Saturday, May 2, 2009

On the Kentucky Derby and Gambling

You may have noticed that a 50-to-1 shot won the Kentucky Derby today. A $2 bet would have paid $103.20 to anyone lucky enough to have made that wager.

Disclaimer: I do not sanction, endorse, recommend, or excuse gambling of any kind. I do not gamble with my own money.

But like most mathematicians, I find interest and amusement in games of chance and the like. I noticed that the Superfecta—picking the first four horses in their correct order of finish—paid an astonishing $557,006.40. This is because three of those four horses were not considered favorites in the race, and with their combined long odds, someone might have done just as well or better to take a random guess at the first four horses.

Actually, that last sentence is quite true.

In a 19-horse field [there were 19 horses in the Derby], there are 93,024 possible superfecta pick combinations. Suppose you placed a $2 bet on each of them. You spend $186,048, and one of your tickets is worth $557,006.40. You would pocket an incredible profit of $370,958.40!!

Had I known this in advance, I would have bet $20 on each superfecta. So why doesn't every savvy bettor try this?

Simple: It's the odds. If four of the top five or six favorite horses had won, the superfecta payout would have been anywhere from about $1,000 to $10,000, depending on which horses finished in which order. Had the ambitious bettor spent $186,048 on all those $2 bets only to have a single ticket pay, let's say, $3,487, he would have been an extremely disappointed guy.

I still recommend that you not gamble on the horses. Ever.

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