Tote Arbitrage and Lock Opportunities in Racetrack Betting


David C. Edelman and Nigel R. O'Brian


Research Report 2001-10
Date: 17 October 2001


We describe a game-theoretic approach to the investigation of arbitrage opportunities based on combinations of exotic wagers for the same event. This situation is also known as a lock or Dutch Book. We apply the technique to recent totalisator data from Australian thoroughbred races. It appears that such opportunities appear fairly regularly, at least according to published final dividends for various bet types. We demonstrate the method in some detail on a particular example.

Key phrases

Dutch Book. lock. arbitrage. zero-sum game. minimax. totalisator. pari-mutuel. gambling. bet. wager. racetrack.

AMS Subject Classification (1991)

Primary: 91A60
Secondary: 90D60


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