A recent letter from a horseplayer suggested it would be “useful – and good journalism” to report how much of a track's betting volume comes from computer assisted wagering accounts typically affiliated with licensed offshore advance deposit wagering companies that offer rebates to their customers.
I agree that it would be useful – if that information was made available, which it isn't. It also might be discouraging to a non-rebated horseplayer knowing that he or she is not betting on a level playing field under the original concept of pari-mutuel wagering. They are still gambling against other players, but some of those players are getting a steep price discount that amounts to a lower takeout.
Computer assisted wagering players are not necessarily betting to win, and contrary to what many believe, they are not winning in the traditional sense of the word. They are wagering at an extremely high volume in hopes of 90 percent or more of the amount bet being returned to them on winning combinations. The rebates they receive can then push them into profitability.
Let's say Player X makes $100,000 worth of bets in various pools identified by the computer algorithms. When the results are tallied in this hypothetical situation, let's say Player X had winning combinations that paid $94,000.
You and I might conclude that player lost $6,000. In fact, when a rebate on the $100,000 in wagers is factored in – for the purposes of this case let's say it was 10 percent, or $10,000 – Player X went from a $6,000 loser to a $4,000 winner.
That is substantial. Suppose the blended takeout on all wagers is 20 percent, the amount you and I have to try and overcome. With a 10 percent rebate, Player X is betting against what is effectively a 10 percent takeout.
The Jockey Club in 2018 estimated computer assisted players accounted for upwards of 19 percent of total North American pari-mutuel handle. That's roughly $2.1 billion of the $11.3 million wagered in 2018, and there's no reason to believe these players are betting less today than they were then.
Tracks and state racing commissions are not disclosing how much of the betting volume is coming from players who are getting discounted pricing. They really don't want the everyday players to know. It's difficult enough to win on a level playing field when 20 percent on average is carved out of each bet. Beating the game when one-fifth or more of the betting volume is from players with such a significant price advantage makes it that much tougher.
Gimmicks like the Pick 6 with a large carryover or Jackpot bets were once marketed as opportunities for players to make a life-changing score. Increasingly, however, those multi-race bets are being won by computer assisted wagering accounts that, because of the rebates they receive, can afford to spread their selections deeper than typical players.
They've also created havoc when their batched last-second bets cause major swings in the odds of horses in the win pool. Contrary to what many think, these last-second odds changes don't always result in the horse with the largest drop in odds winning the race. But it can be infuriating to players and breeds suspicion among them.
Track operators may not like letting the computer assisted wagering players into their pools, but almost all of them do, several have told me, because they can't afford not to.
The New York Racing Association and, more recently, The Stronach Group have reportedly taken steps to limit computer assisted wagering players from making last-second win bets, either by cutting them off before betting closes or by raising the cost of those bets. From what I've been told, those players have moved their action to other pools, where late odds and payoff swings are not as public.
Since NYRA and Stronach are part owners of Elite Turf Club, the largest of the offshore rebaters catering to computer assisted bettors, these two entities are in position to tilt the playing field back in the direction of the average horseplayer. I wish they would do that, while those players are still in the game.
That's my view from the eighth pole.
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