It was a rookie mistake I made, Grits. Glad BTWind was looking over my shoulder. If I can just train myself to look for that asterisk in the equibase chart, I should be okay going forward!

I'm actually rooting for Place in this showdown, so it's funny I'd blow it in the other direction.

One thing seems clear to me at this point. 250 place bets isn't enough to resolve the issue on which is the better strategy with any sort of statistical certainty. (Though it's of course enough to resolve any bet you and randall may have made!) We are getting daily differences that are twice as big as the overall difference. At this point we are waiting for the head bob to see which will win.

It looks as if the first 250 bets will be finished in about 5 weeks from the start. If no one objects, I will continue until a total of 500 place bets have been made. But we'll go ahead and announce the 250-bet winner when that occurs.

--Dunbar

The reality is that the exacta is mathematically the right bet and an aberational result that showed place bets " winning " would be deceptive and unfortunate.

I agree about the relatively small sample size, and always felt all you needed to do was look over six months of past results, but the contest was created for whatever reasons in this manner. Regardless, it's been fun.

Can you elaborate on why you feel "the exacta is mathematically the right bet"? There's something I'm missing with that, and I want to understand it.

I rarely make a place bets, and I even more rarely make "saver" exacta bets, but I just want to understand what you're talking about.

--Dunbar

Not speaking for BTW...
My view is that the exacta bet sould hit about a third of the time when the other horse runs second....if the average exacta payouts are more than 3 times the other horses place payout then the exacta will have a better ROI.

It's just mathematics and takeout dispersal.

So, you're saying that even when the pools are "efficient", there is a built-in mathematical edge to the exacta pool? (at least as far as the 2 bets we are comparing)

Or are you saying that people systematically bet in such a way that the exacta pool is better as far as these 2 bets are concerned?

I'm working on an example, but I'll probably have to assume the pool is "efficient" for it to be at all general.

--Dunbar

Maybe I'm (slowly) catching on. I believe it's related to the concept of why it's better to use a free play on a long-odds bet, like roulette, even if the odds on that bet are worse than the odds on some even money bets like craps or blackjack.

Not sure it's the same, though.

more later...

--Dunbar

Could you elaborate a little bit...

Still thinking outloud...and thinking the above comparison is nonsense.

In the test, we are betting the same amount of money on place bets and on exacta bets. The place bets will lose at a rate of 16% on average and the exacta bets will lose at a rate of 19% on average. (Keenland, say). Breakage will hurt the place bets relatively more than the exacta bets, but not enough to make up for the diff in takeout.

I'll try to come up with a concrete example. As I said, I almost never make place bets, so it's alien terrain.

--Dunbar

Not sure where you are coming up with these percentages???
Anytime that you get one of these exactas there will also be a place payout...in other words for the conditions of the study you should be cashing about 3 times as many place wagers as exacta wagers...but if your average place payout is not at least 33% of your average exacta payout then the place wagers will have a lower ROI than the exacta wagers...

obviously takeout effects payout and exacta takeout is higher than place takeout...also obviously the place pool gets split between the top two horses....however I'm not sure how mathmatics and takeout explain the advantage of the exacta wager...
that is why I am looking for btw to elaborate...

The percentages I quoted were the takeout at Keenland. I'm not quoting them to support BTWind's position. I'm quoting them to question BTWind's position.

I'm looking at these racing bets the same way I would look at any bet: And we are ignoring handicaping skill, because that hasn't been part of the assumptions from the get go. Therefore...

If you make 50 $2 bets into the place pool, you are on average going to lose $16 at Keenland. (plus a little breakage). The $16 is the track take for WPS.

If your twin makes 50 $2 bets into the exacta pool, your twin will lose on average $19 at Keenland. (plus a little breakage). The $19 is the track take for exacta pools.

It's not as if we think the kind of bets being made in the "Contest" were better or worse than the average place bet or exacta bet. Therefore, I don't see why the track take isn't the key figure.

If you or BTWind can find fault with those numbers, I'm all ears. But please be careful to not introduce any additional assumptions.

BTWind usually knows what he's talking about. So I won't be completely shocked if I'm missing something fundamental. But it seems pretty straightforward to me.

--Dunbar

Day 30 (No dark days included) April 12, 2007
Carryover differential: EXACTA BETTING +$71.60

(AQ cancelled after 2)

KE: Race1-- PL 23.00
KE: Race2-- PL 6.60 EX 38.40
KE: Race3-- PL 16.80
KE: Race7-- PL 9.40



Today's races: EX $38.40, PL $55.80
Today's differential: PL +$17.40

TOTALS SO FAR: EX $3452.00, PL $3397.80
OVERALL DIFFERENTIAL: EX +$54.20

Total Number of 10-1's or higher in spots 1 or 2: (225) Will Stop=250
Total Exactas so far: 70 (31%)

Total races run at all tracks during the contest--675

It tightens up a bit, assuming I didn't make a mistake!.

