title: Delusions of expertise: the high standard of proof needed to demonstrate skills at horserace handicapping.
abstract: Gamblers who participate in skill-oriented games (such as poker and sports-betting) are motivated to win over the long-term, and some monitor their betting outcomes to evaluate their performance and proficiency. In this study of Australian off-track horserace betting, we investigated which levels of sustained returns would be required to establish evidence of skill/expertise. We modelled a random strategy to simulate 'naïve' play, in which equal bets were placed on randomly selected horses using a representative sample of 211 weekend races. Results from a Monte Carlo simulation yielded a distribution of return-on-investments for varying number of bets (N), showing surprising volatility, even after a large number of repeated bets. After adjusting for the house advantage, a gambler would have to place over 10,000 bets in individual races with net returns exceeding 9 % to be reasonably considered an expert punter (α = .05). Moreover, a record of fewer bets would require even greater returns for demonstrating expertise. As such, validated expertise is likely to be rare among race bettors. We argue that the counter-intuitively high threshold for demonstrating expertise by tracking historical performance is likely to exacerbate known cognitive biases in self-evaluation of expertise.
authors.affiliation: Institute for Health and Social Science Research, CQUniversity, Bundaberg Campus, University Drive, Branyan, QLD, 4670, Australia, m.browne@cqu.edu.au.
authors.forename: Matthew
authors.initials: M
authors.lastname: Browne
authors.forename: Matthew J
authors.initials: MJ
authors.lastname: Rockloff
authors.forename: Alex
authors.initials: A
authors.lastname: Blaszcynski
authors.forename: Clive
authors.initials: C
authors.lastname: Allcock
authors.forename: Allen
authors.initials: A
authors.lastname: Windross
mesh_terms: D000818:Animals; D001315:Australia; D016739:Behavior, Addictive / Q000523:psychology*; D002755:Choice Behavior; D003702:Delusions; D005715:Gambling / Q000523:psychology*; D006301:Health Services Needs and Demand; D006736:Horses; D006801:Humans; D007389:Internal-External Control; D008297:Male; D012201:Reward; D012309:Risk-Taking; D013177:Sports; D011795:Surveys and Questionnaires