Archive for the ‘Thoroughbred Racing’ Category
Weekend Graded Stakes Roundup
Written by trackmasterplus on September 2, 2010 – 5:55 pm -A weekly rundown of major stakes races around the US.
The Labor Day weekend signals the end of summer and the winding down of the Saratoga and Del Mar meetings. Here’s whats on tap:
Saratoga has two Grade 1 races on Saturday…the $250,000 Forego Stakes features a full field including top sprinters Vineyard Haven, Bribon and Big Drama. Be sure to look for value as anything can happen at 7 furlongs…Last year’s Woodward Stakes was a thriller and we’ve got some big names headed in different directions in the Grade 1 $750,000 event. Expected to go favored big-time is Quality Road despite a recent setback when losing to the up and coming Blame in the Whitney. Without that rival to deal with Quality Road should be somewhere in the neighborhood of 2-5. Perhaps a flyer on Mythical Power might be in order but he’s never had to deal with the likes of the favorite and there just isn’t much in the same class in this race. 2009 Kentucky Derby winner Mine That Bird hasn’t won a race since yet new trainer D. Wayne Lukas puts him in another spot he’s destined to fail.
On Sunday at Del Mar be sure to check out the $300,000 Grade 2 Del Mar Derby, where Twirling Candy, so impressive in winning his four starts to date, including the Oceanside Stakes on opening day, seeks to add to his legacy. This one could be any kind and is still learning the game but could be a superstar in the making…Del Mar closes out it’s meet on Wednesday with the $250,000 Grade 1 Del Mar Futurity. The field was not available at the time of writing but usually attracts the top two year olds in the West.
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The Vicious Cycle of Raising Takeout
Written by trackmasterplus on August 30, 2010 – 9:00 am -Recently, discussions regarding takeout rates have been on the rise again since there is an amendment in California that would enable the possibility of raising the takeout rate on certain bets involving more than one horse. Here are some simplified examples of how raising the takeout rate could potentially be very detrimental to the amount of money returned to the government, the tracks and the horsemen. These examples pertain to the Pick 3, one of the wagers that would have the increase in taxation applied to it.
First, let’s take a look at some data from a typical day at the races using Del Mar’s card from Saturday, August 21st, 2010. The following relates to the Pick 3 sequences for races 3 through 10: the pool size, the off-odds plus one for the winner of each leg (the plus one is the original bet), the payoff with the current takeout of 20.68%, the adjusted payoff with the proposed takeout increase of an additional 3% (23.68%), and the $1 Parlay payoff (if one dollar was placed to win on the winner of Leg A and the subsequent winnings placed upon Leg B, and those winnings placed on the winner of Leg C).
| Sequence | Pool | Leg A | Leg B | Leg C | Pick 3 | Adjust 3 | Parlay |
| Races 1-3 | $133,765 | 2.2 | 2.7 | 2.5 | $23.80 | $22.90 | $14.85 |
| Races 2-4 | $61,516 | 2.7 | 2.5 | 2.8 | $41.70 | $40.10 | $18.90 |
| Races 3-5 | $80,010 | 2.5 | 2.8 | 4.2 | $49.60 | $47.70 | $29.40 |
| Races 4-6 | $102,977 | 2.8 | 4.2 | 2.0 | $36.70 | $35.30 | $23.52 |
| Races 5-7 | $98,153 | 4.2 | 2.0 | 7.6 | $97.40 | $93.70 | $63.84 |
| Races 6-8 | $116,142 | 2.0 | 7.6 | 2.5 | $61.10 | $58.70 | $38.00 |
| Races 7-9 | $82,356 | 7.6 | 2.5 | 2.4 | $75.40 | $72.50 | $45.60 |
| Races 8-10 | $215,303 | 2.5 | 2.4 | 5.0 | $33.20 | $31.90 | $30.00 |
To calculate the parlay payoff, the odds plus is multiplied for each leg to get the parlay payoff. For example, the one dollar parlay payoff for the first Pick 3 was calculated as follows: the odds on the first race (Leg A) winner was 1.2 to 1 ($2 payoff of $4.40), thus if one dollar were wagered, $2.20 would be the resulting payoff. This amount is then multiplied by the odds plus one of the next leg winner (2.2 times 2.7), this amount is now 5.94. Now we need to multiply 5.94 times 2.5 to come up with the resulting one dollar parlay amount of $14.85. As you can see, all of the Pick 3 payouts on this day paid more than the parlay. For the day, the average Pick 3 payouts were 1.6 times higher than the equivalent parlay on the same series of races. This happens more often than not, and is one of the advantages a bettor can exploit to make money at the races.
Let’s say we have a skilled, hypothetical handicapper who picks the winner of a race 31% of the time at an average payoff of $5.94. With these results, if he were betting to win every race, he would have a Return On Investment (ROI) of -8%. These results aren’t too shabby when compared to the takeout rate of 15.4% on win bets. Still, he doesn’t really have any incentive to wager from a strictly profitability standpoint since he has a negative ROI. But, this handicapper knows that if he plays the Pick 3, he can make a profit because the takeout of 20.68% is spread across three races rather than just collected in one race. With this in mind, he is able to generate a profit on his wagering without changing anything regarding his selection method. All other things equal, Pick 3 payouts are about 1.35 times better than the payout of a parlay for the same series of races when the takeout on the Pick 3 is five points higher than on a win wager. I won’t distract you with the detailed math, but these results allow him to generate an ROI of positive 5.4% rather than an ROI of negative 8%, even though his win percentage on the Pick 3 is only 2.98% (.31 times .31 times .31). But, if the takeout rate is raised to 23.68% his profits disappear.
