Handicapping Insights

HANDICAPPING INSIGHTS

NOVEMBER 22, 2013

by Dick Powell

On November 6, I played the Pick 5 at Aqueduct. Because the bet has a base

takeout of only 15 percent, it meets my criteria of only playing in pools that

either have low takeout or carryover money that negates high takeout.

After the first four legs of the Pick 5 were completed, I was alive with four

horses going into the last leg. After race four's results were declared

official, I dutifully wrote down the will pays for the four horses that I used.

In race five, I was alive with the 5, 6, 8, and 9. The Pick 5 with the 5 will

pay $2,850, the 6 will pay $2,129, the 8 will pay $2,004 and the 9 will pay

$7,094. My bet increment was $0.50 so I was looking at one fourth of the above

payoffs.

So race five was run, and the post-time betting favorite, Implied (8),

rallied from the off the pace and drew off to an easy win. It was not my optimum

outcome but a win is a win so I was happy with the $501 payoff on a $96 ticket.

But, a funny thing happened on the way to posting the payoffs for race five.

The race was declared official and the Pick 5 paid $1,968. WTF!

I was sure that I wrote down the correct will pays so I quickly went to

TwinSpires.com which enables you to see will pays after the races are run if you

use the "Express" option. Sure enough, it said that the Pick 5 would pay $1,002

for a $1 bet. How could the payoff be $36 off?

I went back and checked to see if there were any late scratches that would

result in those tickets being switched to the post-time favorite but there were

none. There were four scratches in the fifth race, the 11, 14, 15, 16, and they

were all listed as scratched at 10:53 a.m. (ET) so none of them would have been

switched to the post-time favorite.

In talking to fellow horseplayers, the anecdotal evidence was that we have

seen this before but only since the racing returned to Belmont. All agreed it

was a real head-scratcher.

Later that evening, I was playing around to see if this event happens more

often and sure enough, the will pay for the Pick 4 said it should have paid $898

but the official price was $889.

I started sending emails out to various people in state government and the

results of the inquiry have provided the answer to why the payout was less than

advertised but raises gigantic questions about the big picture.

The only explanation possible for what happened was when a horse scratches in

a Pick N race, the money from that horse goes on the post-time favorite, and the

post-time favorite wins, thus, reducing the payoff. Because the toteboard cannot

anticipate who the post-time favorite will be, the result will be less than what

was advertised. Not a good situation but at least when it happens before the

running of the last leg, we can at least understand it.

In my case, it looked like it could not be understood but the reality is that

there was no difference to what had happened to me and to when it happens right

before the last leg of a Pick N bet.

NYRA, and many other ADWs, now take bets early in the morning on their races.

Their tote systems are already open since they are taking bets on racing from

South Africa, Europe and Dubai so they allow betting on their own races. The

problem is that these bets are being made before scratches are known later in

the morning and they, under the rules of Pick N wagering, are switched to the

post-time favorite. So even though the four scratches in leg five of the Pick 5

on November 6 happened at 10:53 a.m., there were already Pick 5 bets made to

those horses.

In this case, $2 was bet on the Pick 5 that was alive to the 11. Don't know

if it was a $2 bet, two $1 bets or 4 $0.50 bets, but that money was alive to the

post-time favorite. There is no way that the will pays can reflect this since it

does not know who the post-time favorite is so what is being displayed will be

accurate if the post-time favorite loses but inaccurate if the post-time

favorite wins.

This is what accounted for the $36 discrepancy between the will pay and the

actual payoff for the Pick 5 and the $9 discrepancy for the early Pick 4 on

November 6.

When you think about this, there are some scary scenarios that should send

shivers through the industry. Worst case scenario would be a large Pick 6

carryover pool. Let's say it is for seven figures. The first five legs are such

that only one horse is alive in the last leg and it is the post-time favorite.

Every other horse will carry over.

The will pay on the post-time favorite is enormous; let's say $800,000. Some

individual player is going to be very happy if the post-time favorite wins. The

post-time favorite wins and the payoff is $400,000 since there was a horse bet

before scratches that went on to the post-time favorite in the last leg.

Can you imagine the uproar that this would cause? Players complain enough

about late odds changes but at least the odds displayed are accurate. Now, we

have the very real possibility of a Pick 6 bet paying half of what was

advertised.

It looks like there are two ways to handle this issue. The first is to add

the eligible money from the horses that were bet before scratches were known to

all the horse's will pays. If the post-time favorite wins, the actual payout

will be the same. If another horse wins, the actual payout would either be the

same or higher than what they will pay said it would be.

What I don't like about this is that players use will pays to hedge bets and

inaccurate will pays make this harder than it should. What I proposed was to

just not open Pick N pools early in the day before scratches are known. It can't

be a lot of money and it removes all the confusion and potential harm that

currently exists today.

Sometimes, progress has unintended consequences. It seemed like a good idea

to allow betting early in the day, even before scratches were available, but now

I don't think it's worth it. For bets where scratches result in a refund, fine;

allow them. But for the bets where a scratch switches the money to the post-time

favorite, make them available after the scratches come in. I can't imagine it's

a lot of money and if it is, maybe you could move scratch time earlier in the

morning.

But whatever we do, we cannot keep doing it because the worst-case scenario

consequences will be too damaging.