Exotic Betting Markets

Exotics Betting Markets

On Monday morning I received a call from a Mr. Racing Sydney subscriber.  He was ecstatic with his results from following his form files.  He went on to tell me that he is a quinella punter and has been backing the top rated selections in quinellas and exactas.  This prompted me to have a closer look at the exotic results of Mr. Racing Sydney.   His results are outstanding when betting races he designates as a ‘confident’ race.  They are races where he is confident of making a profit.  He may be confident of a profitable result through betting the top rated in the win and place market, Dutch betting in the race, or by attacking the race through the exotics.

Below are the performance tables for the exotic betting.

Quinella performance in confident races – taking the top rated as a rover with the next top rated. For example strategy 3 is taking the top rated as a rover with the next three rated runners.

StrategyBetsWinsSRPOTLRO
11071715.9%-26.6%23
21073633.6%31.5%13
31044543.3%18.2%13
4813948.1%34.2%10
55360.0%38.4%1

Exacta performance in confident races – taking the top rated to win with the next rated runners to run second. For example strategy four is to take the top rated to win the next four rated runners.

StrategyBetsWinsSRPOTLRO
1107109.3%-22.6%28
21072321.5%44.7%18
31043129.8%30.4%13
4812632.1%55.4%10
55240.0%-10.0%3

If we concentrate on the quinella and exacta results for the moment, you can see some very healthy returns.

While he is making 4.2% POT betting his top rated in his confident races, his exotics results are exceptional.  Using the most basic of exotic combinations, the exactas, quinellas and trifectas are all showing big profits.  For example, taking an exacta with the top rated runner and the next three rated runners, you would have made 94.9 units profit over 104 races.  The outlay per bet for the combination is $3.00.  What really appeals is the winning strike rate; 29.85%.  With the higher strike rate, the bankroll fluctuations aren’t as great meaning we can safely invest more heavily than what we could with a lower strike rate.

Setting aside a $1,000 bank and betting $10 on each exacta ($40 outlay per exacter), you would be very close to doubling your bank.  That is assuming the use of a constant bank.  A variable bank will generally increase the profits.  That is an exceptional return considering the average number of bets per week is around four.

Using this approach, the longest run of outs was 13.

Quinellas have also been a top performer.  For example by taking the top rated as a banker with the next four rated, you would have made 110.8 units profit.  The cost of this quinella is $4.  Similar to the above example, you would have more than doubled your bank betting in around six months. The strike rate of this approach is 48.15%.

The story is very similar with the trifectas.

StrategyBetsWinsSRPOTLRO
Box31071312.1%-33.8%23
Box41073532.7%74.7%14
Box51075147.7%172.0%8
1x3x31071715.9%14.6%34
1x4x41072523.4%86.4%17

There are many combinations you can take.  The best return has been from simply boxing the top five rated runners.  This would have resulted in 3,291.3 units profit for a profit on turnover of 171.96%.

It serves no real purpose to go through the various combinations.  There are simply too many and besides, it is clear from the results tables displayed that there are any number of profitable ways to attack the exotics with the Mr. Racing Sydney ratings.

What I did want to touch on in this article is the reasons behind the success.  The most obvious reason is because the ratings are very good.  You need a good set of ratings before you can expect to show profits.  But are there any other reasons that would explain the superb performance?

Exotics Market Magnify the Skill of the Punter

It has been mentioned on many occasions that the exotic markets have a tendency to magnify the skill of the punter.  It works both ways; if you are a winning punter, your edge will increase, but, if you are not a winning punter, then a lack of skill will be magnified and greater loses will result.

Mug Money in the Exotic Pools

Many astute punters state that the exotic markets are easier to beat due to the high proportion of ill-informed money in the pool.  One of the main reasons this occurs is due to incorrect staking of the exotic combinations.  Most punters will simply box, three, four or more horses in an exotic bet.  This essentially means that you are staking the same amount on the longer selections (low probability), outcomes, as you are the shorter priced outcomes (high probability of occurring outcomes).

Typically, the over-priced betting programs generally sold from a Gold Coast location, use this approach of placing a large number of trifectas combinations staking each according to what they believe are the true odds.  Most of the programs have the right basic idea from what I understand.  However, I believe a lack of skill and a failure to develop solid ratings are their downfall.  The majority track what they consider to be the ‘smart money’.  That, however, is a discussion for another day.

Exotics give punters the dream of hitting a big dividend; possibly even a life changing dividend.  Many throw long-shots into their exotics in an attempt to manufacture some ‘value’.  Statistically it has been proven that returns significantly suffer the longer the price of the selections.  Of course this doesn’t mean that it is impossible to turn a profit by attacking these types of runners in the exotics, but it is an excellent indication that there are easier targets.

Mystery bets now ensure that the majority of the combinations have been taken.  Most punters would be aware of the impact extra winning tickets will have on a big dividend.  That is the natural premise of a parimutuel system which is what the TABs operate under.

Bias in the Exotics

I believe a factor in the success of Mr. Racing Sydney’s exotics is due to the types of runners he is including.

A while back I read a publication titled ‘Information Efficiency in Financial and Betting Markets’.  Included is a paper was authored by Les Coleman and Martin McGrath.  The chapter that interested me the most was ‘Biases and insider trading in exotic bets on thoroughbreds’.  The analysis covered trifectas and quinellas.  One can assume that the same findings would hold true for other forms of exotic betting.

Without going into details, the paper basically states that the best returns in exotic pools are on the shorter priced runners; the shorter the price of the runners in a winning exotic, the better the return.

As an example, the expected return for a trifecta with the three placegetters all paying less than odds of 4.9 in the win market is -3.5% (average dividend of 33.2).  Considering the average takeout in the data was 20.2%, this is significant.

The return progressively decreases as the average odds of the placegetters rise.  The expected return when the maximum win dividend is between 54.7 and 81.4 is -61.3%.

The same is true in the quinella market.  During the sample period, there was actually a positive return of 3.2% backing runners with a maximum win dividend less than 4.9.  Once again, as the maximum win dividend of the placegetters rise, the return progressively, falls away.  When the win dividend of the placegetters is greater then 36.0, the return is a dismal -45.8%.

The long-shot favourite bias exists in evidently not only the win and place market, but also in the exotic markets.

Also consider that the above returns were taken using S-TAB dividends.  Betting on metropolitan meetings, it is possible to bet the quinella and exacta markets taking a dividend of the best of the three totes.  This has a massive effect on the above mentioned results.  Dialabet is a bookmaker which offers this bet type.

You can also bet the trifecta, quinella and exactas with IASBet and they will guarantee to at least beat the second best TAB dividend.  This is an exceptional offer and extends to country and provincial racing.

If you are not an exotics punter, hopefully this article has you re-considering investing a percentage of your bank in these markets; especially if you concentrate on the shorter priced runners.

I would imagine that the bias exists in the other racing code markets (greyhounds and harness).  In saying that, betting against yourself in the small pools would seem to be an insurmountable obstacle.

This is an approach I have been attacking for close to six months now.  While most punters dread facing small fields with limited chances, I will step in and bet the exotics heavy.  I have enjoyed excellent success and I am sure you will to should you be using a solid set of ratings.

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