--Dunbar

Day 31 (No dark days included) April 13, 2007
Carryover differential: EXACTA BETTING +$54.20

AQ,KE,SA

KE: Race1-- PL 26.80
KE: Race7-- PL 7.80 EX 55.80
KE: Race8-- PL 15.60
KE: Race10-- PL 20.20
SA: Race1-- PL 6.60 EX 18.20
SA: Race2-- PL 7.80



Today's races: EX $74.00, PL $84.80
Today's differential: PL +$10.80

TOTALS SO FAR: EX $3526.00, PL $3482.60
OVERALL DIFFERENTIAL: EX +$43.40

Total Number of 10-1's or higher in spots 1 or 2: (231) Will Stop=250
Total Exactas so far: 72 (31%)

Total races run at all tracks during the contest--702


--Dunbar

Dunbar, thank you for posting!!

Good luck if you're playing today. I think we'll have a lot of rain here in Lexington today.

Grits, can you believe how close the "contest" is, after 702 races and 231 place bets?! Amazing.

Thanks for the weather report. It looks like the weather will be decent at Oaklawn.

--Dunbar

And down the stretch the come!

Day 32 (No dark days included) April 14, 2007
Carryover differential: EXACTA BETTING +$43.40

AQ,KE,SA

AQ: Race1-- PL 9.20
AQ: Race3-- PL 12.20
AQ: Race7-- PL 37.40
AQ: Race8-- PL 13.60
AQ: Race9-- PL 9.90
KE: Race2-- PL 13.40
KE: Race7-- PL 16.80
KE: Race8-- PL 11.80
SA: Race3-- PL 9.00
SA: Race5-- PL 9.60
SA: Race6-- PL 13.00
SA: Race8-- PL 11.40 EX 39.80



Today's races: EX $39.80, PL $167.30
Today's differential: PL +$127.50

TOTALS SO FAR: EX $3565.80, PL $3649.90
OVERALL DIFFERENTIAL: PL +$84.10

Total Number of 10-1's or higher in spots 1 or 2: (243) Will Stop=250
Total Exactas so far: 73 (30%)

Total races run at all tracks during the contest--730

Place surges back into the lead, but it will all come down to the last day, which may be today, even with AQ cancelling.

I assume that the intent is to stop the original Contest exactly at 250 place bets. If there are more than 7 place bets today, I'll only count the first 7 (according to post time) in deciding who the winner is. If by some bit of statistical cruelty there are 2 qualifying place bets in the race where just 1 would get us to 250, I'll only count the winner's place payoff. (If randall and Grits agree on a different procedure, I'll do whatever they agree on.)

Also, as I said before, I'll keep the record going for another 250 place bets, until a total of 500 have been run. But the first 250 will decide Randall and Grit's bet.

--Dunbar

Dave, the lack of response to your post and at least 2 similar requests of mine suggest one of two things:

1. BTWind is wrong about the mathematics, or
2. BTWind is right, but the concept is subtle enough that there is profit to be made from the betting public's misunderstanding of it, and he wishes to keep that edge to himself. (Nothing wrong with that!)

If it were almost anyone else here, I'd lean very heavily toward #1. But I respect BTWind enough to consider #2 a possibility.

I'm still working on an example that I hope will illustrate that at least in "efficient" pools, the place bet has to be better than the exacta bet for the type of comparison in this contest. Until I do that, I'm open to the possibility that BTWind could be right.

--Dunbar

Grits hit the ultimate exacta today early at Keeneland. She should be ahead now with not very many to go..

Monster hit by Exactas in the 1st at Keenland!

Day 33 (No dark days included) April 15, 2007
Carryover differential: PLACE BETTING +$84.10

KE,SA (AQ cancelled)

KE: Race1-- PL 21.60 EX 223.60
KE: Race8-- PL 10.00
KE: Race8-- PL 14.80
SA: Race5-- PL 12.60



Today's races: EX $223.60, PL $59.00
Today's differential: EX +$164.60

TOTALS SO FAR: EX $3789.40, PL $3708.90
OVERALL DIFFERENTIAL: EX +$80.50

Total Number of 10-1's or higher in spots 1 or 2: (247) Will Stop=250
Total Exactas so far: 74 (30%)

Total races run at all tracks during the contest--748

Exacta takes what looks like an insurmountable lead ($80.50) with 3 place bets left to go.

--Dunbar

Anti, you're right that $223.60 exacta was sweet.