Horse Race Betting
Betting Cheap Claimers: Statistical Testing and Horse Race BettingBy Joel H. Friedman
[From Blackjack Forum Vol. XII #1, March 1992]
© 1992 Blackjack Forum
[Note from Arnold Snyder: Joel Friedman’s published writings on gambling have all been technical papers, all of which have been favorably reviewed in these pages over the years. Like Peter Griffin, he’s one of those writers who never seem to make any mistakes.
Among professional gamblers, he is highly respected, especially as a tournament player, having won far more than his share of jackpots. He wrote to me about Stanford Wong’s new book, Betting Cheap Claimers.]
To properly review Wong’s Betting Cheap Claimers, it is first necessary to provide to the Blackjack Forum readers some background on the differences between betting on horse races and playing blackjack. Only then can you determine whether this book is of interest to you and what kinds of risks are associated with moving beyond the world of blackjack. I will first try to provide that background and then give my review of Wong’s book.
Horse Race Betting and Unknown Expectation
There are two types of games in which gamblers can potentially obtain an edge. First, we have situations like blackjack and video poker in which an edge can be obtained by using appropriate betting and playing strategies where the size of that edge can be calculated precisely.
You may have a very complicated way of playing blackjack, but we can, in theory, use a computer to evaluate your expectation. This is in direct contrast to gambling tournaments, playing poker, and betting on either sports or horses.
In gambling tournaments and poker, your edge is determined not only by the parameters of the game or tournament but also by the quality of your opposition. In betting horses, the key parameter is the savvy of the betting public. In sports betting, we have a combination of the intelligence of the bookmaker and that of the general public.
Betting serious money in situations where not only the size of your advantage is unknown, but also it is unclear whether or not you have an advantage, can be very disturbing to a blackjack player accustomed to knowing his expectation.
Horse Race Betting and Changes Over Time
The usual response to the above concern regarding unknown expectation is a demonstration of how well a given system would have worked in the past. An implicit assumption is being made that nothing has changed.
For a blackjack player, this is usually a good assumption. If this year you play a blackjack game that has the same rules, number of decks, penetration and table conditions as one you played last year using the same method of play, it follows that your expectation is the same.
But this is not true of the other types of gambling described earlier. My experience in gambling tournaments has been that the competition has gradually been getting tougher as players learn both from books and observation of other players. Tougher competition means lower probabilities of winning and hence lower equity.
When California expanded the scope of legal poker games, many Las Vegas poker pros temporarily relocated to California to exploit the public’s relative lack of sophistication at the newly legalized games. When dog tracks appear for the first time in new areas of the country, professional handicappers flock to the scene.
Conversations with professional horse handicappers suggest that the general public becomes more knowledgeable each year and betting ideas that used to be profitable are no longer so. In sports betting circles, it has become popular to test out betting angles against the line in previous years. This approach usually ignores the effects of rule changes from year to year and the fact that the linemakers study similar databases and adjust their lines to reflect past biases and changes in public perceptions. Blindly using a system this year that would have worked in last year’s game can potentially be very hazardous to your bankroll.
Horse Race Betting and Geographical Diversity
Differences between racetracks and between the betting tendencies of the general public at different racetracks add an additional layer of complexity to the handicapping problem. Partly this is caused by differences in readily available information.
I noticed last summer that the horse racing columnist in my local paper reported on almost a daily basis on his impressions of the track bias at Monmouth Park. In a different geographical area, the local paper might never even discuss this question. One would expect that the profit potential inherent in betting because of track biases to be very track dependent.
Wong’s book contains another example of the geographic diversity of the betting public, namely the 1988 Kentucky Derby. Different tracks offered separate betting pools for the race. The winning animal paid anywhere from $4.40 to $10.60 to win. To me this suggests that a successful betting system for one race track might not work at a different racetrack.
Wong’s Target Audience
In his introduction, Wong says that Betting Cheap Claimers is intended for casino customers looking to make an occasional racebook bet who want to make money with only a minimal expenditure of time. Wong offers three types of opportunities: tournaments, horses to bet against, and track bias. I disagree with this viewpoint, and my reasons will subsequently become apparent.
Horse Race Handicapping Tournaments
The section of handicapping tournaments does a solid job of telling you how to play in the most lucrative type of tournament. My only complaint is that Wong grossly overstates the equity that a tournament player has in this type of tournament. The publication of this book should further decrease that equity. Still, the book is of interest for the tournament section if your interest lies in that direction.
Horses to Bet Against
While Wong does give specific recommendations on what horses to bet against, I find this section unconvincing. He statistically demonstrates that a certain type of animal is overbet by the public in a sample of racing at the major California tracks. He does not, however, demonstrate that these animals are overbet by so much that you can profit by betting against them.
Even if he provided a data sample with a demonstration of profitability, I would still have concerns about blindly using his technique because of both geographical diversity and changes over time. I think that his suggestions are dangerous unless you have enough of a handicapping background to develop a feel for the reasonableness of a horse’s odds. I wouldn’t expect a casual casino customer to have this expertise.
The idea of exploiting a track bias did not originate with Wong. Both Andy Beyer and Stephen Davidowitz wrote better treatments of the subject in the 1970’s.
Exploiting a track bias is a potent tool in the hands of a good handicapper. The thought of a casual casino customer betting serious money because his glance at a Racing Form suggests to him that a serious bias exists is downright scary. Normal statistical fluctuations can easily lead one to the conclusion that a bias exists when in fact it doesn’t.
Changing public perceptions over time is a concern here as well. If a local columnist is screaming about the track bias, the public will tend to adjust the odds somewhat. A casual casino customer won’t be able to discriminate enough to know whether a bet is still worthwhile.
Wong’s book offers a reasonable introduction to the handicapping literature and some good material on statistical testing as it applies to horse racing. It is this material that defines for me the appropriate target audience for the book. If you are interested in seriously exploring horse racing for profitable betting opportunities, or even using statistical testing techniques in other areas, this book provides an introduction in a nontechnical way.
Buy Betting Cheap Claimers. if you want to learn about horse race handicapping tournaments or if you are interested enough in horse racing and statistics that you might be willing to go on and explore these areas in depth. Buying the book with the idea that you will be able to make “no brainer” winning bets in a racebook with minimal effort is very scary. You will never really “know” whether you have an edge or not. ♠
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||Professional gambler Joel Friedman reviews Betting Cheap Claimers, and discusses statistical testing issues in horse race betting and other professional gambling.