By Mark Patterson
Decades before artificial intelligence commenced those creepy imitations of human voices or began writing lousy articles on your computer’s home page, the stuff that Stephen Hawking warned would betray and potentially end humanity launched an assault that these days threatens the very existence of horseracing.
It all started in Honk Kong, of all places, when a geeky math whiz named Bill Benter got the bum’s rush from Vegas for counting cards and recalibrated his algorithmic guns to fire on the sport of kings, Asian style, where vexing jackpot sequences sometimes snowballed to payouts Elon Musk might envy.
Chinese bettors, it was fatefully found, were no match for the machines-circuits and wiring that never panicked when things went poorly, surpassed organic understanding of the intricate dance that is a horse race, and read mutuel pools to exploit human mistakes.
Hundreds of $millions were won. And since algorithms teach themselves, the mutation of thoroughbred handicapping into something sinister and grotesquely efficient would continue.
Like a virus specifically engineered to attack everyday bettors and render extinct cigar-chomping touts, horse racing’s version of covid would, of course, spread stateside and replicate itself in the form of other geek teams feeling the pull of some $10 billion wagered yearly on the sport.
Estimates put CAW (the commonly used acronym for “computer assisted wagering” groups) share of that mutuel handle somewhere between 25% and a full one -third.
That volume of business buys privilege, the favored status to wire straight into pools and monitor ever-changing payouts on various bets (both of single and the multi-race variety) and, just as importantly, to have last say by sending in batches of price-changing plays just nano- seconds before wagering closes.
That part-having final say- not only sticks in the craw of non-geeks armed only with racing forms, experience and instinct, but gives rise to suspicion of “past posting,” placing wagers after a race has started.
Try convincing a non-tech bettor that the payout on his front-running winner dropped from $14 to $8.20 during the race merely because displayed odds lag thirty seconds or more behind last second wagering.
“Somebody is betting after the bell” has become the widespread lament of weekend players with bankrolls lightened by computers. CAW can’t be THAT smart, they reason- not enough to predict and pounce on so many winners that commandeer an immediate lead.
Cementing their advantage, the dreaded CAW don’t even HAVE to profit on bets placed. By virtue of rebates, a tiered incentive to wager offered up by tracks and betting platforms, CAW get back a healthy portion of their huge betting volume.
So that’s right, even when they lose they win, and vast amounts, at that. And should they break even before rebates, thus negating a homogenized 20%, or so, takeout across all pools-a bottom-line return-on-investment commonly attributed to algorithms-well, you do the math.
Not surprisingly, this rise of the machines has resulted in an ominous exodus of casual and novice bettors, the ones seen as “dumb money” by seasoned players once atop the handicapping food chain, but nowadays not so eager, themselves, to match wits with electronic foes.
So the next time you fearfully take stock of an increasingly-automated world, one perhaps regressing YOU to dinosaur status (and aiming some extinction event at your occupation or hobby), keep an eye on thoroughbred racing.
Consider it the canary sent into a coal mine. A coal mine run by artificial intelligence.
