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Bob Pandolfo: Hints for the recreational bettor, Part 2
Yesterday I began a discussion on how you can be a recreational gambler who has fun but comes out ahead. I talked about how trends and bias should be considered. Today we’ll focus on maximizing your returns and different wagering options.
Maximizing your returns: You have to be careful about maximizing your returns. For instance, some Pennsylvania tracks, such as Harrah's Philadelphia, still charge as much as 30% takeout in trifecta bets. This is a terrible return. You can offset this by betting through a reputable ADW that gives high rebates on high takeout bets. If you're not getting these rebates, then I would not recommend betting trifectas when the take is over 25%. Some tracks have more attractive takeout rates on certain bets, so shop around. At Harrah's, the win/place/show is 17%, the exacta is 20%, the pick 4 is 15%, all okay by me. But the trifecta (30%), superfecta (32%), and pick 3 (26%), are off limits. If I like a race at Harrah's I'll bet the exacta, or to win.
When maximizing your returns, try to be patient. When you're betting horses, patience is rewarded because you can bet on overlays. Even at the tracks where the favorites are winning at 43%, there are still overlays. If you make most of your bets on horses that are offering good value, you go a long way towards maximizing your returns. But, keep in mind, the more favorites, the harder it is to win.
This is the main reason why the handle tends to be higher at the tracks with a lower percentage of winning favorites. It has a lot to do with overlays. It is tougher to find good value when the chalk is winning at a high percentage. It requires a smart bettor to pass more races. At Balmoral so far this year, the favorites are winning at only 33.8%. That means that there are more weak favorites, so bettors have a better chance of hitting a longshot, or a double-digit overlay winner. Fourteen harness tracks have raced in the U.S. so far this year. Of those 14 tracks, the two tracks with the lowest percentage of winning favorites are Balmoral and the Meadowlands. Guess which two tracks have the highest handle?
Over the years that I've reported on racing, I've heard stories about racetrack executives who felt that a higher percentage of winning favorites lead to more churn and increased handle. I don't see any evidence that this is true. On the other hand, tracks have to be careful when they push exotic bets that are difficult to hit. The trend now is to promote the pick 4, and in some cases, the pick 5, with guaranteed pools. But at a track like the Meadowlands, these are very tough bets for the average bettor to hit. You don't want your players tapping out quickly by chasing these big payoffs. If the handle drops in the summer, part of the reason could be that some players are tapped out from chasing the pick 4 for a few months.
The Meadowlands management has suggested that these super exotic bets help the handle. I'm still not convinced that they do, over the long run. Last week the Meadowlands ran 23 races. The exacta pool went over $80,000 in 10 of the 23 races with five races over $90,000 and one race over $100,000. The late pick 4 handled $104,000 each night. But the pick 4 is a bet that's spread out over 4 races. So to my thinking, this is only $26,000 handle per race. These days, a pick 4 pool of $100,000 is certainly good. But the exactas are still far and away the most popular bet. If you only had one pick 4 a night and no pick 5, the exacta pools would be even bigger and the churn from the exactas is much better because most bettors rarely hit a pick 4. The handle in the 50-cent pick 5 has averaged $45,000, less than half of some of the exacta pools. But the track has reported that the pick 5 is popular, yet it never says that the exactas are popular, even though the exactas are, according to the handle, far and away the most popular bet.
Furthermore, the takeout in the pick 4 is 15%. In the exacta, it's 19%. If the exacta takeout was 15% and the track advertised it the way it does the pick 4, the exacta pools would explode because it would be the best bet in racing. The trifecta has a takeout of 25%. That's the main reason why more money is bet into the exacta than the trifectas; bettors recognize that the return is much better (6%) in the exacta pools. Again, if the trifecta had a 15% takeout like the pick 4, the handle in the trifecta would gradually rise because it would be one of the best bets in racing. And trifectas are much easier to hit than the pick 4. At Balmoral in 2012, exactas pools were about $25,000 a race but the trifectas handle averaged $29,000 a race. But Balmoral offers a 10-cent trifecta, which is the reason why the trifectas handled more than the exactas.
Most tracks have 20% or higher exacta takeout rates. So I don't know. I think that the Meadowlands handle is up this year for other reasons which have nothing to do with the super exotic wagers. I could be wrong, this is just my opinion. I went back and checked out the pools from last winter at the Meadowlands and there was a lot less money bet in all of the pools including the exactas, with many exacta pools under $50,000 a race. Don't get me wrong, I don't hate the pick 4. For some players who have a big bankroll, it can be a good bet. But I just wonder if the harness racing industry as a whole isn't over estimating the long term effect that these bets have on the handle. I don't see super exotic bets like the pick 4 as being good churn wagers because they are very difficult to hit.
