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Emerald Downs: Bettor makes, then cancels $100K wager
A $100,000 win bet made and then canceled within seconds of the start of the sixth race at Emerald Downs on Thursday night created havoc in the race’s betting pools when other bettors placed tens of thousands of dollars in wagers against the horse but did not have time to cancel their own bets.
The $100,000 bet, which was made by a customer of the account-wagering company XpressBet, according to officials, set off a flurry of late bets by well-connected bettors and robotic wagering programs designed to look for inefficiencies in betting pools. Those programs were stuck with their bets when the $100,000 win bet was canceled just seconds prior to the horses leaving the starting gate.
The $100,000 win bet was placed on the No. 2 horse in the race, Lonely and Free, who dropped from 5-1 or 6-1 with a minute to post to 1-20 just as the horses were being loaded into the gate. The bet was canceled before the track’s bet-processing system had time to display the new odds, so most bettors were unaware that the horse had been targeted by the big wager.
Ron Luniewski, the chief executive officer of XpressBet, said that the bettor was a “high net-worth individual who is new to racing” and who made an “honest mistake” by punching in the $100,000 bet. The bettor had meant to wager $1,000 to win on the horse, Luniewski said.
“We are continuing our investigation, but I can assure you there was no intent to manipulate the wagering pools,” Luniewski said.
“They called it a wide thumb problem,” said Ron Crockett, the owner of Emerald Downs. “That’s a pretty wide thumb.”
Because there was a slight delay between the placing of the bet and the cancellation, the robotic wagering programs, which receive real-time access to wagering pools, spotted the large wager and then began making win bets on the other horses in the race, seeking to capitalize on the arbitrage opportunities between the real win odds of the other horses in the race and the wildly inflated odds created by the $100,000 win bet. When the $100,000 bet was canceled, the win odds on Lonely and Free soared to 52-1, while the win odds on all the other horses dropped, reflecting the new ratios in the win pool.
After leading into deep stretch, Lonely and Free finished second, beaten a neck, but, with all the money concentrated in the win pool, she paid $6.60 to place, within a normal range. The race was won by a Have’N a Wild Time, who paid $15 to win. All of the exotic wagers in the race also paid within a reasonable range.
Prior to the $100,000 bet being placed, the size of the win pool for the sixth race was approximately $14,000, according to state steward Thelma Lynn. After the $100,000 bet was canceled and the race went off, the total size of the win pool was approximately $84,000, or at least $50,000 more than a typical Emerald win pool, because of the number of bets made by the robotic programs.
Although everyone involved in the incident has said that there is no evidence that anyone deliberately manipulated the pools, the final win odds on Lonely and Free certainly suggests that a bettor could employ a strategy to entice robots into the pool by making and canceling a large win bet to drive up the odds on the horse. Lonely and Free was 6-1 on the morning line, and if she had not been beaten by a neck in the race, she would have paid $106.20.
This kind of thing happens four or five times a day at the greyhounds. It only happens a couple of times a week at the thoroughbreds, and half of them are at Emerald. Despite what the paranoid say, there's no past-posting anymore. I've done a thorough analysis, and horses that completely blow the start and lose badly get bet down or not bet down just as often as horses that break well and also those that outbreak their running styles.
Just the tip of the iceberg. Manipulation of Internet betting happens all the time as there is insufficient oversight to prevent it. For example, ever notice how horses that break well from the starting gate have their odds reduced immediately thereafter -- and the odds of favorites that break badly go up (or do not shift at all)? The change in odds is always attributed to some mysterious "late" co-mingling of the various pools. However, in a true parimutel system (which is a zero sum game) when the odds for some horses go down, the odds on other horses by definition must go up. But, I have checked this repeatedly and they very rarely do. Why? Because the Interent providers operate with virtually no oversight and so they (or individual operators working for them) are able to manipulate the odds after the race has begun. How? By past-post wagering on several horses in advantageous running positions -- they may use their own money to do this or even "re-direct" the money that you have bet with them (just like the old time Vegas racebook managers used to do before the government cracked down on the process). This is a much more insidious form of manipulation. And until some potent regulation is introduced to watchdog over Internet betting operations you are only going to see more of this not less.
as a software engineer, i have no sympathy for the robotic bettors.. if they dont write code that handles situations that are way out of normal ranges and flags that, then they get what they deserve.
Emerald Downs would be the perfect place to try subscription contracts with pay out add-ons. This is a track that has personality (pacific northwest, mount ranier) that has limited fields. The fields are usually 5 -7 horses comprised of run of the mill claimers which means they get very little WPS handle because the rake and the breakage keep gamblers away. Just suppose though, that after they eliminate breakage and pay to the penny (long overdue at tracks), they offered bettors subscriptions such as, bet $100 on at least 300 races for the meet and get a 10% add-on to the mutual price. This would reduce the 16% hold to 7.6%. The account holder will have the add-on funds held in an escrow account that cannot be released until he bets his required 300 races at Emerald. You can even offer 12.5% add-ons for $500 bettors, which reduces the rake to 5.5%. A must if someones bets will alter the odds as they do at small tracks. This would encourage volume if you could sell enough subscriptions, which in turn attracts gamblers if they think they can be profitable (which they know they cant at 16% holds +breakage). You can even offer subscription add-ons to the $20 bettor too, so his patronage can be rewarded as well. The tracks, if they have patience, and market it properly, will see their takes increase, even with reduced holds, because thats how gambling is supposed to work (just ask Pinnacle Sports or Poker Stars). They better try something, because unless they want to be propped up by slots, they are just going to fade into obscurity, which would be a shame. Small fields don't have to be a negative if you attract the right type of horse players, those who actually prefer lower variance if they can be given a low rake pool that they can grind out a profit at.
Actually the robots did win the race. The pool manipulator got second.
Nice to see these ''Algo'' (algorithmic) bettors take it in the shorts, for once. Not unlike their Wall Street brethren (who've also made similar news, recently) they are afforded an unfair advantage over the average individual bettor via their direct access to the pools/markets. At least no innocent people's retirements were wiped out because of this ''glitch''.