“Kentucky Derby 2014-0214” by Bill Brine is licensed under CC BY 2.0
When you think about the typical horse player, a certain image is projected into your mind. Rumpled clothing, crumpled racing form in his right hand, stogie hanging from the corner of his mouth. There’s usually a sport coat, and always a hat as part of the repertoire.
Well, if one Kentucky Derby-winning horse owner is to be believed, computer betting, relying on algorithms to pick winners, is the wave of the future in betting on horse racing.
Vincent Viola won the 2017 Kentucky Derby with Always Dreaming. He also captured the 2019 Breeders’ Cup Classic with Vino Rosso in a race held at Santa Anita, so when it comes to sports betting in California, Viola knows what he’s talking about.
The same can be said about Viola and computer programming concepts. In 2008, Viola founded Virtu Financial. Forbes magazine described Virtu Financial as a “company that uses powerful computers to make large numbers of transactions at very high speeds.”
Is it any wonder then that Viola considers computer horse bettors to be a step ahead of the game in terms of technology?
“I applaud them,” Viola told horseracingnation.com about computer bettors. “They work real hard. They put their money down. I think it’s great for the game.”
How Computer Betting Works
The principles behind computer betting on horse racing aren’t all that different from the concept that Viola created when he developed Virtu Financial.
To start out, someone who is tech savvy must program a computer so that it will make risk calculations at high speeds and make big volume bets that yield successful outcomes.
These pros are the bane of the average Joe’s existence. You know, that guy we mentioned above, with the hat, cigar and crumpled racing from.
Punishing The Odds
“Old computers” by lorda is licensed under CC BY-SA 2.0
Critics of computer betting aren’t down on it because it allows a select few to win a lot of money.
They don’t like the system because of how when it’s implemented – usually just seconds before post time – such a large wager being placed at once can dramatically cause a significant late shift in the betting odds on that race.
Proponents of computer betting argue that it puts more money in the pool and that’s always a good thing. Critics are of the belief that these automated wagers are driving the regular bettor away from the track because they feel they can’t beat these technological wizards.
This style of wagering was born in 1984. Alan Woods and William Benter, who’d created a system utilizing their expertise in quantitative strategies for beating the dealer at the blackjack tables of Las Vegas, shifted gears and began writing programs to successfully pick winners in races originating out of Hong Kong.
They utilized their computer skills to identify hidden patterns in past performances and arcane mathematics to completely optimize every aspect of their betting strategy.
Such state-of-the-art technology can quickly analyze some 100 variables for possible race outcomes and can place wagers at a rate far superior to regular bettors.
Viola, who also owns the NHL’s Florida Panthers, might be an old-school guy in terms of horse racing experience but he’s totally new age when it comes to making money on the horses.
He’s been around the game a long time. Viola knows how tough it is to consistently pick winners. If someone possesses the knowledge and talent to design a program that will hit more often than it misses, Viola’s opinion is more power to them.
He compares that level of programming expertise to what his company does and Viola especially believes that transparency on these sorts of issues is what should matter most. In fact, he thinks it can only increase the sport’s popularity.
“Virtu was founded on the belief that transparency enables market participants to make better, more informed decisions and that all investors benefit from markets that are more efficient,” Viola explained.
“Anything that improves the efficiency of the outcome enhances the predictability of that outcome going forward. That always attracts more participants.
“That’s what we’ve seen in the stock market. The volumes are much larger now than they were five years ago, 10 years ago. Ultimately this transparency is efficiency. It breeds trust and attraction. It’s just like an innate sense of a square deal.”