Archives for March 2018

HORSE-RACE BETTING AND RATIONALITY: PART 3

Continued from Part 2 on February 25, 2018

One of the most interesting findings from the research of psychologists Daniel Kahneman (Nobel Laureate in Economic Sciences) and the late Amos Tversky is that people generally want to avoid losses more than they desire to attain gains.  Michael Lewis provides examples in his book The Undoing Project.

Question 1:  Would you rather have $500 for sure or a 50-50 shot at $1,000?

Answer:  Overwhelmingly, people took the sure thing.

Question 2:  Which of the following do you prefer?

Gift A:  A lottery ticket that offers a 50 percent chance of losing $1,000

Gift B:  A certain loss of $500

Most people took the gamble and became “risk seekers.”

Lewis writes: “It was instantly obvious to them (Kahneman and Tversky) that if you stuck minus signs in front of these hypothetical gambles and asked people to reconsider them, they behaved differently than they had when faced with nothing but possible gains…  The odds that people demanded to accept a certain loss over the chance of some greater loss crudely mirrored the odds they demanded to forgo a certain gain for the chance of a greater gain.  For example, to get people to prefer a 50-50 chance of $1,000 over some certain gain, you had to lower the certain gain to around $370.  To get them to prefer a certain loss to a 50-50 chance of losing $1,000, you had to lower the loss to around $370.”

Thinking about these results, which were characteristic of a cross-section of people, I wonder if avid horse-race bettors mirror the results or behave differently.  Are such bettors wired to take more risks?  For instance, in Question 1, would they more than the general population opt for the 50-50 shot at $1,000 or at least require a certain monetary gain of more than $500?  In the second question, the vast majority of dedicated horseplayers would undoubtedly follow the normal response and risk-seek.

Assume a handicapper is at the racetrack with winnings of $500 going into the last race.  He or she can skip the race and leave a winner…or can bet some or all of the $500 with the potential to go home with much more.  The findings of Kahneman and Tversky would predict that most people would go home a winner of $500 or risk only a small part of the $500.

By contrast, if a bettor had lost $500 prior to the last race, he or she would be apt to risk-seek and take a shot at getting some or all of the money back.  This proclivity to risk-seek in the face of loss is precisely why people with a gambling addiction keep digging deeper holes for themselves.  A Las Vegas card dealer said she has seen people lose vast sums of money yet try to borrow more in order to recoup.  She felt sorry for one such individual and whispered to him (so her boss could not hear) to please quit betting.

Copyright © 2018 Horse Racing Business

THE 2018 GRAND NATIONAL AT AINTREE

The most famous jump race in the world is the Grand National at the picturesque Jockey-Club affiliated Aintree Racecourse in Liverpool, England.  The race has been held annually since 1839 and the 2018 renewal is scheduled for April 14, which concludes a three-day race meet with a card of seven races each day.  The Grand National has a purse of £1 million with £561,300 going to the winner.  In keeping with its aura of prestige, the event has a portfolio of sponsors like Bentley.

The Grand National is run at a distance of 4 miles and 514 yards and over 30 fences.  In every one of the 21 Grand National betting events, bettors have to search for horses that are in peak condition to stay the course and contend.  Trainers try to exploit their horses speed and build stamina through a combination of actual works and long and leisurely gallops over trails.

As with racehorses on the flat, chasers only have so many runs in them at peak levels before they begin to taper off.  And the Grand National races are so esteemed that trainers do everything they can to have their charges at the top of their games.

Bettors should initially satisfy themselves that leading up to a Grand National race, an entry has shown improvement in form in its two or three most recent races.  Clues to a horse’s fitness can also sometimes be picked up by watching the animal in the paddock or during the warmup.

Once the current form question has been answered with a yes, the next issue is about the horse’s class.  The fittest of horses is unlikely to be competitive if it is placed in a race with others who have consistently raced in much higher-level races (class and form are the subject of yesterday’s article “Class and Form at Cheltenham.”)  It is asking a lot for a horse that has been racing in nondescript races to abruptly move up and compete against proven Group I or Grade I winners.

In the Grand National especially, absolutely no win can be counted on until the horse in front has passed the finish line.  In the 1956 race, the famous mystery writer and then-jockey Dick Francis had cleared the final hurdle in front with Devon Loch, owned by the Queen Mother.  The horse proceeded to do a belly flop and defeat was snatched from the jaws of victory.

Copyright © 2018 Horse Racing Business

CLASS AND FORM AT CHELTENHAM

“Class” is an essential factor a bettor should consider when handicapping the jump races at Cheltenham.  Class is inferred from the caliber of races a horse has been running in.  It projects how a horse measures up to the other horses in a given race on criteria of speed, pace, and stamina.  (Racing angles like class are available at Cheltenham betting tips.)

In other words, besides just looking at how a horse has fared in past races, a bettor needs to make a judgment about the level of competition the horse has encountered.  If a particular horse in an upcoming race appears to be in above his head that diminishes the importance of other elements such as who is riding him, the weight he is carrying, and the distance of the race.

Class can be determined by looking at the overall history of a horse.  Especially relevant for campaign veterans with substantial career starts are the last six or seven races; for younger horses with few or no prior races, estimating class is more elusive; for first-time starters, it comes down to reflecting on how well the horse is bred or how he has performed in workouts.

As with human athletes, equine competitors have their peak performance level.  An older horse that has been contesting ungraded races is unlikely to have the talent to take on the competitors in a Grade I or Group I event.  This is not a hard-and-fast fact, however, as there are many exceptions in which former claiming horses have won graded stakes.  Zeroing in on a horse that may be an exception to the rule opens the door for a savvy (or lucky) bettor to score big time.  Clues to a vastly enhanced future outing might include a recent change to a leading trainer or a dramatic improvement in form.

“Form,” as opposed to class, refers to how a horse has done in his most recent races.  A bettor can tell whether a horse is “on his game” or is “tailing off” by consulting the last two or three races.  When a horse has not raced in several months, the past couple of races may not be indicative of the horse’s current form.  In this case, it helps to consult statistics on how successful his trainer is in racing horses after layoffs of various lengths.

A horse like the once-formidable 10-year-old gelding Faugheen, is difficult to assess.  He has been a stellar performer throughout his career but is coming to Cheltenham to race after finishing second in his last start on March 2nd after being pulled up in a December 2017 race at Leopardstown in Ireland.  A handicapper might dismiss the old horse’s chances, thinking he has seen his better days, or, alternatively, glean that Faugheen’s second-place showing in his last race means that he is possibly coming to form just in time for Cheltenham.  Moreover, his trainer, Willie Mullins, is one of the best jump conditioners of all time and his horses are to be reckoned with whenever they are entered.

A horse like Faugheen has all the class one could desire in a chaser, but his form is in doubt.  This conundrum is typical of the challenges and opportunities of handicapping Cheltenham.

Copyright © 2018 Horse Racing Business