When the great Spectacular Bid entered the starting gate for the 1979 Belmont Stakes, the gambling public was convinced he'd romp to victory and become horse-racing's 12th Triple Crown winner.
This horse couldn't lose. No way.
The jubilant crowd bet him down to odds of 1-to-5 that day, and in so doing, effectively assigned him a stunning 66% chance of winning (after factoring in the track's cut). He would finish a well-beaten third. Two years later, Belmont bettors liked Pleasant Colony's chances of pulling off the feat too: 47%. Funny Cide was given a 43% shot in 2003. Smarty Jones the following year: 64%. Big Brown? Oh he was going to be an easy winner as well — 65%.
When all of the failed Triple Crown bids during this 37-year drought are examined together — 12 of them to be exact — the magnitude of the gambling public's foolishness is breathtaking. Add up the percentages and they show that, in the crowd's estimate, the probability that at least one of those 12 horses would win the Belmont was 99.97%. Or expressed differently, the chances that none of them would pull it off were just 0.03%. That's 1 in 3,333.
So either we've witnessed one of the greatest series of random outcomes in the history of sporting events or the crowd is really stupid when it comes to wagering on the Belmont Stakes.
I'll sign up for the second of those two theories. Caught up in the hype and emotion of the moment, gamblers wildly over-bet their hero. As they do, they disregard all the challenges that the horse has to overcome: a marathon distance (1 1/2 miles) that he has never tried before and never will again; a grueling Triple Crown campaign of three races in just five weeks; and a field of fresh and rested rivals at Belmont.
Now American Pharoah can certainly be the one to end this drought. He's a freakish talent who cruised to the easiest of victories in the Preakness Stakes after gutting out a tough win in the Kentucky Derby. And by all indications he continues to thrive as he trains daily for Saturday's Belmont.
But before you plunk down $1,000 to win on Pharoah at odds of about 1-to-2, remember that the math is working against you. Remember that you're buying an overvalued asset.
Rather than bet on our hero at that price, consider putting down a few bucks on one or two of his rivals. Colts like Materiality, Frosted and Mubtaahij all loom as upset threats.
If the big horse is wildly overvalued in the race, then these others will be undervalued. That's how parimutuel wagering works. Don't be sucked in by Triple Crown mania. Use it to your advantage instead.
David Papadopoulos is managing editor for the Americas editing hub at Bloomberg News.