This year Gulfstream Park has seen big handle in its unique super exotic Rainbow Pick 6. In this bet even if you pick 6 winners you don't get the jackpot unless you're the only winner. If more than one winning ticket is sold, then the two winners share 60% of the pool, a consolation prize, and the rest is put back into the jackpot. But in my opinion the reason why this bet is doing well isn't just the lure of winning big. The bet has a 10-cent minimum. Consequently, it is the only pick 6 type of wager that the average bettor can actually afford to bet.
If the Meadowlands had a 10-cent pick 4 or pick 5 you would probably see the handle in that bet explode, and that would help the churn and the handle over the long run. With a 10-cent minimum, the average bettor would not only be able to get involved, but he or she would get enough hits to sustain a bankroll. One of the main reasons why Balmoral has had such success the past few years has been its 10-cent wagers. In my opinion, lower minimums like the 10-cent bet are the future and will eventually be the norm at the tracks that stay in business. It may come gradually. I can remember when the lowest bet you could make was $2, and some exotic bets like the trifecta actually had $3 minimums. So the industry has been trending to lower base bets for a long time, and that will continue. For instance, the $1 pick 4 may become a 50-cent pick 4 and the 50-cent pick 5 may become a 25-cent bet, and so on. But the future is small base bets.
I believe that some tracks are reluctant to offer lower minimums because they don't want to drive big bettors away. Some big bettors say that they don't want 10-cent pick 4 wagers because it gives them more competition. But these same big bettors complain that the pools aren't big enough for them to bet without knocking the odds down too low. You can't have it both ways. The bottom line is that higher handle benefits everyone: the tracks, the industry, the horsemen, the breeders, and the bettors, big and small. And smaller base bets boost handle.
These are the three keys to increased handle: 1) 10-cent or low minimum wagers. 2) Lower takeout. 3. Good payoffs. Any bet that combines these three strategies is going to have huge handle. This is the future of horse racing. Embrace it, or go out of business, because this is what the average racing fan (and bettor) wants.
As a bettor, take advantage of these situations. Bet the 10-cent wagers. Bet the lower takeout bets. Bet the tracks where the favorites don't dominate and the payoffs are good. Even if you are a smart, but recreational bettor, taking advantage of these things will increase your enjoyment because you'll hit more tickets, have shorter losing streaks, and get a better overall return. As I've said, horse racing is a form of entertainment. But part of the enjoyment is cashing winning tickets and walking out of the track with a profit on a more consistent basis.
Let me give you a proposal. Suppose someone came up to me and said, "Pandy, I'm retired but I’d like to enjoy the racing and make a few bucks a year. I'll hire you and pay you a four figure consultation fee if you give me personal instruction and a betting and handicapping method that will produce a steady long-term profit for me."
Let's say that you're the retiree who approached me. My response to you is this: "I have two plans. Plan A: you will make $200 bets into the pick 4. You will win money two months of the year and lose money 10 months of the year, but at the end of the year you'll have a profit of $20,000. Plan B: You will make $100 bets into the exactas. You will win money 10 months of the year and lose money 2 months of the year, and at the end of the year you'll have a profit of $10,000. Which plan do you want?"
I can tell you without any hesitation that I would take Plan B, even though Plan A produces 100% more profit, which is substantial. Why? Because I know that the mental anguish of making larger bets, and losing almost every month while waiting for the big payoff bail-out pick 4 would eliminate any enjoyment that I get out of betting horses. I'd rather cash more tickets, have more winning weeks and months, even if it means a much smaller return. Very few horseplayers actually try to make a living betting horses. We do this for fun. And ripping up losing tickets week in and week out is no fun. That's why you have to strike a balance between going for the score and cashing tickets. That's why the exacta pools are where most of the money is bet at the Meadowlands, and at most tracks, even more than the win pools. People know that it's easier to pick a winner than the exacta. Yet more money is bet in exactas because they also know that the higher payoffs in exactas giving them more leverage and a chance for a nice score that isn't impossible.
To find out more about Pandy’s handicapping theories check out his www.trotpicks.com or www.handicappingwinners.com websites, his free picks at handicapping.ustrotting.com/pandycapping.cfm or write to Bob Pandolfo, 3386 Creek Road, Northampton, PA 18067.