Monday, February 20, 2017

The Number of Races Aren't as Important as You Think

'Spreading a product too thin' is something that major league sports, like the NFL, grapple with.

"For the 2016 season, that meant a total of 110 NFL television windows when you add up the three every Sunday, plus Monday nights and Thursday nights, Thanksgiving and Christmas, That’s more than the league has ever had before, and the ratings data suggest that some fans felt that football was spread so thin that they simply couldn’t keep up with it all.

The NFL may realize that’s a problem, and there are already indications that the league is looking at scaling back".

In racing we (obviously, look at field size numbers) spread much too thin, but there are clearly forces at play -- mainly about keeping the supply side humming.

However, and more broadly, there is a parallel to horse racing.

When we examine the monthly quarterly Equibase handle numbers, we may see a headline "Handle down 2%, races down 2%" and think everything is fine. But that's missing an important point. Like the NFL, as the windows shrink in number, the gambling product gets better, and the betting menu gets uncluttered. This doesn't result in a one to one reduction (or increase) in handle.

The obvious example is Hong Kong, where they run few races to monster handles. If the meet tripled in length, they are not going to do three times as much handle.

In North America we've seen this first hand, where in Canada harness race dates were clobbered after slots were removed, but customer demand held fairly firm. For those who remember the "elite meet" at Monmouth, this same thing was apparent. In 2009, NJ thoroughbred handle was about $350M. In 2010, with almost 50% fewer racedays, handle was over $470M.

Smart people say the number of races should be looked at more like field size is, as a handle determinant. That's probably a good place to start.


Have a good Monday everyone.

Tuesday, February 7, 2017

Survivorship Bias In Super Bowls; It's Why in Horse Handicapping We Need to Study the Losers

There, as often happens in sports, was quite the discussion about play calling, play execution, and just about everything else after the Falcons blew their massive lead on the weekend in the Super Bowl. This is, generally, what we as sports fans do when something weird like this happens.

"If team X [ran the ball], [passed the ball], [killed clock] etc, they would have won the game!"

Maybe if one or two of those things happened, yes, this startling win might've not occurred, but this analysis sometimes has a built in error with something called Survivorship bias. This is, from Wikipedia: "the logical error of concentrating on the people or things that "survived" some process and inadvertently overlooking those that did not because of their lack of visibility"

We see the success of something (a big comeback) and start attributing, because the success is apparent. What we don't see is the times this success was not achieved (in this case, say for example, a team staying aggressive and running out the clock so the other team never even gets a chance to possess the ball twice) and weigh the other side.

Examples of this from sports are plentiful.

When a 3rd and one pass works, "great call, they caught them off guard."

When it fails: "sheesh, run it, you only need a yard!"

In the Super Bowl itself, something occurred that illustrates this pretty well.

In the Super Bowl in 2013, late in the 4th quarter, with the game on the line, coach Pete Carroll called a pass play from the one yard line. This is not uncommon (coaches have called a pass play about one of every four plays from that spot), and has a 48% success rate from the goaline. And it's often used as a set up play, to keep the defense guessing.

On Sunday, Bill Belichick called a pass play, in overtime, from the one yard line against Atlanta with the game on the line. Again, not uncommon.

Now, guess which one is remembered as "the worst call in NFL history". Yes, you're correct, it was the play that went wrong, not the one that's "disappeared from view."

In horse racing we as bettors do this all the time.

When a jockey switch occurs and we bet the horse, we say "that 8-5 was a GIFT!" for everyone to read, or hear at the OTB. However, perhaps if we run the numbers, the last six times the same switch occurred it resulted in a loss. When's the last time you've heard a positive rider switch get commented on when the horse loses?

What we need to do is look at the angle, or move, in totality, and then figure out if it's profitable. That involves, like in sports betting or Super Bowls, analyzing the losing alternative. We learn much more from what people aren't talking about, than what they are.

As for the Super Bowl, a sound argument can be made that it might've been statistically best for Atlanta to run twice and kick a field goal, but it's statistical hair-splitting. And of course, if there were two incomplete passes - in the absence of holding calls and sacks - followed by a made field goal and a Falcons victory, no one would even be talking about it.

Have a nice Tuesday everyone.

 

Monday, February 6, 2017

The Horse Can't Lose

Mark Cramer's book, Value Handicapping, was the first book I ever read about making odds lines. It provided me with a good gambling lesson, namely, anything is possible. If you have a horse in the race, that horse - somehow, someway - never has a zero chance to win.

For casual football fans that lesson was proven yesterday, when the New England Patriots came from an impossible spot (about a 1% chance in the 3rd quarter) to win the Super Bowl.

Yes they needed a lot of 'luck' that involved a lost fumble (it's about a coin flip on who recovers one), a catch that could not be caught three times if you threw it a thousand times, an actual coin flip in OT (not even giving the other team a chance at a score) and about ten other things. But, they had a "chance".

