John,

If I implied that computer teams are not bad for the overall player, that was not my intention.

By "zero sum game," I was referring to the fact that if one group is winning, by definition that means the rest of the public must be losing that much more. In effect, the computer guys act as an additional rake on the pool. The track takes their 20% or so out, then these winning computer teams take out another chunk.

As I mentioned, Bill Benter himself estimated that the teams have the effect of raising the takeout on the rest of the public by around 2 percentage points. So yes, that's certainly bad for the player.

What I wouldn't necessarily agree with is that their edge is due solely to their ability to place bets late and to receive a rebate.

The teams that I know of use sophisticated 80+ factor multinomial logit models to help them identify positive expectation bets, and they bet these overlays accordingly. Big money sharpies, whether they use computer-assisted wagering or whether they're standing at the $50 window watching the gate close,have always tried put their bets down at the last possible second to hide their action from sycophantic bettors.

Yes, the rebates do allow them to bet down overlays more so than the general public and still show a profit. That may be part of the reason why we've seen the prices of winning favorites decline over the years (along with the neutralizaion of the favorite-longshot bias I mentioned in another post). Compared to the fact that these teams are sucking the value out of overlays across the board in general though, I would think this effect is rather minimal.

If they're actually using CAW to past-post however, that's an entirely different matter.

Rocky