Monday, May 15, 2017

Kentucky Derby – Using Data in Horse Race Betting



As most of you know, the Kentucky Derby horse race at Churchill Downs in Louisville, Kentucky aired recently on Saturday, May 6th. The horse races have become a huge national gambling event. With 20 horses competing in the Kentucky Derby, how do you choose the winning horse, or even the top three? Well, many look at the data and analyze the odds, and how much they could potentially win.

In horse racing there are many types of bets:

Win-Place-Show Bets
·      Win: The horse you choose must win the race
·      Place: The horse you select must come in either first or second place
·      Show: The horse ranks in the top 3 places
The win bet will have the highest pay off due to the highest difficulty of achieving this win.

Exacta Bets:
With an exacta bet, you must select two horses and place one in first, and one in second. You must get the exact order to win money. The exacta bet will be a higher payout than the win-place-show.

Trifecta Bets:
With a trifecta your chances of winning are lower than just a win-place-show bet or an exacta bet; therefore, your payout will be higher. You select three horses to place in order from 1st to 3rd, and the results must be the exact order to win.

Some people will bet on the horse least expected to win because their earnings would be extremely high; whereas others will bet on the horses with the highest odds because they have the greatest expectancy of winning the race. Many will bet on a horse for the simple fact that they like the name of the horse, and some will follow the races from the time these horses were born and base their vote on the performance they have seen in prior races.

The winning horse of the 2017 Kentucky Derby, Always Dreaming had current odds of 9-2. According to kentuckyderby.com, the winners would receive the following earnings on the bets made: win= $11.40, place= $7.20, show= $5.80. Some people like to take risks and go after a bet that entails a lower chance of winning, but with a higher payout. The safer gamblers will place a show bet, which a gambler will have a greater chance of winning, with a smaller outcome in return.

How Are the Betting Odds Determined?
Analysts will look at the data of the performance of each horse at prior races to then determine their odds for an upcoming race. The betting odds are also determined based on weather. Horses will perform differently depending on the weather. When it rains, the track will get muddy. Many horses have a known tendency to perform poorly on a muddy track.

In 2015 an artificial intelligence algorithm was created to predict the outcome of horse races. The A.I technology is called “swarm intelligence.” This technology has been used to predict the Oscars, the Superbowl, as well as the results of the 2016 Kentucky Derby for the superfecta (the first four ranked horses in order). Although the swarm intelligence correctly predicted the results of the 2016 Kentucky Derby, the tool was unfortunately not successful in choosing the 2017 results. However, the swarm intelligence did predict Classic Empire to come in first place, and the actual result was fourth, and the A.I. also predicted Always Dreaming to come in fourth place, and the actual results for this horse was fourth place. The swarm intelligence wasn’t too far off from the actual results. I believe that some things are not meant to rely on A.I. A.I may be a good tool to use to place a show bet, but I wouldn’t rely on the algorithm to place any other type of bet in horse racing.


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