Comment Re:Link doesn't work and geometric distribution (Score 1) 57
Huh, I've never even heard of parimutuel betting. I had to read the WIkipedia page on it. In that case, am not sure my suggestion of using the geometric distribution would work.
Also, yes, finding the gradient between the stated odds of a horse winning and the observed odds is a common method (to find irregularities in how odds are calculated). I had a colleague who, like me, has a Phd in math. Unlike me, he is (or was) athletic. He played tennis as often as he could. When sports betting became legalized, he discovered 1) you could bet on every point of a professional tennis match 2) there were many irregularities of how the probabilities were calculated.