Mark Cramer
C & X Report

C&X 42 January 2008

CONTENTS
Editorial
DO WE LOSE OUR EDGE BY ADDING A CLASSIC FACTOR TO A CONTRARIAN APPROACH? (Don’t miss!)
Two Traders Identify Groupthink and Play Against
Random Betting Studies: Market Inefficiencies
Inefficiencies in the Turf Market (Don’t miss!)
C&X Café
Crafty Prospector on Polytrack (A well-kept secret!)
Past Posting
Santa Anita: Longshot Jockey-Trainer Trends (Don’t miss!)
Book Review: the Fireside Book of Racing
Last Word: Sup-Prime Racing Scheme
EDITORIAL
We have a special focus on this issue, so it will look different from others before it. The theme is market inefficiencies, which in racing terminology would produce what we know as overlays. Before our discussion, we need to stipulate on one thing: the only way a player can win is by playing many more overlays than underlays, and overlays can only originate from inefficiencies in the pari-mutuel market. The greater the inefficiency, the greater our profits!
All evidence points to the fact that today’s betting market is increasingly efficient, making it more difficult to find an overlay, and this is the result of the fact that so much dumb money has abandoned our betting pools and chosen stupid bets like slots, keno and lotteries. However, this is only partly true. In fact, today’s betting public, including the high rollers who greatly influence the odds, is prone to make big mistakes under certain controlled or unexpected circumstances. One recent example is what I’ve called the “publicity horse”. For example, the crowd and the experts within have overestimated the chances of Honey Ryder, for example, in the Beverley D, making her 2-1, even though she had failed in the previous edition of the same race when a well-bet 3-1. The fact that she had sandwiched that loss between a streak of victories suggested that she was not in her element at Arlington.
Another example is what we’ve noted as that the “smartass horse”, the one that the experts expect to be the overlay in a type of collective-expert hysteria. The smartass horse often goes off at unexpectedly low odds and most often fails.
Those are just two examples of market inefficiency. The last issue of C&X pointed to another: the fact that contentious races offer higher average mutuels and therefore a lower “real takeout” than uncontentious races. In this issue, I follow up on this particular inefficiency with several new pieces to the ongoing research puzzle.
In a way, in this new-year issue, we are standing back, reflecting, and then refining and redefining our fundamental approach to this great game. Let’s hope we all gain some pari-mutuel energy from our new year theme.
DO WE LOSE OUR EDGE BY ADDING A CLASSIC FACTOR TO A CONTRARIAN APPROACH? RESEARCH OF THE MONTH
We’ve often asked this question but until now, never been able to quantify an answer. Normally we’ve used our typical warning label: tampering with a good contrarian factor by adding conventional handicapping may destroy your edge. But we’ve also noted that handicapping filters are needed for our flat-bet profit research. So the question has been: “to filter or not to filter?”, and if yes, how?”
In order to make this research as objective as possible, I’ve decided to use the most symmetrical racing game, harness racing, as a way to be as close as possible to a controlled laboratory situation, by eliminating extraneous variables that might taint a sample of thoroughbred races.
The first step was to uncover a contrarian edge and to define it rigorously. The second step was apply a strictly conventional filter. The question asked is whether the filter will weaken the edge or enhance the edge.
Step one. I defined “contentious race” as four or more horses in a field going off at between 2-1 and 5.9-1. I used the Meadowlands because of its larger pools and larger fields. I studied all races that occurred in June of 2007. I came up with 35 contentious races. Within those races, there were 149 horses I could identify as contenders: 2-1 or up and less than 6-1 but only in fields with at least 4 contenders. This situation is referred to as the Law of Maximum Confusion, and is equally satisfactory for identifying contentious races in the thoroughbreds, but with slightly different criteria.
By playing each and every contender in these 35 fields (there were 149 contenders in all), there was $298 invested with a return of $271 for a return on investment $0.91plus per dollar, a little less than a 9% loss. C&X readers know that random betting produces more than a 20% loss, so in fact, the player gains more than 11 percentage points of probability by betting into these fields.
Step two. At the Meadowlands posts 1 through 6 and post 10 outperform posts 7, 8 and 9, and the difference is clear. Every player knows that posts seven through nine have a slight but noticeable disadvantage. Therefore, I went back to the same sample of June races and excluded all contenders leaving from posts 7, 8, and 9. Clearly this filter comes from conventional handicapping. Nothing contrarian about it! Horses getting in at post 10 represent an especially high trainer expectation which seems to nullify the disadvantage of the extreme outside. Don’t ask me why, but it seems to have some relationship with the improved percentages for also-eligible horses in the thoroughbreds. (The outside post from a chute on the turf is a horrendous Tbred percentage, and yet horses that got in there from the alsos performed better than those who were just there. Once more, the suspicion is a highly positive trainer intention.)
