As you no doubt recall, I'm going to the Derby this year as part of a business function, which means that my misbehavior will be limited to relatively tame corporate forms: signing contracts in pencil, calling the receptionist "honey" and going a couple of days wihtout picking up my voice mail.
So, to add value to the event and keep myself from dying of boredom, I'm arranging a Derby pool that will give people, for $5 or so, a stake in the race. The pool will be built around a series of trifecta bets, which is picking the first, second and third place horses -- win, place and show -- in order. I'll also hedge my big bet by placing a smaller exacta bet.
There are 20 horses running in the Derby. I'm going to pick the ten I think most likely to finish in the front of the pack, and then out of that ten I'll pick the four most likely to win. Out of this raw material, I will construct a variety of trifecta wheels and boxes.
A trifecta wheel is picking a horse you think will win, and then combining that winner with possible place and show horses. For example, wheeling the 3, 9 and 12 horses would actually be two trifecta bets: 3, 9 and 12, and 3, 12, and 9. "Boxing" covers all possible combinations, and boxing the same three horses would actually comprise six bets: 3, 9, 12 -- 3, 12, 9-- 9, 3, 12 -- 9, 12, 3 -- 12, 9, 3 -- 12, 3, 9.
Trifecta bets pay a lot of money because they're really hard to pick. In 2005, when longshot Giacomo won the Derby, the trifecta paid $133,000. On the low end of the scale, when Silver Charm won in 1997 the payout was just over $200. The average Derby trifecta pays out a few thousand dollars.
So I'm picking my ten horses and constructing four wheels, taking the four horses I think most likely to win and wheeling nine others around them. Then I'm doing an exacta box (win and show, in order) of the four I think most likely to win. All-in, on behalf of the pool I'll bet about $100, and then sell twenty $5 shares to business associates attending their first horse race. This will make it possible for them to bet without having to make actual decisions. Everyone can feel involved with the races even though they don't know anything about betting on horses.
Here's the problem with this kind of betting: It almost never works. First of all, as extensive as it is, it's not extensive enough. I'm covering only four possible winners and six possible place and show horses. Unfortunately, there's always some totally unpredictable, 50-to-1 horse who sneaks in to finish near the front. So if you want to construct a wheel or box that takes into account that oddball horse, you have to add horses to the wheel and box, and when you start doing that costs escalate faster than geometrically, though not quite exponentially. A three-horse, $2 trifecta box costs $12. A four horse box costs $24. A five horse box costs $120. Betting seven of the 20 Derby horses would cost $672. Before you know it, you're betting more than you can possibly win.
The right way to do this is to wheel or box one of those astronomical payoff bets -- Superfecta (first four finishers, in order) or Pick 6 (the winners of six consecutive races). Hitting one of those bets is like hitting the lottery and gives you the payoff you need to cover a huge number of combinations. I know some people who cashed a $400,000 Pic 6 ticket, for example, but I don't think it would be a good career management to gamble on that scale with a bunch of business associates who've never been to the track.
As for my own, personal bets -- well, I haven't figured those out yet. Derby horses are barely three years old and don't have a real long history. They haven't run many races, and those they have run are shorter than the Derby's one-and-a-quarter miles. My standard betting methodology -- looking at the record over the past couple of seasons, looking for horses who've finished strong in races of similar distance, looking for horses that have done well at Churchill Downs in the past -- is useless. So I'll probably just bet on a good horse going off with medium odds, and that horse will trip coming out of the gate and come in last by a staggering (literally) 35 lengths. I'll get to keep the betting ticket as a souvenir. "Look," I'll say, pulling the ticket from my wallet, "I had money on the loser."
Then I'll show them the John Kerry bumper sticker on my car.