This is another case where being rich lets you get richer. :)

I had a friend who had a private box at a horse track. One of the benefits of this box was that you had a personal betting machine. This let you bet on the best odds just seconds before the race every time. I made a lot of money doing that.

You can kind of do it in Vegas too because the sports books aren't usually that busy.

In fact, that hardest part of this strategy is actually figuring out who the favorite is! The odds are usually listed as fractions, but they have different denominators, so you quickly have to convert them all the the LCD and then order them.

But yes, the closer you bet to post time, the better your outcome with this strategy will be.

Actually the most successful parimutuel syndicates and HNWI bet programmatically through API’s. They consistently win and they do not make their money from picking a single winner. They bet on exotic bets that have much higher odds and are easier to box. For instance picking two winners or order of the first three horses.

Source: I worked on those APIs to integrate with 20+ exchanges over three companies and 10 years. The syndicates and HNWIs were always the same people over that decade.

He has this completely wrong. The idea in pare-mutuel betting is not to pick the winner. The favorite usually wins, but the house cut makes betting the favorite a net lose.

The goal is to find underpriced bets, where the collective estimate of the odds is far from the prediction systems's estimate.

Using computers to beat masses of the general public at horseracing in this fashion has been going on for well over 30 years. I first read articles about the gambling teams and data scientists behind them in Hong Kong in the mid 90's. The teams had data capture people entering realtime odds from the tracks at Sha Tin and Happy Valley and hired private tellers to enter thousands of computed bets moments before a race began from their offtrack locations in downtown HK highrises.

The thing that makes it easy to simulate but impractical to execute is that getting enough bets in fast enough and late enough to tip the odds to your favor to give you an edge while limiting losses is difficult to do. It's even harder to do without this wagering itself affecting the odds. For one there often just isn't enough money wagered on a race. In the heyday of the HK races you'd often have 100 million+ HKD wagered on every single race, much of that coming from the general population -- individuals going to the track. There are only a few big event races in the US or Europe that will attract that kind of betting pool. Even HK is no longer like that.

> The last results, after remodeling the problem, came to be on par with the odds themselves. Around 37%. This time my AI was as good as consensus at betting harness racing.

using the same dataset as betters with a NN is not really better than running a regression on it, so this doesn't really surprise me.

nn are able to find patterns with things others than historical series. taking this forward would need to combine historical race sets external sources that could have correlated information available that's not easy to extract by simple regression, like news and articles whenever available or meteorological data or whatever, just feed it everything and let the nn sort itself the useless data out

I found this nugget to be the most valuable:

Simulated flat betting 1$ on 26 000 races over 15 years shows a hefty return on investment

If this is true, why don’t we all just go and hire people in Sweden to put in bets for us at the last minute, based on the favorite horse, and pay them out of the profits? We pay them to do it and we collect the winnings.

If this strategy works it may work elsewhere too. Why not just do that all day long with an army of people? And you aren’t hurting who is the favorite either.

Interesting comparison to the old fashioned way: https://www.bloomberg.com/news/features/2018-05-03/the-gambl...

The OP writes repeatedly that the "odds of winning are related to the amount bet on each horse." This is not correct. The payout is related to the number of people betting. The odds of winning are based on the horse's DNA, training, competitors, etc. The horse does not know who bet it on it while it's running. It's easy to confuse the word "odds" in gambling because that often refers to payout, but these are not the odds of winning.

Here's my 2 cents.

Anyone who is telling you they have cracked the parimutuel pools, and "here's how to do it", is trying to sell you something else. Anyone who has actually cracked the parimutuel pools knows how they work, and that if you share your "tips", or selections, you only serve to diminish your own returns, so you are not going to do it.

He was unlucky in picking harness racing. Standard horse racing is already corrupt, but harness racing takes it to the next level. The rules and the addition of the harness make cheating much more prevalent.

I'd rather bet on Professional Wrastling than harness racing.

appreciate the write up but is this even AI? It seems like he just did some analysis & stats on observed data, and came up with a simple model.

All in! You can't lose. Bet your house!