• Winning underlay or losing overlay? The Players Pool conundrum

    POSTED Jun 27, 2013
    You are offered two games of chance with fixed odds. In the first game, you flip a coin and get 4-to-5 odds on your choice (heads or tails). In the second game, you roll a standard six-sided die and get 6-to-1 odds on your choice (1, 2, 3, 4, 5, or 6).

    Which game do you choose if...

    A) You get one chance and must bet 100% of your bankroll?
    B) You get 100 chances but can only bet 1% of your bankroll on each chance?


    The coin offers underlaid odds but a much higher chance of success. The die offers better value, but you fail 83.3% of the time.

    So if I only get one chance for all of my bankroll I'm flipping the coin. My expected value is lower, but so is my risk of ruin. Sort of a one in the hand is worth two in the bush situation. Under the "B" scenario I'm rolling the die. I'll win less often, but getting 6-to-1 instead of the fair value 5-to-1 on each successful roll makes it far more likely that I will profit.

    Balancing these probabilities is at the heart of multi-race wagering for me. Giving yourself a chance not only at success from a "hitting it" standpoint but also financially rewarded for the risk taken.

    The Pick 6 on Wednesday at Belmont featured a $248,140 carryover and a coin flip paying 1-to-2 in the form of Crackerjack Jones in race 5 (leg 2). 3-to-5 on the morning line, Crackerjack Jones paid $2.90 after winning by 4 3/4 lengths. He was never threatened, and in retrospect  was probably fair odds to win considering it's tough to see him losing that race more than a third of the time.

    The Players Pool took a stand against him, however, using him on "only" 42.82% of our tickets, which indicates odds of about 4-to-3. The thinking was that there was far more value in beating him than trying to hit it multiple times at the expense of not using longshots we liked later in the sequence. As it turns out, Crackerjack Jones won and none of the potential $20+ horses we liked ran a step.

    We correctly leaned on Strapping Groom, who won race eight (leg five) at odds of 23-to-5. We used him on 22.7% of our tickets (17-to-5), but made our biggest mistake in the first leg where Cay To Pomeroy faltered as the 1.55-to-1 second choice but as the top choice on our tickets with 48.9% (nearly even money) of our action.

    All that adds up to we backed the wrong side of the coin and was wrong about the die. We took the calculated risk to play the ticket to give us the best chance at a $500,000 score. We don't always play it that way. Sometimes I agree with the public that a horse like Crackerhead Jones can't lose, and we ask, "what can we do to hit this thing 10 times?"

    Even with all the dead money in the pool from the two-day carryover, a horse like Crackerhead Jones winning is never going to produce the watershed payoff, and that's OK. If you choose to flip the coin then make the most of the opportunity. But having $48,315 to put into the Pick 6 and not loving a 1-to-2 favorite put us in a unique position to make a really nice score otherwise.

    Here's to next time.
  • 23 comments:

    Anonymous said...

    Dear Mr. DeRosa,

    I am facinated with the structure of your pick six tickets. I invest in the players pool from time to time. I liked the last ticket for you had seven horses live going into the last race. Other times the ticket is like almost all, all, etc and then the last race there might only be one or two selections for the last race and then I get disappointed when they do not win. I would like to make a couple suggestions, one that when you have a players pool the dollar amount of the jackpot should be about 10 to 1, the pot to the pool ratio. When you have special days like the Kentucky Derby, Preakness and Belmont perhaps focus on one to two contest rather than trying to win four or five jackpots in one day. Lastly you might consider having a players pool in advance, gather $15,000, $25,000 or $50,000 in advance to play for a large pool that might come up almost overnight like a high five, yet the jackpot is at least 10 times the pool. You would stipulate the wager would not be made unless the jackpot is at least 10 times the investment, something to think about. If you like any of these thoughts let me know at rmccec@aol.com. Have a good day! Ron

    Anonymous said...

    I enjoy playing in the player's pool because I can't afford to buy all-all type tickets on a $2 pick six bet on my own. I have no problem with your betting choices or the amounts. I had four of six on a few tickets but that doesn't get you any cash. I just threw that money away but I lost about $100. Had I been brave enough to risk $1458 I would have cleared $5000 but it is always easier after the race or to do it on paper. I'll stick to the ten cent pick six when I bet on my own. I,ll be in the next pool with you. Good try.

    Anonymous said...

    when you decide how to structure the bet do you first attempt to understand the probable payout of the wager?

    Anonymous said...

    Thanks for the detailed and sound explanation on how the stake was invested. My only critique is this: Cay to Pomeroy, a standout on paper, was a little dead on the board -- and, in fact, finished behind two horses taking money. Seeing the board, I think I would have backed off Cay a bit after seeing the action, and bet perhaps 25 or 30% of the entire sum on him, instead of 48.9%. Could then have leaned heavier on Crackerjack Jones and/or Strapping Groom. I'm honestly not red-boarding here. The way the first leg of the pick 6 was bet, I was worried about Cay to Pomeroy and the disproportionate amont of the investment that was riding on him.
    Mike D.
    NYC, NY

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