When something weird happens we tend to see a lot of this:

Somehow, a series of fortunate or unfortunate events (depending on your perspective) resulting in a surprising result, gets turned into "the math is wrong." No, it's not wrong. Don't slag the math just because you don't understand what it's saying.

For us as horseplayers, or gamblers, the math is all we need and it's the primary pass/fail decision maker. Yep, the Falcon's can lose, but if someone gives you 50-1 you don't want that side, at 150-1 you do. It's the same thing we do in horse racing, almost each day.

If you use the words "the horse can't lose" it's probably best to do it as hyperbole, because if you truly believe that, you probably just took a major bath on the Falcons. And it will take a lot of short-priced wins to get your money back. 

Have a nice Monday everyone.

Sunday, February 5, 2017

Packaging the Derby Preps

There were three Derby preps yesterday, which is always nice for fans. Two of the races had potential superstars, and one had the top seeded Derby horse in training. Even though it was early in the season, when we should take results with a grain of salt, I don't think anyone was disinterested in the preps.

What I often wonder is, why weren't the preps packaged in a way where, say, the three races are raced in sixty minutes? With this timing tweak, TVG, XBTV, and major track signals could show all three preps at proper intervals in packaged form. A one hour Derby prep "show" with three scheduled races seems to me to be effective marketing for this sport (or any sport). It would probably increase handle in each of the races, as well.

As a sport, I think the Derby (through Churchill Downs Inc.) does things better than most. But I don't think the sport can't do better. Always improving is at times elusive, but should always be a goal. In a sport like horse racing - where people don't talk much with each other - it's not easy, but it should not be something that can't be overcome.

One nice incremental improvement, was the use of Facebook, by NYRA:
That's solid.

Notes:

In HRU today there was an update on Meadowlands' racecaller Sam McKee. Sam is a wonderful man who loves the sport and is nice to anyone, no matter who you are. We wish him a speedy recovery.

Also in HRU, a look at how other entities and companies like Google and the NFL have explored new avenues through investment; and how that pertains to horse racing.  Testing, experimenting and investing in potential revenue streams is important. Racing, with a defacto internet betting monopoly, funded in a major way through alternative revenue (revenue that will decrease, not increase over the next 25 years), is ripe for the same thing.

Enjoy your Super Bowl Sunday everyone.


Wednesday, February 1, 2017

Progress in the Sport - We Learn Things if You Let Us

The Pegasus' timing was wrong. How do we know? Because some people - not employed by Gulfstream or Equibase or any alphabet - had access to video, and the brains to decipher what they were seeing.

10 or 15 years ago no one would've even known.

Meanwhile, January's handle numbers were released.

Hold it, who is the person with the funny avatar? Where are the real numbers, the ones from the industry?

They're not being published until the quarter is over.

Reporting of handle has progressed, and it's gotten better, but it's not coming from the industry. Social media discussions, and some (like o_crunk) with access to the numbers, have provided that progress. We are smarter because of it.

As above, we don't need a degree in statistics to figure out that January was a decent month for the sport, with the tracks in the middle down a wee bit.

This industry data has still not been unleashed; it's really been about one or two people doing some datamining. But think what might happen if it was?

Maybe there would be study of what bets are working; subsetting weather data with handle; the number of races, time of day, day of week, types of races, card length, post dragging.... all of those things may be analyzed by smart people, interested in the sport. For free.

Ditto with timing. Smart people having access, and offering solutions to run-up, timing issues and just about everything else that goes into a past performance.

The sport will learn something if they become more transparent and open-minded. It can increase revenues for the sport, and make life better for customers.

Note:

Thanks to Brandon, I see Swedish handle was about $US1.4B last year, up another 6%.  Sweden's economy is about the size of Pennsylvania's. And this is all bet on harness racing.

"ATG has, on behalf of the sport, has invested considerable resources to reverse any negative years and meet the sharply increasing competition in the gaming market"






Tuesday, January 31, 2017

Baffert and "That's Not Right".

A quote surfaced on the twitter yesterday, presumably told to Steve Byk by Arrogate's trainer Bob Baffert:

Ray Arsenault (congrats Ray) competed in the NHC this weeekend and took home the big prize.

Bob Baffert's horse (congrats Bob) won the Pegasus World Cup and took home the big prize.

Both prizes - Bob's $700k and Ray's $800k - were derived from exactly the same sources.

Ray took the lion's share of the purse provided by other horseplayers who contributed to the NHC purse pool.

Bob took the lion's share of the trainer money provided by horse owners who contributed to the Pegasus Cup purse pool.

It's certainly "right". It's rudimentary math.

If Bob wants to make more than Ray next year, he can. He just has to get 12 horse owners to put more money into the prize pool. Whoever wins next year's NHC can do the same thing.

Have a nice Tuesday everyone.