‘Show’ Us The Money? The Plight Of A Simple Wager

by | 07.12.2017 | 8:13am
Heavy show wagering on favorite Terra Promessa, who finished off the board, led to big show payouts in the Azeri Stakes at Oaklawn Park earlier this year

The modern menu of betting options in North American horse racing has reached dizzying levels. Daily Double, Pick 3, 4, 5, 6, exacta, trifecta, superfecta, Super High Five, Pick 6 jackpots, Grand Slams, Place Pick All. You get the idea.

But it's one of the oldest and most basic wagers that has horseplayers in fits, ADWs suspending player accounts and racetracks cancelling the bet even when they're not supposed to.

Show: Pick a horse to finish first, second or third in a race. Sounds simple, right? Well, let's see what you think at the end of this article.

We'll begin with a few pertinent definitions you may or may not already know.

Minimum Payouts: In most states, the minimum payout for a show wager is five percent or $2.10 for a $2 bet. However, in two states — Iowa and West Virginia — the minimum is 10 percent or $2.20. That dime makes a big difference to a certain group of people known as…

Bridge Jumpers: Bettors who make large show wagers on heavy favorites, thinking they can't possibly finish worse than third, and the result is a “sure thing” payoff of 10 or 20 cents on every $2 wagered. A separate group of bettors aims to “kill” the bridge jumper by placing bets on every other horse in the race, hoping the favorite misses the top three and his money will fund inflated show payouts on the others.

Net Pool Pricing: A method of handling payouts that came about in the mid-90's primarily to facilitate wagering dollars from Canada, where the regulations required bet-takers to use the “local” takeout rate, not the rate at the U.S. track where the race was being held. Net Pool Pricing allows for the handling of multiple takeout rates. The result of this process for show wagering: a dividend remains that is split among the paying horses, leading to higher-than minimum payouts, particularly on non-favorites. It makes show wagering slightly more attractive than it used to be.

Minus Pools: Because of minimum payouts, when an overwhelming percentage of money in the show pool is bet on a heavy favorite, there may not be enough left after takeout to reach the minimum payout threshold. The track or ADW is responsible for making up the difference.

Breakage: The process of rounding out payoffs to the nearest nickel or dime. The leftover pennies are usually split between the track, the state and possibly other entities (breeding funds, horsemen, etc.)

With the definitions out of the way, what exactly is going on here?

In summary, the combination of Net Pool Pricing, the proliferation of short fields and the astute identification of minus pool situations by bettors has led to something of a confrontation between bet-takers and bet-makers.

“We figured it out in about 2013 at the end of the year, so for three or four years, we've been doing exactly the same thing,” said a horseplayer who chose to remain anonymous because his account with a large ADW had been suspended. Among the other bets he made each month, our horseplayer said five or six times a month, he was betting an average of $4,000 to 5,000 on minus show pools he identified.

Bettors track this by watching the pool percentages and anticipating when bridge jumpers will create a minus scenario after slamming down huge money on the favorite to show. Sometimes the pools will not end up staying minus, and our horseplayer's strategy doesn't work, but if there is a minus pool, his calculations make profit a certainty. He played the role of both bridge jumper and the “killer.”

“If you have a five-horse race and the favorite has 94 percent of the pool or more, we would bet $5,000 to show on the favorite and then a hundred to show on the other four horses,” he said. “Only two things that can happen. You either win a couple hundred (favorite runs 1, 2, 3) or if the favorite doesn't hit the board, you win a couple thousand. It's a no-lose scenario.”

You can be certain racetracks and ADWs don't like hearing those words.

“If you were booking these pools and taking a loss on them, you'd probably look into it also,” Marty Pohlmeier, simulcast manager at Prairie Meadows in Iowa, has told horseplayers. “That's not being confrontational, that's just the facts.”

Pohlmeier said Prairie Meadows has taken enough hits recently with bridge jumpers and minus show pools the track cancelled show betting on two six-horse maiden claiming races June 17. That turned out to be a problem. The Iowa Racing and Gaming Commission (IRGC) caught wind of the decision and told the racetrack it was a violation of state regulations.

“So a facility can offer win, place and show wagering on contests with six or more,” said Brian Ohorilko, administrator of the IRGC. “But then they can prohibit show wagering with five or fewer. If you have six or more, you would need to do all three (win, place, show).”

Here's exactly what Iowa's pari-mutuel law says: Tracks may offer win, place, and show on all contests with six or more betting interests and may prohibit show wagering on any contest with five or fewer betting interests.

However, West Virginia's law only states that tracks/simulcast outfits may offer show wagering on any contest with five (5) or more betting interests. So, they don't have to, but they can, and the law doesn't say anything about six or higher. California's law is more stringent, sort of. It says tracks shall provide win, place and show in any race in which there are five or more separate wagering interests, but in the same paragraph it says, upon a showing of good cause, the (California Horse Racing Board) may waive the requirement for a place or show pool in any race.

As you can see, there's plenty of room for wiggle and interpretation in the rules regarding show wagering across the country. In Iowa, the commission and track agreed an off-season examination of the rules' clarity might be in order.

