Using The Horse Street Handicapper

The Key to the Mint System

By David E. Schwartz

I live in a gambling city abounding with casinos. There are a number of racebooks here. Some of the clubs are parimutuel and some are not. When you wager in a parimutuel club your money is co-mingled with the money wagered by all the other people all over the country. Effectively, your money is “sent to the track” and the casino becomes nothing more than a “ticket seller.” 

John Ascuaga’s Nugget in Sparks is an example of a non-parimutuel racebook. They are doing business the old fashioned way, the way bookies have been doing it since before Columbus first set foot in our hemisphere.

The primary thrust of a bookie is to “balance the books” and take the profit built into the arrangement (the “vigorish”). When it comes to sports betting that is not too difficult because each contest is comprised of only two entities. If they have too much action one way, they make the other way a more attractive bet. Horse racing is tougher because the fields are larger and the money at the track determines the odds. In that case, the bookie becomes concerned only with not getting hit too hard on a single horse.

Imagine if you can, a typical Wednesday in John’s basement racebook. There are about 100 regular players that will wager here this week. They play a variety of systems and approaches to the game.

Some play favorites; others play jockeys, while still others use complicated esoteric systems. On this particular Wednesday about fifteen of the hundred will go home as winners.

Thursday comes and goes with some new winners and some new losers. Of the fifteen winners from Wednesday, only ten are still on the profit side of the ledger for the week.

Friday, Saturday and Sunday. Of the original fifteen winners, only three are left. By next the weekend, only one will be left. By the following weekend, after 15 days of play, John has beaten them all.

Picture Rome’s Coliseum in its hey-day. John Ascuaga, bookie, is the fearless gladiator. He takes on all challengers and, though he may occasionally sustain an injury, at the end of the tournament he is the only one standing. Always. With out fail.

Why is that? How can it be that every participant is always defeated? It seems that it has got to be more than simply the take.

I have decided to get smart. Whatever it is that John does different than the rest of us, it is working. Since I want to emulate John’s performance, I will try to emulate his approach. When there is a difference between what the typical player is doing and what John is doing, I want to do it John’s way.

Let’s consider the differences between the methods of the typical player and the bookie’s methods.

The typical horseplayer has a tendency to bet low-priced horses. Even when they like a longer-priced entry, they still wind up with some money on one of the favorites. Oh, many of them tell a different story, but generally between their computer and the window some of the money that was earmarked for that 15-1 horse gets sidetracked onto the favorite. “Just hedging a little,” you hear them say.

The bookie, on the other hand, is quite content to let everyone wager on the low-priced horses. Favorites just don’t hurt them very often. In fact, if you ask a racebook manager to recite the stories of the racebook’s worst days, it will inevitably turn into a story about some guy that bet a lot of money on a price horse.

Think of the bookie as your opponent. If betting longshots is bad for the bookie, it must be good for the player! Conversely, if wagering on favorites is good for the bookie, it must be bad for us.

Rule#1 – Never play a favorite.

Our research indicates that it is more difficult to find profitable scenarios involving favorites than it is longer-priced horses.

Now, understand that we are not saying that all favorites are bad bets. We are saying that we cannot make money with them using this strategy.

Imagine that a player who bets on the favorite in each race would simply be ground out. They would have no chance of winning. At least the longshot player would have occasional flashes of brilliance, which threaten the bookie.

Rule #2: Never bet a horse over 39-1.

Another play that bookies love are extreme longshots. While those old ladies with their hatpins do occasionally cash a ticket on a $200 horse, they are few and far between. (As are hatpins these days.)

In one search through a 10,000-race sample of claiming races, we asked the question, “How many winners paid $100 or more?” The answer? Zero. Nada. Zip. None.

Not a single winner paid 50-1 in a ten-thousand race sample. Let that number settle in for a moment. That’s ten thousand races. For the one-track player that represents about four years of races.

Does that mean you should never bet a horse over 50-1? In my mind, yes it does (at least for the purpose of this system). In fact, our studies indicate that the cutoff should be 40-1. Generally, when you have a strong horse that is that long, you have missed something, which is obvious to everyone else.

Rule #3: Never bet a first-time starter

First-time starters are very difficult to handicap. In order to bet a first-time starter, you need information about the trainer’s intention, the breeding and the jockey. Workouts are also an important factor, but more so in the context of how the trainer usually brings a FTS to the races.

Without this information, we will call first-time starters a bad bet. Individually, they simply represent too big a question mark and, collectively, they are not winning propositions.

This also applies to foreign starters making their first start in this country.

And we issue a similar caveat to that we offered for favorites: We are not saying that first timers are never profitable. We are saying that this strategy does not lend itself to being able to find profit from first-time starters.

Okay, so whom do we bet? Well, most players apply some type of contender process. So shall we.

There are two parts to a contender process: A way of ordering the field and the number of contenders we are looking for.

In order for this approach to work, the contender process must produce very close to 90% winners (if not more). Be aware that this is no easy task. Users of our software are at a distinct advantage because they have the Race Reports to quickly tell them which factors do the best job of selecting contenders in this kind of race.

Rule #4: Contenders = field / 2 + 1

Our experience is that the correct number of contenders is half the field plus one horse. Thus, in a 10-horse field, we will have 6 contenders, and in a 6-horse field we will have 4 contenders.

