Exotic Betting: A Reaction

In my last entry, I cautioned against the over consumption of handicapping books and the importance of maintaining a critical skepticism towards experts. Yet, accompanying this warning, I carved out an exception for certain type of books, including books about bet structuring. However, as of this spring, the handicapping literature on bet structuring was quite thin – an appendix to Steve Davidowitz’s Betting Thoroughbreds, a few paragraphs in Andrew Beyer’s The Winning Horseplayer, and a couple of chapters in James Quinn’s The Best of Throughbred Handicapping constituted the entirety of the mainstream works. Based on this paucity of novel approaches, it was with much anticipation that I awaited the publication of Steven Crist’s Exotic Betting -- a book that I heard him first describe last fall during a Breeder’s Cup preview session at Belmont Park.

Even while my view of handicapping experts had soured as I developed as a horseplayer, my excitement for this book was still quite large. I anticipated its publication throughout the winter – I had great respect for Crist’s intellectual ability, his writing skill, and his success as a horseplayer, and I looked forward to him shedding some new insight into racing’s most challenging and rewarding bets. Yet, when the book finally arrived last Wednesday and I finished it the same day, I was left feeling a bit unsatisfied. Written on such a narrow topic and advertised as dealing solely with bet structuring (as opposed to selection), I expected the book to emphasize and detail strategies for maximizing potential return at appropriate levels of risk through the use of exotic wagering – the key principles of a disciplined and winning approach to the races. Simply put, I wanted to know when to add that extra horse to a trifecta ticket or when it made financial sense to leave off a vulnerable favorite in a leg of the Pick 4. In contrast, however, Exotic Betting is styled more as an introduction to exotic bet structuring for the absolute novice, and could be described as simply an extended and more in-depth version of a pamphlet handed out a track explaining simple horizontal and vertical strategies. This is, by no means, intended as an insult to the book or to Crist, and is more a warning to the veteran/professional player looking for advanced treatment of the subject. Indeed, the book is geared more toward the reader of Handicapping 101(which, incidentally, is a great introductory book) who routinely boxes trifectas and three-horse exactas than the reader looking to apply the principles of Fooled by Randomness or a hearty statistics tome to their wagering.

At its core, Exotic Betting contains a discussion of the basic strategies for both vertical (exacta, trifecta, and superfecta) and horizontal (daily double, pick three, pick four, and pick six) wagers. For the most part, the strategies are sound and provide a good, launching pad for deeper thinking about the exotics. In particular, Crist mentions the single, most important piece of advice for the exotics bettor: Exotics can not be used as a means to profit from an overall lack of clarity. This was a lesson that I learned in the early days of wagering, believing that I could use these bets as a replacement for difficult decision making. While you may occasionally reap the reward from this method, the bettor is typically not getting a return in accordance with the risk undertaken. And, at the core, that is what exotic betting is about -- finding ways to increase the return while managing risk -- all based upon your opinion and analysis of the race.

Unfortunately, Exotic Betting does not delve deeply into this fundamental dilemma – one in which the handicapping literature desperately needs more work. Indeed, one problem I have had in the past with other handicapping books was the failure of the authors to explore the rationales underlying certain decisions and attempt to discern general principles from specific examples – a key ingredient in the rigorous pursuit of knowledge. As an example, I’m reminded of Pedigree Handicapping by Lauren Stich, in which she never revealed any sort of guiding principles for interpreting pedigrees, instead trying to impart knowledge to the reader by example after example. While her observations were very useful, she never explained how or why she reached those conclusions, and she never gave the reader any theories for the reader to evaluate and possibly apply themselves. Unfortunately, although not to the degree of Stich’s book, Exotic Betting suffers from these same problems. And it’s only through the development of general principles that the handicapper can critically assess the theories for himself, and, as a result, continue to grow as a horseplayer.

While Exotic Betting serves an introduction to the subject, more guidance and detailed exploration of the relation between risk and reward is sorely needed in any future text dedicated to exotic bet structuring. In looking at Crist’s work, we can see the questions that need to be answered in an advanced treatment of the subject. For example, in devising his tickets for the Pick Four and Pick Six, he normally divides his horses into four groups – A’s (likely winners), B’s (horses that can win if the A’s fail), C’s (horses that could conceivably win, but are unlikely) and X’s (eliminations). Based on these classifications, he then creates tickets with various combinations of the non-eliminated horses to cover a vast range of possibilities. While Crist gives some examples of his “Chinese Menu” selection process (e.g. three from Group A with one from Group C), there is no discussion of the reasons why certain combinations are used. As a result, the reader is left wondering why he determined that financial rewards are best served by these combinations, and how to make these adjustments to their wagers. The same problem occurs in discussing the amounts to bet on certain combinations. In fashioning his tickets, Crist mentions that when he plays a Pick Four ticket with four A’s (the likeliest winners), he buys it four times to compensate for the lower payoff. Yet, much like the earlier discussion regarding the selection of combinations, no explanation is given on why or how these amounts were calculated. To the participant in the handicapping life, there is nothing worse than putting out capital at an undue amount of risk for the range and likelihoods of various returns, and, consequently, the horseplayer needs theoretical tools to help him assess when he has either overplayed or underplayed their capital.

