'s Op-Ed regarding High Volume Players
from the Thoroughbred Daily News 03/04/16
We discussed all this ad nauseum years ago .
In some ways it\'s a real problem , and in other ways its overstated. Horses still routinely pay overlaid odds.
I\'d say the overall high takeout is a much bigger problem for the average player than the computer whales.
I watch the pools, they get it wrong plenty. Question is, will YOU get it right when THEY blow it.
One whale is confirmed in the GP super high 5 pool on carryover days, betting huge sums into that usually \"deadish\" pool.Seems he obviously has a way to grind out a profit.
Believe same guy has started to gamble into the SA Super High 5 pool.
Box,
Need to research this more, they do not miss often enough to lose money over the long run. Their edge over regular players is well documented and known to racetrack operators. For the sake of handle, most operators, NYRA for certain,are willing to permit regular players to take the worst of it.
Finley noted they are at break even and enjoying a 10% profit from the rebate, hear a very different/lower profit margin being held by whales.
Can\'t be 10%. If it were they would bet more, take a lower ROI, but make more money. I had that conversation with Rocky a while back.
The fact that there are still some overlays doesn\'t change Finley\'s math. Whether or not what they do should be allowed is another issue, but without question if they are taking a lot out of the pools everyone else collectively has to do worse. It\'s a less than zero sum game.
I\'m not sold on Finley\'s math. At least, there\'s not enough presented to made a determination.
The problem of the effective takeout idea seems to stem from the claim that the big bettors are better bettors. If my ROI at the track is .75 and yours is 1.25, the \"real\" takeout for me is higher than for you - using Finley\'s rationale. If my hit rate is the same at the whales, the takeout is exactly the same. This is just a proxy for being the worse bettor. Are we gonna ban TG players because their ROI is higher than your typical mope?
And this assumes that the whales are that good. As Finley said, even if they aren\'t\' breaking even, it makes sense to continue betting, so long as the rebate offsets the loss. But if their pre-rebate ROI is less than one, then you are gaming them by having a better ROI. Given the rebates, you\'d think they\'d be more risk averse about the bets, which could put a celing on the ROI.
This of course assumes that the rebates aren\'t funded by raising the takeout rates. Then we are paying them through the backdoor. But, it\'s not like whales only bet into sure things. Casinos love whales, not for no reason.
In any event, the general public doesn\'t seem put off by the ridiculous odds on scratch off tickets. And if you think you can out ROI a whale (pre-rebate), you should welcome their presence.
(Full disclosure, I\'m not a whale or someone who has a lifetime positive ROI)
ajkreider Wrote:
-------------------------------------------------------
> I\'m not sold on Finley\'s math. At least, there\'s
> not enough presented to made a determination.
>
> The problem of the effective takeout idea seems to
> stem from the claim that the big bettors are
> better bettors. If my ROI at the track is .75 and
> yours is 1.25, the \"real\" takeout for me is higher
> than for you - using Finley\'s rationale. If my
> hit rate is the same at the whales, the takeout is
> exactly the same. This is just a proxy for being
> the worse bettor. Are we gonna ban TG players
> because their ROI is higher than your typical
> mope?
>
> And this assumes that the whales are that good.
> As Finley said, even if they aren\'t\' breaking
> even, it makes sense to continue betting, so long
> as the rebate offsets the loss. But if their
> pre-rebate ROI is less than one, then you are
> gaming them by having a better ROI. Given the
> rebates, you\'d think they\'d be more risk averse
> about the bets, which could put a celing on the
> ROI.
>
> This of course assumes that the rebates aren\'t
> funded by raising the takeout rates. Then we are
> paying them through the backdoor. But, it\'s not
> like whales only bet into sure things. Casinos
> love whales, not for no reason.
>
> In any event, the general public doesn\'t seem put
> off by the ridiculous odds on scratch off tickets.
> And if you think you can out ROI a whale
> (pre-rebate), you should welcome their presence.
>
> (Full disclosure, I\'m not a whale or someone who
> has a lifetime positive ROI)
But their ROI is on an amount much larger than yours.
Your casino analogy is apples and oranges to this discussion. A casino whale has zero impact on my earnings. These guys do. Casino comps don\'t make up for the losses, thats why they love them.