Back to our research, the filtering results are as follows. There were 30 exclusions based on post position. Among which there were 4 winners. The total investment was $238 and the return was $232.40 for a loss of $5.60. The percentage of loss is 2 1/3 %. In other words, by adding a conventional filter to a contrarian edge, the market has remained inefficient to our advantage, and in fact, we can increase our advantage.
This may be one isolated case but nevertheless, I was taken by surprise by these findings. I had expected that we would have lost a couple of points from our edge by incorporating a conventional factor. The opposite was true. Once we have discovered an inefficiency in the market, it seems that we can apply at least one conventional filter and enhance the advantage.
Naturally, more research is needed. However, I am satisfied that both my contrarian sample and my conventional filter were rigorously free of static, thanks to the symmetry of harness racing. Now at least, I feel comfortable following up this research with the Tbreds.
In preliminary Tbred research, it seems that the odds criteria for defining a contentious needs to be changed. In the harness races, a favorite above 2-1 is considered weak. With the Tbreds, where the average odds of favorites is higher than that of the trotters and pacers, 3-1 seems like a more reasonable cutoff point.
I decided to experiment with two groups. Fields where at least four contenders fall between 2-1 and 5.9-1 (Group A) and fields where at least four contenders are between 3-1 and 5.9-1 (Group B).
For both groups I discovered that you end up with more winners from outside the club of contenders than you would have had at the trotters and pacers. Makes sense. There are more longshot winners at the Tbreds. In fact, in Group A, betting the ALL, with a total of more than 500 horses bet, there was actually a flat-bet profit. This suggests that the odds range we have chosen is ripe for upsets and overlay payoffs. However, the findings are iffy, since the bottom line incorporates two longshot winners that paid off at more than 50-1 (Hawthorne, 20 December, race 2, a $163.40 payoff, and Charles Town, 21 December, race 8, a $133.20 payoff.)
On the other hand, in this Group A sample, betting exclusively on contenders resulted in a loss that was greater than the track takeout. The reason for this poor result, at least in this sample, is that too many of the favorites among the contenders were winners. This seems to corroborate that the 2-1 minimum is too low for the Tbreds, and that the 3-1 minimum odds of Group B would better point to a truly contentious race. In that Group B, betting all contenders and nothing else, the result was a loss of 17 cents on the dollar, almost as bad as random betting. However, playing the ALL in these group 3 races led to $238 invested with a return of $220, for a loss of $18, which is less than 8 cents on the dollar, three times as good as random betting (see later articles on random betting).
The first conclusion is that contentious races in the thoroughbreds, contrary to the harness races, are more likely to result in a victory of a non-contender. The Law of Maximum Confusion is more applicable to the Tbreds than to the harness races. But I have a second conclusion which is more vital for our interests. The category “contentious race” needs to be divided into two, for there are real contentious races and there are negatively contentious races in which the so-called contenders are really lesser-of-evils horses. If we were able to distinguish between these two groups, mechanically, we’d win by betting the ALL in the negatively contentious events and also win by playing exclusively contenders in the posivitively contentious races.
For example, a horse that is made 3-1 because it loses less often than the other horses in the field is not the same as a horse that’s made 3-1 because he wins more often than the others. I am convinced that contentious races create scenarios of maximum public confusion which would lead to market inefficiencies, and that negatively contentious races may be even more inefficient. But I need to work on much more research. (See another step of that research in the article entitled “Random Betting: Potential Market Inefficiencies”).
TWO TRADERS IDENTIFY GROUPTHINK AND PLAY AGAINST
This example of market inefficiency comes from the stock market itself. It reminds me of the Andrew Beyer discovery, a quarter of a century ago, of the rail bias at Pimlico, when he was virtually the only player to cash in on it.
Today’s market bias comes from the subprime mortgage investment vehicles. Normally the structured investments based on subprime mortgages should have been a reasonable investment, that is, according to a banker I interviewed. His bank had created two ill-fated funds which were structured on the subprime mortgages (structured investment vehicles or SIVs).
“I could have taken you to visit the borrowers,” I said, “and when you saw their financial situation and you saw how they lived on the edge, you would not have wanted to lend them money.”
“We knew there was a greater risk,” he responded. “But we also knew that the returns on the loans were higher. So we understood that there could be a greater percentage of defaults but at the same time greater profits on the majority that did not default.”
“But weren’t you simply following the crowd?” I asked.
“Yes,” he said. “There was this perception that if we did not join the trend, we would be left behind.”
This interview is good stuff, for it allows us to see from the inside how even the betting psychology of the major movers is prone to groupthink and other forms of market inefficiency. It was easy for this guy to talk about his bank’s poor investments in subprime because he was not from the department that actually did the investing. His frankness points to the probability that groupthink had taken over and the collective wisdom of the larger investment community had been lost when diversity of thought was annihilated.
