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>>> (And the public is often reliably biased -- this is why they say sports betting is more about betting on gamblers than on games.) One mistake here. It's th

>>> (And the public is often reliably biased -- this is why they say sports betting is more about betting on gamblers than on games.) One mistake here. It's the house that sets the odd, not the public. When the house sets the favorite to 1:3 odd and the second favorite is 1:4, they better be damn right about that proportion. At the end of the run, the money on the losing side will need to cover the winning side, and if it doesn't the company must pay the difference out of pocket. The direct effect is that there is an enormous spread, the article mentioned about 17%, for the exchange to cover high uncertainty and make some profit.

kqr 5y ago
In parimutuel betting, which is what the article talks about, the public sets the odds.
- user5994461 5y ago
  I doubt it's parimutuel per the strict definition. It's subject to extreme variations due to liquidity and doesn't work well in practice, especially for quant trading and at the volumes involved here. (If it were, the article certainly did a terrible job of showing it, where's the part where odds moved last minute and massive losses ensued, or where both rivals took the same large position causing massive losses to one another). Anyway, the deeper point still stands, the house takes an ENORMOUS margin, could be in the order of 25% (even nowadays). This changes everything.
  - topicseed 5y ago
    From my understanding[1][2], the Honk Kong Jockey Club does indeed follows a strict parimutuel pool betting system, like the PMU in France (at least years ago). Though you are right, the house have historically taken massive cuts per pool. Eapecially as for years they were the only allowed gambling arenas. [1] https://betandbeat.com/betting/parimutuel/ https://betandbeat.com/betting/parimutuel/ [2] http://special.hkjc.com/racing/info/en/betting/guide_qualifications_pari.asp http://special.hkjc.com/racing/info/en/betting/guide_qualifi...

kqr 5y ago

In parimutuel betting, which is what the article talks about, the public sets the odds.

user5994461 5y ago
I doubt it's parimutuel per the strict definition. It's subject to extreme variations due to liquidity and doesn't work well in practice, especially for quant trading and at the volumes involved here. (If it were, the article certainly did a terrible job of showing it, where's the part where odds moved last minute and massive losses ensued, or where both rivals took the same large position causing massive losses to one another). Anyway, the deeper point still stands, the house takes an ENORMOUS margin, could be in the order of 25% (even nowadays). This changes everything.
- topicseed 5y ago
  From my understanding[1][2], the Honk Kong Jockey Club does indeed follows a strict parimutuel pool betting system, like the PMU in France (at least years ago). Though you are right, the house have historically taken massive cuts per pool. Eapecially as for years they were the only allowed gambling arenas. [1] https://betandbeat.com/betting/parimutuel/ https://betandbeat.com/betting/parimutuel/ [2] http://special.hkjc.com/racing/info/en/betting/guide_qualifications_pari.asp http://special.hkjc.com/racing/info/en/betting/guide_qualifi...