I used to play several times a week. I rarely play now. I\'ll attend the Big Cap next weekend, play on the big days. That\'s pretty much it. Why should I invest my gambling dollars in a game rigged for those that get rebates??
My gambling dollars are now mainly going to sports betting, where I have a much bigger edge. And its really unfortunate, as I would much rather watch a horse race than anything else. Especially if I have money invested.
Casinos do not like whales that win. Whales that win are beached.
For those that didn\'t read it: Oaklawn Park is
the only major racetrack in the country that doesn't allow the
computer bettors into their pools.
You seem to have this hiccup in your thinking, that if they are not taking down the entire pool, every time, there is no problem.
Picture a swimming pool. Picture yourself as a fish in that pool. Now, Picture an orca in that pool. Is it easier or harder for you to get a meal with that orca in the pool? The point isn\'t whether it\'s possible for you to eke out an existence, the point is that the orca is really, really bad for you!
The most noticeable pool where Orca feasts is the Gulfstream \"championship meet\"
particularly in the first 7 or 8 races before Santa Anita goes off.The Aqueduct inner tube has been abandoned by anyone serious for the past 2 or 3 years with it\'s trotter like heavy 26 and 27 3rd and final quarters producing 1:42 and 44 miles.
Anything logical or within the realm of possible is crushed in the exacta\'s and tri\'s. This meet was my 2nd most major focus besides the Spa for many years and a positive ROI especially on the green was a constant. It\'s gotten to the point where the payoff\'s are so paltry I\'m having trouble betting enough to qualify for the rebate levels I\'m targeting to obtain. The pick 5 and the rainbow 6 are the only shots worth firing there anymore except on one of their 2 or 3 20 million dollar handle Saturdays.
Frank D.
Isn\'t this problem largely self-correcting? As the whale\'s share of the pools goes up, their ROI will have to go down, because they\'ll be playing for their own money, minus the takeout.
Maybe the whales will be the ones to put downward pressure on the takeout.
Compression of the payoffs in the exacta pool has been a problem for quite a while. Less of an issue in larger fields, though if the payoff involves some longshot that the the boys took a fancy to, expect a half price sale on the final number.
Oaklawn. Not sure how you keep anyone out of the pool. Maybe other tracks are giving some bettors special access to the tote, but other than that, there\'s no way to keep anyone from betting late, and many combinations.
Fairmont. I notice you often chime in on OP so you must follow it. Jack \" Hay, Oats and Water\" Van Berg is near 20% for the meet with 9 wins for 50 as of tomorrow\'s DRF. I realize OP is a bit softer than SoCal but he won a total of 12 races from 2011 to 2013. Any word on the sudden resurgence? He had much better results in 2015 with some lesser quality meets but 9 wins at OP in less than two months. I doubt it\'s the Hot Springs. Just Curious as he used to be an auto toss on any ticket for a decade.
Thanks N2 for posting this. I\'m sure Rocky is checking Mr. Finley\'s
math as we speak. Two whale watching issues which need to be discussed: What is
the whale impact on the horizontal wager pools and why racing hasn\'t done more in
terms of leveling the playing field with regards to shutting down the tote a
minute or two before post time. Would shutting down 90 seconds before post time
significantly lessen Moby and Orca\'s edge?
Great race: Ortiz brothers all even with 63 wins on the inner course through
yesterday\'s racing.
Good race: While the Gotham is getting most of the attention, the ungraded
Heavenly Prize Invitational drew a short but interesting field with 6 of 7
runners already having earned black type. House Rules and Include Betty are
graded quality runners coming off a layoff with no inner tube experience;
likely favorite Cali Star has moved up significantly after moving from Alice
Cohn to Marty Wolfson. Wolfson very successful shipping to NYRA tracks but
Cali has never raced over the inner. Mei Ling is potential lone speed adding
blinkers for TAP and gets seven pounds from the above-mentioned runners. The
two NYBs, Saythreehailmarys and Storied Lady, are getting outside posts,
getting weight from contenders and are both proven commodities over the Inner
at 15/1. An interesting handicapping puzzle and the first leg of the late P4.
Richie:
I agree. The Heavenly Prize a better race from a handicapping perspective. Was looking at it on DRF when you posted your note. Looked at TG numbers which confirmed my original thoughts.
