Get Rich or Die Trying (v: 2.3)
An Econotorium Publication

Sirhatter's guide to gambling in the food club
Web/Hosting by BENLADESH
Edited by CRAN_B
Re-editing and formatting for petpages by FRANCINEH
First draft by SIRHATTER

Chapter 1: Introduction
Chapter 2: Finding the Arbitrage
Chapter 3: Capitalizing on the Arbitrage
Chapter 4: Multi-Race Bet Strategies and Parlays
Chapter 5: Trophy Chasing, and Betting on Sub-Optimal Races
Chapter 6: Conclusions, and Takeaways for the "real world".

Chapter 1: Introduction

So, this is the first game guide I have written that is aimed for a mass audience in a long time, and that is for good reason. My writing skills when I first started writing guides were not as polished as they could have been, and most importantly, I didn't really have anything to add.

As most people who are familiar with my work know, my area of specialty is the battledome, where I have earned a degree of respect for my tactical prowess from a wide variety of established Neopians, especially in two-player battles.

What I did to make neopoints was hardly unique, and I hardly had a monopoly on the knowledge that made me rich. I restocked, I took advantage of the Neo stock market, I took one-time opportunities as they came, and I invested in items -- and for obvious reasons didn't publicize my investments. So I stuck to writing about the battledome and let others post their secrets on how to get rich.

As time progressed, though, I left a very fast connection and very fast computers for my home computer, which at the time was a Pentium 2 with 300 mhz and 96mb of RAM. Needless to say, that was not very fast. The restocking method of making neopoints was gone. The one-time opportunities, such as towering an item when they initially release it at a very low price, are hard to come by when you have a real job and cannot get online often. More importantly, my interest/addiction/obsession/(insert word of choice here) waned as I became more content with my status. Of course, while I wasn't on as much, I still had a big spending habit on training my pet, and weapons don't typically get cheaper.

As a result, while playing most of the flash games and restocking were out, I was forced to find a way to replace some of that income, beyond the mall I had joined. The result was my dominance of food club. I have shared this secret in some form or another with maybe a dozen people. Some have had luck with it; some have not. In either case, this is the one game outside of the battledome where I strongly feel I DO have a unique insight into the workings of the game, and am legitimately better at the game than 99% of the people who play. I have long resisted publishing this out of fear that it could be used by people for the wrong reasons -- namely to cheat through use of multiple accounts -- but realistically, since this is a game that rewards longevity, making multiple accounts would not help much. Besides, there are better ways to cheat with multiple accounts (the stock market, for example).

As for my credentials: I have a gold trophy in the food club, but anyone who is lucky and/or willing to play for seven days straight at the end of the month, then log on at 01:00 NST can get a gold trophy.

The results I have earned, though, cannot be attributed to just luck, but to over a year of fine-tuning a system that worked nearly from its invention, and has only gotten stronger since then.

Bet History
Bets Placed Bet Total Win Total Difference
2206 5613000 NP 8960000 NP 3347000


All told, for every 10000 neopoints I have wagered, I have earned back my original stake plus an extra 5960 neopoints in return. For the past four months, that number has stayed steadily around 6000, and it would take me losing 900 CONSECUTIVE maximum bets in order for me to break even again. Simply put, I am a winner at this game. There may be bigger winners than me, but not too many, and almost none with my specific system that I am now laying out for you, the reader.

The best part of this game is that its income will grow with you, while the time commitment never will. The longer you play, the more you can earn from it. I seldom promise much to my readers, but unless Neopets totally revamps the game, this will be a big winner for you, just as it has been for me. I may some day walk away from this game. Some day there may be no more Neopia. Either way, this guide will also give you, the reader, lessons beyond this game, and hopefully my impact will live on. This is a long read, but hopefully it is worth your time and serves its purpose.


Has that got your appetite up to make some neopoints?

Then read on. The fun is about to begin.


Chapter 2: Finding the Arbitrage

What's Arbitrage? We shall get there. First, take a little trip to Krawk Island. Here is where the greatest gambling game in all of Neopia is played, along with a host of other gambling games. Food Club is towards the right. Once you get there, there will be an intimidating array of percentages and advice. You go to place a bet, and you see confusing lists all posting different odds that apparently can fluctuate throughout the day! It's like a stock market for eating and pirates, but everything seems mad! What to do?

If you click on the rules, it gives you the following suggestions for betting strategies:

Betting Strategies: When you are placing bets, you need to remember that there are many different things to take into consideration. If you are simply using their win/loss record, you are bound to lose a lot of NeoPoints. First thing to do is to take a look at each pirate in the match. You should do some comparisons between their strength (stamina) and their weights. Also, more importantly, look at the foods that could possibly be served for the match. If you place a bet on a strong pirate, but he happens to be allergic to many of the foods that could be served for his match, you are almost guaranteed to lose! To research the possible food courses for a match, simply click on the Next Round link and choose which match you want to look up.

What I can promise you is this: if you follow the site's advice, you will spend a ton of time on the game and you will lose money, or maybe break even. That won't do you any good. How do I know this? Once upon a time, I tried following all of these strategies, and I was a losing bettor. I even made a graph here:


Pretty cool-looking, right? Well, it did not make me any money, and it wasted my time back in 2003. Today it serves as a reminder to not follow the advice listed in the rules.

Follow my advice.

There are two fundamental ways you can beat food club. One is by finding an inequality in the assessed market. What does this mean? Well, if Koshanda the Konqueror has listed odds of 6 to 1, but you think Koshanda's odds are really closer to 4-1, you could bet on that pirate and show profit over the long run. For the best way to do this, which involves some of TNT's advice, I highly recommend the user lookup of garmfay. One of his pet pages will have the answers for you. While I have never talked to garmfay, he is one of the very few people I do not know in this game that I manage to hold in high regard. His work is simply superb, and you can tell he is generous with his time, and selfless. With that said, his way is very time consuming, though I'd think it has to be effective.

