With the Breeders’ Cup getting closer and closer, I have all but locked myself in my betting bat cave, i.e. my downstairs office, to prepare for this year’s two-day extravaganza at Santa Anita Park. And my quest for pari-mutuel truth and equine enlightenment appears to be paying off, as I have unearthed several worthwhile angles that I will be sharing in the coming weeks. Granted, my wife has grown tired of me addressing her as Alfred and I’m not sure whether or not my youngest son appreciates the title “Boy Wonder,” but, hey, there’s a price for progress. After all, I’m the guy stuck wearing the mask and tights… oh, alright, I’d probably be wearing them anyway, though not nearly as often — maybe to go to the grocery store or to church.
Anyway, the one thing my BC studies have made abundantly clear — again — is the importance of identifying overlays and underlays and betting accordingly, so I thought I would use this week’s column to explain a key component of “value” wagering, ROI.
Read almost any modern book on sports wagering and you’re likely to encounter the concept of return on investment, or ROI for short. Although calculated in a variety of ways, ROI attempts to measure one’s degree of wagering proficiency and, thus, is absolutely critical to the ultimate success of any speculative venture. Yet, very few bettors seem to know what ROI is, much less understand its importance.
ROI is similar to a dividend rate. It simply measures the return on a given investment (bet). It is typically expressed as a percentage or as a unit return on a one or two-dollar wager, as illustrated below:
Percentage: return / bet – 1.
$1 Bet: return / bet.
$2 Bet: (return / bet) x 2.
Thus, if one were to make five $2 bets and cash on two of them, with returns of, say, $5.00 and $5.40, the ROI would be calculated as follows:
Return: $5.00 + $5.40= $10.40.
Bet: $2 x 5= $10.
Percentage: $10.40 / $10 - 1= 4.0%.
$1 Bet: $10.40 / $10= $1.04.
$2 Bet: ($10.40 / $10= $1.06) x 2= $2.08.
Now, look closely at the example above. What does it reveal? Well, some of you veteran horse players may have noticed that the average payoff ($5.20) in this mock scenario just happens to coincide with that offered by the typical race favorite at most tracks across the country. But even more illuminating is that, despite a 40% winning rate (well above the norm for favorites), the ROI is just 4% — which should serve as a screaming wake-up call to those who think that the racetrack is just one big check waiting to be cashed.
Sagacious gamblers simply must confront the somber reality of how difficult it is to beat the races, despite what one hears from various “experts” and “pros.” Expecting to maintain (please, no stories about a particular day, week or even month at the track) a triple-digit ROI is about as realistic as playing the lottery for a living.
So, what is a reasonable ROI? Respected horse racing handicapper and author, Jim Quinn, has consistently offered 17% as an obtainable goal, which he derives from a 33% success rate and 5-2 average winning odds.
Doesn’t sound like much does it? Especially when there are Web sites and newsletters promising to double your money and triple your wardrobe. However, when one considers that ROI expectations are confined to a single event in sports wagering, as opposed to a span of time (like interest rates), a 17% return is certainly respectable, as the statistics below clearly demonstrate:
Bet Amount: $200.
ROI: 16.7% (based on Jim Quinn’s goal of 33% winners and 5-2 average winning odds).
Profit after 100 bets: $3,333.
Profit after 200 bets: $6,667.
Profit after 400 bets: $13,333.
Profit after 800 bets: $26,667.
Profit after 1,600 bets: $53,333.
Keep in mind that 1,600 bets equates to just under 4 ½ wagers per day over the course of a year. In today’s era of simulcasting and Internet wagering, such a schedule is hardly taxing. And while an annual income of $53,333 won’t get you into any VIP parties at the Viper Room, it’s not a bad salary for watching sports all day.
On Top of the World
One of the most difficult tasks in racing — of any kind — is to overcome a slow pace. To do it while encountering traffic trouble and running wide is even harder. Yet that is precisely what Miss World did when she won the Garden City Handicap at Belmont Park on Sept. 12. The pace was so slow that day the opening half-mile could have been clocked with a sundial. In watching a replay of the 1 1/8-mile event, it almost looks like jockey Ramon Dominguez is pointing out historic landmarks to the other riders, as he strolls through the first four furlongs in 52.36 seconds (+8 ESR) aboard Shared Account.
Meanwhile after checking between rivals entering the first turn, Miss World, who was making her stakes debut in the Garden City (a Grade 1 affair), had only one horse beaten in the early running. But the daughter of Bernstein showed her quality by rallying wide to post a 1 3/4-length score and earn a 95 Beyer speed figure and +9 LSR.
This weekend, Miss World will be out to prove she’s no flash in the pan when she heads a field of seven entered in the Queen Elizabeth II Challenge Cup at Keeneland Racecourse. Contested at the same distance and over the same grassy surface as the Garden City, the QEII drew a couple of Miss World’s Garden City foes as well — the aforementioned Shared Account and Gozzip Girl. While I’m not that impressed by the former (if you can’t win after walking the first four furlongs last time…), I do think the latter has a big shot to win Saturday’s Keeneland feature.
Like Miss World, Gozzip Girl had her fair share of trouble on Sept. 12, yet still managed to run a credible fourth in her first start since whipping her elders in the American Oaks on July 5.
Currently a full-time freelance business/sports writer, Derek has been published by Motley Fool, Newsmax, Dulcinea Media, iStockAnalyst, Beacon Equity Research and a host of other online and offline venues.
The opinions of Youbet Update writers are their own and do not necessarily reflect the opinions of Youbet.com or its subsidiaries.