This may be a bit too far for Mei Ling and House Rules but they have to be used to protect. Include Betty not for me at the price---will be left with too much to do toting 123. Storied Lady consistently too slow and drawn wide.
Saythreehailmary\'s is sharp (and a :47.4 breeze) likes the inner and the distance. Concern is the inevitable wide trip. At double digits I like underneath in the exactas with a win bet to protect.
Good Luck,
Joe B
TGJB Wrote:
-------------------------------------------------------
> Can\'t be 10%. If it were they would bet more, take
> a lower ROI, but make more money. I had that
> conversation with Rocky a while back.
>
> The fact that there are still some overlays
> doesn\'t change Finley\'s math. Whether or not what
> they do should be allowed is another issue, but
> without question if they are taking a lot out of
> the pools everyone else collectively has to do
> worse. It\'s a less than zero sum game.
Had a few questions regarding the predatory habits of the Orca.
First an extreme hypothetical case:
It is the UNCLE BILL BACKYARD DERBY (often called THE SIESTA STAKES)
Purse: Dinner and Drinks at PRIME at Saratoga National
It is a Match Race THE WEATHERMAN versus MATHCAPPER
The \'Weatherman\' sheet has him surpassing a 40 year old top of after moving to the barn of TOPCAT.
Mathcapper, who is managed by a rezlegal syndicate, has all of his races well spaced and he has never gone backwards.
Based upon the ORCAputer, Mathcapper should be 1 to 5 and Weatherman at 5-1 or thereabouts.
However, the Backyard Boys include Bud Fox and he has \'inside\' info that Mathcapper took the last train from Clarksville, had some bad chicken at Hatties, warmed up badly and begged Uncle Bill to be scratched.
Meanwhile, some Backyard chemists have juiced up the Weatherman\'s morning java and, based on Shanahan\'s proprietary algorithm, are certain he will run a another new top .
The Backyard Boys move into action.
Total Pool: $125,000
Takeout 20% (Prime ain\'t cheap and this covers drinks, dinner and an Uber driver)
Only 2 beting entities: the Backyard Boys and the Pequodians
The Backyard Boys bet early placing their 65k on the nose of the Weatherman.
Moby Dick\'s Orcaputer naturally spots the huge disparity in odds and plucks his $62,500 (or more in theory) on Mathcapper.
Mathcapper spits the bit and the Weatherman romps home.
The Backyard Boys give Mathcapper a pepto bismol and toast the Weatherman
Moby Dick gets beached
Granted, the example is extreme.
The questions raised are:
At which tracks and which meets do whales operate?
What \'pools\' do they typically bet into?
Who creates the software and the algorithm they deploy?
Are performance figures (such at TG\'s) incorporated into their algorithm?
How does an algorithm handle claims, trainer changes via private transactions, equipment changes, medication changes, feed chages (or how does the computer find out about the Weatherman?) jockey changes, surface changes, distance changes, etc. etc, etc. (How does the computer avoid Mathcapper?)
I find it difficult to imagine that such highly subjective intangibles could be incorporated into a program since, by their very nature, they are subjective.
My feeling has always been that:
I see the odds pool (exactas, DD\'s WPS etc.) before I bet
I can see the Will pays going one race forward (pik 3 etc.)
I have a pretty good notion of what the return will be based upon my wager.
If there is perceived value you bet.
If there is no value you pass.
To me, having the option to be \"Selective\" is one of the great advantages in wagering on racing rather than other casino games (ex-poker) .
I suppose that the Orca may eating some of my profits but i wager based upon my perceived value proposition.
Bob
I will send a private message with more details/opinions later this weekend to avoid the crime of Board Assertion, a class A infraction punishable by up to 3 richiebee reprimands and 2 Rick B brevity warnings (all in good fun guys).
As for a few facts from this meet, Chris Richard has been my favorite trainer followed by Karl Broberg and I caught on very fast this year after Jack won two races right away. Both have been \"autotoss\" in the horizontals all meet. These are only Oaklawn Park stats listed below.
