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Old 12-06-2003, 07:35 PM
PairTheBoard PairTheBoard is offline
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Default Win-Show Mutual Pool Overlays - The Ziemba System

Around 15-20 years ago a book came out authored by a pen-name "Ziemba" I believe, in which he claimed an edge could be achieved in Racing where there are mutual pools for Win-Place-Show. The dynamic involves the observation that people sometimes are reluctant to place bets where there are very short oddss payoffs. If this is happenning it can be theoretically measured in the case of Racing mutual pools. For example, the win pool for a favorite horse is 1/3 the total win pool for the race, giving the favorite 2-1 odds to win. Now, assuming market efficiency for the win pool at these odds, an efficient show pool should also see 1/3 of the total pool being bet on that same horse. Yet often times, especially in the later races of the day, there will be a much lower ratio bet on the favorite to show than to win. For whatever reason, maybe people are looking to get even for the day, sometimes as little as 1/6 of the total show pool is bet on this horse. When there is that much of an overlay you should theoretically be able to gain an edge by betting this horse to show. The method is to wait until just before post time and when you see the divergence in pool ratios, place your bet.

Ziemba claimed to have enough data from one session's results from one track to prove the system works. Theoretically, you could employ this method sitting in a Casino's Race Book if the Televisions were flashing the mutual pools close enough to post times.

Has anyone actually worked this method and made long term profits from it? I tried it a little years ago with dismal results. Offtrack there is too often a large change in the final mutual pools compared to the last ones flashed on Television. I've also thought there might be a problem due to the possibility that when the favorite doesn't have it that day and it's clear he's having little chance to win, the jocky may let up and not ask him for all he's got just to beat out horses for 3rd.

Any experience with this here?
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Old 12-07-2003, 03:55 AM
Wildbill Wildbill is offline
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Default Re: Win-Show Mutual Pool Overlays - The Ziemba System

It doesn't work in the real world because a lot of people take shots at it. The final change of the board occurs about 20 seconds into the race and you wouldn't believe how many times show money comes flooding in on the favorite. The place sometimes still offers a little value, but not much. In general the rule of thumb is that the shorter the price horse, the likelier that you will get a good value betting it to place, but probably not show. In any event to purely apply this system is very hard to do because many times you will think you have a value and then the last second bettors will all take it away.
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Old 12-07-2003, 09:30 AM
crazy canuck crazy canuck is offline
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Default Re: Win-Show Mutual Pool Overlays - The Ziemba System

By the way his real name is William Ziemba and he is a management science prof at the University of British Columbia in Vancouver.
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Old 12-07-2003, 09:33 AM
PairTheBoard PairTheBoard is offline
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Default Re: Win-Show Mutual Pool Overlays - The Ziemba System

Aha! Thanks for that report Wildbill. Evidently this is now widely known with all the edge soaked up by practitioners. It's like in the stock market with all the arbitrage oportunities quickly jumped on by computerized trading programs. My curiousity is satisfied.
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Old 12-07-2003, 09:38 AM
PairTheBoard PairTheBoard is offline
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Default Re: Win-Show Mutual Pool Overlays - The Ziemba System

Really! I thought that was just his pen name. Evidently, by what WildBill says below, there are now so many Ziemba betters out there that all the edge is soaked up for this system.
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Old 12-07-2003, 10:05 AM
crazy canuck crazy canuck is offline
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Default Re: Win-Show Mutual Pool Overlays - The Ziemba System

I guess that's why he is still not retired. [img]/images/graemlins/smile.gif[/img]
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