Common sense now applied to place betting
The quiet announcement that changes to place dividend calculations will take effect next season should prove more significant than the lack of fanfare would suggest and Sunday's racing provided two excellent examples of why.
The existing plan takes the standard 17.5 per cent from place pools, then divides the remainder among the winners by a ratio of percentages bet on each of the placed runners. It's a system largely designed to save the club on extra payouts when hot favourites take a place - as they usually do - but backers of longer-priced placegetters kindly subsidise payouts on the hot favourite.
In a case we have noted before - 100-1 chance Tiber finishing second to Silent Witness - that subsidy was all of the profit a backer might have expected for a 100-1 placegetter, so the 100-1 horse and 1-20 favourite returned the same place dividend. It's a system which is patently unreasonable and stifles place betting.
Next season, the 17.5 per cent take will be removed from total bets placed, the remaining money divided into three equal parts to pay the successful backers of each placegetter. That may vary for tiny fields but we're not considering that here.
So what will happen if the one-third payout pool is HK$2 million and 2,000 people decided Tiber had a place chance and bet $50 on him? The place dividend for Tiber would be $200, regardless of other placegetters. It displays neatly and simply like win betting - no more place ranges.
Sunday's races won by Dao Dao and Viva Pataca as hot favourites provide a good look at the changes and the issues for both punters and the Jockey Club.
In Dao Dao's event, place betting was healthy at $10.746 million and he dominated to the extent that 51 per cent of the place bets were on him. When he was placed, he paid at the bottom of his 1.1 to 1.2 range at $11 and backers of Go Johnny Go and Hail The Storm paid at the bottom end of the range with $16.50 and $18.00, even though their win odds were much higher than Dao Dao.
A straight translation from the existing system to the new one and the place payouts would have been $5.40, $33.80 and $40.00.
Whoa! Hold on. What happened there? I backed Dao Dao for a sure win on the place and lost $4.60 for every $10? No. Because there is a minimum dividend requirement of $10.10, the Jockey Club throws in $2.57 million to ensure that payout - and that's where the sticking point has been in getting change. Show it to any accountant worth his starched collar and humdrum tie and a big red pen goes through the whole idea.
But what about punters on Go Johnny Go or Hail The Storm? Or Sunny King, for that matter. The second favourite for the race would be showing a payout of $24.00. A profit if you're placed. And that's where our man in the humdrum tie isn't quite in tune. He isn't a punter.
How many punters did not place a bet at all because they figured Dao Dao would run at least a place and ruin the other dividends? In fact, only the punters betting on Dao Dao or Viva Pataca had the right idea.
The punters backing Sacred Kingdom lately have been getting $10,100 for a $10,000 place bet - only a $100 profit, but they can only lose $9,000 with the rebate, so they've actually been getting a profit of $1,100 while win betting counterparts have been hoping for not a lot more and have to win the race. When Sacred Kingdom lost to Absolute Champion, his win dividend was only going to be $11.
The right place bet was the hot favourite because every other punter subsidises your return. And punters behaved that way, shown by comparison with the win pools.
In race three, 12.6 per cent of win money was on Sunny King but only 11.5 per cent of the place pool said he could run in the first three. Go Johnny Go had more than 10 per cent support to win but only just over eight per cent to place.
Likewise, in the Gold Cup there was a higher percentage of the pool on Floral Pegasus or Bullish Luck to beat Viva Pataca than to place behind him. Using a straight translation to the new system and Sunday's figures, Floral Pegasus would have paid $38.00 a place and Bullish Luck $28.00.
Which makes it clear (for the accountants, it might be hard to accept) that, under the new regime, punters' behaviour will change.
When Tiber was 100-1 and punters wanting a bit of sport away from the 1-20 favourite saw him paying $200, they might've wanted a piece of that. The same scenario plays out across the field.
It's hard to imagine punters ready to accept $57 for Bullish Luck to beat Viva Pataca would not have taken half that for a place, with or without Viva Pataca.
And this will alter the balance in the pool. Total place betting will rise, most of it in opposition to the favourite (which will be showing 1.01), shortening the attractive odds for other runners and reducing the club's contribution. Making the accountants confused, but happier.
On Sunday, a straight translation would require place pools to more than double to bring the top up to zero in both cases, but the dynamics of the equation may only require an increase of 30-40 per cent - and considering how punters have been willing to bet in the existing ridiculous situation, that is far from out of the question.
And even another $2 million of place betting per race is another $1.5 billion in turnover on the 740 races that will be run this season.