An In-depth Study of Horse Racing
Gambling is popularly believed to ensure its participants in a system -- involving the reckless expenditure of scarce resources on events of great risk in the naïve hope of making a killing.
Also, gambling is presumed to be an escape from rationality, even where pathological addiction is not at issue.
However, an examination of race track data fails to confirm these interpretations. In order to clear the way for alternative interpretations, these popular views are considered below:
Recklessness as Heavy Betting on High-Risk Alternatives - the evidence is that the larger the amount of a given bet, the more likely it will be wagered on a favorite - the horse with the statistically smallest-risk.
Approximately 50 percent of the money wagered at $100 Win windows is bet on favorites, while about 29 percent of all smaller bets is wagered on favorites.
Hollywood Park has two $100 sellers windows which account for seven percent of the total handle but 16 percent of the total amount bet on favorites.
At one point in the investigation, 100 men were interviewed about the way they bet. These men, however, were mostly loners drawn as a quota sample from the grandstand and Clubhouse areas.
Among the questions asked was, 'When you win, do you usually re-bet all of your winnings right away or what..?' 11 percent of the respondents said they re-bet all winnings immediately; three percent do so eventually; 34 percent re-bet a fixed amount or a fixed ratio only; and 41 percent simply answered 'No' to the question.
If these respondents can be believed, it appears that these men (probably the most likely to be 'reckless' of anyone at the track) handle their money fairly 'conservatively.'
Next, a relatively small proportion of all bets made costs over $50.About half of the $100 bets are made by Turf Club members, and it is very doubtful that any substantial part of the remaining large bets are placed by people without financial means.
Most people buy reasonably inexpensive tickets.
Dividing the total handle for the tracks in the United States by the number of attendees, the average amount wagered per day was found to be $77 in 1964 ($85 at Hollywood Park, California; about $98 at Aqueduct, New York).
Even when the disproportionate influence of wealthy bettors is subtracted, the average still seems sizable.
However, these figures are misleading when taken out of context because they include both re-bet winnings and fresh money.
It is possible to compute the minimum amount of fresh money that must be invested by supposing that all winnings are immediately reinvested and under these fictional circumstances, about 25 percent of the total handle would have to be fresh money.