One type of market inefficiency occurs precisely with the loss of diversity. Whether it’s the stock market or the betting public, the usual success of these collective instruments is their ability to maintain diverse thought from within. In the case of the Pimlico bias of Beyer’s My $50,000 Year at the Races, diversity was lost when one factor, bias, was underappreciated by the doctrinaire betting public. Beyer bet against this one-sidedness of the public, the failure of the public to see that something was dreadfully abnormal.
In the world of investment banking, consider that the subprime market was on the rail and the rail was dead, and an increasing number of bad results from the rail did not sway the investors because they were in denial about the new bias against subprime performance.
Goldman Sachs Group, Inc. was still touting its clients onto subprime mortgage funds, even when two of its staff, Michael Swenson and Josh Birnbaum went to their supervisor to convince him, through heated debate, that it was time to “short” the subprime market. They got the backing of their boss and eventually convinced the chief executive that they could have a free hand in stepping in on the other side of trades. So they bet against the subprime market just as it was plunging, buying what were called “credit-default swaps”. And even when the trend was more apparent and the CDS swaps were more expensive, these two guys still saw the trend and believed they had a monumental overlay, and once more had to argue their case with conviction. They won and they continued to play on the short end.
It wasn’t as if all of Goldman Sachs had adopted this position, and in fact, many of the firm’s clients were on the wrong side of this bias. I can imagine, for example, players betting on early speed in Kentucky after the polytrack had made Keeneland and Turfway closers’ tracks. Swenson and Birnbaum were playing the closers, often using the firm’s own money. In the end the firm was a hugely successful for the year end even though some of its clients went the wrong way. The two men who single-handedly identified and acted on the anomaly, the market inefficiency, were rewarded with multi-million dollar bonuses and Goldman was expected to report a net annual income of $11 billion.
The Wall Street Journal brought up the ethical issue: the company going short with its own funds while encouraging some investors to go long. (I have not identified any ethical problem: like a betting public, the company was not monolithic, and within it, there were different “handicapping” currents. It could happen to any of us. We could invest in a losing mutual fund even though, within the same fund group, there are other funds that are winning big.)
The equivalent of the gross market inefficiency discovered by these two investors can happen in pari-mutuel markets. Publicity horses are like the subprime mortage investment vehicles. Even the most intelligent handicappers (like the usually smart bankers) are taken in, leaving us with good odds for betting against.
Our problem as players is that we spend too much time and make too many bets on what may be only minor inefficiencies, or may not be inefficiencies at all, instead of waiting for an extra special opportunity and then sending it in. I am reminded of the horse Deep Impact in the 2006 Arc de Triomphe. All handicapping analysis was suddenly rendered irrelevant when 6,000 Japanese journalists and racing fans descended upon Longchamp and bet on Deep Impact to win, making bets for all their friends back home.
The odds on Deep Impact were 1-20. He would pay less to win than to show. And yet they kept playing him to win. His chances were, perhaps, 4-1, so he did have a chance to win. Other legit contenders, including the eventual winner, Rail Link, were flashing at 25-1 on the board when they too should have been 4-1 or 5-1. There was only one possible strategy: bet against the subprime Deep Impact, playing every other legitimate contender to win.
(See SUB-PRIME RACING SCHEME later in this issue)
RANDOM BETTING STUDIES: MARKET INEFFICIENCIES
I am writing this with one or two days left in the year 2007. Please recall how I have mentioned the name Carla Gaines as a trainer to bet. I had to root against her horse in the Breeders’ Cup because we want her to continue to lay low. Year after year her horses yield a flat bet profit. For the year 2007 she has had 158 starts with 31 wins for a 20% hit rate. For what it’s worth, her median payoff, which is different from her “average” payoff, is $7.80. For each $2 you bet on CG, you get back $2.53.
Originally from Alabama, and an avid horse rider and jumper in her childhood, Carla Gaines later earned a masters degree in social services and she worked for some time with troubled children. Anyone who can handle troubled children can find a way to deal with troubled horses. She had not been looking to switch trades, but horsemen saw her talents and invited her to work. She has never turned back.
Now here is the question. A $2.53 return for each $2 means that you get back 26 _ cents for each dollar invested: what does this mean? Does it mean that Carla Gaines gets a 26 percent better performance from her horses than fair value? Does it mean that she takes horses that look bad in the pps and improves them? Does it mean that the betting public simply overlooks her? Or perhaps it is a combination of the two.
