Betting Strategy: ‘At that price you've just got to live or die with it'

Talking Pick 5 strategy and game theory with Ed DeRosa

After my first season as a public handicapper, I looked at my betting account and realized one thing: I need help. Picking 349 races, I had 97 winners (28%) with an ROI of $2.08. But after subtracting my action bets--tell ya what I was a kid in a candy store the first month--I had lost 15% on my personal bets. Clearly, I need to spend more time structuring my wagers. I will use this column to learn from people I respect about how to better express my opinions. We’ll take a card and a pool, and discuss betting strategies.

Ed DeRosa is the Vice President of Content and Product Development for Horse Racing Nation. Prior to that he served in many roles at Churchill Downs, including on-air analyst, reporter, director of marketing for TwinSpires and for Brisnet. Active on Twitter @EJXD2, Ed serves up innovative ways of using data to assist players in handicapping and winning more often. Consistently transparent and forthcoming about his wagers, stats, and opinions, Ed is laser-focused on leveling up and advocating for horseplayers.

Kevin Kilroy: Opening day at Churchill Downs, Ed—where are your opinions and how are you building your bets around them?

Ed DeRosa: The big thing I got excited about is the Roxelana S., Race 9. I expect the undefeated #5 Caribbean Caper (8-5) to be favored, but #3 Bayerness (5-2) stood out to me as well so I see an opportunity where I can single against a favorite. For me that is a pretty strong one-two punch.

KK: All right, so I often fall into spreading when I am against a favorite—the idea being I want to capture that value. Are you tempted to do that here?

Ed: In this case I am not tempted at all because I do like Bayernness, and with the shorter field, I am even more inclined to single. With only five horses, they all are going to take some sort of money, so in my mind it is best to stick with your strongest opinion.

KK: For you, it’s not just the handicapping opinion but also capturing value where other players are diminishing their returns?

Ed: I am always keeping what I think other players will do in mind. They are doubling, tripling the cost of the ticket when I am narrowed to one in a race where a lot will have a different single anyway.

KK: Love it—so you are building your wager around this main opinion and the opportunity it presents. Do you consider other pools besides the Pick 5 or is the Pick 5 an automatic bet for you?

Ed: At Churchill Downs especially with a 15% takeout in the Pick 5, where it is more in the Pick 3 and 4, in my mind it’s like “OK, go with the better takeout and a bigger pool.” But there are two races surrounding it where I have opinions, too, so, yes definitely the Pick 5 makes sense. 

KK: Tell me about those other two races.

Ed: In the last, Race 10, there are 11 horses in a maiden 10k, which are some of the most formful races. Thinking about how your competition is other players, I know immediately people will think “single Caribbean Caper in the ninth and spread in this 11-horse maiden.” I like and will use the two morning-line favorites #1 Vasilevskiy (7-2) and #4 Knightly Mischief (4-1) but also the longshot #11 Zipper Zapper (20-1) who showed speed after getting a new jock last time out. If the other legs chalk out, than I want to be alive to the price.

KK: Do you treat last legs or opening legs in sequences differently?

Ed: In general, I think the first and last legs are susceptible to people wanting to be deep because a) they don't want to go out early and b) they want to be alive to a lot of will pays. Also, maybe in the first leg you have the psychology of single here so I can be alive later. But more so I think about all this combined with race type and field.

KK: How about the eighth?

Ed: I like the #10 Bay Storm (9-5). Others are interesting, but when you like a favorite and are going to use it, I say it is a single. I call it the 50/50 rule. To me, by adding one horse how much am I really increasing my chances of winning? So I am doubling the price of my ticket but only giving myself maybe 5% or 10% chance more of winning, and that’s not a situation I like to be in. 

KK: Interesting.

Ed: If I am going to spread, whether two deep or four deep or six deep, every horse needs to be adding some sort of scenario where it makes sense to go beyond my strongest opinion in the race, such as the last race where OK I'm already two deep, and this Zipper Zapper horse has showed some speed and at 20-1 that’s interesting. But in the eighth (race) I am locked in on a horse that will be sub 2-1 with no real other strong opinion, so at that price you’ve just got to live or die with it.

KK: So going from one to two horses in a leg is much more of a dramatic increase in cost than going from two to three horses or three to four.

Ed: Exactly. But also think of it this way: The more you add the more you want to be away from the favorite. Because six deep and getting the chalk is typically not a good situation. If you are five deep including the favorite and are teetering on adding the sixth choice or whatever, the answer is likely yes, but lop off the favorite. 

KK: So are you chalky in the first two legs?

Ed: #3 Take a Stand (7-2) fittingly for this conversation is who I have on top in the sixth, but even though they are short prices, I wouldn't want to go out on #4 Five Prizes (5-2) or #5 Inviting (7-2) either. If the 11 wins the last race at 20-1, I don't want to lose because of Five Prizes. I could either use four horses here and single that 20-1 11 in the last leg, because if I am using the 3,4,5, and I am interested in the #6 Miss Yearwood (3-1)–all logicals—then I can’t have the sequence chalk out and expect to be paid well.

KK: Great, so you are not only considering your opinions but also the math behind the value you achieve when getting through each leg.

Ed: The math works out. Think about it this way—if you have five 9-1 shots, well that’s 50%. If you really think they have a 10% chance of winning and  you think 9-1 is fair, then you are even-money to get through the race. And if you are singling a fair value 3-2 or 2-1, you are not even money to get through. Yes it's more expensive but the point is you need to add up your prices and see that as your chance of getting through the leg. There’s no hard and fast rule, but usually if the favorite is an A, that should almost always be a single.

KK: So you are building this ticket around the three opinions and the rest comes down to game theory. 

Ed: If you are taking a shot against the horse you believe everyone else will single, then in my mind it's OK to like the logicals elsewhere, but if you're on the same 2-5 as everyone else then you don’t want a bunch of $5 or $6 around that. If I love Bayerness and I am willing to single her, then maybe in a spot where instead of singling with a 3-2 I can be five deep with 9-1s and have a better chance of getting through the leg. 3-2 is 40%, but five 9-1s is 50% plus you get your price. The worse thing to do is add a 3-2 to five 9-1s. Basically at that point you have a 1-10 shot. You have a 90% chance of getting through the leg which is nice from a survival standpoint but getting 1-10 if the 3-2 runs off the screen is foolish. It stinks to go out, but it is going to happen if you are going to play this way. Either you go with the 3-2 and press it or go with the 9-1s.

Ed’s Pick 5