Unlike the poker or chess player, whose shelves are filled with intellectual discussions of the finer points of the game, the advanced horse player looking for rigorous approaches to betting the game is still without much hope at the bookstore. Hopefully, in the coming years, an author – perhaps even Crist himself – will begin to develop the potential of the ideas in Exotic Betting, and bring much needed new insight to the advanced participant of the horse playing game. But, until that day, any player who finds himself boxing trifectas, baseballing exactas, or filling out a Pick 4 ticket with 2 horses in each leg, would be wise to pick up Exotic Betting to begin the process of deeper critical thinking.

The Generic Horseplayer

Conformity is a curious thing. In many walks of life, it is a pathway to comfort; a means to attain a predetermined level of security. If you play along, do what you’re told, obey the rules, then you’ll be taken care of – an above-average, yet cookie cutter life will exist for you. There’s almost no risk in taking the safe path; while the non-conventional person may attain or acquire more or less, conformity brings safety, although perhaps not deep satisfaction. I don’t disdain or disrespect anyone for making such a choice for their life – it’s a dilemma that I struggle with often. However, if you lean towards conformity and its resulting safety, then I’m fairly positive that you shouldn’t be expecting to profit from the horses, whether recreationally or professionally. Because in playing the horses, it’s exactly the opposite of many other aspects of life. Thinking like everyone else will not create even an average level of success. As in any speculative activity, profit can only result from an opinion that is different from the norm, so long as the difference of opinion is based on something tangible, and not merely different for difference sake.

As a devoted horseplayer, I’ve had my own experiences with the pressures of conforming. When I began handicapping, I was wildly successful, despite only using incomplete bits of knowledge based on repeated observation to reach my selections. My first big winner (35-1) was selected on a drop in class combined with a last race decent close -- an analysis derived solely from watching several races mixed in with a good dose of common sense. Believing that I was probably just lucky and wishing to perpetually sustain this luck, I embarked on a journey to learn as much as I could about the game. In the following months, I read the classics of Ainsle, Beyer, Brohamer, and Quinn – and a host of other authors who all added something to the equation. In fact, as of this writing, I own and have read 47 books related to handicapping – all catalogued neatly in a veritable library of truth in my office.

After reading all these books, I was armed with an almost complete body of handicapping knowledge. However, after incorporating this information into my handicapping, I noticed a not-so-positive change in my thought processes and in my ultimate selections. I now routinely settled on favorites or other top horses, and I no longer found the less than obvious horse. I routinely supported the horses that met the proven, well-trodden angles learned from the books, such as best last race finish, top speed, top trainer and jockey, best class, and improving form cycle. At the same time, I was chanting to myself the mantras of value at every turn. Although I was acutely aware of the importance of the overlay, I would incorrectly support false overlays repeatedly. And then, one day, I realized what had happened. I had become nothing but an organization man – an unthinking disciple of a dominant ideology. Stripped down of my early individuality, I had become a generic horseplayer.

Aware of my now commonplace handicapping, I began to suspect that the success at the beginning was more than just beginner’s luck and that it contained seeds of an individualized method that I had abandoned to subscribe to the views of the orthodoxy. Determined to recapture some of the methods that had worked so well at the beginning, I began to disregard conclusions based solely on the surface of the form. In an effort not to be swayed, I would make my selections ignorant of the odds, and only bet when the public did not mirror my assessment. I tried to predict how the public would value the horses – using the knowledge that I gained in my exhaustive study of the literature – and tried to find less than obvious reasons why the public might be in error. But, mostly, I tried to unlearn what the books led me to believe – that the past performances completely reflect the possibilities of the race and that an individual race can predicted with accuracy. Indeed, I discovered that, in a speculative endeavor, the illusion of certainty can be fatal. By returning to a view that anything can happen, which I held at the beginning of my horse playing days, I recaptured the looseness of thought necessary to distinguish my thought process from the crowd.

These duel perils of extensive handicapping study – conformity and the illusion of certainty – present traps for the novice and experienced player alike. For the novice player, I would caution against too much early infusion of the technical handicapping techniques of others. Seek only to understand what a past performance means and only approach the technical works when you have the base of knowledge to critically assess them. However, anything dealing with the game that does not involve the technical part of picking winners, i.e. bet structuring, money management, or emotional control, is incredibly useful to the novice (and veteran) horseplayer. And, for the seasoned horseplayer who has read the classics and is familiar with all the established techniques, a consistent check to see if you have entered the realm of the generic is always useful. This game’s ups and downs can push all but the most emotionally disciplined handicapper into moments of doubt and towards more accepted approaches and a vain quest for certainty.

