SPORTSWATCH
Exacta knives
As fan base dwindles, pro horse players face longer odds of cashing in
By Michael Kitchen, MarketWatch
Last update: 11:44 a.m. EST Dec. 7, 2007
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NEW YORK (MarketWatch) -- The current pogo-stick stock market -- up one day, down the next -- has some investors worried about their mutual funds. But what about pari-mutuel funds?
While many Wall Street players might not take horse racing seriously as an investment, professional handicappers are a lot like their counterparts in the mainstream financial world, using research and risk management to maximize their returns. <!--phatpath=news/story/misc/personal_finance.htm--><TABLE cellSpacing=0 cellPadding=0 width=231 align=left border=0><TBODY><TR><TD width=221></TD><TD width=10></TD></TR><TR><TD><TABLE cellSpacing=0 width=221 bgColor=#cccccc border=0><TBODY><TR><TD><TABLE cellSpacing=0 cellPadding=5 width=219 bgColor=#ffffff border=0><TBODY><TR><TD><TABLE height=84 cellSpacing=0 cellPadding=0 width=209 border=0><TBODY><TR><TD width=110 height=84></TD><TD width=99 height=84>Check out Personal Finance </TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=209 border=0><TBODY><TR><TD><!--webbot bot="HTMLMarkup" startspan alt="[5px-spacer]" -->
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And just like traditional investors, they are struggling to adjust to a changing market in order to keep turning decent profits.
At first glance, betting on horses might seem little more than game-of-chance gambling. But unlike casino games such as craps and roulette -- which are designed to ensure a long-term profit for the house -- horse racing is a form of pari-mutuel wagering, where bettors match wits against each other, and the winnings go the most skilled players.
Watch: Treating horses like stocks.
According to Dan Illman, handicapping editor at the widest-read U.S. horse racing publication Daily Racing Form, a select group of bettors is making consistent seven-figure incomes by picking winning horses.
"The professional players will put a million dollars a year through the window," Illman says. "Just like with the stock market, they're looking to get the most value for the least amount of investment."
One such professional handicapper is Paul Cornman, a 55-year-old horse-playing veteran who works out of a plush Las Vegas suite, laying down bets on races across the country.
Cornman began wagering on horses for a living back in the late 1970s and has since built his expertise into what he admits is a "very comfortable" income.
Winning, he says, requires a lot of homework in terms of learning the myriad horses, trainers, jockeys and other factors that influence the outcome of a race. It helps to have a sports-fan mentality, but it's even more important to be what Cornman calls "an open thinker."
"Handicapping is the world's greatest problem solving game," he says. "Some people pick it up quickly and learn to win at it, but most don't, just as with the stock market."
Tough and getting tougher
While Cornman won't say exactly how much he made from race wagering last year, he does confess that his average profit "is nowhere close to what it was it was 15 years ago, 10 years ago."
Some less successful pro handicappers have seen their previously large annual returns drop as low as the single digits -- little more than they could get from a CD or conservative bond fund.
One of the problems is the hefty percentage of money which the track takes out of the betting pool in return for organizing the races. At Aqueduct race track in Jamaica, N.Y., for example, the cut can run between 15% and 25% depending on the type of bet.
A common strategy professional players use to overcome this is to focus on big scores. The experts usually won't simply bet their picks to win, place or show, but will use exotic betting options -- Pick Six, trifectas and the like -- that require correctly predicting several winners from different races.
While correctly hitting these can be very difficult, even for experienced handicappers, Daily Racing Form's Illman says that such bets "have the kind of payoffs that really count. You just need a few of those, and you're set for the year."
An even larger obstacle for the pro horse gamers is tied to the declining popularity of the sport from its heyday in the first half of the 20th century.
As Illman explains, "It used to be really cheap for radio and then for television to broadcast the races, and this helped keep up their popularity."
But over the past 50 years, horse racing was displaced by other sports, and today, only a few top events such as the Kentucky Derby and the Breeders' Cup get national TV coverage. Read more on betting the Derby.
<!-- StoryTop, clearall, StoryBottom --><!-- THERE MUST NOT BE ANY CONTENT BETWEEN END OF StoryBottom DIV AND START OF MidRail DIV!!!!! -->Community
Exacta knives
As fan base dwindles, pro horse players face longer odds of cashing in
By Michael Kitchen, MarketWatch
Last update: 11:44 a.m. EST Dec. 7, 2007
NEW YORK (MarketWatch) -- The current pogo-stick stock market -- up one day, down the next -- has some investors worried about their mutual funds. But what about pari-mutuel funds?