You aren't here though to do things his way. You are here to do them mine. And to a degree, mine will have overlap with his, as you will find out. Instead of finding inequalities, you just have to find an arbitrage and bet on it. What's an arbitrage, you ask again? It's still a great question. We're getting closer to the answer.

Let's take a sample race.

Koshanda the Konqueror: 2 to 1
Zepoby the Zany: 4:1
Sirhatter the Skinny: 5:1
Fusionstorm the Full: 10:1

Garmfay's method would involve trying to figure out which of these pirates were undervalued, and therefore a good bet for their money. My method? I'd take one look at this race, I'd fail to see an arbitrage, and I'd move on. I'd take a look at the next race, and let's just say I find an arbitrage there. Let us show the pirates:

Guatemole the Great: 2 to 1
Grephun the Grinner: 6 to 1
Mollymooster the Mighty: 10 to 1
Silvak the Strong: 12 to 1

Now there's an arbitrage!


What is the difference between the two races? Great question. I'll list a third case with THE IDEAL ARBITRAGE, and maybe you can figure it out on your own.

Kemito Kid: 2 to 1
Lyteric the Lofty: 13 to 1
Gongachoek the Choker: 13 to 1
Togsterthe2nd: 13 to 1


Well? Do you see it now? This last race, one pirate has great odds, and the others have terrible odds. However... great odds don't pay as well, so what is the big deal?

I'll go over that with you right now. Neopets, as part of the rules they put in, capped the odds. I'll try and explain it with a sports analogy, but one that surely anyone can follow. Let us say you, two of your friends and Tiger Woods were to tee off for 18 holes of golf. Who would be favored? Unless if you happen to be on the PGA tour, the odds would look like this:

Tiger Woods: 1.001 to 1
You: 5000 to 1
Friend A: 3000 to 1
Friend B: 11000 to 1

Presumably, there's a chance that lightning strikes Tiger down on hole 7, or you hit a shot so poorly that it bounces off a tree and knocks him out, or a phone rings and Nike wants to give him another 50 million, but needs him ASAP. Otherwise Tiger is winning, and the gambling public would have to face these odds to bet on.

How would Neopets make these odds? Here's how:

Tiger: 2 to 1
You: 13 to 1
Friend A: 13 to 1
Friend B: 13 to 1

Who are you betting on now? I thought so, too.

These capped odds are the basis for all of the 3 million I have made from this game. Why is this such a good situation? Well, not only is Tiger (or, going back to our pet analogy, Kemito) more likely than not to win half of the time, there is an actual way to GUARANTEE profit. Food Club has a progressive betting system, meaning the longer you play, the more you can bet. To make things simple on me, let us say you have an account that is nearing two years old. The most you can bet is 1500. You can't make an identical bet, but you can bet multiple times on the same race, and even on the same pirate if you parlay that pirate with someone else. So let us go back to the Kemito Arbitrage situation:


Kemito Kid: 2 to 1
Lyteric the Lofty: 13 to 1
Gongachoek the Choker: 13 to 1
Togsterthe2nd: 13 to 1

You could bet 1300 on Kemito (not even a full 1500)
You could then bet 200 on EACH of the other 3 pirates.

What would the results be?

Well, either Kemito wins 1300 at 2 to 1 odds, earning you 2600, OR a long shot wins. You bet 200 on each of the long shots at 13 to 1, earning you 2600. Either way, you have spent exactly 1900 to make those four bets. You have 700 in profit no matter what. Pretty cool, right? Well, not really. 700 neopoints is easy to earn, and it is more fun to do it playing games. Plus, there's no suspense and no skill. And you didn't come here to earn 700 neopoints.

The arbitrage, though... that is the key. Going back to the race that also had an arbitrage:


Guatemole the Great: 2 to 1
Grephun the Grinner: 6 to 1
Mollymooster the Mighty: 10 to 1
Silvak the Strong: 12 to 1

You could find an arbitrage here, too. Bet 1500 on Guatemole, 500 on Grephun, 300 on Mollymooster, and 250 on Silvak. Overall, you have spent 2550 and will guarantee yourself 3000 neopoints. It isn't as big of an arbitrage, but it is most definitely there.


As it turns out, the real world seldom sees such arbitrages. I use that term because it is the term the financial services industry uses, and is a fancy word for riskless profit in an otherwise risky industry. These arbitrages, in relative terms, are huge. A real-world arbitrage might involve less then nine pennies on a $100 transaction, and that would be seen as a big arbitrage, because if it is repeatable, it could make the one who finds that arbitrage a millionaire. Every year, PhDs and MBAs search the commodities and futures market for this sort of riskless profitable paradise. Most never find one. The sports world will never offer one. They will instead offer you the reverse. If we go all the way back to the first race, you cannot find a situation that guarantees profit, but you can find one that guarantees a loss. If you bet on "the line" in a sports event, you are getting 1.9 to 1 odds, no matter which side of the line you choose, meaning if you bet 1000 neopoints on each side of the line, you would earn 1900 neopoints on your 2000 neopoint investment. That is a loser. Similarly, if you go to the horse races, or anything like that, you can do the math yourself -- you will see there are no arbitrages out there.

So, how do you do the math in a quick way? Let my handy-dandy calculator help you here:

Take this chart, and either memorize it or write it down or print it if you are not facile with math already.

2-1 50%
3-1 33%
4-1 25%
5-1 20%
6-1 16%
7-1 14%
8-1 12%
9-1 11%
10-1 10%
11-1 9%
12-1 8%
13-1 7%


Take the 4 races, and add up the percentages. If they add up to less than 100, there is an arbitrage there. If it adds up to 100 or more, there is not an arbitrage.


Why is this so important? Why find these arbitrages if the only obvious profit is peanuts?

