So after a few weeks of posting followed by a few weeks of vacation, I am going to officially introduce myself. I am an Associate Professor of Economics at Rhodes College in Memphis and am entering my seventh year here. I was promoted and tenured in the spring and am on sabbatical this academic year. My main research interest is horse racing -- seriously. I have published papers on the efficiency of betting markets and plan to spend my time away from teaching focusing on industry and breeding issues. I consider myself an empiricist and spend much of any given day analyzing data (whether betting or researching).

How can I justify research on horse racing? For starters, the Efficient Markets Hypothesis is one the most studied and debated topics in Finance. Market efficiency requires that prices reflect all relevant information. In a speculative market this implies that the expected return on an asset will equal the return on the entire market. A natural outlet for the study of efficient markets has been parimutuel betting markets. Betting markets have been studied by social scientists as a perceived controlled repeated experiment of asset markets and behavior. These experiments are repeated numerous times daily around the world in parimutuel betting markets such as horse racing, dog racing, and jai lai. The unique aspect of parimutuel betting is that the track acts only as an intermediary or market maker who extracts a certain amount from the betting pool and then redistributes the rest to the holders of the winning tickets. Through parimutuel betting the public collectively establishes a price on each betting interest. The odds/prices as set by the public tend to be a fairly accurate representation of a horse's chance of winning. A horse that is backed by 20% of the win pool wins approximately 20% of the time. In any given race there may be aberrations and overlays, but over time the market efficiently establishes prices with one caveat. The public (generally) tends to slightly overbet longshots and underbet favorites. Given the persistency of this bias, some conclude that parimutuel markets are inefficient. In some sense whether or not this market (or any market) is efficient depends upon the eye of the beholder. I tend to believe markets are generally efficient, but am not strict in viewpoint (I believe one can "beat" the racetrack or the stock market).

Horse racing was a passion long before I even dreamed of an academic career. I grew up in Washington, DC and started to closely follow racing after the 1986 Triple Crown (I was 13). I had always watched the Triple Crown races in the past as well as other televised races (my first favorite horse was Timely Writer), but for some reason I was drawn to the sport at that particular time. Outside of an uncle who once took me to Longacres, there was no one I knew who was interested in horseracing or provided me an initial guidance. I began reading Andrew Beyer's Washington Post column religiously and bought and read all of his books. Whenever I had a few bucks to spare I would walk a mile to Peoples drugstore (now CVS) and buy a copy of the Daily Racing Form (then $2). The Form, with its multitude of statistics, was fascinating to me. I think that kids who like math often find an outlet following baseball, but baseball to me is an inherently boring sport. Betting on horses is such a fascinating proposition because there are so many opinions and so many different outcomes. Winning involves correctly solving a very complex puzzle with an outcome measured in probabilities. Like any dynamic market, the ingredients to success are always changing. New methods evolve as old one are adopted and become unprofitable. Gambling itself teaches important life lessons and reveals characteristics or traits that must be curbed or harnessed for success in any walk of life. How do you handle defeat? Do you walk away or do you chase your loses? How do you handle success? Does it go to your head?

Unfortunately, those who market horse racing believe that the sport and the form are too complicated and the numbers intimidate would be fans. I suppose our target audience would be made up of fans of Nascar, WWE, and slot machines. Until I became a home owner I could only watch the few races that were broadcast and I found myself religiously devoted to ESPN's weekly recap show (from Down the Stretch in the 1980s to Wire to Wire). Now, much to the embarrassment of my wife and ire of my neighbors, I have a satellite dish in my front yard to ensure I get my racing fill (I had threatened to cut down the three one-hundred-year-old oaks blocking any dish in my backyard until a compromise was made). TVG and HRTV have been the best thing to happen to the sport since simulcasting. Despite all the negativity about horse racing and prophecies of an impending downfall in which all racing fans presumably die (since they are all heavily smoking old men), we have two competing networks that offer wall to wall racing and show live races from every major and many minor tracks. From my home in Memphis I can bet almost any race in North America as well as races from the UK, Ireland, South Africa, Australia, and Hong Kong. All sources’ handle are continually on the rise and purses are higher than ever.