Gambling motivation and involvement: A review of social

however, that individuals within the collective are equally well informed and act
equally rationally. It is with regard to this issue that the economic studies of horse
betting are of wider interest to studies of gambling behavior, both that of the leisure
gambler and the problem gambler.
With respect to the return of their bets in the long run, the player collective is
made up of three groups. There are ordinary leisure gamblers who select horses
on the basis of a wide variety of ideas and principles. This group earns a return of
slightly less than the expected return, that is, amount bet minus track take. Then
there is a group whose return is significantly less than that, because the players often
follow betting strategies that perform poorly. Some of these strategies are known
as being indicative of problem gambling, such as overestimating the chances to win
and chasing losses (see below). The third group consists mainly of expert handicappers
– handicapping being the art of picking horses on the basis of relevant information
and analytical skill. Individuals in this group earn a greater than expected
return on their bets because they consistently follow good betting strategies. Some
of the favorable strategies employed by such experts are inverted mirror images of
the failed strategies of the above-average losing players in the second group.
The most explored phenomenon in betting behavior is the favorite-longshot bias
[222, 224–229]. The favorite-longshot bias has been observed at many racetracks
and other betting markets, though not all, and research is currently focused on isolating
the conditions under which it occurs. The bias is created when players tend
to bet too much on long-shot horses with high odds. The reasons for making such
bets may be: picking horses at random, wishful thinking that there is a good chance
of winning, the thrill of having the chance to win a lot of money, or the expectation
of personal pleasure and bragging rights from having picked a winner that few others
believed had a chance. The favorite-longshot bias is usually more pronounced
in the last races of the day [230–232], when an increasing number of players are
running low on gambling funds and hoping for that one big hit that would make
them break even or make a profit – they chase their losses. The end of the day is
also when players are most influenced by the day’s intake of alcohol. Consequently,
the expert player bets more often on favorites and second favorites. On its own,
such a strategy is seldom favorable enough to actually generate a profit, but it can
significantly reduce losses. For instance, a Swedish study of trotting races included
in the V75 Pick Seven game, found that the return from placing win bets on horses
in the odds range of 5 to 6 (a typical second favorite odds) was 92 percent, thus 12
percent higher than the average expected return of 80 percent [233]. The longshot
bias was very noticeable, as horses with odds of 30 and above yielded an average
return of only 48 percent.
Other issues investigated include the advantage of betting as late as possible. A
number of studies have shown that, on average, the final odds, when a race starts,
better reflect the chances of the horses to win, as later evidenced by the results of
the races, than the odds at any earlier point in time [223, 234]. The later a gambler
waits to decide how to bet, the greater the amount and quality of relevant infor-
42 G A M B L I N G M O T I VAT I O N A N D I N V O LV E M E N T