An analysis of exotic wagers in a parimutuel setting
AbstractIn US horse racing, there is increasing emphasis placed on the creation of exotic wagers - those bets beyond the standard win, place and show. Bets on multiple races that typically do not result in a winner for several days are of particular interest to the industry. The growing carryover pool helps attract people to the racetrack in a way similar to a growing carryover in the lottery attracts more people to participate. This article examines several multiple race bets and provides a framework for their comparative analysis. The results of the analysis will help racetrack management decide if a proposed bet is appropriate for their particular track. This analysis shows a tradeoff between the difficulty of winning the bet versus the amount of the ultimate payoff. If a bet is too easy to win, then the carryover pool will never reach an attractive level. If the bet is too difficult to win, then the bettors will lose interest before the carryover pool is able to grow sufficiently large. The amount of money wagered daily is an important consideration in determining the appropriate type of exotic wager to implement.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 35 (2003)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Asch, Peter & Malkiel, Burton G & Quandt, Richard E, 1984. "Market Efficiency in Racetrack Betting," The Journal of Business, University of Chicago Press, vol. 57(2), pages 165-75, April.
- Vaughan Williams, Leighton, 1999. "Information Efficiency in Betting Markets: A Survey," Bulletin of Economic Research, Wiley Blackwell, vol. 51(1), pages 1-30, January.
- Ali, Mukhtar M, 1979. "Some Evidence of the Efficiency of a Speculative Market," Econometrica, Econometric Society, vol. 47(2), pages 387-92, March.
- Mukhtar Ali, 1998. "Probability models on horse-race outcomes," Journal of Applied Statistics, Taylor & Francis Journals, vol. 25(2), pages 221-229.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.