WHY PARI-MUTUEL BETTING IS TOO COMPLICATED


WHY PARI-MUTUEL BETTING IS TOO COMPLICATED
August 20th, 2011 · 5 Comments
Racino earnings from slot machines have helped to support pari-mutuel purses in North America during a time when wagering on horse racing has been in decline. However, there has not been the hoped-for migration of slots clientele to pari-mutuels. This is unsurprising because slots are simple to understand, easy to play, and provide immediate feedback, whereas effective handicapping of horse races requires in-depth thinking about esoteric information and a significant commitment of time.

The intellectual challenge of deciphering past performances and evaluating odds and probabilities is incompatible with the skill sets and/or proclivities of a significant slice of the American population. Consider some of the abundant evidence.

The Organization for Economic Cooperation and Development periodically administers competency tests to students across the world. In the latest study of 470,000 15-year-old students in 34 countries, the United States ranked 25th in math and 14th in reading.

The Newsweek issue of April 4, 2011, carried an article titled “How Ignorant Are You?” that reported the results of a scientific poll the magazine commissioned to ascertain how well Americans would perform on the official U. S. Citizenship test. This test asks 10 questions randomly selected from an inventory of 100 standard questions and is comprised of five categories covering American government and history. A score of 60% is passing. In February, Newsweek had a pollster administer the U. S. Citizenship quiz to a representative sample of 1,000 adult Americans.

Overall, 62 percent of the respondents passed and 38 percent failed. Outcomes from many of the questions posed were dismal. For example, only 65% of the test takers knew what transpired at the Constitutional Convention, 40% were unable to identify who the U. S. fought in World War II, and 80% did not know who the American president was at the time. Sixty-three percent could not correctly stipulate how many judges are on the Supreme Court and 81% could not articulate a single constitutional power of the federal government. Twenty-seven percent did not know that the president is in charge of the executive branch of government, 29% could not name Vice President Joseph Biden, and 59% could not designate Speaker of the House John Boehner. Worse yet, 33% did not know when the Declaration of Independence was adopted and 67% missed the question “What is the economic system in the United States?”

The repercussions of having so many uninformed citizens—combined with inadequate competencies in reading and math–for the future competitiveness of the United States are beyond the scope of this analysis, but the implications for the future of pari-mutuel wagering are not. While there will always be a relatively small segment of Americans who have the time, inclination, and aptitude to handicap, the vast majority will not. Reversing or moderating the downward trend in pari-mutuel wagering necessitates relentless experimentation with products that are as effortless to grasp and play as lotteries and slots and have the promise of big payoffs.

Copyright © 2011 Horse Racing Business

Originally published in the Blood-Horse. Used with permission.

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