In fact, as you are about to see, random betting, which is the precise opposite of intelligent betting, seems to lose about 24 cents on the dollar, which means that betting on Carla Gaines horses, blindly, does 50 percentage points better in roi than random betting. A few years ago, Wayne Catalano was in a similar situation, and then not so gradually, his average mutuel plunged, so that now you get a flat-bet loss when betting his horses blindly. The change in the fortunes of Catalano bettors seemed to intensify after his Breeders’ Cup win two cups ago. But CG has four advantages over WC. First, she gets her profits with a lower win percentage. Catalano was winning 30 percent of the time so he attracted much more attention. Second, Catalano trains many more horses than CG, so that CG can still lay low like her fellow SoCal trainer Richard Matlow, while Catalano becomes ubiquitous. Thirdly, Gaines is in SoCal, where she is overshadowed by designer trainers like Baffert and Mandella. Catalano, on the other hand, is a big fish in a small pond. And of course, the fourth difference is WC’s BC win, which knocked a point or two off his average mutuel.
Why am I talking about these trainer stats. Because I like to see the contrast between an automatic profitable bet and an automatic random bet. In order to prepare this article, I studied the results of 13 consecutive racing days in December at Calder and another 10 consecutive racing cards at Turfway Park, for the same period. I took down each win payoff along with the number of horses in each field. That’s a total of 247 races. In order to track the results of random betting, I considered a $2 wager on each and every horse in all 247 races. I totaled the amount invested and compared it with the amount returned. Here are the tallies:
Calder: Invest $2,122. Return $1,613. Loss $509. ROI, rounded off, Minus 24%
Turfway: Invest $2,062. Return $1,584. Loss $478. ROI, rounded off, Minus 23+%
I’ve done such research before but I needed to validate my previous findings. When you bet randomly, you lose much more than the track take, because you are playing more underlays than overlays. Since favorites are less underlaid than 50-1 longshots, you lose less percentagewise by playing favorites. In other words, the track take is not a uniform measure, not a rigid percentage like the 5.2 percent house advantage in roulette. Conceivably, there are inefficiencies on the toteboard that would allow the player to bet randomly or automatically and make a profit.
This opens the door to several research projects. It makes sense to hypothesize that (1) some tracks card more contentious racing than others, which would mean that you’d have a higher average mutuel and random betting would be less of a drain on the bankroll at certain tracks. Thinking of the concept of “meet shapes”, there might be (2) certain periods in meets that would more likely produce higher average mutuels. Perhaps ends of meets, when stables are playing catch-up. Or beginnings of meets when trainers have not had a chance to get a feel for things. Similarly, it makes sense to hypothesize that (3) certain types of races, such as turf races, may be more contentious and therefore less of a negative expectation from the random perspective. My longshot trainer research suggests a fourth possibility. If (4) one bet randomly on all trainers with, say, an 18% win rate and at least a breakeven roi, one would vastly improve on the random betting result. We’re looking for other improved stats that can be considered “random”.
I’ve begun researching the first category: do any tracks have different pari-mutuel efficiency. At this point, I have no answer but I did stumble upon a bizarre occurrence that in the end may prove to be a mirage. When I began researching Charles Town, I ended up in a period of strange anomaly. The first eight race cards I tallied in random betting showed an investment of $1,136 and a return of $1,513. The profit was $377. This came from betting every horse in every race for eight straight race cards. That’s a whopping 33% profit! But then I looked back at the payoffs for this period and realized that something bizarre and unsustainable was happening. There were six payoffs at 49-1 or up, with mutuel returns of 166.20, 137.00, 133.20, 123.20, 108.60 and 99.00. It had looked as if some sort of record was being broken. I checked back. There were 6 different trainers, so no hot-trainer pattern existed. Six different riders, too.
Next I checked back through previous charts, and saw, to my disillusion, that things would eventually even out, and Charles Town would soon be looking statistically more like Calder and Turfway. There still remained the “meet shape” possibility, but I’ve been unable to find a theoretical reason for the strange period of results. By the way, Charles Town has no turf course. My next step will be to investigate turf racing.
INEFFICIENCIES IN THE TURF MARKET
Certainly it makes sense that certain types of races would lead to a better random roi. The turf fascinates me because I’ve always played more turf races than dirt races, impressionistically “feeling” that I had a better chance for a generous payoff.
Much of this research will have to wait until next month, as I compile results as they come in. However, there were two initial tallies I plunged into, just to get a glimpse of whether or not I had any sort of legitimate hypothesis.
Dirt vs. turf: first sample
I had the Calder sample of consecutive race days between 13 December and 27 December. I decided to divide the sample of ALL races, with its minus 24% roi for random betting, into dirt and turf subsets. The results were as follows:
TURF. Invest $610, return $534, for a loss of $76: ROI minus 12 _ % rounded off.
DIRT. Invest $1,512, return $1,079, for a loss of $433: ROI minus 28 2/3% rounded off.
Sorry folks, but this one looked too good to be true, and reminded me of the “profitable” Charles Town sample of random betting that I previously referred to.) But still, it looked as if I were sitting on an exciting discovery.
