Saratoga and Del Mar seasons are underway, a worthy time to consider pari-mutuel wagering.
While some might think that pari-mutuel wagering has been around ever since organized horse racing started, this is hardly the case. There is a clear history to pari-mutuel wagering, and there is one actual and acknowledged inventor in Joseph Oller. The invention of pari-mutuels was not even Oller’s major contribution to cultural history. He was probably better known as the founder and manager of Moulin Rouge, probably the most famous nightclub of all time.
The pari-mutuel story dates from Paris in 1862. Oller pioneered a sweepstakes game based on horse racing results. This was a system based on total chance. The bettor paid for a chance and was randomly assigned a horse on a given race.
This was however illegal in France. Betting wasn’t illegal, but lotteries were. So:
In place of the system under which the bettors were assigned their designated horse by pure chance, Oller devised a system under which the bettors selected the horses themselves. “By this scheme each investor selected the horse he desired to bet on, and if his favorite proved successful, he became entitled to all the money in the pool, less the commission exacted by Mr. Oller.
Meanwhile, in the US:
Before 1870, the main form of wagering at the American tracks – which were reopening after the Civil War – was the auction pool, also known as the Calcutta pool. Under this system, bettors bid on the right to choose horses in a race. The highest bidder got to pick the horse of his choice, usually the favorite.
In time, an engineer named Harry Straus devised a machine that would issue a printed ticket, and update bettors on the odds.
Straus developed the totalizer – a system of rotary switches and relays based on the principles of automatic dial telephone.
Straus founded a company, American Totalisator, which is now owned by Stronach Group, which owns Santa Anita, Pimlico, Gulfstream, and few other racetracks.
All that from an illuminating article, “Pari-Mutuels: What Do They Mean and What is at Stake in the 21st Century?” by Bennett Liebman in Marquette Sports Law Review, Vol. 27 Issue 1, Fall 2016.
It’s illuminating to know that bettors were once assigned a horse at random. Liebman’s writing on the legal meanings of “pari mutuel” is thrilling intellectual history.
Many state constitutions exempt or have unusual rules for different kinds of wagering like lotteries and “pari mutuel betting.” Struggles over the definitions have meaningful consequences.
Take the case of “historical racing machines.” These are pretty much just slot machines but technically (maybe) their outcomes are generated on the results of horse races, and the betting is arguably “pari mutuel.” Liebman’s article offers good examples of the law being whatever convinces the judge.
Choosing a horse at random may not be a terrible method, especially given that the pari mutuel market as a whole tends to be pretty sharp. Many a study has looked for inefficiencies, and though they exist, I do not know of a study that’s found an enduring profitable angle. Bill Benter’s work took advantage of inefficiencies in Hong Kong racing, combined with sophisticated modeling developed over painful trial and error. Dr. Z might be onto something but who wants to do all that math?
Horse handicapping is more art than science. I’ve found Brad Free’s book to be the most readable and clear-eyed. Steven Crist (whose own memoir Betting On Myself is fantastic) recommends Davidowitz, which is indeed full of insight. My copy of James Quinn’s Complete Handicapper is thoroughly marked up. Tom Ainslie writes with a style that makes the whole game seem amusing, for example his choice use of the word “animal”:
These books I bought at the Gambler’s Book Shop in Las Vegas all brought me some delight and in a limited way insight.
Andy Beyer’s books are all quite fun. Even the heroes of the great 1970s era of horse race betting, when Beyer discovered his E=mc^2 (“six furlongs in 1:13 equals seven furlongs in 1:26 and a fifth”) tell that it’s near impossible to make money these days. Certain trainer patterns can be exploited from time to time. The dominance of Bob Baffert in southern California can’t be ignored as an example.
Remember that the takeout is sometimes as high as 25%, even higher once you factor in rebates given to high rollers. Something like 40% of the money in competition might be from syndicates working with advanced computer modeling. And note, in the case of the Stronach Group, the track owners are themselves invested in one of the syndicates! Should be illegal but isn’t.
Liebman quotes the UK’s Chief Justice Cockburn, making a ruling in 1871:
experience shews that there is nothing about which there is so much uncertainty as the event of a horse race.
