02/24/2017 1:53PM

Value differs in the contest world

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Value is a misunderstood concept in horse racing. Many players used the term “value” to describe any nice-priced horse, where in reality, for a horse to be value, the price in isolation is irrelevant. What matters is the chance of an event happening versus the reward you will receive if you are correct. In theory, there should be as many 5-2 shots who offer value as 15-1 shots.

Contest play changes two things that are fundamental about playing the horses: the risk-reward structure and the fundamental meaning of what value is. The risk-reward structure gets turned on its head. Sometimes late in a contest, a 2-1 will pay like a 200-1 or more if you only need to pick a winner to secure a chunk of the prize pool. Consider the bet that Craig Bernick made at the Breeders’ Cup. He bet his whole bank of over $50,000 on California Chrome in the Breeders’ Cup Classic. Had he made that wager outside the contest, he would have received 4-5 odds. Because he bet within the contest, he was getting more like 8-1, factoring in the contest’s $300,000 first prize. Obviously, it didn’t work out, despite what it looked like at the quarter pole, before Arrogate accelerated past the champ. Nonetheless, Bernick’s gamble was one of the value plays of the century: He got 8-1 on a 4-5 shot. Without contest dynamics, that simply doesn’t happen.

Other times in contest play a 100-1 will pay more like a 10-1, as was the case when Frisk Me Now won the 1997 Hutcheson Stakes (coincidentally the first year I followed the Triple Crown prep season religiously). This was in the day before odds-caps, and the race occurred late in the day. Around 20 people used the horse, simply reaching for the big odds, and they leapfrogged everyone else on the leaderboard. That’s an extreme example and less relevant now with odds caps in place, but it still goes to prove a point. As Maury Wolff told me in "The Winning Contest Player," “Somebody came up with a phrase I thought was beautiful: 100-1 on the board and 6-5 in the room.”

Some players, like Chris Larmey, still let the tote value guide their contest selections, figuring the only way to win in the long run is to have a better barometer of what the true odds are than the crowd.

“I make an odds line for each race,” Larmey said recently. “That’s why I have a limited amount of races I can handicap, because I am very numbers oriented. What that buys me in terms of contest play is I don’t just have one horse and if [one horse] gets bet down I have to figure out what I’m going to play; if the horse I thought I was going to play ends up getting bet, I know exactly who the next one down the line to play is. You have to trust your odds lines.”

He will then adjust what value means as he gets down to the business end of a contest (once the prize pool comes into play), allowing himself to take more likely winners who offer less tote value rather than strict overlays who may not be the likeliest winners. “Some people think that’s silly,” Larmey continued, “but it just makes you employ a different strategy because your value is separation from the field, rather than the price on the board.”

To reiterate, in your everyday play, any overlay can be valuable at any time.  A 3-1 that should be 2-1 could be your play of the day.  In most contest situations, that horse is likely to be mildly helpful at best, useless at worst.

In a contest, even a 15-1 shot that should be 6-1 could still be an underlay.  If you know that several other players in the contest are likely to play it, its contest value goes away even if its tote value is super strong.  Value is still everything in contests; it just means something different.

This is because instead of competing against all the people playing in the pari-mutuel pool, you’re competing primarily against the other people in the contest and, secondarily, all the people in the pari-mutuel pool, since they’re the ones setting the prices. The easiest way to combat this craziness is to become more selection-oriented, i.e., simply pick horses you like. The problem is that for many horseplayers this idea is too simple: A parade of chalk won’t get you far in most contests, and if you’re not thinking strategically during the contest endgame you’re taking a knife to a gun fight.

Another way to look at it, if we’re talking about a contest with optional races, is that you should pick races you like — ones that should produce a price — and then find the value within those.

The best real-world advice I’ve heard is probably what Larmey described above. Blend a value-oriented approach with a selection-oriented approach and let the racing gods take it from there.