Dirt vs. turf: second sample
You can imagine my thirst for wanting to know more. If these tallies were anywhere near the truth, the gap between random dirt and random turf would tell us that the real takeout is much worse on dirt than for turf. I’ve suspected such for a long time, but knowing objectively makes a difference from simply suspecting. When we make a betting decision, we need to KNOW and not simply suspect. My impatience got the best of me so I decided to go back to earlier races from Calder for which I only had the basic results (those that do not show coupled entries). I hadn’t seen so many coupled entries at Calder so I didn’t think that a slightly impure tally of these results would distort my findings. Furthermore, the number of coupled entries in turf races would not be significantly different from that of dirt races. It was the gap between random dirt and random turf that mattered here and not the pure roi.
So I decided to go back to the beginning of the month and fill in all the consecutive racing days from 1 December through 10 December. The results were as follows:
TURF. Invest $382, return $286, for a loss of $96: ROI minus 25% rounded off.
DIRT. Invest $946, return $606, for a loss of $340: ROI minus 36% rounded off.
Allowing for possible coupled entries among these plays, the loss will probably be slightly less in each category, but not a whole lot less. Let’s brush that finery aside. Clearly the gap between random dirt betting and random turf betting continues to be significant.
Hypothesis
The real takeout based on random betting tallies, already proven to be worse than the published track take, is considerably worse for dirt races as compared to turf races. This means that the real takeout is not a fixed percentage and thus means that pari-mutuel betting market inefficiencies exist, and that these inefficiencies may be related to the type of field that is running in a given race. This speaks eloquently for the notion that many races are simply unplayable, and that we should wager in a selective way.
Stated in a different way, these findings suggest that the betting public understands dirt racing more than turf racing and is more likely to be confused in its collective analysis of grass racing, which means there will be more overlay winners on grass and that the size of the real betting advantage on many turf winners will be greater than the size of the advantage for dirt overlay winners.
But this also means, if the hypothesis is true, that fewer players understand turf racing and that if you are going along with the majority concept of handicapping, you will not be able to profit from the added value of turf racing. Thus, dirt racing would be somewhat more favorable to more conventional handicapping, though still better for contrarians, while turf racing would provide a greater advantage for the contrarian player.

C&X CAFÉ
From Dr. H.R. to C&X Readers:
Hi Mark. Hope all is great. Just read the C&X I received in the mail. Great work!
Mark, I need help with trying to find a statistics program. I color code my choices during handicapping. A color represents an angle or conclusion, for example, yellow=horse-for-course. I find color coding speeds up my handicapping (vs writing), and leaves a better visual imprint. Also, very helpful for not overlooking a horse. But, best of all, it seems certain color combinations do very well at particular distances. For example, blue+green does great at 1 mile turf and 6.5 dirt at Hollywood. How about Green+yellow with Jon Court in maiden races! All I am doing is applying the factors I use, like any other handicapper would, but I look for "multi=colortural" agreement!

I am very interested in obtaining a program that allows me to tabulate race-type vs colors. I would like to be able to find out if Blue+Green is more likely to win with yellow vs pink. Does orange make it stronger or weaker at 9-1 or higher? Basically, I need a program that can tabulate ABCD vs CDEF, or A vs F, etc. Do you know of a statistician who can lead me in the right direction? How about co-subscriber Dr. Billy M? Is he the statistician you know in Canada. Hey, I use to live in Canada!
Mark responds:
The color coding is literally brilliant. I tend to analyze things visually, so naturally your idea is intriguing. But I'm terrible with
computers and know nothing valuable about programming. But I can say for sure, that I use color highlighters when digging into the DRF. All the more reason why I prefer the paper product over the screen.
Perhaps if you allow me to print your letter, we will get a response from C&X readers. And I will follow up by asking friends.
If we could find a statistician for you, I'd be happy to close my eyes, send some money and test your method with symbolic amounts of real money.mc
Dr. H.R. responds:
You can certainly print my question and method in the newsletter. If any statistician comes your way, please give her or him my email.

By the way, I really liked your comments about the Formulator. I don't use it for the same reasons you mentioned. Every now and then, I get tempted to get the BRIS Ultimate Past Performances. But, for similar reason, I rule it out and stick with the good old Racing Form. H.R.
CRAFTY PROSPECTOR ON POLYTRACK
Each polytrack has its own characteristics but it appears that certain sires produce better polytrack runners. I am not in a position to create statistics on the subject but I do have anecdotal evidence. In the past I noted (and cashed in on) the fact that Crafty Prospector produces more of his fair share of winners on French polytracks, especially at Deauville but also at Cagnes-Sur-Mer. In the beginning, before the horses became known, I regularly played Crafty Prospector horses switching from turf to polytrack, with good results. I also noted that the legend about turf horses adapting to the polytrack better than dirt horses was true for a minority and not majority of such horses. In France I found a wide gap between turf pedigree and polytrack performance.