The next chapter has your answers...


Chapter 3: Capitalizing on the Arbitrage

Before we go further, I will pass along a gambling lesson of a sort. I actually first learned it in some sort of classroom setting, then read a book where Doyle Brunson explained the analogy a little differently, and I have a different spin on it still. The story goes like this: you wake up tomorrow to find a man in a sharp white suit at your bed. He is carrying a suitcase full of money and is clearly a billionaire. At some point in your dreams the night before, you dreamt of becoming rich. This man can make you rich, he claims, and as the answer to your dream, he opens up a suitcase full of money. There is, of course, a catch. This man has a rather odd obsession with flipping coins. He is not a con man, but a gambler. To prove this to you, he wants to make you an offer. He asks you who is your most trusted person in the world. You say it is your grandmother. He finds your grandmother and teleports her to you. He then instructs you to find a quarter; any quarter will do. You pull one out of your pocket. He makes you the following offer: you hand the quarter to your grandmother; she flips it; you can call the flip in the air. For the sake of simplicity, let us say you always call heads (perhaps you like George Washington or something). If the coin comes up heads, you shall win $10. The catch? If it comes up tails, you must pay the man a dollar. Now, you may not be rich, but surely that bet is too good not to be true. The man even lets you make that bet five times. Heads comes up twice. You win $20, and then lose $3 from the time it comes up tails. Still, you are up $17. The man in the white suit informs you, though, that he was not here to help you buy lunch for the next couple of days, but to make you legitimately rich. He wants to up the offer to paying you $1,000 if tails comes up, with the promise of $10,000 if heads comes up. It is the same fantastic offer, same ratio, but now you start to worry. You have saved that $1,000, and had a real purpose for it. The thousand dollars represents savings from 100 lawns mowed. If you lost that, you had be depressed about having to mow 100 lawns again. At the same time, $10,000 is no small sum of money. You are pondering this bet when the man realizes that $10,000 is not rich in the grand scheme of things, either. He is not here to mess around with trifling sums. He is here to make you a millionaire. Of course, you probably do not have $100,000 handy. He informs you that It iss ok if you do not. If your grandmother flips the coin and you lose, you, or your parents, will simply have to start selling off your possessions to pay the debt. Your computer would be gone, along with probably all of your furniture and cars, and you might have to move to a little apartment, because your house would be gone too, and your credit cards all maxed out. For the next 5 years, you will be working 80 hours a week to pay off the debt, while living in impoverished conditions, since you are now massively in debt. If you win, you are a millionaire. You are sure it is a 50-50 proposition.

Do you take the bet now?


At what point, if you say no, do you cry uncle? Did you cry uncle at $1000? $100? How about somewhere between $1,000 and $100,000?

This is a fairy tale of sorts, of course, but a lot of times in life, similar dilemmas occur. People have the chance to start a business that could make them millions, but failure would quite literally bankrupt them. The odds are seldom so extreme as 10 to 1 on a 2 to 1 proposition, but the emotional worries can sometimes be paralyzing. Over the long term, the stock market has been a consistently better bet than CDs, savings accounts or accounts that guarantee your money for a long time. At the same time, most financial experts would tell you that it is not always a great idea to bet 100% of your life savings on that market. The word diversification is one you often hear.

The same concept applies to Neopets. Some investments on paper seem like solid ideas. Odds are they are solid ideas. Collecting an item in anticipation of a significant rise in price in the future is a great way of making some major neopoints. At the same time, investing every last neopoint you have and then watching the item become worthless would be disheartening. At some point, you have to judge the value of neopoints, figure out a level at which you can stomach losses, estimate what your income needs are, and make sure you have a strategy to meet them.

How does this all relate to the food club, you ask?

Simple! The food club is a series of bets. The bets are weighted in your favor, through finding arbitrages. We can ultimately create the estimated odds we want of a winning situation and an approximate payout. We can change these conditions every day, and make bets over and over. Unlike the fairy tale told earlier, we are not faced with the uncomfortable decision of being forced to wager millions of neopoints in a single day. Depending on your longevity, you are capped at how many neopoints you can wager, since you are limited to 10 bets, and each bet is capped.


Confused?

Let us go back to our example.


Race X

Guatemole the Great: 2 to 1
Grephun the Grinner: 6 to 1
Mollymooster the Mighty: 10 to 1
Silvak the Strong: 12 to 1


Race Y

Kemito Kid: 2 to 1
Lyteric the Lofty: 13 to 1
Gongachoek the Choker: 13 to 1
Togsterthe2nd: 13 to 1

I have already explained how to guarantee profit through an arbitrage. Using the handy-dandy conversion chart above, you can see that these are both arbitrage situations since the numbers add up to less than 100. In the first race it adds up to 84, and the second race it adds up to 71, which is the lowest possible number.

What are the actual odds of winning, assuming uncapped numbers? For everything between 3-1 and 12-1, assume the actual odds are correct. For someone at 13-1, give them a 5% chance (since their implied odds may well be worse than even 20-1, this just seems like the actual number in my experience)

To calculate the odds of someone at 2-1, we have to do some subtraction.

For race x, we can subtract 8, 10, and 16 from 100 (see the numerical chart once again). This leaves us with 66, or about a 2/3 chance of Guatemole winning.

For Kemito, he has almost an 85% chance of winning, according to the odds. These really sting when Kemito loses, and you will feel like this happens more than 15% of the time, but really it is just because the losses in this situation are so shocking that they stick out way more than the wins.