But when that rainbow shines over the racetrack, and you’ve got the Form open, and you think Forbidden Kingdom might be for real? Nothing better.
I thought I would go down and buy a morning racing paper. There was no quarter too poor to have at least one copy of a racing paper but you had to buy it early on a day like this. I found one in the rue Descartes at the corner of the Place Contrescarpe. The goats were going down the rue Descartes and I breathed the air in and walked back fast to climb the stairs and get my work done. I had been tempted to stay out and follow the goats down the early morning street. But before I started again I looked at the paper. They were running at Enghien, the small, pretty and larcenous track that was the home of the outsider.
So that day after I had finished work we would go racing. Some money had come from the Toronto paper that I did newspaper work for and we wanted a long shot if we could find one. My wife had a horse one time at Auteuil named Chèvre d’Or that was a hundred and twenty to one and leading by twenty lengths when he fell at the last jump with enough savings on him to —-. We tried never to think to do what. We were ahead on that year but Chèvre d’Or would have —. We didn’t think about Chèvre d’Or.
They still run at Enghien:
The next chapter is called “The End of an Avocation”:
We went racing together many more times that year and other years after I had worked in the early mornings, and Hadley enjoyed it and sometimes she loved it. But it was not the climbs in the high mountain meadows above the last forest, nor nights coming home to the chalet, nor was it climbing with Chink, our best friend, over a high pass into a new country. It was not really racing either. It was gambling on horses. But we called it racing.
Racing never came between us, only people could do that; but for a long time it stayed close to us like a demanding friend. That was a generous way to speak of it. I, the one who was so righteous about people and their destructiveness, tolerated this one that was the falsest, most beautiful, most exciting, vicious, and demanding because she could be profitable. To make it profitable was more than a full-time job and I had no time for that. But I justified it to myself because I wrote it. Though in the end, when everything I had written was lost, there was only one racing story that was out in the mails that survived.
It looks like Hemingway wrote a sort of tone poem about the track for the Toronto Star in 1923.
or really any movie with significant horse action, I’m going to try to copy the way the shadows work around 1:22 in last year’s Breeders Cup Turf.
This is an interesting race. The favorite was Magical, shipped from Ireland, trained by Aidan O’Brien. The Irish are great trainers of turf horses, going back long before Stewball. Local Louisville boy Brad Cox had Arklow. Tarnawa, also from Ireland, was a four year old filly* – a girl racing against boys, past the age when females are usually still able to compete with their brothers. Channel Maker had run this race three times, finishing twelfth, eleventh, and seventh and was coming in strong.
*when exactly a filly becomes a mare is not a subject I’m prepared to opine on.
On October 25, 1870, the racehorse Preakness won the inaugural running of the Dixie Stakes (now called the Dinner Party Stakes), on the opening day of Pimlico Race Course in Baltimore. Three years later, they named a new race after Preakness. The Preakness Stakes ran just the other day, it was exciting.
As for Preakness the horse?
After his retirement from racing, he was sold in England to stand at stud. He later became temperamental, as did his new owner, the Duke of Hamilton. After an altercation where Preakness refused to obey the Duke during a breeding session, he retrieved a gun and killed the colt, leading to a public outcry. As a result, there was a reform in the laws regarding the treatment of animals.
Poor Preakness. The Duke looks like a cad.
A description of Hamilton pertaining to this period in his life has this description of him to offer:“At Christchurch, he went in for boxing, as he went in later for horse-racing, yachting and other amusements… He was full bodied, of a rudely ruddy complexion, had a powerful neck, and seemed strong enough to fell an ox with his fist… He had a frankness of speech bordering on rudeness”.
Killing a champion horse seems like the most notable thing he ever did.
Loved William Finnegan’s article about horse racing (can it survive?) in the May 24, 2021 The New Yorker. Horses given Lasix can lose 20-30 pounds of urine.
Horses usually give birth in the middle of the night, which makes sense since that’s when they are less likely to be disturbed by predators. But foals need to be able to move with the herd at daybreak.
What about this scam that the Stronach Group, owners of Pimlico, pulled on Maryland’s taxpayers?
