08/12/2010 1:18PM

1-9: A Pari-Mutuel Impossibility

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Before and after her victory in last Sunday's Clement L. Hirsch Stakes at Del Mar, Zenyatta was quoted in many publications as the 1-9 favorite. This is a common occurrence these days and one that needs to be rectified, for the simple reason that it is a mathematical impossibility for a horse to be 1-9 on the American pari-mutuel system.
In fact, Zenyatta was the 1-10 Clement Hirsch favorite, as a quick perusal of the Daily Racing Form chart will inform you. This means that if you bet $10 on her to win, you would get back exactly $11, that is, your $10 stake plus $1 in winnings. If Zenyatta had been 1-9, her $10 backers would have gotten back $11.11, that is, their $10 stakes plus $1.11 in winnings.
This is not a matter of semantics, but one of the much more accurate science of mathematics. To determine one's winnings for a $10 win wager on a 1-10 shot, divide 1 by 10. The answer is $1. To determine one's winning for a $10 win wager on a 1-9 shot, divide 9 by 1. The answer is $1.11. Zenyatta's $10 backers all received $1 in winnings, therefore she was 1-10, not 1-9.
In the American pari-mutuel system, in most cases we break the odds down to a dime, sometimes to a nickel, but never to a penny, which is what would be necessary to have a horse go off at 1-9, or to state it decimally, 11-100, or 11 cents to the dollar. The only country in the world with a pari-mutuel system that breaks down to a penny is Italy, where horses are always going off at strange odds like 5.61-1 or 79-100.
The reason so many of us have come to accept 1-9 as a fact is our antiquated toteboard system, one that is incapable of displaying a two-digit number in the place of the divisor, that is, the 10 in 1-10. In this highly computerized day and age, that is unacceptable. If we have the ability to be accurate, we should be accurate, whether it is displaying odds of 1-10, 5-1, 3.60-1 or 10.80-1.
If none of this makes sense, bet $10,000 on a horse that is listed on the tote board at 1-9. Then, if it wins, just try collecting the $11,111 you would get if the horse really was 1-9. You will get only $11,000 because the winner could only be 1-10 under the American pari-mutuel system.
This 1-9 business has gotten so out of hand that some morning line makers are even quoting horses at that impossible price. The Associated Press reported in its post-Clement Hirsch story that Zenyatta had gone off at 1-9. Let's all get on the same page and stick 1-9 where it belongs- in the ashcan. At least until tracks start breaking odds down to a penny.

 

DEAR READERS: Some of you have been inquiring why none of your comments on my blogs have been published. I am sorry to say that the fault has been entirely my own. New to the blogosphere, I was unaware of the intricacies necessary to post your comments. I have since wised up to the system, and all previous comments have now been published. Please keep your comments coming, be they positive or negative.  Again, I offer my heartfelt apologies.

Warren More than 1 year ago
It is not in the interest of the track to have odds accurate to the penny. Imagine the millions of dollars in lost revenue if they did have odds down to the penny. Exactly what Alan alludes to, its down right embarassing that the tote system cant be accurate to the penny. We have computers guiding spaceships into outer space, please dont tell me computers cant be accurate to the penny. Let's be honest, when money is wagered into the pari-mutuel system, there's no way the odds round to the nearest tenth that neatly. The track is keeping that hundredth of an odd (ie. the invisible penny). And its not only a penny, it could be a penny to four pennies if odds are rounded to the nearest nickle, or any where from 1 penny to 9 pennies if rounded to the nearest tenth. So the next time you cash your ticket, just imagine the extra pennies that the track is keeping on your behalf, and this is money that is never returned to the customer. Instead, its being used to fund stake races that only benefits connections. I dont really care its a Million Dollar stake race, I dont get a share of it, but instead, give me back my pennies and I'll be happy, they will sure add up in the long run.
Darrell Williams More than 1 year ago
Surely a bigger issue is that the US Toteboard has so few options when the favourite is odds-on. i.e. 1/9 1/5 2/5 at the top end. For big money players there is a huge difference in potential payout between 1/5 and 2/5. Why can't the system recognise 1/3, 1/4 etc.
Luisbe More than 1 year ago
In Argentina shows, for example, 5.55 (It's understood to 1) on the tote since 80's.
Fred More than 1 year ago
Dear Alan, I like numbers guys. Your next project is to adequetly explain Net pool Pricing since the racing and wagering boards as well as the pari-mutuel departments can not! I would appreciate the algorhythm as well as an example. Lets have a six horse field with two different take-out/retention rates and lets calculate show pricing. As a comparison lets do the math using older fashion Gross pool pricing. Thanks in advance. Fred
Franco Raimondi More than 1 year ago
Hi Alan, you are right, Italy is the only country in the world to crush one euro in 100 cents to pay the dividends. But we are so poor to pay a 29% take out on simple bets and 39% on the exotics. Now you can understand why I feel as a rich man when I bet in Usa, or UK or everywhere in the world! By the way, I agree 100% your analisis about the 1/9 Ciao Franco Raimondi