So to me, the other three pets, using my system, are either fair bets, or bets with a negative expectation if we were only to bet on them. The garmfay system would attempt to figure out which pirates are actually better values than the listed odds, and more often than not will find the best values in arbitrage situations (which is why there is some validity to his method). I, in this particular case, am going to run with the 2-1 pirates. Assuming X and Y are the only profitable races, I will make at least the following three bets:

Race X: Guatemole, 3000 NP (this is not my maximum, or yours, but I am using it for illustrational purposes)

Race Y: Kemito: 3000 NP

RACE XY: Guatemole, Kemito, 4 to one odds: 3000 NP


Note that you can not make an identical bet twice, but you can bet on the same pirate in multiple races. This last bet is called a PARLAY. To win the PARLAY, both pirates must win. One pirate winning and one losing will lose me the bet. As you can see, though, the payout is bigger. Combine this with race X and Y, and from just two profitable races out of five, I could have a good situation.

If just Guatemole wins: I make three bets for 1500, one pays out for 3000, and I lose 1500.

If just Kemito wins: same as Guatemole, I lose 1500.

If neither win: I lose 4500 (ouch!)

If both win: I get paid 4:1 on my parlay, plus 2:1 on each individual race, for a total payout of 12000, or profit of 7500.

So I could make 15,000, but could lose at least 3,000 and maybe more.

Notice that IF we took the arbitrage in each race, assuming a 1500 max bet, we would have made 1200 neopoints, with no risk, for eight bets. So that's better than the best I have outlined, right? Wrong.

If we really look at the EXPECTED profit, over the long run, here is what it will show:

We know the approximate odds of each pirate winning.

The odds that neither Guatemole nor Kemito win are quite small, 5% to be exact.

The odds that just Kemito wins are decent, 29%.

The odds that just Guatemole wins are also decent, 10%.

The odds that both win are surprisingly only a little bit better than 50%. In this case, I estimate them to be 56%.


If it makes you feel better, I do not do this math out when I bet; I just bet, because once I proved this to myself the first time, I never needed to prove it again.

For those who are math dorks, you know how to calculate expected value. For those who are not, I would not hit you over the head with the gory details. If we ran this race 100 times, the overall expected profit would be: 4200 - 810 or 3,390 neopoints.


To go back to the fairy tale: let us say the man with the suitcase hands you a check for $12. He says you can either keep the check, or let your grandma flip the coin. If it comes up heads, you get $68. If it comes up tails, you simply have to hand the check to the man. Do you let your grandmother flip the coin now?

I certainly would. The Neopets equivalent, of course, is taking the arbitrage for the guaranteed 1,150 neopoints. Or you can make the parlay bet, for a 56% chance at 7500 profit, with a 39% chance of only losing 1500.


If you are dead broke and do not have any way to earn neopoints, this may not be the greatest thing in the world. If you are fantastically rich, this may seem like a waste of time unless you have an older account and can make real money. If you are neither of these scenarios, this seems like a decent, but not great, way of making money.


Of course, that is right where it is time to start the next chapter.


Chapter 4: Multi Race Optimal Bet Strategies and Parlays


So now you see which races are profitable -- which will ultimately make you a winner in this game. The question becomes: how do you make some serious money?

And again, it goes back to the risk/reward question. To make it clear, we are all about maximizing expected reward. You could put together a crazy strategy that could net you millions if it hits, but if the bets are bad, it is not worth it. You could go buy five Powerball tickets; that would seemingly maximize the risk-reward ratio, too -- but again, we are only interested in increasing risk if our EXPECTED gain increases.

To make it a little easier to understand, let us take some non-food club scenarios.

Bag A has 5000 neopoints
Bag B has a 50% chance of 10000 neopoints, and a 50% chance of 0 neopoints.

Which bag is better?

Effectively, their expected value is equal, so if this sum of money is not important to our daily activities, we can safely pick either bag and not worry about the consequences.

Let us redo the scenario.

Bag A has 5000 Neopoints
Bag B has a 40% chance of containing 15,000 neopoints, and a 60% chance of containing 0.

Which bag is better?

Now, even though were more likely to walk away with NOTHING, bag B is better, again assuming we do not need these neopoints desperately. On average, we will make 6000 by choosing bag B over the long run. Since the food club is all about the long run, playing many times over the year, we should clearly choose bag B even though it is a riskier strategy.

At the same time, we clearly want to avoid THIS mistake:

Bag A has 5,000 Neopoints
Bag B has a 10% chance of 45,000 neopoints; otherwise it has 500 neopoints.

Bag B looks enticing, a chance at a big payoff, and at least a consolation prize if it fails. But on average, bag B will only have 4,950 neopoints (45000 * .10 500 * .9 if you can not do the math).

Bag B is the mistake, though, and therefore is usually NOT worth betting on (the scenario in which it is will be discussed later).


So our goal, always, is to maximize our AVERAGE gain. I am not worried about the prospect of losing, or even losing big, on any race. If you are worried, or are poor, I suggest you take your guaranteed arbitrages when they are there, and just let it go.


So how do we get there?


Great Question. I will lay out the strategies that have made me money. You can use them or modify them to your own liking. Picking the right races is most of the trick, anyway. I feel I have tailored my strategies to get that extra bit of profit, but it is up to you.


Let us start out with some scenarios:

----------------------------------------

Scenario 1: There are no arbitrages on race day.
Solution 1: Do not think of betting, unless you are chasing a trophy (and the "Chasing the trophy" section will address this in more detail), or are sufficiently addicted to gambling that you want to take a shot at something and do not mind throwing the money away. Just take a pass on today, and do other activities.

As a quick guide, here are some ways you can eyeball a race and immediately know it is not bettable:

Two pirates have 2:1 odds. The arbitrage rule tells us this is at least -10 points of arbitrage. AVOID THESE AT ALL COSTS. Sometimes you will see amazingly bad races of two pirates at 2:1 and a third at 3 or 4 to 1. These are even worse than what real-life bookies would offer you on an actual horse race. The reality is that the 2:1 pirates are probably about 36% to win. Too juicy for 3:1, but not good enough for 2:1. AVOID AVOID AVOID!!!