… the company wanted to move the Preakness to Laurel Park, a racino in the suburbs. Baltimore officials were aghast at losing the race, which has been running since 1873, and the state ultimately agreed to invest nearly four hundred million dollars in Pimlico and Laurel Park. Stronach committed to leaving the Preakness where it was, having offloaded the risk onto the State of Maryland.
Belinda Stronach, a fascinating character. Served in Canada’s Parliament for two different parties, “just friends” with Bill Clinton, her second husband was Norwegian speed skating legend Johan Olav Kloss, she defeated her father in a lawsuit to claim his assets.
Finnegan suggests that “sealing” the track at Santa Anita too frequently after the dump of 2019 rainfall here in southern California may have contributed to the number of horse deaths at the track, a loss we mourned at the time.
One of the attractions of Santa Anita is that it’s a time capsule, of another California:
Alexander grew up down the street, in Pasadena, and he knew the track in its heyday, in the fifties. “When I was growing up, horse racing was pretty much the only game in town,” he said. “No Dodgers, no Lakers, just the Rams. But I was already a Dodgers fan, because of Jackie Robinson. We were both from Pasadena.”
Had a chance to take in some racing at Santa Anita a couple weeks ago, and had a corned beef sandwich on rye with mustard, horseradish and pickles that I found exquisite both in taste and in antiquitude.
It’s hard to see a growing future for horse racing. Finnegan notes that “in the past two decades, the over-all national betting handle at racetracks has fallen by nearly fifty per cent.” Although at Santa Anita over 2020, even while spectators were kept out, the handle was up from the previous year.
Used my complex handicapping method on the 2021 Kentucky Derby.
- Known Agenda – 81.33
- Like a King – 75
- Brooklyn Strong – 73.6
- Keepmeinmind – 78
- Sainthood – 79.66
- O Besos – 80.8
- Mandaloun – 85.6
- Medina Spirit – 91.6. Came in second to 15 at the Santa Anita Derby back in April.
- Hot Rod Charlie – 75.57. Has very been fast lately.
- Midnight Bourbon – 85.833
- Dynamic One – 74.6
- Helium – 78.3
- Hidden Stash – 75.2
- Essential Quality – 87.6 . The favorite, undefeated in five straight, has beaten 4, 9, 17 & 18.
- Rock Your World – 88. Undefeated in 3 straight.
- King Fury – 75.83
- Highly Motivated – 88.2
- Super Stock – 78.4
- Soup and Sandwich – 87.66
- Burbonic – 67.16
A couple storylines to watch. Kendrick Carmouche will be the first black jockey since 2013. In the early days of the Derby, almost every jockey was black, 15 out of the first 28 winners were black.
Luis Saez will be riding the favorite, 14, Essential Quality. Saez has a shot at redemption after being denied a victory due to disqualification in the 2019 Derby. Essential Quality’s Brad Cox would be the first Louisville born trainer to win.
I gotta cheer for Medina Spirit, a horse with the same name as the Great Debates moderator. Medina Spirit may not end up as a “value,” with six time winner Bob Baffert as trainer. Just glancing at the odds here I’d say Highly Motivated could be something at 19/1? Highly Motivated is a fast horse.
Bob Baffert named his son after Bode Miller?
The best odds as usual are being the house. If you’d bought Churchill Downs stock, $CHDN, the morning after the last Derby (Sept 7) for $169, it’s today worth $211, a 22% return (S&P 500 was up 18% same period). Even the most studious horseplayer would be pleased to gain that return from studying the form.
1 – Essential Quality
2- Rock Your World
3 – Medina Spirit.
Every time I’m in Las Vegas I pass through the sports book and pick up a few racing sheets. I’ve never been able to make much out of them, but the life of the full-time degenerate who’s eating a hot dog and watching the 3rd at Gulfstream or Louisiana Downs is somehow attractive. Why is that? What is it about this that’s appealing? The songs and legends are part of it, for sure. I’ve always found sitting in the stands at Santa Anita an appealing afternoon. Less so since news of the frequent horse deaths.
Santa Anita is running right now, without spectators.