While many Wall Street players might not take horse racing seriously as an investment, professional handicappers are a lot like their counterparts in the mainstream financial world, using research and risk management to maximize their returns. <!--phatpath=news/story/misc/personal_finance.htm--><TABLE cellSpacing=0 cellPadding=0 width=231 align=left border=0><TBODY><TR><TD width=221></TD><TD width=10></TD></TR><TR><TD><TABLE cellSpacing=0 width=221 bgColor=#cccccc border=0><TBODY><TR><TD><TABLE cellSpacing=0 cellPadding=5 width=219 bgColor=#ffffff border=0><TBODY><TR><TD><TABLE height=84 cellSpacing=0 cellPadding=0 width=209 border=0><TBODY><TR><TD width=110 height=84></TD><TD width=99 height=84>Check out Personal Finance </TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=209 border=0><TBODY><TR><TD><!--webbot bot="HTMLMarkup" startspan alt="[5px-spacer]" -->
From real estate to retirement, MarketWatch covers the topics that are vital to your pocketbook. Don't miss these recent winners:
<!--webbot bot="HTMLMarkup" startspan alt="[5px-spacer]" -->
• Top secrets to win shopping game
• The 10 worst jobs in America
• We need a recession now
• Keep your house warm for less
<!--webbot bot="HTMLMarkup" startspan alt="[5px-spacer]" -->
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE></TD><TD></TD></TR><TR><TD></TD><TD></TD></TR></TBODY></TABLE>
And just like traditional investors, they are struggling to adjust to a changing market in order to keep turning decent profits.
At first glance, betting on horses might seem little more than game-of-chance gambling. But unlike casino games such as craps and roulette -- which are designed to ensure a long-term profit for the house -- horse racing is a form of pari-mutuel wagering, where bettors match wits against each other, and the winnings go the most skilled players.
According to Dan Illman, handicapping editor at the widest-read U.S. horse racing publication Daily Racing Form, a select group of bettors is making consistent seven-figure incomes by picking winning horses.
"The professional players will put a million dollars a year through the window," Illman says. "Just like with the stock market, they're looking to get the most value for the least amount of investment."
One such professional handicapper is Paul Cornman, a 55-year-old horse-playing veteran who works out of a plush Las Vegas suite, laying down bets on races across the country.
Cornman began wagering on horses for a living back in the late 1970s and has since built his expertise into what he admits is a "very comfortable" income.
Winning, he says, requires a lot of homework in terms of learning the myriad horses, trainers, jockeys and other factors that influence the outcome of a race. It helps to have a sports-fan mentality, but it's even more important to be what Cornman calls "an open thinker."
"Handicapping is the world's greatest problem solving game," he says. "Some people pick it up quickly and learn to win at it, but most don't, just as with the stock market."
Tough and getting tougher
While Cornman won't say exactly how much he made from race wagering last year, he does confess that his average profit "is nowhere close to what it was it was 15 years ago, 10 years ago."
Some less successful pro handicappers have seen their previously large annual returns drop as low as the single digits -- little more than they could get from a CD or conservative bond fund.
One of the problems is the hefty percentage of money which the track takes out of the betting pool in return for organizing the races. At Aqueduct race track in Jamaica, N.Y., for example, the cut can run between 15% and 25% depending on the type of bet.
A common strategy professional players use to overcome this is to focus on big scores. The experts usually won't simply bet their picks to win, place or show, but will use exotic betting options -- Pick Six, trifectas and the like -- that require correctly predicting several winners from different races.
While correctly hitting these can be very difficult, even for experienced handicappers, Daily Racing Form's Illman says that such bets "have the kind of payoffs that really count. You just need a few of those, and you're set for the year."
An even larger obstacle for the pro horse gamers is tied to the declining popularity of the sport from its heyday in the first half of the 20th century.
As Illman explains, "It used to be really cheap for radio and then for television to broadcast the races, and this helped keep up their popularity."
But over the past 50 years, horse racing was displaced by other sports, and today, only a few top events such as the Kentucky Derby and the Breeders' Cup get national TV coverage. Read more on betting the Derby.
<!-- StoryTop, clearall, StoryBottom --><!-- THERE MUST NOT BE ANY CONTENT BETWEEN END OF StoryBottom DIV AND START OF MidRail DIV!!!!! -->Community