No pirates have 2:1 odds. AVOID THIS RACE, TOO! The way the math works, again, you never get the benefit of the doubt from the bookie. So something at 26%, even though it is real close to 4:1, and should be 3.9:1, only gives you 3:1. As a result, anytime you see no pirates at 2:1, it is a situation where all four pirates are getting a raw deal from the bookie. AVOID.

Two Pirates have 3:1 odds, or two Pirates have 4:1 odds in any race. Will not do out the math here, but you can avoid these, too - trust me.


Scenario 2: There is one arbitrage on race day.
Solution 2: Again, if you are looking to maximize profit, only bet on that race. I never touch the 13-1. Perhaps if you studied garmfay's method, there might be a spot where a 13-1 seems like a good bet. I do not study garmfay's method, though, and to me, usually 13-1 means its really about 20-1, so I just stay away. If the race is only marginally profitable, you have a tough call. For example:

Eater A: 2:1
Eater B: 5:1
Eater C: 5:1
Eater D: 13:1

This is about a 5% point arbitrage if you use the analysis I gave you earlier. We think A is 50% to win, B is 20% to win, C is 20% to win, and D is 5% to win.

Again, in these situations I give the 5 points of arbitrage to Eater A, because of the cap at 2:1. We can reasonably assume that if Neopets had their way, the true value on Eater A would be about 1.9 to 1.

This then leaves us with this difficult question, and two possible bet strategies: is it better to just dump your whole load on Eater A, or maybe a big bet on Eater A, followed up with about half-sized Bets on Eater B and Eater C?

Meaning we could do the following:

2000 NP Eater A

OR

2000 NP Eater A
800 NP Eater B
800 NP Eater C


The first way gives us a 55% chance of winning 2000 and a 45% chance of LOSING 2000. The expected value is only 200 neopoints.

The second way gives us a 95% chance of winning 400 neopoints and a 5% chance of LOSING 3600 neopoints. The expected value is exactly the same. Which strategy do I choose?

I choose the first one. I do not want to waste my time with three bets. I do not want to only make 400 neopoints. The expected values are the same, but more importantly, Eater B and Eater C are probably also slightly negative-expectation bets. Meaning if TNT gives them 5-1 odds, they are definitely better than 6-1, but definitely not better than 5-1. They could be 5.3 to 1, or even 5.5 to 1. Either way, I will stick with my single bet and be done with it. Not much of a moneymaker unless it is a big arbitrage, in which case I feel good about winning my maximum bet back.


Scenario 3: Two races are profitable.
Solution 3: Let us do some talking now!

This is probably the most common scenario you will see on a day-to-day basis. It is not your biggest moneymaker, but the skill in doing these correctly will result in a decent and solid bit of profit.


Let us start out with what I call the Two-Race Monty.


Race 1 has the following pirates:

Eater A: 2:1
Eater B: 6:1
Eater C: 9:1
Eater D: 13:1

Race 2 offers us this scenario:

Eater E: 2:1
Eater F: 10:1
Eater G: 11:1
Eater H: 12:1

Both races are decent-sized arbitrages, and both are clearly profitable.

The main bet I want to make, again, is as follows:


2000 on A at 2:1
2000 on E at 2:1
2000 on AE at 4:1


We have talked about this before. This is the basic two-race monty, and you will make this bet every time it comes up.

There are two more bets I want to make. In the one-race monty, I did not want to hedge, and I had reasons why. Here I will make one hedge bet, and it is a very important bet to make.

2000 on BE at 12 to 1


Why this bet? Is not B still a losing-expectation pirate?

Yes. B is a loser. But B-E is a big winner. The second race outlined is a big arbitrage situation, 20 full points. Racer E has about a 73% chance of winning in my book.

While Racer B probably is not even 16.6% good to win, its going to be above 14% to win, and it is pretty darn close to an even money bet. More importantly, Racer/Eater A has a 32% chance of wrecking us and ensuring we have a losing bet on our two-race monty.

Overall, if I just do the two-race monty, here is what I can expect:

50% of the time I win 10,000 (If A and E win)
41% of the time I lose 2,000 (If A or E, but not both, wins)
9% of the time I lose 6,000 (If A and E lose)

All told that is a net profit of about 3600 per race.

That hedge bet, though, changes the odds a bit. Here are the new odds:

50% of the time I win 8,000 (if A and E win, I win less this time in profit)
12% of the time I win 20,000 (if E and B hit, I get the payoff on E and EB)
29% of the time I lose 4,000
9% of the time I lose 8,000 (again, a disaster -- A and E both miss)


This changes the odds a little bit for me. The potential loss is bigger, but I actually win a little bit more often, and more importantly, my average profit is now about 4400 per race!

The hedge bet here is clearly good, because betting on EB by itself is a winning proposition. I could make other hedges, or even change the value of my hedges. I could just bet 1000 on EB, and maybe 1000 on EC. I could even bet 500 or 1000 on AF. Whatever. There is some creativity here that you can tailor to your bet. But this is a spot where the two-race monty is good, but a well-timed hedge can be even better. 7/8 times you are just throwing away an extra 2000, but that 8th time you are making 22,000 neopoints you never would have had otherwise. And that is a valuable insight.

To conclude: when two races are profitable, bet the two-race monty, and possibly hedge, especially if the hedge involves the second pirate having decent odds (I define decent as 7:1 or better; you can define this as you wish).


Scenario 4: Three races are profitable.
Solution 4: It is three-race monty time (with three hedges behind it)!


This is actually similar to the two-race monty.

Let us set up our races, and go over what the three-race monty looks like.