“I love to go back to Paris,” Hemingway said, his eyes still fixed on the road. “Am going in the back door and have no interviews and no publicity and never get a haircut, like in the old days. Want to go to cafés where I know no one but one waiter and his replacement, see all the new pictures and the old ones, go to the bike races and the fights, and see the new riders and fighters. Find good, cheap restaurants where you can keep your own napkin. Walk over all the town and see where we made our mistakes and where we had our few bright ideas. And learn the form and try and pick winners in the blue, smoky afternoons, and then go out the next day to play them at Auteuil and Enghien.”
“Papa is a good handicapper,” Mrs. Hemingway said.
“When I know the form,” he said.
How do you “learn the form”?
I chanced recently across this academic paper, Sports Betting As a New Asset Class, by Lovjit Thukral and Pedro Vergel. It addresses the possible money-making potential of a strategy of “laying the favorite.”
The authors take a simple betting strategy based on Horse races in the UK and invest consistently on laying (betting on the event not to occur) the 4 favourite horses (with the lowest odds) in each race. They find the following:
(1) this type of horse racing strategy provide uncorrelated returns to the market;
(2) the strategy outperforms the Credit Suisse Hedge fund Index and S&P 500 Total returns on average for the last 6 years.
Can this be so? A quick investigation reveals that “laying the favorite” in this way doesn’t seem to be a commonplace option in US horse betting. I don’t think this strategy would be financially viable here.
This talk of laying favorites reminded me of my friend Beth Raymer’s book, Lay The Favorite: A Memoir of Gambling.
The book was made into a 2012 film starring Bruce Willis and Catherine Zeta-Jones.
In the book, Raymer describes learning from the professional gambler and line-setter Dink:
Studying to find value — into it! I resolved to learn how to read a Racing Form, and try to glean some information from it that might give an edge.
Using the very helpful resources provided by the late Neil Benoit’s Getting Out Of The Gate website, which has a Racing 101-401 course, I was able to grasp the basics. This resource at Art of Manliness was also quite helpful, and there’s a Wikihow about racing forms, but it’s Benoit who really gave us a gift.
I’d like to try and summarize my learnings for you, to save you the time in case you’re interested, and because the easiest way to really learn something is to try and teach it.
Let’s take as our example the first horse, Route Six Six, in the 7th race tomorrow (Saturday, June 20) at Santa Anita.
Up top we’ve got some basic info about the horse, like who owns her (f=filly), and her mom (Dam) and dad (Sire).
Personally, and this is based on zero study, but I suspect there’s all together too much focus on breeding in horses. It feels distracting and possibly irrelevant, like when the old-time scouts in Moneyball are focused on how hot a player’s girlfriend is. It just feels old-fashioned and unstatistical. But then again, since I haven’t run any statistical studies, this belief of mine is based on zero evidence as well.
You know what I want to find out from a racing form? One thing. How fast is this horse?
1) elimination of horses that seem unsuited to the distance of the race2) elimination of horses that do not seem in sufficiently sharp condition3) elimination of horses that seem outclassed4) elimination of horses at a serious disadvantage on today’s footing or in light of track biases
Beyer figures are a whole thing
Beyer took a stack of old Daily Racing Forms and did the laborious math by hand, sifting through years of data, applying the analytical skills he had developed as a games-playing child. “‘Six furlongs in 1:13 equals seven furlongs in 1:26 and a fifth’ was my E=MC2,” Beyer says, laughing. By 1972 he had managed to construct a reliable speed chart that incorporated the important element of track variance, a measure of track speed and bias, which was previously calculated by an antiquated–and, in most cases, inaccurate–system. Beyer devised a highly specific, sophisticated method for determining track variances, a method that accounted for the times turned in by different types of horses.
By combining his newly minted speed ratings with his fresh perspective on track speed, the young columnist invented the Beyer Speed Figures.
Interestingly, Beyer come up with his numbers specifically because so much of racing thinking at that time was centered around class:
“The orthodoxy back then said that ‘class’ was the measure of a race,” Beyer says, while making hieroglyphic notations in the margins of his race program. “For instance, if a $10,000 claimer was running against a slower $200,000 claimer, the assumption was that the slower but ‘classier’ horse would win. I was looking for a way to verify–or contradict–that assumption.”
