Need Another Reason to Hate "Single Ticket" Jackpot Bets?

[moses]

My thoughts:

1. The track got it right.
2. People should see this and stop betting on this crap.
3. People will see this and will not stop betting on this crap.

[ScottJ]

This was the update from last weekend for those who had not seen the latest in this story.

https://www.bloodhorse.com/horse-rac...its-sooner-6ix

Key points :

[1] The wager has been suspended.

[2] A claim has been made legally against Remington due to the unclear rules associated with the "unique wager" concept.

[ScottJ]

I have been trying to understand the impact of these Jackpot wagers on the racetracks and parimutuel handles and, not surprisingly it is somewhat difficult to model. Apologies for the length of this note.

Consider yesterday's Fonner Park Jackpot Pick-5 pool. A total of $2,300,000 was wagered chasing a carryover pool of $355,000 on a mandatory payout. A quick back of the napkin calculation shows that with a 15% takeout, wagering on this mandatory payout day negated any effect of the takeout which is a good thing for the bettor.

But what about the $355,000 that was locked up in increasing amounts for two weeks and not churning? The University of Arizona estimates that every dollar brought to the track will turnover between 3 and 4 times during the course of a wagering day.

(Source : https://cals.arizona.edu/classes/ans...Module-02.html)

Let's assume that this is also true off-track (which it might not be) and assume the lower churn of 3x. If the jackpot increased smoothly to make the argument easier, we would be increasing about $60,000 per day on the six days of racing that built this Fonner Park pool.

This would mean that the missed churn would be as follows :

($60,000 x 6 days x 3 multiplier) +
($60,000 x 5 days x 3 multiplier) +
($60,000 x 4 days x 3 multiplier) +
($60,000 x 3 days x 3 multiplier) +
($60,000 x 2 days x 3 multiplier) +
($60,000 x 1 days x 3 multiplier) = $3,780,000 total churn missed

So, on the surface, it would seem that the value of the churn is worth more than the actual handle chasing the Jackpot day. If we get slightly more complex by saying there are more dollars taken out of circulation to the end of the jackpot chase period, we might get the following.

($20,000 x 6 days x 3 multiplier) +
($20,000 x 5 days x 3 multiplier) +
($50,000 x 4 days x 3 multiplier) +
($60,000 x 3 days x 3 multiplier) +
($70,000 x 2 days x 3 multiplier) +
($80,000 x 1 days x 3 multiplier) = $2,460,000 total churn missed

In essence, it would seem that the track is likely to be relatively neutral to negative on this wager over the long term along however the impacts to the bettor are highly varied as expected. Again, all of this argument depends on the churn factor.