Race 1:
Eater A: 2:1
Eater B: 13:1
Eater C: 13:1
Eater D: 13:1

Race 2:
Eater E: 2:1
Eater F: 5:1
Eater G: 6:1
Eater H: 9:1

Race 3:
Eater I: 2:1
Eater J: 4:1
Eater K: 12:1
Eater L: 13:1

Three arbitrages…what to do, what to do…


Race 1 is a monster race. Races 2 and 3 will help make Race 1 even more profitable. First the three-race monty:

Bet 2000 on A at 2 to 1
Bet 2000 on E at 2 to 1
Bet 2000 on I at 2 to 1
Bet 2000 on AE at 4 to 1
Bet 2000 on AI at 4 to 1
Bet 2000 on EI at 4 to 1
Bet 2000 on AEI at 8 to 1

Whew!


For the record, for this particular format, the expected profit breakdowns look like this:

If all three pirates win: 14000 NP turns into 52000, for a profit of 38000
If two of the three pirates win: 14,000 NP turns into 16,000 for a profit of 2,000 NP (ouch!)
If one of the three pirates wins: 14,000 NP turns into 2,000 NP for a LOSS of 12,000
If zero of the three pirates win: it is perfectly acceptable at this point to say your favorite expletive as loudly as you wish and spike whatever you are holding at the moment against the floor. Please try not to hold anything too fragile in your hand when checking your winnings.

The odds, of course, vary, but if your races looked like this, here are my best estimates:

Odds of all three pirates winning: .85 * .53 * .62=28%
Odds of two pirates winning: (.53 * .15 * .62) (.47 * .85 * .62) (.85 * .38 * .53)=47%
Odds of one pirate winning=22%
Odds of no pirates winning=.15 *.47 * .38=3%

The two pirates winning is basically a push. All your bets cashing in is a little more likely than losing in this case, but it is kind of close. Of course the payoff if you win is monstrous. I estimate the total expected value to be 8500 neopoints.

This is a big payday, potentially. But now let us make it bigger.

If Eater A loses, we can count ourselves in trouble here, because I want to put in three hedges. They are as follows:

Bet 2000 on AFI at 20 to 1
Bet 2000 on AGI at 24 to 1
Bet 2000 on AEJ at 16 to 1


This is not so much for insurance -- as we already win if two out of our three pirates win -- but since its quite likely that we will have two of our main three win, we might as well bet on the scenarios that could provide a big payoff if this does happen. Here are the three most likely scenarios with their affiliated payoffs. It is 1:30 in the morning and I do not want to hit you (or myself) over the head with any more numbers tonight, but this makes the expected payoff much bigger. Just trust me, please;

Incidentally, the three-race monty is about the most profitable one. There is a legitimate situation when there are four or five profitable races, when I just ignore the two least-profitable arbitrages and stick with my three-race monty. There are other times when I attempt the start of a four or even five-race monty. These are quite rare, and the situations that come up there have no automatic answers as to the best strategy. If the four arbitrages are about the same, sometimes I will not attempt the four-race parlay bet, and just make the four possible three-race parlay, and the six possible two-race parlays. Other times I again ignore the arbitrage on the least-promising race. It really is more of a feeling here and when you get the hang of it your strategy may be as good as mine or even better. As much as there are some hard and fast rules I follow, there is some creativity and some hunches I allow for, and it is often on which hedges to attempt (if any), and also these rare situations where more than three races are profitable. Perhaps also someone who can analyze which pirates are the best by looking at foods and dislikes and stuff can out-earn me here. It is possible. I only claimed to be better than 99 out of 100 people at this game at the time of publication. Perhaps if people take what I know and add their own knowledge, they will become stronger than I, and I will no longer have this advantage. Perhaps the people that are already better than me are cursing me for giving away this secret, or perhaps they are cackling because there are imperfections in my system that they have solved, and thus they out-earn me. I do not know. I do have one more bit of wisdom to share, and it may prove useful for some of you.


Without further ado, here is the last bit of information for you, and it might prove useful, especially if you are more after the glory, and less after the money.


Chapter 5: So you want a trophy, and sub-optimal races

Before we get into this section, I feel the need to draw the distinction between earning neopoints and going for the glory. The two are not 100% correlated, and this is one area where the two might be at odds. The bets that will make you the most profit are not necessarily the ones that will earn you the best chance at a shiny trophy on your lookup, so keep that in mind when going for a trophy. A scene comes to mind from the movie Rounders.

The anti-hero of the movie, a completely corrupt yet charismatic cheater by the name of Worm, is in yet another dispute with the members of the community he shares. The old wise man of the movie admonishes him for yet another reckless decision Worm made, and Worm comes back with one of my favorite lines ever:

You know what? You keep grinding out that rent money, Joey; it's noble work you're doing!

The implication being that Joey was a lifer, and a successful card player, but would never make the big time because he was too conservative and never took chances to make his life really amazing. Ed Norton (my favorite actor) delivers it with an extra zing, and the line stings. Maybe sometimes you feel like that in real life, or even in the game. You just grind away restocking, running your mall, buying your 1000 shares in the stock market, but never really making any fast money. Of course, in the movie Worm nearly dies after trying to cheat some police officers, and he has no redeeming value. But a lot of times I feel the insult applied to Joey may well be applied to the way I play Neopets as well. And most of the time I will grind. But once in a while you may feel the need to run for glory, and this guide will help you get there.

If you do choose that run, there are a few things that ought to help you out, and things you should know about trophy collecting in general.

It is typically easier to collect trophies at the start of the month than at the end of the month. On the first day of each month, they reset all the high-score tables. Thus the minimum score to get a trophy on the first of the month is lower than it is on, say, the 19th of the month. By then not only do you have to beat everyone that submitted on the first day, but perhaps any late entrants who put up a big score on future days as well.