To everything, there is a season

Ah, it's good to get back to the handicapping life. I apologize for the long delay in writing, but I think I have a fairly decent excuse -- I got married! Much like the best of handicapping decisions, this one was relatively spontaneous and felt absolutely right in my gut. Engaged last Wednesday evening, we bought rings on Thursday and were married Friday morning at the home of a local justice of the peace. A short jaunt up to Quebec City gave us a wonderful weekend honeymoon. We do, however, have visions of Ireland (and, of course, a visit to Curragh) for a longer honeymoon in the future.

So, needless to say, I missed watching Lava Man and his narrowest of triumphs in the Hollywood Gold Cup last Saturday. After watching the replay, however, I've developed some worries that he's slipping off form....although the Beyer did come back a strong 108. Based on last year, I'd still prefer to see Doug O'Neil rest him a bit, in order to freshen him for the race that will make his career -- the Breeders' Cup Classic.

In thinking about Lava Man's form cycle and the cliff he fell off last year, I'm reminded of a theory that I developed in my first few months of handicapping. In my first few trips to the OTB in Denver, I noticed that certain horses tended to excel at certain times of the year. In analyzing a race, I'd simply look at the calendar and see how a horse had performed in the current month in the past. I was very loose with these assessments -- looking generally at the particular season and see if I noticed a difference in performance. I evenutally abandoned this approach as unscientific, but eventually I took many of the concepts and transformed them into a quasi-form cycle assessment. And, while I'm still not sure that the seasonal theory has any validity, it doesn't really matter for the qualitiative handicapper. Because approaching a past performance from a different point of view than the basics can get you deeper into a qualitative assessment of how a horse has performed in the past and, most importantly, why he or she has performed in that fashion. And, so long as you're not married to the initial basis for the investigation, when using an approach such as this one, you are far more likely to reach novel conclusions about a race.

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We've got exciting races all throughout the weekend. Lost in the Fog reappears in the Smile Sprint and faces a very tough field and has to carry 125 pounds. Speaking of LITF, was anyone else turned off by the news that Gilchrest and Aleo would have retired the Fog if he had lost 4 in a row, simply to protect the image that this horse was once a superhorse? Statements like that really make me wonder how much of the fog was really just mirrors...and a whole bunch of smoke. Also from Calder, personal favorite Too Much Bling looks to rebound from the loss in the Woody Stephens in the Carry Back. And, later this afternoon, TMB's half-sister, Littlebitofbling tries for the second time to break her maiden in Thistledown's 10th. I love her dam, Rose Colored Lady, and I'm beginning to believe (although unscientific) that we may have some large heart size (X-factor) being passed on from this dam. Combined with the two-year old filly prowess of the Carson City line, we could be looking at a fun horse here. And while on the subject of fun sprinters, it's worth noting that Fabulous Strike -- discussed below in the entries of June 9 and 10 -- has already come back to win a minor stake at Belmont -- a much-needed return to his proper level. As proven by his domination of the field, this was yet another wise move by the other Todd, the talented and successful Todd Bettie.

Enjoy the races.

S.A.

The Fundamental Theorem of Handicapping

About a week ago, I closed with a question:

"What is the more important factor in being a successful horseplayer -- skill or luck? Or, more specifically, the ability to see a race as clearly as possible, or the ability to admit that most clarity is false?"

These questions directly relate to a line of thinking I've been exploring for quite some time. I've spent much of my adult professional life as a "truth seeker." I spent a good portion of time in academic pursuits where I'd research and think incessantly and seek the right answers to questions. And, after school, while working as an attorney for an appellate court, I was concerned with finding the right resolution to the intellectual problem posed by the case at hand. In both situations, there was one absolute truth to be found, and it was always a part of my job to find it. If I couldn't find an answer, it was always a question of looking harder or thinking deeper. I was perpetually optimistic about the eventual revelation of truth through effort.

However, as a handicapper, this optimism was misplaced; in a particular race, repeated effort or deeper thought after a certain point does not get any closer to truth. After a while, I discovered that the reason was simple: No truth is possible before a race is run, and no right answer can be found. I found that as a a handicapper, you must not be guided not by a desire for truth or knowledge or a right answer. Because no matter how deeply or skillfully you look at a particular race, you can never know what is going to happen. And, this, my friends, is the Fundamental Theorem of Handicapping.

It's almost ridiculous in its obviousness and begs for a response of "so what." But, from my own experience and development as a horseplayer, I've seen how powerfully misleading a belief in the existence of a right answer can be. In many races, it drove me to elevate secondary factors to separate contenders. And, as a result, I would reach a level of false certainty and bet with false confidence. But, unfortunately for the seeker of pure clarity, even with all the careful analysis and detailed research, you can never truly see what is going to happen. Anyone who tells you otherwise is selling something.

Some knowledge is, of course, essential. I believe that there is a line -- http://www.trackchampion.com/abrams_balance.aspx -- which separates legitimate initial analysis from counterproductive right answer searching. After this point, when analyzing a particular race, making repeated efforts to reach a level of certainty will always be in vain. Indeed, finding the point where you realize that any additional clarity is false is a key to this game.

S.A.