Sunday, April 15, 2012

Hollywood Dog Track to Test Single Pool Wagering

Concept to Be Tested At Hollywood....

The parimutuel system has undergone several changes in the 84 years since it was adopted at U.S. racetracks, allowing new bet types, accepting wagers from far-flung locations and in different currencies, and calculating prices when takeout rates have differed between jurisdictions. But the basic math has remained the same: Minus the takeout, winning bettors in one bet-type pool get all the money from the losing bettors in the same pool.

Are bettors ready for that system to change?

A Wall Street company hopes so. Longitude, a subsidiary of the options-trading company International Securities Exchange Holdings Inc., lobbied successfully for the passage of a bill in New Jersey last year that legalized a new parimutuel system called single-pool wagering. The new system tweaks the way money is distributed from the pools. In the system, it’s possible – in fact, it’s probable – that a portion of the money bet by players of one bet type will be distributed instead to players of another bet type. In other words, money bet on exactas could be distributed to win bettors, or vice versa.

Longitude officials contend that single-pool wagering will provide a multitude of benefits, including the ability to display real-time odds and an increase in pool liquidity, a term that supporters of the system use to describe the ability of a bettor to place a wager of any size without dramatically changing the odds. That ability would presumably enable bettors to make larger and larger bets.

Under the system, most wagers – whether exacta, place, superfecta, etc. – would be combined in a single pool. Using patented mathematical techniques that were developed to analyze the prices of commodities and derivatives on exchanges, the pool’s calculator would analyze the amount of money on a specific finish-order outcome to determine payouts. In practical terms, if a dog is being played more heavily in exacta bets to finish first relative to the money bet on the dog to win, the win price for the dog would be lower than in a standard mutuel pool to reflect the positions taken by the exacta players.

 Since the single-pool system would treat any bet as a wager on a specific outcome among a matrix of possibilities for the final running order – for example, all exacta bets with a specific dog finishing second would influence the odds on a bet on a single dog to finish second, since both are betting, in part or wholly, on the same outcome – bettors would have more confidence in making a large wager.
If all this sounds enormously complicated, that’s because it probably is, at least when considering the complexity of the algorithm that underlies the calculation of single-pool prices. .

The current parimutuel system has its own share of oddities, such as trifectas that pay less than exactas, or win prices that are lower than place prices. Under the new system, some of those oddities would disappear: trifectas would always pay more than exactas, for example.

Currently it appears we are at least a year or two away from this system being adopted in New Jersey and possibly much longer in other states that would first have to pass new laws to legalize it.

Not willing to wait this long the Hollywood Dog Track at Mardi Gras Casino will test their own version of single pool wagering.  Beginning on Friday April 20th  the ninth and final race of each evening performance will serve as the Single Pool Wagering Race. This ninth race will offer wagering only on the trifecta pool. No other bets will be accepted. This simplified version of single pool wagering will provide an interesting test of the concept. Hollywood welcomes everyone to support this test and to experience the ability to wager into what promises to be one very large Trifecta Jackpot. 

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