What is more important is that there is a rule that you must collect your winnings after seven days or they expire (a major no-no, and I can tell you it is brutal when you accidentally throw away neopoints like that). The scoring is tabulated based on how much you collect, though, not on the outcome of a single race. So you can load up for that big collection by collecting seven days worth of races at once. On that first day of the month, there is a brief window where a very low score can get you a trophy if you wake up in the middle of the night USA time, or afternoon Singapore time. Tables reset between 12:15 and 12:45 a.m. NST and trophies are given out between 4:30 and 4:45 a.m., so send your score sometime within that approximately-four-hour window for the best chance at a trophy.

You need to finish in the top three for gold, top eight for silver, and top 17 for bronze.

How does one do this?

Simple. Start making very, very aggressive bets on the 26th of the month. What does that mean?

1) Be sure to maximize your 10 bets EVERY day that you are on the chase. If there is a three or four-race monty, this is not a problem. If there is a two-race monty, or worse, you will need to make some sub-optimal and 0 EV bets. These are not pretty, but I will go into detail more.


2) Still bet on an overall EV basis. Easier said than done.


3) Never make a hedge bet unless you are betting the maximum amount allowable on the hedge.

4) Be willing to lose some money in an effort to chase your trophy, and do not get discouraged when you do.

5) Know how old your account is. The older your account, the more intelligently you can bet. If you have a new account, getting gold may well be impossible, or a few ridiculous long shots and multi-race parlays may have to fall for you.


With those guidelines in place, I will lay out a few more details on how to get there. As accounts continue to age, the thresholds will change. Perhaps I am a bit optimistic, but if a lot of my students and friends read this and utilize it, perhaps that will also spark a higher level required to gain a trophy. I am typically aiming for 200k neopoints to earn some sort of trophy at the start of the month, and I figure 400k SHOULD get me a gold most months. Here is a realistic scenario:


It is the 26th. You want to start gunning for a trophy. You see two absolutely putrid races to bet on; you grimace slightly and ignore those. The third race looks very good:

Pirate A: 2-1
Pirate B: 8-1
Pirate C: 12-1
Pirate D: 13-1

The fourth race has some promise, but is a slight negative arbitrage in the end:

Pirate E: 2-1
Pirate F: 3-1
Pirate G: 9-1
Pirate H: 13-1

The final race is a perfect zero-expectation race:

Pirate I: 2-1
Pirate J: 5-1
Pirate K: 5-1
Pirate L: 10-1


Normally, this would not be a good day to make bets. You would drop the single maximum bet on Pirate A, and wait for another day.


Today though, you have to act differently. 5000 Neopoints will not cut it (assuming your 2500 bet at 2-1 odds pays out).

Here is how I might bet, all bets being the maximum:

A at 2-1
B at 8-1
AE at 4-1
AF at 6-1
AI at 4-1
AJ at 10-1
AK at 10-1
AL at 20-1
AEI at 8-1
AFI at 12-1

That is a total of 25000 wagered. What is important to know is that when the odds are calculated, a pirate at 4-1 really has a 21-25% chance of winning, not just 25%. So that even-expectation race usually means that pirates J, K, and L are slightly bad bets, meaning pirate I is slightly a good bet. Of course, it is so close, and, with so little research done on food likes or dislikes, I normally ignore those odds and just avoid the race. That is the grinder side in me. Now those dead-even races or slightly negative arbitrages become very good to bet on. What makes them really good is that you are combining them with a good race. That is what REALLY makes them profitable.

A practical example: let us say you are getting even money on two sporting events. In one you get to pick the Brazilians in soccer against Canada. Nothing against Canada; Canada of course would win in hockey; but in soccer, Brazil is a huge favorite. You are getting EVEN MONEY odds, meaning that you do not have to give your Canadian friend odds on his team. This is a great bet for you. You also can bet on a coin flip that you pull out of your pocket and your friend calls. This is also an even money bet, but one you would ignore, since it does not favor you. However, you now get a chance to parlay this bet, meaning not only can you keep your Brazil bet, but you can also bet on both Brazil and the rugby team you picked to win. If that happens you get 4-1. This now seems like a great deal, because you really have about a 45% chance of winning a 4-1 bet. There is a 50% chance the coin will land your way, and a 90% chance or so Brazil will win. So in this manner, bets with an even expectation can be profitable if parlayed with bets that are in your favor.

The result for the 26th of the month: Bet B pays off at 8-1, and the rest all miss. You make 20,000, which is really like losing 5,000. Still, this is not too poor of a result. While it is not going to get you the trophy by itself, if you gain a few big hits soon it could put you over the top to the next shiny color.

The 27th:

You see the first three races as all putrid. You wisely ignore.

The fourth race looks like this:

Pirate A: 2-1
Pirate B: 4-1
Pirate C: 11-1
Pirate D: 13-1

The fifth race looks like this:

Pirate E: 2-1
Pirate F: 5-1
Pirate G: 6-1
Pirate H: 13-1

These are both small, but reasonably good, arbitrages. You might bet as follows:

A: 2-1
E: 2-1
AE: 4-1
AF: 10-1
BE: 8-1
BF: 20-1
B: 4-1
F: 5-1
AG: 12-1
AEX: 8-1 (where x is some random 2-1 in a bad race elsewhere)

The result:

Total Winnings: B (from yesterday): 8-1 20000

Disaster!

As it turns out, G won, which was ok, but C also won, which was not ok at all. You did not make a dime, and lost 25,000. You are now down 30,000 in 2 races.

The races today, in fact, do not have a single arbitrage or even a 0 EV race. If you had somehow found a way to cash in on the 66-1 miracle from the day before, you would cobble together 10 races, and bet on some long shots and hope to hit miraculously again between two or three of the least-offensive races. At this point, though, you have only collected 20,000 in two days, and you are surely behind other people. I would just cash out and not bet today, and wait till the 29th. That still gives you three days to see if you can collect any monsters. If you only have some average hits, you just do not click the button, and wait till the 1st, 2nd and 3rd to keep betting aggressively in this manner, hoping to hit on some big winners somewhere. The reality is that you are going to have some periods when chasing trophies where you throw away a lot of your money and a lot of the profit from the rest of the calendar. So be emotionally prepared for that, or do not chase gold. You can still sometimes get to bronze or even silver by not deviating from my original system, but the reality is that if you want gold, you may have to make some extremely marginal and ropey bets.

