lansdale
02-05-2013, 02:38 PM
There still seems to be some confusion on the methods and influence of whales on the game even though it's often discussed, so I thought it worth posting this piece, which clearly explains how rebates tilt the game in the whales' favor (assuming they can close to break-even) - something I had thought was obvious. The article details some of the gambling activities of Zeljko Ranogorec, often described as the world's most successful gambler, a horseplayer with a computer model like Bill Benter's, but one whose bottom line can make even the latter seem like a piker.
WINNING BY LOSING
In February, the Weekend Financial Review printed a lengthy exposé (http://afr.com/p/national/the_gambler_GwoSmf5IXaVFjmpyYXNu9J) on Ranogajec’s betting exploits in America. Ranogajec allegedly convinced US pari-mutuel operators to provide his syndicate with substantial rebates in return for adding his billions into their pools. While Ranogajec’s operations in Australia appear to have been based on winning his wagers, the US side actually earned more from losing bets. According to Ranogajec’s own testimony in a court case involving a former bookmaking associate, the plan was: “You bet to lose, so that you actually turn over more money and the win comes from the rebates … If you bet $100 and lost $5, but you get a 10 per cent rebate, you still make 5 per cent.” Ranogajec estimated he’d earned about $52m over a three-and-a-half-year period betting on US races, but just 15% of that sum came from picking winning horses.
Ranogajec’s US cash cow was turned into ground beef after its operations attracted the attention of then New York State Attorney General Eliot Spitzer. Capital Play, a bookmaker that counted Ranogajec’s syndicate as its sole client and financial backer, was subsequently barred from most major US racetracks. Ranogajec ultimately filed a civil suit in Australia against Capital Play’s Karl O’Farrell after the bookie/employee refused to hand over $2.5m in rebates Ranogajec claimed to be owed. In a rather audacious display of naiveté, Ranogajec told the court his syndicate – which is believed to employ 300 people to place thousands of bets in the final minutes before the race gates open – was a “punters club” or a “collection of individuals” rather than a business concern.
TASMANIAN DEVIL
With America no longer the land of opportunity, Ranogajec turned to his home state of Tasmania. In just four years, TOTE Tasmania (TT) saw pari-mutuel turnover triple, but the lucrative rebates – averaging 10.5% – meant profits were scarce; just $1.5m in 2011. Dick McIlwain, CEO of Tatts Group, which purchased TT for $103m (http://calvinayre.com/2012/03/28/business/tatts-confirm-tote-purchase/) in December, was no fan of TT’s business model. “They gave all the profits away. They rebated the backside out of the business (http://calvinayre.com/2012/02/23/business/tatts-profits-tote-rebates-star-casino-high-rollers-piss-under-tables/) until there was nothing left. The ordinary punter is subsidizing these guys.”
cahttp://calvinayre.com/2012/05/18/business/australian-betting-whale-move-to-cost-race-bookies-millions/n
WINNING BY LOSING
In February, the Weekend Financial Review printed a lengthy exposé (http://afr.com/p/national/the_gambler_GwoSmf5IXaVFjmpyYXNu9J) on Ranogajec’s betting exploits in America. Ranogajec allegedly convinced US pari-mutuel operators to provide his syndicate with substantial rebates in return for adding his billions into their pools. While Ranogajec’s operations in Australia appear to have been based on winning his wagers, the US side actually earned more from losing bets. According to Ranogajec’s own testimony in a court case involving a former bookmaking associate, the plan was: “You bet to lose, so that you actually turn over more money and the win comes from the rebates … If you bet $100 and lost $5, but you get a 10 per cent rebate, you still make 5 per cent.” Ranogajec estimated he’d earned about $52m over a three-and-a-half-year period betting on US races, but just 15% of that sum came from picking winning horses.
Ranogajec’s US cash cow was turned into ground beef after its operations attracted the attention of then New York State Attorney General Eliot Spitzer. Capital Play, a bookmaker that counted Ranogajec’s syndicate as its sole client and financial backer, was subsequently barred from most major US racetracks. Ranogajec ultimately filed a civil suit in Australia against Capital Play’s Karl O’Farrell after the bookie/employee refused to hand over $2.5m in rebates Ranogajec claimed to be owed. In a rather audacious display of naiveté, Ranogajec told the court his syndicate – which is believed to employ 300 people to place thousands of bets in the final minutes before the race gates open – was a “punters club” or a “collection of individuals” rather than a business concern.
TASMANIAN DEVIL
With America no longer the land of opportunity, Ranogajec turned to his home state of Tasmania. In just four years, TOTE Tasmania (TT) saw pari-mutuel turnover triple, but the lucrative rebates – averaging 10.5% – meant profits were scarce; just $1.5m in 2011. Dick McIlwain, CEO of Tatts Group, which purchased TT for $103m (http://calvinayre.com/2012/03/28/business/tatts-confirm-tote-purchase/) in December, was no fan of TT’s business model. “They gave all the profits away. They rebated the backside out of the business (http://calvinayre.com/2012/02/23/business/tatts-profits-tote-rebates-star-casino-high-rollers-piss-under-tables/) until there was nothing left. The ordinary punter is subsidizing these guys.”
cahttp://calvinayre.com/2012/05/18/business/australian-betting-whale-move-to-cost-race-bookies-millions/n