Jack Van Berg:
2016: 55-9-7-11
2015: 53-1-5-7
William Fires:
2016: 30-8-3-2
2015: 42-1-4-2
Gary Hartlage:
2016: 18-4-5-1
2015: 49-3-6-5
Chris Richard:
2016: 37-1-6-8
2015: 97-15-11-11
Karl Broberg:
2016: 29-1-4-2
2015: 62-7-9-8
Robertino Diodoro has been my favorite trainer all meet for seeking out winners scoring every weekend and somehow I\'ve been on him nearly every single time. He has two in today including heavy, heavy fav Subtle Indian. Asmussen is heating up the last two weekends and is poised to have a big day with the over/under at 2.5 wins today. Midwest Thoroughbreds and Roger B. absent from the meeting thus far.
Overall, the meet has been very competitive with few heavy chalks and the ones that are heavy chalks have went down a few times also. In addition, there aren\'t horses \"running off the screen\" or \"rebreaking like a tremendous machine.\" I usually don\'t enjoy the Oaklawn meet. But I will miss this one as miracle jobs have been few and far between to my eyes (yikes?...I might be in assertion territory). I do not study it to the minute detail Boscar does but the payoffs seem to be generous in the win, exacta, and trifecta pools as compared to other tracks for the last few years.
Last one:
Bob Baffert:
2016: 3-0-1-0 (Off the board in 2 3yo stakes)
2015: 4-3-1-0
2014: 5-1-1-1
EDIT: TGJB has stated that the better info is the number power trainers have shown last year vs. this year vs. pre-Oaklawn as a better barometer (as compared to win %) of how these guys are doing and I don\'t dispute that and would venture you would see some guys just aren\'t getting the numbers down there this year.
I think the issue is which ADWs a track sells its signal to and allows into its pools. My understanding is that there are ADWs that are specifically designed to accommodate whales/batch bettors in terms of technology and rebates. The tracks know which ADWs they are.
One can determine how well the whales are doing by analyzing data regarding the settlements between those ADWs and the track. It is not information that the public has access to, but the track does.
I couldn\'t agree more Richie. When these folks get a very large bet down at the last second, and I mean the last second, it can have a severe negative impact on the game. I can\'t stand watching my horse leave the gate at 3-1 and then as they come around the final turn I look up and now he\'s 9/5. Anyone on that horse feels cheated, and that drives people away from the game - ironically especially if their horse wins. Not to mention past posting because there was a \"hiccup\" in the data stream.
There\'s a part of me that says good for them for exploiting an edge. Fundamentally I\'m kind of all for that sort of thing. But at what point does an edge become cheating?
Certainly past posting should be cheating.
Bit,
If Finley really wants to tackle this, he should ask Chris Kay or Marty Panza to:
1.Disclose the net settlements with all the hubs and explain what that means(we know)
2.Fully explain NYRA\'s position on CAW/whale rebates
3.Confirm that the NYSGC is fully aware of what and who NYRA is allowing into its pools and under what terms.
4.Confirm in detail how the \"other\" gamblers in the NYRA pools are not disadvantaged by the preferential treatment afforded to a few.
As much as I enjoyed reading the analysis of this week\'s ROTW I like Richie\'s choice. While investigating the entries I logged my thoughts fwiw.
#1 Pangburn
Which sounds a bit like a spicy hot Thai dish was convincing winner in last without a stellar ride. Winning in bad weather @LRL and prompt return causes me to think the horse is in good form. However the horse has never put two good back-to-back efforts together.
2. Mei Ling
As RitchieBee points out this gal could be loose on the lead and with the weight advantage may last. After watching her previous races it is apparent to me this one will be on the pace if not the lead. But she\'s been there before and could not out finish the winners (in stakes company). M/L 8/1 is attractive considering she probably won\'t lose any ground today.
#3 House Rules
Well rested, looks to be training strong, capable but doesn\'t get any weight or an Ortiz? This race looks more and more contentious as one goes through the entries.
#4 Include Betty
This mare can\'t be easy to ride. She routinely loses ground on the first turn with no other horses around and a bunch on the second turn while doing her Zemyatta thing. As handsome as Aaron is I don\'t think he\'s up to the task here. Hard to imagine a Tri without #4 in there somewhere. Would be a good payoff however.
#5 Saythreehailmary\'s
This one was unlucky to lose her last. But her running style makes her vulnerable to traffic problems so we can expect some more today. But she is hard hitting and M/L 15/1 seems generous considering this one\'s success on AQI.
