How computer-robotic wagering is crashing pari-mutuel pools
July 17, 2018 3:00 AM
by Dave Valento
Horse racing must decide between short term monetary gain or long term customer health. Accepting computer-robotic wagering (CRW) into the pari-mutual pools is all but killing the betting experience for 99% of the horse playing public.
CRW’s are syndicates armed with sophisticated software programs. These programs identify inefficiencies in the betting pools, analyzing literally thousands of permutations in seconds. The syndicate teams have heightened access to the tote system (they can get up to the second odds) and can send in hundreds of thousands of dollars into the pool in the final few seconds causing the final odds to fluctuate dramatically.
In addition, these syndicates are rewarded with the highest rebates for their volume betting. Their goal is to stay near even wagering and make a major profit with the rebate kickbacks. Unfortunately for the public, their money is so precise, it appears they are betting with information the public doesn’t have. The net result for many long-time players is pure frustration leading to evacuation.
A study done in 2016 determined CRW’s made up about 20% of the total handle. Today it is significantly more.
The Grade 3 Dwyer Stakes at Belmont Park on Saturday, July 7 might have been the tipping point for the die-hard wagering community. In that race, Firenze Fire, a nibbler on the Derby Trail this spring, was 8-1 on the morning line and 7-1 as the horse started loading into the gate. Trainer Jason Servis has been winning at over 55% the past two months (a major issue for another day) and it was likely this horse would get some attention on that fact alone. However, over $120,000 was bet on Firenze Fire in the final 35 seconds of wagering. This action knocked him all the way down to 5-2 odds.
Firenze Fire figured as one of the main dangers to favored Mendelssohn but the 5-2 odds were significantly lower than what was fair. It has been determined another straight $60,000 wager came in on Firenze Fire at the window on track (in denominations of $5,000 each). This appears to have been placed by someone with knowledge of the horse and not a CRW.
When Firenze Fire drew off to win by 9 lengths the racing public was in an uproar and social media became a common gathering ground to discuss this issue. Two of the most detrimental issues to hit the game (high percentage trainers likely taking a competitive edge via drugs and CRW betting) collided at one of the major racing venues in the country.
Tracks benefit from the total pool of money bet on each of their races. Basically, each track withdraws around 20% of the each wagering pool (i.e. the takeout). This means the pool total, and not how the money gets there, is what the tracks care about. Eliminating CRW money would be reducing their cut, their bottom line. But if tracks continue to allow this money into the pools, pretty soon CRW money will make up all of the pari-mutual pool.
Oaklawn Park eliminated CRW betting from their pools a few years ago and the result is one of the best overall betting products in the game.
Two of the most popular racing meets of the year hit the landscape this week when Del Mar and Saratoga open their doors to the public. Del Mar opens on Wednesday and features the Oceanside Stakes on the turf for three-year-olds. Saratoga opens on Friday and has two $150K Grade 3 races on the card. Both meets run through Labor Day. I’ll have detailed analysis sheets for both tracks available at trackphantom.com.
Play of the Week
It comes in the 9th race at Canterbury Park on Friday. It is a Minnesota-bred Stakes at 6 furlongs on the dirt. No. 6 SPEEDING KID is virtually unbeatable in this spot. He ran a game second to the ultra-talented Mr. Jagermeister last time out and now runs against an overmatched field. He is 7-5 on the morning line.