Bet With the Best: Expert Strategies from America's Leading Handicappers

Excerpt from the book hailed as the most comprehensive book on handicapping thoroughbred horseracers that has been published in over a decade. Written by DRF experts Andrew Beyer, Steve Davidowitz, James Quinn, Tom Brohamer, Steven Crist and many more. This excerpt is a courtesy of NBN Books, the book's distributor. Order your copy online!

CHAPTER 3: CRIST ON VALUE

BY STEVEN CRIST

Continued from Page 6

Using Multiple Bets to Improve Your Prices

Despite facing higher takeout and fewer casual opponents, the 21st-century horseplayer has a tremendous opportunity that his counterpart of 50 years ago did not enjoy: The ability to bet a race in a dizzying array of options beyond win, place, and show. Nearly every race in America now offers both multi-horse bets-the exacta, trifecta, and superfecta-and also is part of at least one multi-race bet-a daily double, pick three, four, or six.

For the purposes of this discussion of value betting, we will not attempt to examine the mechanics and optimal strategies for each of these wagers, an exercise that would require an entire volume. Instead, the question is how multiple wagers can give the value-oriented horseplayer an additional opportunity for profit.

Many old-timers and other curmudgeons dismiss all multiple bets as some newfangled work of the devil and begin and end their argument by pointing to the higher takeout on these wagers. A typical takeout structure is New York's, where one-horse (win, place, and show) bets are subject to a 15 percent takeout, two-horse bets (daily doubles and exactas) face a 20 percent bite, and all wagers involving three or more horses or races are hit with a 25 percent takeout. No matter how you slice it, say the defenders of straight betting, over time you will do better playing against a 15 percent takeout than a 20 or 25 percent takeout. Isn't that a fundamental of value betting? Isn't choosing to play into a 25 instead of a 15 percent takeout the equivalent of getting $7.50 on a horse who should pay $8.50?

There are two good answers to this cranky argument. The first and most important is that a higher takeout is meaningless if the greater opportunity for profit exceeds the difference in the toll. Would you rather make a pre-takeout 35 percent profit and give back 25 percent for a 10 percent profit, or make 16 percent and give back 15?

The second answer is that multi-race bets allow a player to spread the effect of takeout over several races, so that he is actually facing a smaller bite per race than if he played them separately. Consider the difference between making win bets on three consecutive races and playing a pick three. In the first case, you are taxed 15 percent three consecutive times so your original dollar is sliced first to 85 cents, then to 72 cents, and finally to 61 cents. Playing those same three races via the pick three devalues your dollar just once, to 75 cents.

Wrapping your mind around this idea leads to an appreciation of the value opportunity in multiple betting. If you are playing a second or third race or horse at a reduced takeout, you are getting better odds on that additional race or horse than you normally could. This is why, over time, multi-race payoffs are higher than an equivalent parlay of the individual winners would be.

Let's look at the simplest version of how this works, a daily double. Suppose that in each of the two races, there is a horse paying exactly 2-1 who you think is actually 50 percent likely to win. If you parlay the two horses with $100 win bets, your $100 turns into $300 after the first race, and $900 after the second horse wins.

Not bad-an $800 return, and 8-1 on a proposition you believed was 3-1 (50 percent times 50 percent).

But what will the daily double of these two horses pay? At a 15 percent takeout, each 2-1 horse has 28.3 percent of the win pool on him, meaning he will pay $6 to win. Assuming that these horses are bet the same way in the double pool, that means 28.3 percent of all tickets have the first winner, but out of those tickets, only 28.3 percent combine him with the second winner. Multiply those two probabilities, and it means that only 8 percent of the daily-double pool is bet on the winning combination.

At a 20 percent takeout, a double that accounts for 8 percent of the pool returns $20, and your $100 double gets you $1,000 instead of the $900 you would get for parlaying the same two horses-despite betting into a pool with a higher takeout. In effect, you are getting a $20 mutuel instead of an $18 mutuel.

This may not seem like a thrilling difference, but a 10 percent increase in payoff is enough to make many a chronic loser into a chronic winner. Moreover, the difference increases in pick threes and fours as you add more races, and can often be far more than 10 percent. Add a third 2-1 winner to the example above and the $18 parlay becomes a $54 three-horse parlay. The $20 double, however, even with a 25 percent takeout, becomes a $66 pick three.

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