Here�s an important handicapping term you may not have heard of: Effective Takeout. This is the amount of each dollar wagered that you can expect to lose in a given situation. The Effective Takeout (ET) of all win bets, for instance, is about 22 cents per dollar bet. Only an estimated 3% of long-term handicappers can make money in a 22% negative expectation situation like this. I know � here I go bumming you out. Don�t get depressed � there are better situations available. We can make our handicapping job much easier if we find situations where the ET is lowest.
Do you bet a lot of favorites? The ET for favorites to win is about 18% � better than win betting in general. However, the ET for favorites to show is only 10%. Generally speaking, you�re better off betting favorites to show than to win. You move almost half the distance to profitability just by changing your bet type. Favorites-to-show is what I call a "soft spot" in thoroughbred wagering. These are situations where the distance to profitability is significantly smaller than average. By restricting yourself to these situations, you are effectively playing a much easier game than most of your competition.
Handicapping is a filtering process. We�re all using our own filters, whatever they may be, to find a subset of all available bets that we will wager on. We�re looking, in our different ways, for a subset that�s profitable. Why not start with broad subsets that improve your chances before you even begin handicapping? You can apply your handicapping filter to these situations, and will stand a much better chance of making money in the long run.
Here�s another example of a soft spot: in one large study, the rail horse in turf routes actually had a 1.03 ROI. They didn�t win much more than the other posts. The odds were a bit higher, though, probably due to the public�s unjustified fear of traffic problems coming from the rail.
Or, one of the top four last-race-Beyer horses moving from a fast track to an off track has an ET of 8%. The same type of horse running on a fast track today has an ET of 17%. Perhaps the public�s overemphasis of "mud" sires allows the competitive horses to go off at better odds on off tracks.
Some other soft spots: In dirt sprints, horses with 6+ Quirin Speed Points have an ET of less than 10% � the public still underestimates the importance of early speed. In dirt routes, the inside horse has less than a 10% ET. In dirt routes, horses with 7+ Quirin Speed Points have an ET of 7%. In turf routes, the horse with the most earnings in the last two years has less than a 9% ET. Interestingly, in turf routes, horses with 6+ Quirin Speed Points have an ET of 5%. Also in turf routes, second-race-after-a-layoff horses have an ET of 7%. And so on.
You can also improve your Effective Takeout by eliminating types of horses with low ROIs as discussed in my article Separating the Wheat from the Chaff: Semi-Mechanical Contender Selection. By removing horses with very high ET�s, you lower the ET for the rest of the field.
The point isn�t for me to quote all the soft spots caused by low Effective Takeouts which you can find in legitimate thoroughbred handicapping studies. They�re out there if you want to purchase them, or you can do your own studies. But it�s important to realize they exist. Rather than jumping into a negative 22% pool, why not start with a more favorable situation?NC
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