While we have so far concerned ourselves solely with casino games, some of the principles we have used are equally applicable to other gambling situations. In this section, we apply mathematical theory to horse race betting and backgammon.
Horse racing is the number one spectator sport in America and a large amount of its success in this regard can be attributed to the wagering opportunities. The racegoer becomes a participant in the spectacle. While we offer no surefire system, we do suggest an approach that shows promise for the gambler-investor.
Backgammon is an exceedingly complicated game from a mathematical point of view. Because of the possibility of repeated restarts by the counters, the game is potentially infinite. This impedes analysis, but we offer several insights into the end game and the doubling cube, parts of the game where optimal strategies can be computed.
While so far I have limited myself to discussing casino games, the concepts presented apply equally to other gambling games, such as horse racing. At the racetrack, one is offered a variety of different wagering possibilities. The player can wager on one or more horses to win, place, or show, as well as combine any number of horses in the various exotic bets (daily double, exactas, quinellas, etc.) The goal of the gambler at the racetrack is to isolate in each race those bets that yield a positive return, after considering the pari-mutuel takeout and breakage.
One approach with applications in horse racing involves the use of a technique called hedging. Hedging, often used in the securities and financial markets, involves taking two or more investment positions simultaneously. The risks should cancel out and an excess rate of expected return should remain.
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