My observation has been corroborated by an American Turf Monthly researcher who mentions Crafty Prospector on top of his polytrack sire list for Kentucky, and who also debunks the turf-polytrack correlation. About a year ago, Rich Nilsen wrote these things in American Turf Monthly: A leading Thoroughbred publication did an in-depth analysis of the sires of Polytrack winners from the concluded Turfway season. One thing from this study that jumped out at me was that there was quite a mix of turf and dirt stallions that had successfully sired poly winners.
Consider that some of the most successful polytrack stallions included Crafty Prospector, Fit To Fight, Louis Quartorze, Presidential Order, Sefapiano, Storm Boot, and Souvenir Copy, not your household names in turf pedigree. In the early days of polytrack, with so many odd results and with running styles looking more like turf racing, the experts groped for some correlation and came up with a turf-polytrack hypothesis. But I also remember that these experts also repeated the same mantra: it’s too early to tell. Now it’s no longer too early to know that there is no simple pedigree answer to poly or cushion track racing.
The grand scheme of things is still “muddy”, but little pieces of information, such as that of Crafty Prospector, can help us along.
PAST POSTING
Interesting that a Kentucky Horse Racing Authority is forming a subcommittee to investigate a past-posting incident where the windows remained open for wagering on a Fair Grounds race at Keeneland while a race was in progress.
The source is as reputable as they come. The man who identified the situation was none other than Mike Maloney, a high roller from Kentucky who was one of the most informative speakers at the last DRF handicapping Expo. It all happened during the third race at Fair Grounds Nov. 25. Maloney explained that the “window was still open” at least 55 seconds into the /16-mile race. Maloney is so highly-regarded in Kentucky that the race track gives him his own private pari-mutuel office with monitors to do his betting.
In these laboratory conditions, Maloney was able to test the suspicious situation by making bets each eighth of a mile to determine when the tote system would finally lock. He was able to make four bets during the race. Until now, no one has come forward to declare whether or not the wagering remained open at other simulcasting outlets.
Maloney is one player who is taken seriously by the racing establishment, so it’s important that he has said exactly the right thing. “It hurts the integrity of racing,” he said. “We have to secure these pools or eventually we won’t have a game. He added that we players deserve our own version of the Securities and Exchange Commission. “This shows the level of accountability we have in our industry. It’s going to blow up.”
Churchill Downs Inc., also owner of Fair Grounds, is conducting its own investigation into the situation. The KHRA will do so with a new subcommittee, which will include racing officials and bettors.
One thing we know for sure. According to Roger Beasley, Keeneland’s racing director, there was no tote malfunction. Beasley said officials contacted the KHRA after being told of the incident by Maloney. The next step is to get some sort of response from the Louisiana Racing Commission.
SANTA ANITA: LONGSHOT JOCKEY-TRAINER TRENDS
Let’s get back to the basics and attempt to spot a trend. Typically, at the outset of a meet, we should look for anything unusual that might be a trend. One of the methods is to simply jot down all the winning mutuels at 5-1 or above and then look for pattern (repetition). With each $12 and up payoff, we write:
Trainer’s name
Rider’s name
Payoff
Class/Distance/Surface
I’ve waited to complete the first six days of the meet and am sending this article, with the rest of C&X immediately to Dave, hoping that it can be timely. I went through 1 January, so you can pick up after that and continue the stat.
The concept is simple. The beginning of a meet often points to a trend that will continue for weeks or longer. Trainers gear up for particular meets. Riders may find themselves at a peak for a particular meeting. For Santa Anita this is an especially important tally since it takes place with a new racing surface, and some riders and trainers may be better adapted for the surface.
The reason for the 5-1 and up requirement is that horses at lower odds win just because they figured to do so, but at higher odds levels, something special had to occur: an exceptional ride or a magnificent trainer maneuver. So now, let’s look at the possible trends.
RIDERS
3 wins at 5-1 and up
Espinoza (with Mandella, Monteleone, Truman). No particular stable, so the rider himself must be primary. All three wins were over the new cushion track, two sprints and one route.
Flores (with Dollase, Robbins, Shireffs). Again, the rider has risen independently. Two wins on new surface, one on turf.
2 wins at 5-1 and up
Rosario (with Gary Stute and Paco Gonzalez). Both wins on new cushion track.
Other longshot winners, one win apiece: Bejarano, M. Garcia, Court, T Baze, Valdivia, Nakatani, M. Smith, Enriquez, Leparoux, Migliore.
TRAINERS
2 wins at 5-1 and up
Mitchell (with Baze and Leparoux). Both of Mitchell’s longshot wins were on turf, one of them on the downhill.
Stute, G. (with Nakatani and Rosario). Both were in sprints on the new surface.
