The Compleat Horseplayer

This is a review of Dr. David Edelman's book The Compleat Horseplayer, which is not to be consued with Tom Ainslie's book of the same name. I have never read Ainslie's book as I am not a fan of "handicapping" techniques.

Edelman is part of a long line of economists who have used horse race betting markets as part of their research. Some of his research papers can be found on this website.

The Compleat Horseplayer consists of nine chapters that are worth every penny of this slim volume. The first chapter is an introduction to the elements of horse race betting; odds, markets, value and information. Odds, markets and value don't really need mentioning to readers of this blog.

Information is the most important aspect of horse race betting. The successful bettor is one who has the best information. And the best informed bettors are usually insiders with information that is not privy to members of the public. Edelman gives you a formula for evaluating information and determining its financial value.

The second chapter is titled Money Management and it is no surprise that the chapter concentrates on Kelly Criterion. Towards the end of the chapter we are also given formulae for value, volatility and the Sharpe's Ratio, which is something that I have used for evaluating systems.

Chapter three deals with Technical Analysis of prices, including arbitrage, hidden information and exotic betting.

Fundamental Analysis is covered in chapter four. Class, speed, weight, fitness and some red herrings are discussed. At the end of the chapter a method for evaluating multpile fundamental variables is given with the Multinomial Logit Model and mention of Bolton and Chapman's paper, which can be found on this website.

Chapter five deals with exotic betting and place pricing models. Edelman gives an interesting alternative to Harville, Henery and Stern's place pricing model. After some discussion with Edelman via email I managed to produce a program that generates Edelman place prices to compare with existing models.

If you do wish to contact Dr. Edelman then insure that your query is of the taxing academic kind and not that of the inquisitive amateur otherwise you will soon outstay your welcome. A consulting academic does not come cheap and time is money.

In chapter six we are given a treatise on placing bets. As this book was published in 2001 there is no mention of betting exchanges so this chapter is the least useful to us.

Evaluation of an ongoing system is given in chapter seven with discussion of Regret, Deconstruction and Information Theory's method of scoring the value of information.

Chapter eight gives a little time to automation and chapter nine gives some concluding remarks.

For a small book there is a lot of useful information packed inside it that will send you scurrying for research papers. A valuable addition to the intelligent bettor's library.