What you should also remember, though, is that the same problem facing you faces all the other top Neopians as well, so if you hit big, you can expect a lot of others to have hit big too, and vice versa. It is no accident that you see mostly the same people at the top of the food club standings every month. The name at the top or even top three changes a lot, but if you look towards the bottom of the top 50, you will see the same 10-15 people, and that is hardly coincidence.

But the conundrum faced goes beyond just being able to emotionally take a loss. It also has to do with how to make large sums of money.

I pose a different problem to you, a very real-world problem.

Take two different investors:

Investor Bob: Turns $1,000 into $5,000.
Investor Jane: Turns $100,000 into $140,000.

Who is the better, smarter and cleverer investor, Bob or Jane?

And that is a nearly impossible question to answer. Bob could argue that if he had access to more money, he could make 5 times his return and thus destroy Jane. Jane could argue, with equal authority, that Bob could not replicate his scheme on a larger scale.

I have a real-world story that is a fair equivalent. As my friends know, I am a die-hard Philadelphia Eagles fan. Before they stopped selling tickets in such a manner, you could camp out for playoff tickets, which were a very hot commodity. The earlier you got there, the better your seats, at least among the 3000 or so that did not go to existing season ticket holders. One very frigid January, two of my brothers, myself, and one of my brothers buddies showed up at about 9:30 a.m. the day before tickets went on sale. We were among the first 200 people in line. We camped for about 22 hours, sitting in lawn chairs on concrete, freezing our butts off. We passed the time by playing catch, playing cards, listening to the radio and CDs, and consuming prodigious amounts of food and drink (one person from any decent-sized group was allowed to leave to go to the portable restrooms or drive for pizza and cheese steaks and the like). After staying up through the night, aided by some trash can fires, and surviving a line of over 10,000 people, we were rewarded by not only getting tickets before the phone lines opened, but also getting some very good seats for the face value of 65 bucks a seat. That sounds like a lot. You were allowed to buy I think two seats (or maybe four). Either way we bought the maximum allowable. We kept some for ourselves, and sold the rest on eBay, where they went for something along the lines of over $300 a seat (the person that eventually won our auction was a big shot at the United Nations, who also paid for the train ride for my brother to hand-deliver them in New York). We more than broke even, even factoring in the 20 bucks or so we spent on food per person. Had we not been such crazy fans, we could have of course made lots more money by selling the seats we used for ourselves. The hourly profit would have been pretty good, especially considering we sat there and made friends for most of the time.

The reality is, though, that while some people do make a successful living as ticket brokers, and that our investment grew; five-fold infact, it was not something easily replicable. Since the Eagles put limits on how many tickets each person could buy, it is not like I could have walked into the line with $20,000 in my pocket and then sold the tickets for $100,000 (even if I had had the money).

A lot of times, the best investments from a pure risk/reward and percentage-return basis are small enough in scope that you are not going to make millions of dollars. They also are not easily replicable. So while Jim may brag about having turned $1,000 into $5,000, he may well be just a small potatoes investor. He probably won't be able to take his $5,000 and turn it into $25,000 and so on, or else he would end up the next big billionaire.

Thus, in food club, you often get offered these situations. You can either take a very high-percentage rate of return, or a lower rate of return with higher overall profit. This means you could either wager a total of 10,000 neopoints for an average return of 20,000, or you could wager 20,000 for an average return of 32,000.

The first wager looks glitzier, doubling your money, and it might be more impressive to show off to friends, but the second one is in reality the better move, assuming you have the bankroll to survive the ups and downs. It does not look as impressive to your friends at first, but it will put more neopoints in your bank account.

Where it gets tricky is wagering 10000 to earn 20000, versus 20000 to earn 27000. In non-trophy situations the first one is a no-brainer, but in trophy chasing situations, that second option MUST be taken; otherwise, you will be a grinder, earning enough to pay the rent, but not really getting the trophy that you want for yourself.

The fact that you are in competition with others makes it even harder. Timing when TNT updates the trophies and not wanting to submit too soon are important skills; others can see your score and decide whether to submit or hold off for another day, and this can make it even more difficult. You are effectively no longer just trying to win money, but you are in competition with others. This can be tough even when you are showing profit overall, but a few bad losses and it can get ugly. Your best bet is to hope for a huge and slightly unexpected hit early, build off of it, and have a high enough score that no one can touch you. When I finally got my gold (took me over a year of off-and-on trophy chasing towards the first of the month), I hit big on two negative EV races that actually paid off on long shots. I then hit on two three-race montys where all the favorites paid. I was up to 450,000. A total loss on the 30th did not even bother me. I was conservative with the timing, and let some Singaporeans take the first gold with very low scores (150k). I submitted my result, and was #1 by over 200,000. Someone beat me through the day, but #2 is still good enough for gold, and at the next update, after finishing in the silver spot at least SIX times, I finally had my gold. Amazingly, my great friend qtpieluvr, who was one of the very first people I had explained the game to, had on her own held off for two or so days and put up an even bigger number, and she also got gold that month. It was the final validation for me that this system truly works.


Chapter 6: Brief final thoughts:

Enjoy the game: enjoy the highs, and do not get discouraged over the lows. Much like the rest of life, it is about the long run and having faith in what you are doing. Knowing the numbers are in your favor and having a positive outlook will contribute to long-term success. Do not be afraid to take chances if they are in your favor. And lastly, if this guide was helpful for you, feel free to let me know. If it was poor, also let me know. The middle-class battledome community deserves a game that can make them some money, and this might just be it.




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