Originally Posted by rdiam
Why you can't win betting to win: in a nutshell, the win betting market is too efficient...
Remember, we do not bet ON horses, we bet against OTHERS in the pari-mutuel pools. Due to current conditions, the win pool is generally efficient (of course, there are always exceptions on a case-by-case basis), and it is extremely difficult to find positive expected value (+EV) these days betting horses to win. Let me explain:
Betting favorites are currently winning roughly 38% of races, probably closer to 40% as time goes by. The main reason for this is smaller field size, closely followed by cheating (MTH had favorites winning close to 50% in 2019, with Navarro (cheater) the leading trainer, not a coincidence), and finally, rebate syndicates.
Can we bet these favorites and achieve +EV? Well, consider that horses going off below 1-1 ONLY win around 50% of the time, and horses going off below 3-2 ONLY win around 40% of the time. If you do the math, betting on such horses still produces -EV. Even favorites that "only" win 33% of the time (the old "standard" for winning favorites) on average go off below 2-1. No Bueno...
The problem with betting favorites is that, as a group, they won't produce +EV. What about favorites that go off 3-1? They, on average, win less than 25% of the time.
What is going on? Small fields, cheating, and rebate syndicates. Small fields and cheating should be obvious in how it causes favorites to become underlays. What about rebates? Consider that in 2019, if you bet every horse in every race, you LOST $0.25 out of every $1.00 bet. Wait, you say? The takeout and breakage on win bets is only somewhere between 15-20%, so how does one lose 25%? The answer: the winning horses are "overbet" by rebate syndicates, who are getting up to 10% back on every dollar bet. They are willing to "pound" low odds favorites to odds where they breakeven or even lose a bit, making up the difference in their generous rebate. It is no coincidence that the 0.75 ROI betting every horse in 2019 roughly corresponds to the extra spread below the takeout and breakage. MORE IMPORTANT, swimming in the pool with the big rebate syndicates has the effect of actually RAISING the takeout on those with smaller or zero rebates. If you thought beating a 20% takeout game was tough, how do you feel about playing into a 25% takeout?
Those are the facts, boys and girls. So how do we play the game? Well, there is not a whole lot we can do about cheating, so we have to live with that. But we can try to avoid playing in the win pool with the rebate syndicates and playing races with small fields:
First, pass on the win pool if there are fewer than 8 runners. Yes, I know there will be exceptions, but the rebate syndicates prefer chalk in small fields. As a corollary to this, pass on races taken off the turf: it tends to cut down on field size, and you do not know which horses are "stuck" (grass horse that the racing secretary has asked the trainer to leave in to have enough horses to run the race). Similarly, pass on races on "wet" tracks, as it is hard enough to handicap a race without having to deal with how a horse will respond to running on a wet trace.
Second, if you are going to bet a horse 7-2 or lower, make sure you can identify at least one other horse with 20% of the win pool (i.e., going off 3-1 or lower) that has little or no chance to win today's race. If you can do this, and your handicapping is superior to that of the rebate syndicates, you can swim in the pool and create +EV.
Otherwise, stay away.
Third, try to find races where the rebate syndicates are staying away: start with looking for a race where the ML favorite is 5-2 or higher. Make sure your horse or horses you are looking to bet have a ML or 5-1 or higher.
Finally, bet into pools where the rebate syndicate "sharks" are not playing. Exactas are difficult to handicap due to the place horse (IMPORTANT: READ and RE-READ "The 55% Solution", probably the most important contribution Sartin has made to racing literature), so if you can analyze contra-energy and other factors, you can create +EV with Exactas. Similarly, rebate syndicates tend to stay away from most horizontal pools. DD and p3 pools are generally too small, and there is too much uncertainty for them in p4 and p5 pools. Look to structure your horizontal bets properly, and let the takeout spread over a series of races allow you to lower the ROI requirements in each race to create +EV relative to the win parlay.
In sum, minimize your win bets as discussed above. The win pool has been bastardized by small fields, cheating, and rebate syndicates. Chalk wins a lot these days, but the prices on the chalk are too low to actually make $ betting them to win (see Selections by LT1 in recent days -- lots of winners, no prices). Be more selective in choosing races where you bet to win, and use horizontals and verticals to "fish" in larger fields where the cheaters and rebate syndicates don't swim. Good luck.
Richard
|