#6 Cali Star
The omnipresent favorite albeit this one at 8/5 m/l and surely easier to beat than the 1/9 ROTW candidate. Wolfson\'s success visiting the big apple is credible and an Ortiz is up, my concern is this one loses ground or may get blocked making her favorite rail move? Not infatuated.
#7 Storied Lady
This one had a formless summer in 2015 but looks to be healthy again. Along with her Spotlight cohort from the Biogio Rose 15/1 seems generous and I prefer this one.
Conclusion
Proving once again that RichieBee can oft have good judgement this race is a worthy puzzle and a nice test for Mar In NYNY. The absence of RR, Preciado, Josephson, etc allows me to jump in. Considering I can get a better price on include Betty to show than Songbird to win bet a buck.
Mike,
I started this conversation along with the take out concerns of everyday players with Klueless Kay last year at the Spa. The first week or so of the meet he was very visible and accessible as the gates opened up. I also invited him up to our seminar citing many serious players would like to address some of these issues. Of course he said he would stop by during the meet and never did.
He mumbled some gibberish about the boards hands being tied by racing and wagering on take out issues and that they were trying to obtain some relief. When I mentioned batch betting and changing odds he looked at me like I had 11 heads!
This political board full of cast offs that couldn\'t get a job anyplace else in the working world will never do a thing that could even possibly effect the bottom line negatively. I\'d love to see the look on their faces when someone mentions banning 20% or more of the mutual pools. Can you imagine the cost of a picnic table if that ever happened?
Frank D.
Frank
Top NYRA management not gambler friendly and consistently decline any reasonable gambler request,know that for a fact.Kay a bonafide racing neophyte, his bean counter team cant spell exacta, just know debit/credit/price increase.There is also a faction amongst NY horsemen who perceive the gambler as a necessary evil, fking morons.
One or two NYRA Board members are ok and trying to improve some things but the bureaucratic process thru Albany near impossible.Politicians firmly in charge of many aspects of NY racing.
Mike
I\'ve never seen a single race where I thought it had been past posted.
Have to limit that to after the race is run, someone betting 15 seconds late would be impossible to detect from my vantage point.
belmont3 Wrote:
> the Backyard Boys include Bud Fox and he
> has \'inside\' info that Mathcapper took the last
> train from Clarksville, had some bad chicken at
> Hatties, warmed up badly and begged Uncle Bill to
> be scratched.
>
> The Backyard Boys bet early placing their 65k on
> the nose of the Weatherman.
>
> Moby Dick\'s Orcaputer naturally spots the huge
> disparity in odds and plucks his $62,500 (or more
> in theory) on Mathcapper.
>
> Mathcapper spits the bit and the Weatherman romps
> home.
>
> Moby Dick gets beached
Moby should\'ve factored into his algorithm the evidence from my past performances, which showed that when I veer into that netherworld of nasty Hatties chicken and away from my standard diet of hard boiled eggs, I bounce badly next time out.
(loved the Bud Fox reference btw Bob - I can still recite just about every line of Gekko\'s, including the classic Teldar Paper speech).
> The questions raised are:
>
> At which tracks and which meets do whales operate?
Pretty much everywhere these days. They started in Hong Kong, which was fertile ground because of the huge pools and the self-contained horse population, but they\'ve long since expanded into the N.American market. The limiting factor for them is track handle - smaller tracks may not be worth their time.
> What \'pools\' do they typically bet into?
All pools. Basically any bet they\'ve computed to have a positive expectation. The natural tendency is toward the superexotics (both vertically and horizontally) because edges are multiplicative. I posted a little bit about this not too long ago: Computer-Robotic Wagering (https://www.thorograph.com/phorum/read.php?1,98943,99004#msg-99004)
> Who creates the software and the algorithm they deploy?
There are many imitators now, but the original, and most widely known, was created by Bill Benter and Alan Woods. It took them 5 years and over a million lines of code.
> Are performance figures (such at TG\'s)
> incorporated into their algorithm?
I can only speak for the Benter/Woods model, but not performance figures that I\'m aware of, although I do believe they incorporate some sort of variant-adjusted final time. Benter\'s model uses something like 80 factors, which include \'native ability\' variables like normalized finishing position, race competitive level (ie. purse), final time , etc., along with \'preference\' variables like distance, surface, track, condition (wet/dry, hard/soft), etc. and \'incidental\' variables like weight, post position, trainer, jockey (normalized finish position or win%), etc. All variables are in the form of exponentially recency-weighted averages.