“For right now, going forward, if there are six or more horses — it doesn't matter if Superman is running in the race — we're going to leave show,” said Prairie Meadows' Pohlmeier.

Still, situations like this leave horseplayers scratching their heads, groping for consistency. Our horseplayer said he used his show betting strategy for a couple of years, then suddenly was contacted by his ADW, who asked him to refrain from making the $5,000 show wagers. He kept on but was contacted again and told he'd lose his account if he didn't stop.

“They said your account has cost us thousands of dollars over the last three years,” he said. “My little $5,000 bets into a half a million dollar pool? That's hard to believe but then what am I going to say?”

The ADWs do seem at higher risk for exposure to minus pools than tracks themselves, simply because a vast majority of wagers these days are made through simulcast/ADW, not on-track. In most cases, the bet-taker assumes responsibility for its percentage of the minus pool. So, if the ADW took 80 percent of the show bets on a particular race, it must cover 80 percent of any minus pool.

While most tracks would prefer ADWs take all of the wagers they offer, some companies go with a hands-off approach. That's the case with Penn National Gaming-owned Charles Town, one of the three major tracks still offering the $2.20 minimum show payout (Charles Town, Mountaineer and Prairie Meadows have been referred to as the “Holy Trinity” of bridge jumping).

“If they (the ADW) want to take out (show betting), we've never had qualms with that,” said Erich Zimny, vice president of racing operations at Charles Town. “We kind of leave it to them to decide what's best for their business and their customer.”

Zimny said Charles Town has tried to stick to its own policy of offering show wagering on fields with five or more but has in the past cut off a show bettor at the track.

“For the minus pool, you're going to be feeding it dollar for dollar for ever how many dollars you're short in paying back the money, so you can definitely create some exposure for yourself there,” Zimny said.

But not every racetrack looks at this the same way. Joe Morris, the Stronach Group's senior vice president of West Coast operations, fully embraces the show bet.

“One of the tough things is to get new people to come to the track and we're always spending marketing dollars to attract new wagers. What's the easiest entry to our pari-mutuel pool? It's the show bet,” Morris said.

In that spirit, Santa Anita offered show wagering on all four of heavily favored Songbird's non-Breeders' Cup races last year. The track had to cover minus pools every time. When Songbird then flew east for a pair of races at Saratoga, show wagering was suspended both times with fields of seven and five. Tepin was in a field of eight in the 2016 Woodbine Mile and the track removed show betting for that race.

Morris equates offering show bets to a marketing expense in a gambling industry. He said he's never had a minus pool so big it didn't seem a logical cost, considering that new fans had the thrill of cashing a ticket.

“It just makes no sense to have a draw like Songbird – she's a promotion in herself when she races – you're going to use her as a promotion to bring in new people and then you're not going to let them show bet?” Morris said. “We think it's worth that investment (the minus pool).”

On the other hand, why bridge jumpers think it's worth the investment to plunge into a show pool with large sums of money in order to make cents on the dollar is a mystery to many. In fact, locating and playing against them has become kind of a cottage industry in forums and elsewhere on the Internet.

A few years ago, Stuart Slagle, now the racing secretary at Woodbine, set up a Twitter account that served as a social media repository for identifying when jumpers were metaphorically throwing themselves off the show pool bridge. The account is still active, although Slagle now as a racing official serves only as an absentee landlord and does not contribute to it anymore. His thoughts on bridge jumping from a horseplayers' perspective? Doesn't make sense.

“Mathematically, it's foolish because the precision you need to break even is beyond what most people are capable of. You have to be right 20 out of 21 times just to break even (with a $2.10 minimum),” said Slagle. “As a bettor, I was always looking for guys to do it so I could go against them.”

At the “Holy Trinity” tracks, the ones that offer $2.20, bridge jumpers only need to be half as precise, but that target is likely to go away eventually. Zimny said Charles Town will continue to ask the state to reduce the minimum payout to $2.10, and Prairie Meadows, after crunching the numbers for this year, plans to consider making the same request in Iowa.

An increase in field sizes would also reduce the likelihood of minus pools, but the trend, of course, has been smaller fields in recent years.

Horseplayers like the one mentioned in this article look at this issue as another example of “us vs. them” in the sport. It's hard enough to make money in this game, he says, between takeout and breakage, and then he's told he can't seek out an advantage when he spots the potential of one. According to his log of the handful of large show wagers per month, only about 60 percent of the time did the pools actually end up being minus.

“We like doing it and it's fun and now we're being told even though there's nothing wrong with these bets, it's like card counting at the casino I guess. We reserve the right to refuse service to anyone or whatever,” he said. “They're making 17 or 18 percent takeout plus the breakage the other 99.9 percent of the time and then when they have to cover one of these (minus pools), it's a big deal.”

Whether or not it's actually a big deal, the regulations give bet-takers quite a bit of latitude in deciding when the show bet must go on. Track and ADWs, many of whom are in fact owned by casino companies, perhaps understand the benefits of allowing show wagering's unique form of gamesmanship to continue but will most often err on the side of the bottom line.

“I know the online community can be very enthusiastic about takeouts and breakage and bridge jumpers,” said Pohlmeier. “But when we see places where we're just flat out going to take a big loss on a pool, both on track and with our partners, we're going

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