I know, I’ve heard it all before. “I like 5 contenders in each race.” “I just use APV (Average Purse Value) to get my contenders.” It stands to reason that you need a different number of contenders in a 6-horse field than in a 10-horse field. And I promise you that if you use APV you not only won’t get 90% winners, in many kinds of races you won’t reach even 75% winners!

Remember that this is the contender phase, not the handicapping phase. Our goal is to eliminate horses that really have little chance of winning.

Fields with an odd number of horses present a slight problem. Since a 9-horse field would result in 5.5 contenders, the question is, “Five contenders or six?”

We see two workable alternatives in this situation. You may choose to use 5 contenders and be done with it or you may use 6 contenders, but eliminate using two factors instead of one. In other words, in order to be considered a contender, the horse must rank in the top 6 for both factors. If you are using our race reports, there is a third alternative: Try both approaches and, by looking at the performance of the selected factors, decide which is most appropriate in this race.

Rule #5: No Handicapping!

Now we are down to the “Who to bet?” question. Again, let’s consider what the typical horseplayer does.

He usually bets the one or two horses he perceives to be the best. Seems like such a good idea. Remember that this doesn’t work. So, we’ll do it differently

What we will do is… nothing. We will not handicap at all!

Before you write me off as a borderline moron, consider that I have committed to “doing what John does” and what John does is let someone else pick the best horses. He concentrates on the leftovers. This seems to work better.

Rule #6: Bet ½ the field minus 1 horse.

What we will do is order the field by the odds. Then we will reverse that order. Finally, we will bet one-half the field minus one horse. In other words, in a 10-horse field we will bet 4 horses; in a 6-horse field we will bet 2 horses. The bets will be the longest odds we can find on contenders without going over our 39-1 limit.

Now, I know that this is where the mail starts flooding in telling me how crazy I am. All I can say is, “Don’t knock it till you’ve tried it.” Consider, again, the rational behind the bookie’s approach in his contest with a single customer.

He let’s the customer pick all the horses. The customer selects the contenders, picks the best of those and the bookie takes the rest of the field. The important thing to notice here is that the logical horses are not the ones that are likely to show profit. It is the illogical ones!

Rule Summary

• Set the number of contenders to one-half the field (actual entries) plus one horse.

• Select the contender factor using the Race Reports’ sort function.

• Eliminate the non-contenders.

• Eliminate first-time starters and foreign horses.

• Rank the remaining horses by post-time odds, high-to-low.

• Eliminate any horse over 39-1.

• Play the lesser of one-half the field (tote entries) minus one horse or the remaining contenders.

How good is this system?

Let’s look at our expectations from an analytical standpoint.

In an “average” 100-race sample, the favorite will win 33 times. We will lose those races.

100-33=67

Non-contenders will beat us about 12 times, of which 3 of those will be favorites (leaving 9).

67-9=58

The second choice will win about 19 races. About 3/4 of those will not be playable because they will be the low-priced contender we don't bet. Thus, we will lose about 15 winners there.

58-15=43

Thus, we could expect to win 43% of the races we wager on.

In an extensive test of almost 8,000 races we showed a profit (R.O.I.) of 19% per wagered dollar. We won 39% of the races, which was slightly less than the expectation shown above. We attributed that to the fact that the races took place during the late spring and early summer when there are many first time starter winners in the maiden special weight ranks.

Actual Experience

The profit in this system comes from big price horses (i.e. $45+). Our experience is that weeks that do not contain such a winner were, typically, slight losers. When the favorites come dancing home race after race, you will lose. But just remember that they do not keep that pace up. The pendulum swings.

We tested this system against six months of southern California racing (early 1998) and found that in the very worst week we lost 31% of wagered dollars!

An interesting approach to tracking this system is to compare the plays to the “not plays” horses. It is typical that the “not plays” will produce $nets in the range of $0.95 (i.e. lose 50-55%). Even in the week where we lost 31%, the “not plays” did worse!

About the only time the “nots” will outperform is when they have one or two longshots that were non-contenders. These are usually $90 horses that you'd have a hard time picking on the replay.

What is Really Going On

The profit in this system is fueled by horses above (about) 15-1. Consider that what we are really doing is making money by separating the longshots that are valid contenders (i.e. have a “reasonable chance” of winning) from those that are not. If you chart those two groups you will likely find that the contender group is almost six times more likely to win than the “not” group.

The plays we make in the lower ranges are simply a hedge against the long losing streaks produced by wagering on these contender-longshots.

Before You Play

I would spend the time verifying this approach with several hundred races. Make sure you are comfortable with this approach. Many people find that they simply cannot stand the idea of being beaten five or six times in a row by the favorites.

Another problem can be day of the week. Although we have not studied this, we have certainly seen some Sundays where the 1^st and 2^nd choices almost swept the entire card and the only race they didn’t win was the $97 winner that was out of range. This can be very demoralizing.

A suggestion that I might make is that you integrate this approach into your exotics play, especially the multi-race exotics. It is exactly these $40+ winners that drive the huge daily doubles, pick-3s and pick-6s. Remember that while our experience says the non-contenders can be thrown out for the win, they can still run second! Do not assume that these non-contenders cannot ruin an exacta or trifecta for you!