How algorithms are changing horse betting ... and outraging gamblers in the process
They're called CAWs — or Computer-Assisted Wagering syndicates — and they're creating inequity between them and the common fan.
LOUISVILLE, Ky. — The sixth race at Del Mar on a random Saturday last July should not have been memorable in any way. Running for an $81,000 purse, a 4-year old Thoroughbred named Nanci Griffith won the one-mile race and paid $14.
80 to win on a $2 bet. But for many of those who backed the winner, the payout was a massive disappointment. As the gate opened, the tote board showed Nanci Griffith’s odds at 18-1.
When she crossed the wire, however, the odds had changed to 6-1, meaning those who held winning tickets collected less than half of what they might have expected at post time. Unlike sports wagering, where a bettor is playing against a bookmaker and locks in their odds at the time of the bet, American horse racing has long been based on a pari-mutuel system where the bettors are wagering against each other. Once all the money goes into a pool, the racetrack takes a fixed percentage off the top and what’s left is divided up among the winning bets.
As a result, the odds shown to the public on TV or computer screens are constantly shifting based on what percentage of total money is being bet on each horse. Gambling decisions at the racetrack, however, are often based on perceived value. Someone may be willing to bet on a horse at 7-1 but might think differently if the odds were 2-1.
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