Don’t bet the horse, bet the jockey
Readers, I just idly checked out the 9th race at Belmont today, the Jaipur. Will be televised on NBC. I noticed Hidden Scroll, a very fast horse, had something aberrant in his last race:
What’s that about? Here we see the pleasures and oddness of the Racing Form as compressed storytelling:
Luckily in this glorious age of YouTube what Hidden Scroll did in his last race, this might be the craziest thing in a horse race I’ve ever seen:
Motherfucking horse nearly broke his own neck, lost his jockey, and still almost won! He’ll have the same jockey (JR Velazquez) today! That should be a very interesting race.
Santa Anita racetrack is a beautiful place. There’s history. Seabiscuit raced there, a statue honors him. It’s good to sit in the stands, look at the mountains, and drink a beer, watch the horses race. Read the little horse newspaper.
Santa Anita’s been having problems though. Horses keep dying there.
Since December 36 (!) horses have died.
On Saturday at Santa Anita they had the Breeders’ Cup, a nationally televised race.
Santa Anita! This is your big moment. All eyes on you. You’re on TV, time to shine.
Don’t let any horses die.
They had ONE job. And what happened?
A green screen was rushed onto the track to block Mongolian Groom from the view of 67,811 fans and a prime-time television audience. He was loaded onto an equine ambulance and taken to a hospital on the backstretch.
Cup officials said in a statement about two hours after the race that Mongolian Groom had been euthanized after suffering a serious fracture to his left hind leg.
Couldn’t we pretend we were giving him tender care? euthanize him later?!
I’ll be sad if Santa Anita closes down. It’s like some enchanted time capsule of southern California. But, if you’re in the horse business, you can’t get me excited about horses and then keep killing them.
Was wondering why Justify / Mike Smith’s silks looked like the Chinese flag. Turns out the horse is part owned by China Horse Club.
The China Horse Club has about 200 members, according to its vice president, Eden Harrington. Membership costs a minimum of $1 million, according to some reports, but Mr. Harrington said the club offered different tiers of investment and that the fee was a credit that went toward the purchase of horses. He declined to give a range, and the club does not disclose the identities of members, who include wealthy citizens from China’s mainland and beyond.
Mr. Harrington said the club kept its membership private to shield members from potential public scrutiny amid a Chinese government led anti-corruption campaign which has “created a culture of fear where people didn’t want to be seen to be spending money in a way that may be seen as excessive.”
Much stimulating discussion ensued after Saturday’s post about why Kentucky Derby winners aren’t getting much faster.
Reader Avin D. sends us this 2014 Deadspin piece by Roger Pielke Jr. which has much better stats and looks at whether we’ve neared peak speeds in animal races:
One possibility, advanced by Denny and others, is that thoroughbred race times may have leveled off because the narrow genetic diversity of racehorses limits the genetic diversity in the pool of potential thoroughbred champions. Modern thoroughbreds are descendants of a small number of horses (less than 30 in the 18th century), and 95 percent are thought to trace their ancestry to a single horse, The Darley Arabian. Today, there are fewer than 25,000 thoroughbreds born each year in the United States. Compare that with the more than 7 billion people worldwide.3 The size of the human population may simply lead to a greater number of potential athletes with extreme speed.
Very cool. Imagine if every current human runner was descended from, like, Guto Nyth Bran.
The Darley Arabian sired Flying Childers:
It is said he completed this race, over the Round Course at Newmarket, in 6 minutes, 40 seconds and that he reached a speed of 82 1/2 feet per second or 1 mile per minute. This was claimed to make Flying Childers the only horse on record as having matched the top speed of the unbeaten Eclipse. By way of comparison, this would be nearly 40 seconds faster than the unbeaten Frankel ran the Newmarket Rowley Mile in his famous 2,000 Guineas victory of 2011, over 30 seconds faster than the current mile track record and very close to the five furlong track record set by Lochsong in 1994.
As for Eclipse:
Eclipse is still remembered in the phrase “Eclipse first and the rest nowhere”, snowcloned as “[name of competitor] first and the rest nowhere,” referring to any dominating victory. This phrase is occasionally seen in American print media (most often in newspaper sport sections) but is more common in Britain.
A new one to me. If Flying Childers could keep his alleged top speed of 82.5 feet per second he’d finish the Kentucky Derby in a minute twenty.
Why aren’t horse races longer anymore, the way they were in the Stewball era?
Anyway, congrats to Justify: