TGJB Wrote:
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> I\'m talking straight math here, one takeout vs
> only paying out part of the pool. And yes, that
> aside, the payoffs flatten out, especially when
> there\'s a mandy payout.
Jerry – I’m not quite sure what you mean by “one takeout†so I hope I’m addressing your question below, let me know if I’m misunderstanding.
I’m not too familiar with the jackpot wagers at Lrl or FG (although I suspect the Lrl wager is similar to GP), so I’ll just speak to the Rainbow 6.
To my mind, there’s always two takeouts associated with pick 6 wagers, be it the traditional version or the jackpot variation.
In a traditional pick 6 like at Santa Anita, there’s a 23.68% takeout. Another 30% of the pool is then paid out in the form of consolation tickets, which I view as an additional “takeout†since that money rightfully belongs to pick 6 winners but is instead being shared with the other 99% of bettors who only selected 5 winners. So it can be argued that the effective takeout on pick 6 winners (notwithstanding a winner’s consolation tickets) is really closer to 1 - (1-.2368)*(1-.30) = 46.6%.
In a jackpot pick 6 like at Gulfstream, there’s a 20% initial takeout. Then another 30% of the pool is carried over to the jackpot pool (unless there’s a single winner), resulting in an effective takeout of 1 – (1-.20)*(1-.30) = 44%.
So the effective takeout of a traditional pick 6 vs. a jackpot pick 6 is pretty similar. It’s not an apples-to-apples comparison of course, but a case can be made that the end results are similar in the long run. A traditional pick 6 player gets some of that consolation takeout back in the form of his own consolation tickets during the course of his play, while a jackpot player gets some of that jackpot takeout back through the bonanza positive expectation mandatory payout days, assuming he’s lucky enough to grab a piece of those mandatory day payouts once in awhile.
The one time when there isn’t two takeouts is in the jackpot variation when there’s a lone winner or a mandatory payout, in which case the effective takeout (at GP) is just 20%, which is great when you’re the lone winner. On the surface it would seem even better on a mandatory payout day, but somewhat counterintuitively, the value is often as good or better on the days that are not mandatory payout days.
There’s no mathematical reason why this is often the case – it’s a phenomenon that can only be observed empirically, by comparing the actual payouts to the expected payout based on a parlay of the win prices, on non-mandatory payout days vs. mandatory payout days.
What seems to be happening, as Boscar alluded to, is that on non-mandatory payout days, the crowd money is skewed towards longer-priced combinations in an attempt to take down the entire pool, which creates tremendous overlays on logical combinations. Even so, the mandatory payout day, with it’s lone 20% takeout and monster free carryover pool, should in theory produce higher overlays, and indeed it’s often a positive expectation bet, but the resultant value is often mitigated by the fact that so much money is bet on that final day (often 2-3 times the amount of the jackpot carryover) that it mutes the positive effect of all that free money. And unlike the days leading up to the mandatory payout, the crowd money is now skewed the completely opposite way, towards favorites and logical combinations rather than underlaid longshots, the thinking being that even a short-priced sequence will produce a bonanza payoff because of all that free jackpot money. So when those logical combinations do come in, but resultant payoff is often rather underwhelming.
If the question posed at the top of this post relates to the fact that you only get hit with the takeout once in a pick 6 vs. 6 times in a win parlay, the answer is that the pick 6 still has a higher expectation than a win parlay for both a traditional pick 6 and the jackpot variation, even after taking into account the additional drag of the consolation “takeout†and the jackpot pool, respectively.
In a traditional pick 6 like at Santa Anita, with a 15.43% win takeout, the expected pick 6 payout is (1-.2368)*(1-30)/(1-.1543)^6-1 = +46.0% more than the equivalent win parlay.
In a jackpot pick 6 like at Gulfstream, with a 17% win takeout, the expected pick 6 payout is (1-.20)x(1-.30)/(1-.17)^6 -1 = +71% more than the equivalent win parlay.
I’m not sure about that FG pick 5 jackpot wager. From what I see, 50% of the pool is carried over to the following day unless there’s a single winner. Since there’s no consolation tickets in a traditional pick 5 wager like there is for pick 6’s, there\'s only one real takeout - the typically very low 15% vs. an effective takeout of 50%(!) for the jackpot version. It might be worth it to play on some large carryover days, but on a non-carryover day, phew – NO THANKS.
I haven’t followed the betting associated with that FG jackpot pick 5 wager, but I’d be surprised of it’s attracting much attention vis-à -vis the traditional version, which is a fantastic bet given that it’s such a low takeout on such a superexotic wager (the value gets better the more races that are included) and with no additional rake for consolation tickets.
It’s no wonder the low takeout traditional pick 5 bet has been such a success. Tracks should take a cue from that success and model the Pick 6 after it. Lower the take to 15% (or even 20%), lower the minimum to $.10 or $.20 like in the Rainbow 6, and eliminate any consolations and jackpots.
Because 25-30% of a traditional pick 6 pool is distributed in the form of consolation tickets, winning Pick 6 players are in effect subsidizing the lousy handicappers, much in the same way that good Rainbow 6 players are subsidizing the “lucky†one-time jackpot winners.
This is the main problem with the takeout structure of the Pick 6. It’s not that it isn’t a good bet. Because of the fact that you only get hit with the takeout once, and because your edge is multiplicative, superexotics like this are still very good bets, even with the higher takeouts typically associated with them, and even with the punitive consolation or jackpot gimmicks, both of which act as an additional “tax†on day-to-day winning handicappers.
Stop subsidizing losing and lucky players, and put the money in the hands of the winning players.
As we’ve seen with the 14-15% takeout Pick 5’s, pools will likely escalate substantially, and the payouts for winning combinations will be demonstrably higher.
Now that’s a bet worth making.
(sorry for the rant - JMHO)
