The phrase "profitable underlays" sounds like an oxymoron. Yet I�ve spoken for some time about underlay tracks � tracks where you put your financial health into jeopardy if you try to bet using typical value methods. By typical value methods, I mean creating a betting line and wagering in the various pools on horses who go off above your fair odds. There are racing meets where if you attempt this, the parimutuel system will, financially speaking, rip the living heart out of your chest at the top of a pyramid and eat it raw. (Please excuse my analogical excesses.)

Let�s look at some examples using my betting records. At Canterbury Park, if I had bet my top horse when it was an overlay, I�d have a 12% win rate and a .67 ROI. If I had bet my top horse when it was an underlay, I�d have a 44% win rate and a 1.10 ROI. River Downs: 14%, .79 ROI for the top overlay vs. 43%, 1.03 ROI for the top underlay. Santa Rosa: 14%, .70 ROI for the top overlay vs. 39%, 1.01 ROI for the top underlay. And so on.

Do these underlay tracks violate the fundamentals of value betting, of which I am a devotee? How can an underlay really be an overlay?

Well, the truth is, these underlays aren�t really underlays. It�s just that at some tracks, betting action is such a powerful predictor that if a horse doesn�t get it, it�s much less likely to win. A betting line that doesn�t include the influence of tote action at these tracks is less accurate than it should be. In a perfect world, the betting action would be factored into your betting line. That way, the more a horse got bet down at an underlay track, the lower its fair odds would become. For instance, you might make a horse 2/1 on your betting line before the tote action began. As it received heavy support from the public, you�d drop its fair odds, perhaps down to 3/2 or lower. Its fair odds would be recalculated because of the tote action to such a degree that it would often be an overlay bet despite its low track odds.

By the way, betting action is normally perceived vis-�-vis the win pool. Wouldn�t it be nice if there was some way to track the action in the exotic pools, where the real money is? Now there apparently is: check out the E-Horse Arbitrage program at http://www.toteboard-daytrader.com.  It looks like a way to check out action in the exacta pools as it occurs. Wish I had the time...