Nag, nag, nag: The psychology of horse-race betting
All forms of gambling lie on a luck–skill dimension. Neither games of pure skill nor games of pure chance are particularly attractive to serious gamblers. Games of chance (like lotteries) offer no significant edge to serious gamblers and are unlikely to be gambled upon. While games of skill provide a significant edge for the gambler, serious gamblers need more than an edge – they need an opponent who can be exploited. Serious gamblers gravitate towards types of gambling that provide an appropriate mix of chance and skill. This is one of the reasons why sports betting – and in particular horse-race betting – is so popular for gamblers. In the most recent British Gambling Prevalence Survey published in 2011, the results indicated that betting on horse-races in the past year had slightly decreased to 16% (down from 17% in the 2007 survey) with men (21%) being more likely than women (13%) to have bet on horse-races. The survey also showed that 7% of the sample had gambled on horse-races in the past week. The survey also indicated that horse-race bettors were more likely to be classed as ‘high spenders’ compared to most other types of gambler.
The edge available in horse-race gambling can be sufficient to fully support professional gamblers as they bring their wide range of knowledge to the activity. There is the complex interplay of factors that contributes to the final outcome of the race. There is the form of the horse, the length of the race, the reputation of the jockey, trainer and stable, breeding, weight, the conditions of the racetrack, etc. From this mix of information the horse-race bettor will, broadly speaking, do one of two things. Either they try to select a winner, or they try to select a horse that offers the best odds in terms of its true chances. Assessing these odds (i.e., handicapping), is done by developing ratings based on the available information. Precisely how all these factors can be combined to select a horse is a matter about which most gamblers disagree, but it is reasonable to assume that many punters believe that their knowledge of these factors gives them an edge over other punters that they are competing against.
Individuals clearly differ in how they use complex information to select horses. There has been some interesting research on the psychology of handicapping particularly in whether good handicappers are more intelligent. For instance, American psychologists, Dr. Steve Ceci and Dr. Jeffrey Liker studied a group of experienced horse-race gamblers all of who had been serious gamblers for over eight years and who attended racetracks most days. In a paper that had published in the Journal of Experimental Psychology, they divided the gamblers into experts and non-experts on the basis of predicting the favourite and the rank order according to odds of the three most favoured horses. Expert gamblers were those who correctly picked the favourite in at least nine out of ten races and correctly picked the top three horses in rank order in at least five out of ten races. In contrast, the best of the non-experts correctly identified the favourite in only five out of ten races, and selected the top three in only two of the ten races. The two groups were then given a number of intelligence quotient (IQ) tests. Ceci and Liker predicted that the experts would have higher IQs on the basis of their handicapping ability but was very surprised to find no difference at all between the two groups’ intelligence levels.
When the psychologists did some follow-up interviewing, they found that one of the best handicappers was a construction worker with a low IQ (of 85). He managed to pick the top horse in terms of post-time odds 100% of the time and picked the top three horses in correct order in five out of ten races. They also highlighted the case of a high IQ lawyer who picked the top horse only 30% of the time and got the rank ordering of the top three horses correct only once. One of the things concluded was that there is probably more than one type of intelligence and that the IQ test that was used may not have measured the types of skill needed in the handicapping of horses. At least Ceci and Liker’s findings give some hope to us all!
Psychologists have also shown that gamblers (including those who bet on horse racing) can be very biased in their thinking. The occasional punter expects to lose but this isn’t the case for serious gamblers. Each bet is part of a pattern of bets that the gambler expects to yield a positive return overall. To the gambler, winning bets confirm that their system is successful. However, losing bets do not convince gamblers that their system is a failure. Gamblers may explain losing bets as an error in implementing their system or to factors beyond their control. In essence, (and as I have shown in some of my own research studies) many gamblers attribute wins to their skilful gambling but explain away losses as something due to external factors or the environment that they gamble in. On a psychological level, the serious gambler is able to maintain their belief that they have a winning system despite mounting losses through biased evaluations of the outcomes. Since winning is central to the gambler’s self-concept and self-esteem, they cannot quit while losing as this would invalidate the core of the self-concept and initiate intense negative effects (such as depression).
Although horse-race gamblers treat their pastime as a skilful activity, it has been estimated that at least 40% of the relevant information that determines the winner of a race is not accessible to any gamblers. Furthermore, despite years of practice, frequent gamblers may still be very poor at assessing the chances of different horses.
Dr Mark Griffiths, Professor of Gambling Studies, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK
Ceci, S. J., & Liker, J. K. (1986). A day at the races: A study of IQ, expertise, and cognitive complexity. Journal of Experimental Psychology: General, 115, 255-266.
Griffiths, M.D. (1994). The role of cognitive bias and skill in fruit machine gambling. British Journal of Psychology, 85, 351-369.
Griffiths, M.D. (2010). The psychology of sports betting: What should affiliates know? i-Gaming Business Affiliate, August/September, 46-47.
Griffiths, M.D. (2011). Mobile sportsbetting: A view from the social sciences. i-Gaming Business, 69, 64-65.
Parke, A., Griffiths, M.D. & Irwing, P. (2004). Personality traits in pathological gambling: Sensation seeking, deferment of gratification and competitiveness as risk factors, Addiction Research and Theory, 12, 201-212.
Parke, J., Griffiths, M.D. & Parke, A. (2007). Positive thinking among slot machine gamblers: A case of maladaptive coping? International Journal of Mental Health and Addiction, 5, 39-52.
Wardle, H., Moody, A., Spence, S., Orford, J., Volberg, R., Jotangia, D., Griffiths, M., Hussey, D. & Dobbie, F. (2011). British Gambling Prevalence Survey 2010. London: The Stationery Office.
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Posted on March 11, 2014, in Addiction, Case Studies, Competitions, Gambling, Gambling addiction, Games, Gender differences, Online gambling, Problem gamblng, Psychology, Work and tagged Cognitive biases, Gambling, Gambling heuristics, Gambling IQ, Handicapping, Horserace betting, Luck, Skill, Sports betting. Bookmark the permalink. 1 Comment.