> How does an algorithm handle claims, trainer
> changes via private transactions, equipment
> changes, medication changes, feed chages (or how
> does the computer find out about the Weatherman?)
> jockey changes, surface changes, distance changes,
> etc. etc, etc. (How does the computer avoid
> Mathcapper?)
This was the biggest issue Benter/Woods ran into, and it caused them to go through their initial bankroll at least once before they were able to correct the problem.
When the first developed their program, they found that there was a very big bias in their estimates. The horses they deemed as overlays were not winning at the rate they predicted, they were underperforming badly.
What they discovered was that they needed to incorporate the public\'s probability estimate into their model (to account for the so-called \'smart money\'). When they combined the probability estimate from their fundamental model with the public\'s probability estimate (50% weighting to each input), they found that they now produced a set of probability estimates that showed very good correspondence to the actual frequency of winning. And the rest, as Benter says, was history.
> I find it difficult to imagine that such highly
> subjective intangibles could be incorporated into
> a program since, by their very nature, they are
> subjective.
They do have to quantify some of the more subjective \'preference\' and \'incidental\' variables. As they do with their other variables, I believe they use a normalized scale on the order of -0.5 to +0.5 or something like that.
> My feeling has always been that:
> I see the odds pool (exactas, DD\'s WPS etc.)
> before I bet
> I can see the Will pays going one race forward
> (pik 3 etc.)
> I have a pretty good notion of what the return
> will be based upon my wager.
>
> If there is perceived value you bet.
> If there is no value you pass.
Exactly. That is one of the reasons I always compute the odds based on the Will Pays, and then measure my expected value based on those odds, which are generally pretty close to the final odds. I\'m rarely surprised by a horse going from 3-1 in the gate to 9/5 down the backstretch. In fact, if the odds based on the Will Pay for such a horse was 9/5 and his odds didn\'t drop, then I would be surprised, and likely in trouble if I bet him, as the lack of support in the win pool vis-a-vis the Will Pays is usually a bad sign.
> I suppose that the Orca may eating some of my
> profits but i wager based upon my perceived value
> proposition.
Yep. Benter himself estimated that the computer guys have the combined effect of raising the blended takeout by around 2 percentage points. So if a track\'s blended take is, say, 20%, the average handicapper would feel like he\'s playing against a 22% takeout instead.
Since it\'s a zero sum game, the fact that the computer guys are extracting this money from the pools makes it a little harder for everyone else, but as I mentioned in a recent post: Odds Lines: Omniscient vs. Zero Knowledge (https://www.thorograph.com/phorum/read.php?1,99481,99512#msg-99512), as long as you can create an odds line that is better than the public\'s (which is the same thing the computer guys are doing), and your overlays are performing like they should, there is still value to be had.
Best,
Rocky
No problem with any of the conclusions here, except I find that \"2%\" impact figure a bit disingenuous.
If that\'s all it was , then no one would notice or care.
What matters is what happens to the odds on WINNING combinations.
Exactas going from 100 to 80 is not 2%. 3-1 to 2-1 is not 2%.
I don\'t believe that figure for a minute.
Sure, when they get it wrong, the payoffs are elevated, but they don\'t get it wrong all that often , and the \'boost\' in odds is not of the same order of magnitude as the \'cut\' when they get it right.
PS I\'ve watched some Hong Kong pools now that we have access. The odds changes in the Q\'s (no exactas there) can be enormous on the last flash or two. Even with the massive pools, the movements can be even larger than we see here.
Thanks for the great explanation.
I guess I have going to have to do some more extensive reading on the subject as my intellectual curiosity has been aroused.
On a different note, The Weatherman said that, despite finishing up the track, you are invited to his retirement party.
It has been \"Heard on the Street\" that the Weatherman will soon unveil a new financial product that is currently being tweaked during beta testing.
It is called \"Sunny Skies\" or a \"Meterorologists Guide to a Rebated Retirement\"
First seminar being held at the Saratoga Harness OTB.
Bob
Well we notice, mostly, when it hurts us. Sure, its evident and pisses us off when our exacta is $20 lower. We don\'t notice the five previous times when the exacta is four dollars higher
If you think you\'ll be right 5 times against the pros for every time you\'re wrong, you\'re wrong.