random thoughts and thoroughbred selections

Wednesday, May 12, 2004

When is an overlay not an overlay?

In horseplayer parlance, an �overlay� is when a horse is under-bet, providing a greater value in odds than what you would normally feel the horse was worth.

It�s like finding a horse �on sale,� or in poker terminology, it�s like identifying a +EV situation and attempting to capitalize.

There are many, many routes horseplayers take to identify overlays. A true handicapper will ignore morning line odds, and pour over past performances to determine where, in his opinion, the cutoff point in odds will have to be (an over/under number) to find overlay. If his established cutoff line is 4/1, and he sees 9/2 on the board, that's an overlay, and a potentially profitable opportunity.

Take the Kentucky Derby, for instance. In a race that was seemingly that wide open, it�s not hard to find value. Smarty Jones didn�t get a �Win� bet from me simply because he was priced too low in my opinion. I would have taken him at 10-1, but not at 5-1. There were probably six horses that had a good enough shot at winning that were going off north of 15-1, and I considered them overlays. They got my bets.

And, of course, the underlay, Smarty Jones, won the race.

Handicapping isn�t always about identifying the winner, it�s often about finding overlay value. A �Win� bet on Smarty Jones this weekend in the Preakness is bound to only return $.60-$1 on a $2 bet. If you feel that strongly about the horse, you�ll have to plunk down a considerable bet to make a decent profit. But if Borrego or Rock Hard Ten go off north of 10-1? That�s value.

I mentioned that there are many, many methods to finding overlay. If I don�t have past performances, or even if I do, sometimes I run the route of comparing morning line odds with the odds on the board with less than three minutes to post time. The theory is, if the morning line was low, someone thought this horse was a possible winner. If the current odds are higher? Could be worth a play.

This method has landed me huge profits in the past, but is also tricky, as in a pari-mutuel betting system, you�re at the mercy of the money and minds of your fellow gamblers.

They may see something they don�t like about the horse that the morning line guy didn�t. Or, even worse, is what happened to me last night.

Youbet.com on a Tuesday night. Tuesdays are ridiculously light as far as thoroughbred cards are concerned. At 730PM EST, there were a small handful of harness tracks running (along with Mountaineer, the track that never sleeps), and I happened upon a race at Pocono Downs with less than five minutes to post. Here�s what the board looked like:

No. � M/L � Current Odds
#1) � 2/1 � 1/9
#2) � 6/1 � 84/1
#3) � 5/1 � 99/1
#4) � 9/2 � 99/1
#5) � 7/2 � 50/1
#6) � 10/1 � 99/1
#7) � 4/1 � 34/1
#8) � 8/1 � 99/1
#9) � 12/1 � 99/1

I called Bob up immediately, waking him from a nap, to get on and put money down on this race. There�s nothing better than looking at how a solid favorite (the 1 horse) can drive up the price on the rest of his field to ridiculous levels.

And this, my friends, was ridiculous.

I put $2 to win on the 2-5 horses (and exhausted my account), and Bob went $2 WPS on the 6-9.

And we were licking our chops hoping one of these 99/1 horses crossed in first.

Again, however, we get bitten by the ugly side of the pari-mutuel system.

The first problem is that �late money� always affects the odds of the horses, even as the race is running. What you see on the TV screen isn�t precisely where those odds are. It�s more like where they were 45 seconds ago. The money bet in the last 30 seconds hasn�t even factored into the equation yet.

As a result, it�s absolutely maddening to be watching the horse you liked leave the gate at 10/1, but see odds of 7/2 recalculated as he�s rounding the home stretch in his race. It�s not an illegal thing, it�s just that the computers take 60 seconds from when the windows close to figure out exactly what the closing odds are.

The second problem, a corollary to the first, is that late money affects a lightly bet race far, far more than it would a heavily bet race. I would think that the Kentucky Derby, with $50 million dollars bet in different pools, wouldn�t have substantially different odds from one minute to the next on its field.

Pocono on a Tuesday night though?

I made the mistake of not looking at the Win betting pool prior to making my bet. According to the info on Youbet, there was less than $1000 wagered on this nine horse field in the Win pool combined. And, with most seasoned horseplayers making their wagers at the absolute last possible minute, my bets with two minutes on the clock were corrupted mightily by all the late money coming to the windows.

I watched the #4 horse, with 99/1 odds posted with one minute to post, go from 99/1 to five to freaking one on the last turn. It was like this with the entire board. All that late cash got calculated in, and all of a sudden what looked to be a tremendous overlay opportunity completely crashed around us.

That�ll teach me to play Pocono on a Tuesday night. And also to ignore the size of the betting pool when looking for overlays.

[>>]posted at 2:15 PM by BG - click to email
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