The math shows on his Pick 3 wagers, if the takeout is raised one percentage point, his return on investment drops about two percentage points. Since the takeout rate in our example is raised by three percentage points, our handicapper’s ROI will drop six percentage points (to zero). This could cause him to cease wagering (for profit) altogether.
To illustrate this point with actual numbers we can use our Del Mar data to illustrate the effect. Let’s say someone had a very lucky day and hit all eight of the Pick 3 wagers offered on the day and invested a total of $200 to do it. With the current takeout rate, the bettor would have received $418.90 which gives results of an ROI of 109% versus the return with the increased takeout rate of $402.80 and an ROI of 101%. In this example, the result is a hit of 8% in profits. As I said earlier, the underlying math would indicate a loss of about 6% on average across all tracks and all Pick 3s. The point is, a significant swing in ROI would likely result in such players looking for other ways to “invest” their money.
Our handicapper decides that enough is enough. He thinks the takeout rate should be lower, instead it is raised. He thinks that all-weather tracks are safer for horses and more fair to all styles of runners, but Santa Anita is reverting back to dirt. He is intrigued by certain aspects of peer-to-peer wagering, but that is being discounted by the racing industry as well. He decides to quit betting after 20 years of playing virtually every weekend at the track and via his ADW account throughout the week.
Given the very real scenario of our handicapper, and the general economic principle that when demand is down an increase in price is probably going to be detrimental to business in the long run, let’s take a look at how the proposed takeout increase in California is likely to play out. These figures are based on my personal, but I believe “educated” opinion. The data is again taken from our day at Del Mar. It includes: the projection which is the estimated change in handle from our current Del Mar day, the takeout rate, the size of the Pick 3 handle for the day, and the estimated total return to the government, tracks, horsemen, etc.
| Projection | Takeout | Pool | Return |
| No Change | 20.68% | $890,222 | $184,098 |
| 17% Down | 23.68% | $738,884 | $174,968 |
| 33% Up | 15.00% | $1,183,995 | $177,599 |
| 50% Up | 15.00% | $1,335,333 | $200,300 |
The No Change row shows what happened this year for our Del Mar day. Let’s be optimistic and assume overall handle will stay flat going forward. The next row is a conservative estimate of what I think will happen if the proposed increase of 3% is implemented. Los Alamitos recently raised takeout and a decrease of 27% in handle has been the result, when overall handle declined about 10%. So the “net” effect was a 17% decline. As you can see, less money will be returned to purses, etc. I actually think the drop will be even greater. The next row is my conservative estimate of the effect if the takeout rate for the Pick 3 was lowered to 15% instead of increased as proposed. The 33% rate is taken from the recent increase in handle on the California lottery when they reduced the takeout rate on scratcher tickets about five percentage points. Since the Pick 3 customer is more focused on ROI than the typical lottery customer I think an increase in handle of 50% is actually a fairly conservative projection. In my opinion, this is a much likelier way to increase purses rather than the proposed increase in takeout rate.
Raising prices when demand is down is not a good strategy for long term growth. Increasing the takeout percentage is not going to increase purses in the long run. Whether a bettor is highly conscience of his Return On Investment or not, he starts to notice when he is coming home from the track with less and less money, until he finally quits going. The horse racing industry needs to find ways to increase handle in order to prosper. If we don’t do that the future looks bleak. Owners, trainers and others in the racing industry need to focus on coming up with ways to increase handle, rather than trying to only increase purse levels. Increased purses with decreased handle will be a losing proposition in the long run. Increasing the takeout rate will just add to the ever declining wagering handle statistics and the downward cycle will continue.
Craig Walker
TrackMaster Senior Product Development Specialist
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Weekend Graded Stakes Action – Five Grade I Races Highlight Schedule
Written by trackmasterplus on August 19, 2010 – 3:30 pm -A weekly overview of major stakes races around the country.
Arlington Million Day is a day that horseplayers look forward to. A trio of Grade 1 races on the grass with big fields and horses coming from all points on the map. The “big” race, of course is the Arlington Million which features reigning US Turf Champion Gio Ponti (winner of the Million last year as well), a heavy favorite to repeat. The consistent Just As Well and enigmatic General Quarters rate the main domestic threats. A pair of Euro-shippers, Tazeez, and Summit Surge (IRE) figure to have a big say in the outcome…The $750,000 Beverly D. Stakes looks to be a wide open affair with any of the 10 fillies and mares entered having a legitimate shot. Rainbow View is the tepid 4-1 morning line choice, the up and coming Hot Cha Cha could make a breakthrough here. We’re going to give a slight push to Treat Gently (GB) with the Juddmonte/Mott/Desormeaux connections. Eclaire de Lune is a sentimental choice, being owned by the man who rebuilt Arlington after a fire in 1985 in a race named for his late wife, and trained by the man who won the first Million in 1984 with John Henry..Rounding out the turf trio is the $400,000 Secretariat Stakes for 3-year-olds where Paddy O’Prado will be an overwhelming favorite.
Saratoga has the Grade 1 $500,000 Alabama Stakes as Saturday’s feature, and what a matchup of Blind Luck and Devil May Care. The first named will try to run down the other in the stretch, the rest are running for peanuts. In a small field like this the edge has to go to ‘Devil who has more tactical speed, but Blind Luck has shown the ability to close off of any pace and we think she’s a better filly anyway. No value here but will be a great race to watch.
The Grade 1 $300,000 Del Mar Oaks field was not available at the time of writing but was expected to include Evening Jewel.
In other races of note, I Want Revenge shows up in the $300,000 Grade 3 Phillip H. Iselin Stakes. He might have been the favorite in the 2009 Kentucky Derby but was scratched the day of the race.
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