Other trainers who have broken their SA longshot maiden with a single win so far: Mandella, Drysdale, Cerin, Truman, Polanco, Puype, Gonzalez, Monteleone, Cenicola, Wicker, Shireffs, Spawr, Robbins, and Craig Dollase.
This is good information. Use it wisely. And follow it up by getting the most recent the pdf results from the DRF website or from the DRF charts. mc

BOOK REVIEW: THE FIRESIDE BOOK OF RACING, A THOROUGHBRED TREASURY
Edited by David F. Woods
Foreword by Eddie Arcaro
Available used at various on-line bookstores

This book was written in 1963, when racing was still a part a dynamic part of American culture. At a time when Puritanism was still not on its way out, racing provided one of the few escapes from righteous living, for lovers of grand spectacles, lowlifes attracted to the seedy world of fraud and illicit exchanges, and inveterate gamblers for whom there was no other game in town. Even in the world of aesthetics, racing was considered as artistic as ballet dancing and as colorful as cubism.
We all know about the changes that have allowed competition with racing or put constraints on this subculture we love so much. Ironically, by shedding the mantels of Puritanism in the 1960s, our society has generalized “naughty” things, which is probably good for all of us. But because of the change, racing is no longer an island of seduction in a society of blandness. Lotteries and casinos draw away stupid money from the tracks, high technology opens up parallel worlds to explore from our dens, rival sports have improved their marketing, and in general, there are so many other avenues available that lead to the darker side of life.
Racing, once an island of sin has itself cleansed itself to a large extent so that today there is less corruption in racing than in most other facets of society. Racing has become sanitized and has lost the negative image that was so seductive. Even when we finally have a pick six scandal in the Breeders’ Cup or a massive doping problems, it is not spicy enough to compete with Monica Lewinsky, O.J. Simpson, Enron, the Savings & Loan Scandal, the subprime mortgage fiasco, and these are just the tip of the corrupt iceberg. What doping stories of racing can compete with the baseball slugger steroid saga?
Until now I’ve left out a major factor: the compression of our attention span. The way racing was, as you can read in this fine book, required the “art of time”, including patience and a willingness to think and analyze. Racing was an ideal product for these two things. You had a half hour between races to study and reflect and even absorb the atmosphere in order to make a decision and then live the intense excitement attached to that decision.
CNN, either the cause or the effect (I’m not sure) prohibits its tv programmers from remaining on a single image for more than 13 seconds. It’s no different at other networks. They are afraid we’ll lose our attention and zap to another channel.
The Fireside Book of Horse Racing, by including a wealth of visual racing, presents the impression that our spectacle was able to balance one dimension of speed and another of reflection. We have the famous Manet painting, “The Races at Longchamp, Paris”, which used to stand at the Art Institute of Chicago. There’s Raoul Dufy’s “The Paddock at Deauville” (ah, today, who has time to hang out at the paddock?), there’s another by Edgar Degas, and then five superb copies of works by Vaughn Flannery, including “The Seven Furlong Chute, Sarataga”. Look that one up, that is if you have time between internet wagers.
Included in the imagery is an array of racing photographs that are worth contemplating over a period of a lifetime, including the triple dead heat in the 1944 Carter Handicap (by the “great artist” Jones Precision Photo Finish) and an impressive portfolio of Robert Riger photos.
The language of racing had once filtered into everyone’s general language, but when pundits write that the 2008 election is “in the stretch drive”, few of today’s readers will recognize that the term comes from racing, nor have they realized that what has been referred to as a “photo finish” in recent elections came from racing. When idiomatic expressions become divorced from their horse racing source, it means that racing humor is no longer part of everyday culture. The Fireside Book of Racing features cartoons that once made it into the mainstream press. There’s the 1961 drawing by Henry Boltinoff of a husband taking down a framed picture of his mother-in-law and replacing it with a picture of a race horse. You can see the protesting face of the wife, with the husband responding: “Did your mother ever pay $95.00?”
Then there is 1958 drawing by Hoff that made The New Yorker Magazine: once more we have a wife berating her husband. The husband is seated in an easy chair, intensely reading the racing form. The wife says: “Other men lose their money by luck – you got to figure out how to do it.” At the time, The New Yorker even had its regular racing columnist, so cerebral jokes about racing could be understood by a general audience. O. Soglow’s 1956 New Yorker drawing is an example. It shows two frames. In the first, players are entering the track, passing by a stand with JOE’S LUCKY PICKS 50 CENTS. In the second frame, you see them coming out from the track, and Joe is now selling another sheet, perhaps with the same picks, with a sign: SAVE EMBARRASSMENT: CONVINCING EXPLANATIONS OF WHAT HAPPENED WITH YOUR MONEY 25 CENTS.
