Carryover – A Year-Long Exploration for True Value

For some serious fans, the game of horse racing is equal parts entertainment and a chance to make a score. For others, it’s a serious grind to make ends meet. Depending on where someone falls on the scale ranging from entertainment $2 WPS bettor to hard-core, max-churn for rebate, +EV bettor, approaches to handicapping and ticket construction will vary greatly.

I’m committing the next year of my horseplaying to a disciplined approach, with the main goal of demonstrating the devastating effect of high takeout on all wager types. To make sure I’m being clear, 15% takeout is high! Just because it is lower than other industry standards does not make it a desirable takeout percentage. The industry shift to jackpot pick 6 and pick 5 wagers, which all carry significant takeout, has fueled my desire to shine additional light on this subject.

In the process of demonstrating the negative effect of takeout, I will be limiting my wagering to non-jackpot, carryover wagers only*. For example, one of my favorite wagers to make is the $1 Hi 5 when there is a substantial carryover. The resulting pool, with the carryover added, almost always results in a near 0% takeout situation and the $1 minimum bet also ensures payouts will be beyond fair. However, the majority of my play will go through pick 5 carryovers and the mandatory payout days on the jackpot wagers. I will track ROI, as well as the ROI of what the results would have been without the carryover money.

I feel the need to add context to the jackpot horizontal wagers and my decision to play on mandatory payout days. Track management, when making the decision to move to the jackpot wagers, are looking at revenue, revenue, revenue. How do they get more revenue from the jackpot wagers? Easy, the lower minimum wagers attract a different type of bettor that fall squarely into the category of “entertainment with a (delusional) chance to score.” These bettors do not do the math over the long-haul and will create a daily pool that rivals the traditional $2 minimum pools. Players will continue to chase the jackpot payout, contributing to the daily pools, until it’s time for the mandatory payout. The mandatory payout pools can fall in the 7 digit range and on the rare occasion can surpass $10M. Big money, with a guaranteed payout and low to non-existent takeout, attracts all players. Of course, the track takes a significant cut of that massive pool. Some players refuse to contribute to the cycle of this less than ideal situation. The only way this wager-type will die is if the daily pools are light and the pool doesn’t grow to the size where it attracts additional significant play on payout day. I don’t have the energy to concern myself with those that choose to light nearly half of their wager total on fire by participating daily, but I do have the energy to fire away at a large pool with little to no takeout.

From time to time, I will attempt to get some playable tickets and handicapping thoughts out. With that in mind, let’s take a look at carryover opportunities for Thursday, August 8, 2019.

$1 Hi 5 Carryover : Gulfstream – Race 2

There is an $18K+ carryover leading off the Gulfstream card for Thursday. However, the first race won’t have the required 7 runners to make the wager go. That takes us to race 2.

From my experience betting the Hi 5 carryovers, there are three ways to approach your ticket construction:

  1. If you have a fairly strong opinion, try to cover all of your angles and press those opinions that are strongest.
  2. If you have a fairly weak opinion but it would pay if it hits, make a small wager on your best opinion.
  3. If you have a mildly strong opinion but try to cover too much, you get stuck in no man’s land. DON’T GET STUCK IN NO MAN’S LAND! Either dump a chunk of your bankroll into the wager or tread lightly, DO NOT get stuck trying to cover half of the scenarios you think are possible.

If the turf races remain on, let’s hope that those who drew posts 1-7 make it to the starting gate, as posts 8-11 are MTO entrants. 

I give 1,2,5,6 and 7 a chance to win the race, while 3 and 4 appear to be badly overmatched in this 5F sprint. If 1-7 run on grass, I will be taking wagering approach number 1 listed above.

When building my tickets, I will key on two things:

  1. The 1 needs to finish top 3
    • My top choice to win
  2. The 5 needs to finish top 4
    • At 8-1 ML, I think this horse goes right to the lead and finishes no worse than 4th. Not a ton of other early speed, has rattled off two straight bullet works, and has a running line of 2-2-0-0 for last two at GP going 5F on grass. Even with those positives, it’s a second consecutive step up in class which will make it very tough to cross the wire first.

My suggested wagers, totaling $138:

$2 – 1/5/2,6,7/2,6,7/2,6,7 = $12

$2 – 1/2,6,7/5/2,6,7/2,6,7 = $12

$2 – 1/2,6,7/2,6,7/5/2,6,7 = $12

$1 – 5/1/2,6,7/2,6,7/2,6,7 = $6

$1 – 2,6,7/1/5/2,6,7/2,6,7 = $6

$1 – 2,6,7/1/2,6,7/5/2,6,7 = $6

$1 – 5/2,6,7/1/2,6,7/2,6,7 = $6

$1 – 2,6,7/5/1/2,6,7/2,6,7 = $6

$1 – 2,6,7/2,6,7/1/5/2,6,7 = $6

$1 – 1/5/2,6,7/2,6,7/All = $18

$1 – 1/2,6,7/5/2,6,7/All = $18

$1 – 1/2,6,7/2,6,7/5/All = $18

$3 – 1,2/1,2,7/1,2,7/5/6 = $12

Now for the fun part, the long-term math and ROI. For each wager participated in, I will track 6 things:

  1. Total Wagered – Money bet into the pool
  2. Total Returned – Money returned from the pool (Winnings)
  3. Total Pool – All pari-mutuel money bet into the pool
  4. Effective Takeout with carryover added – The effective house or player edge based on total pool size, base takeout rate, and carryover money added
  5. Base Payout – Winning payout for the minimum wager accepted
  6. Base Payout if no carryover – The hypothetical winning payout if there were no carryover money added to the pool

For long-term results I will track ROI, and ROI if no carryover, which is the hypothetical ROI if there were no carryover money added to the pool. It’s worth noting that these numbers will not necessarily represent or translate seamlessly to everyday play, as pools are played differently when there is carryover. For example, I tend to worry less about “value plays” when there is a significant carryover, and instead focus more attention on my true opinion. That’s not to say value plays aren’t used, I just use them less.

My hypothesis is that after a year of wagering on carryover-only wagers, I will have a positive ROI and the ROI if no carryover will be negative. I consider myself a fairly average handicapper with an edge in pool selection and wager construction. I’m hoping this exercise will demonstrate that being selective and wagering efficiently can be the key to profitability.

Lastly, there is also a late pick 5 carryover for $38,054 at GP on Thursday; I will participate and track results. Good luck if you’re playing!

*I will be wagering on Arlington Million Day, Breeders Cup, and 2020 Triple Crown races regardless of takeout. These cards carry as much entertainment value for me as they do wagering value. I will track results from these days as well so it is clear how it all comes together.

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