Computer Assisted Wagering in Horse Racing: A Comprehensive Guide

By Al Hudson

Horse racing has been one of the most popular sports across the globe for several decades, and millions of people enjoy betting on horses every year. In recent years, computer-assisted wagering has gained significant popularity among enthusiasts worldwide. Let’s take a look at what computer-assisted wagering is, how it works, and its affect on the state of the game.

What is Computer-Assisted Wagering in Horse Racing?

Computer-assisted wagering is the use of computer algorithms to help bet on horses in a race. This approach helps bettors analyze statistics, race history, and other relevant data when developing a prediction model for a race’s outcome. The use of machine learning algorithms has made this practice more accurate and reliable in recent years.

Some of the biggest bettors in the country (also known as whales or CAW players) are employing computer algorithms to do their handicapping and compile their bets. Many everyday horseplayers and smaller bettors also use computer programs to handicap but not at the same level of the CAW players.

How It Works

Computer-assisted wagering works by using algorithms designed to sort through a vast amount of data that can influence the outcome of a race. These algorithms can analyze variables such as the horses’ performances in previous races, their speed ratings, jockey statistics, and current conditions of the racetrack. This analysis can lead to the identification of variables that correlate with the winning pattern and help develop prediction models.

Typically, these algorithms work by passing data through a series of filters and analysis tools, identifying patterns and trends that may affect the outcome of a particular race. Once these patterns have been identified, the system can compile a list of horses expected to perform well and generate a betting selection and a complex set of wagers, some of which are based on the live odds of the runners.  When overlays are discovered, the CAW players pound those combinations, oftentimes in the final seconds of wagering.

Goals of Computer-Assisted Wagering

The main goal of computer-assisted wagering is to help increase the chances of winning a bet, thus maximizing profit margins for the user. With proper data analysis and prediction models in place, bettors can select horses that they believe have a higher chance of winning, leading to more significant profits in the long run.

CAW players need only to break even to ensure themselves a small fortune in the form of rebates earned.  These players receive the highest rebates from their respective ADW (Advance Deposit Wagering companies), and thus are incentivized to produce large handles in terms of bets throughout the year.

The Advantages of Computer-Assisted Wagering in Horse Racing

Computer-assisted wagering in horse racing comes with various advantages. Firstly, it enables a bettor to analyze vast amounts of data within a short period of time. This is because computer programs are equipped to process large sets of data in fractions of a second. With this, a bettor can easily identify patterns and make betting decisions based on statistical data.

Secondly, computer-assisted wagering eliminates the element of emotional attachment in betting decisions. Bettors often lose bets due to biased decisions based on their perception of horses, jockeys or trainers. However, with computer-assisted wagering, betting decisions are based on data analysis, resulting in less biased decisions.

Lastly, computer-assisted wagering provides bettors with diverse betting options. This is because computer programs analyze horses’ data and come up with various betting combinations, unlike traditional betting methods that offer limited options.

Utilizing powerful algorithms, machine learning, and predictive analytics, computer-assisted wagering has allowed bettors to analyze vast amounts of data and make more informed decisions than ever before. CAW players process and analyze data at a scale that was previously unimaginable. These bettors consider a wealth of variables, from track conditions and weather patterns to jockey and horse performance, all with a level of accuracy that was previously unattainable.

But it’s not just the sheer volume of data that makes computer-assisted wagering so powerful. The technology’s ability to spot trends and identify patterns means that even the most complex variables can be taken into account when making a bet. They can then evaluate the live odds and place a large volume of bets in the final seconds of wagering.

The problem is that these benefits are only enjoyed by a select few whales within the game of horse racing.

The Fallout

The whales generate their many wagers for each race and then feed those bets through the Tote system in the final minutes (sometimes seconds) before the race goes off.

As the three major Tote companies in horse racing have failed to update their technology over the years, it takes way too long to process these wagers. Consequently, odds drops happen after the race goes off, and in some cases, after the race is over.

“To use a Bronx expression, I would have to be a schmuck to continue to bet as in days of yore in the face of the CAW issue (among others) and my parents did not raise a schmuck.” ~ longtime player Richard Resnick is a letter to TDN about CAW play.

There are examples of this happening every day at tracks around the country.  It doesn’t take long to scroll through ‘racing twitter’ to find someone who is complaining about getting screwed on an odds drop. Worse yet, if you are Win bettor, it doesn’t take long for an odds drop to affect you directly.

Loyal Louie paid $8.80 to win.

This has been going on a long time. Loyal Louie was in front and reaching the wire at odds of 6-1 in the opener at Gulfstream last year. However, when the race was  official, his odds dropped to 3.40-1, or $8.80 to win instead of over $14.

One of the most glaring examples came in the Grade 1 Maker’s Mark Mile which was won by Chez Pierre (Fr) on April 14, 2023. Going into the gate at 23-1, the five-year-old gelding hit the wire in front by a large margin.  To the dismay of his many backers, his odds were now 9-1, an incredible odds drop of over 60 percent.

Can you imagine putting in an order to purchase Apple stock at $100 per share only to pay $160 and receive far fewer shares than expected?  The outrage is understandable.

Conclusion

The ADWs accepting these last second bets are owned by some of the biggest racetrack names in the country, and thus, have no motivation to restrict their best players.

It is hard enough for the average Joe horseplayer to survive in this sport of gambling.  These days, they have to do it while never knowing what type of price their horse will be until after the race is over.

CAW play is here to stay, but the industry better find a solution to the problem affecting their regular patrons.  How many times will a racing fan get ‘screwed’ before they look to alternative forms of wagering.  If you bet on the Kansas City Chiefs to win or cover a game, you know exactly what risk/return you have on the line.  That type of betting is looking very attractive right now.

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About Editor

Rich Nilsen is a 19-time qualifier to the National Horseplayers Championship (NHC), an event he has cashed in four times. He was the first player to finish in the top 10 of the NHC twice. A former executive with Brisnet.com and a member of the NHC Players’ Committee, Rich is a graduate of the University of Louisville Equine Business Program and is founder of AGameofSkill.com, a site devoted to horse racing education and promotion.

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