Some of the best reading in The Fireside Book of Racing comes from the fiction genre, including several stories by Damon Runyon, the classic “The Rocking Horse Winner” by D.H. Lawrence, and “What’s it get you?” by John P. Marquand.
Non-fiction journalistic accounts of great horse races. We can read about the most famous of races with the prose of Grantland Rice, and then there are the many surprises, such as “Seeing Nellie Home”, the story by iconoclast Raymond B. Tomkins of the 1924 Preakness. The horse that won, the filly Nellie Morse, was not supposed to have a chance. In fact, her owner was not even there, nor could he be located after the victory. The filly was helped along by the sloppy surface, but the hunchplayers in the crowd had backed a horse named Nautical, who finished 14th in a field of 15.
Both fiction and non-fiction include references to the seasonal nature of racing, and the fact that players who remained local had to wait for months until opening day. Perhaps we have lost the art of waiting. The racing industry is no less to blame for this overindulgence than the rest of the consumer society. Meanwhile, shorter seasonal meets like Saratoga and Del Mar continue to be the most successful. Someone may come around and apply the standards of ecology to racing. There is a pleasure of waiting for a fruit to come into season, biting into an apple in September after you haven’t tasted an apple for many months. In appreciating stories in this book about the sense of expectation for an upcoming race meet, I am left with the suspicion that (sorry that this point will repeat in the next article) there is simply too much racing. Like too many tourists flocking to a city so that this city becomes too uncomfortable for tourists. Like overfishing and then having a poor crop of fish.
I’m left thinking of a quote from Jean-Louis Servan-Schreiber’s The Art of Time about a type of Pascalian “hyperentertainment” that prevents us from perceiving the march of time. “We dedicate pieces of time to a multitude of pleasures, instead of taking advantage in a leisurely way of those rare pleasures that really mean something.”
Substitute the word “races” for “pleasures” and he may be suggesting a way not only to preserve our joy of racing but also to increase our return on investment.

LAST WORD: SUB-PRIME RACING SCHEME
Could it be possible that racinos and race track slot dependency are about to reach the equivalency of the sub-prime mortgage crisis? I am aware of all the positive business factors of slot machines: low overhead, capital-intensive rather than labor-intensive, a willing consumer base.
But if you’ve read C&X for long enough, you know I was always a skeptic about the long-term benefits of slots at race tracks. Eventually there has to be a glut.
According to a January 1 DRF article, announcing the upcoming Gulfstream meet, “when business in the casino did not approach original projections, purses ended up being overpaid by several million dollars.”
The subprime crisis hit full blast when the mortgage industry got greedy and began marketing its product to people who could not really afford it. It’s the growth syndrome, a vicious circle created by the “grow or die” mentality. There is no economic law that says a good business has to grow perpetually. This reminds me of the famous “Peter Principal” by which a proficient employee keeps getting promotions, working well, getting another promotion, until he reaches a level where incompetence takes over, and then, he no longer qualifies for a promotion and remains at a dysfunctional level.
Consider Saratoga. What would happen if this, the most successful U.S. race meet, were expanded to three months. The excitement would be diluted, it would lose a lot of local media coverage, the sense of anticipation from locals would be lost, and the quality of horses would decline. In fact, already, with the recent expansion of the Saratoga meet, racing quality declined a notch or two.
I’ve been to racinos around the USA and have noted that there is no crossover between casino crowds and racing crowds, as if you had combined a collectible book store with a pornography shop.
Now consider this hypothesis. In the glorious days when racing was the only game in town, potential slots players treated the ponies as a lottery. Result: the average mutuel was at a higher level than today. (You can see from previous articles in this issue that random betting today produces horrendous losses far above the track take. No slots players in the pools to raise the average mutuel.) Now I know there are several variables in the formula but if we reduce the variables to two, consider this hypothetical situation.
A race track offers slots.
Slots players abandon the horse race pools.
Slots players bring more revenue to the track.
With the resulting lower average mutuel, horse players reduce the amount of their play.
The result is that handle declines from two perspectives: less dumb money in the polls, and as a result, some degree of smart money withdraws from the pools.
I could be wrong. The Gulfstream example could be a simple glitch rather than a tip of an iceberg. But economic growth in any industry, including racing, is not infinite. The world does not have the capacity for infinite growth. In order to expand its revenue, racing, as exemplified by Gulfstream, is becoming part of a larger entertainment and shopping industry. Racing is being sanitized. Like Times Square. What’s happening to all the seediness we could once depend on in order to see life as it really is?
The sub-prime fiasco resulted from a market that refused to face a normal periodic “correction”. With slots and racinos, the horse race industry may be flirting with the same unsustainable market. The glut may be near already.
For yours truly, the only authentic growth in racing can come when more potential players discover the joys and challenge of reading the past performances and their putting their money on an educated and well-calculated risk. For this to happen we need more truly qualified players, and not sub-prime slots players.