Whaddaya think?

[takeout]

Just read Richard Eng's column "Bettors aren't using heads" and wondered what others thought.

http://www.lvrj.com/lvrj_home/2001/Nov-09-Fri-2001/sports/17411965.html

I always thought that at least some small part of the equation would depend on player preparation. If a player didn't have some handle on a track, handicapping-wise, then why would he jump at a lower takeout which would probably be offset by his lack of knowledge about the new venue? Management seems to think that players will bet tracks ONLY because of a lower takeout that in many cases is described as just an experiment. I switched tracks one time and it took a l-o-n-g time to feel at home.

Don't get me wrong. I'm all for lower takeouts - much lower. And with the computer revolution and all the simulcasting these days, maybe there are a lot more national-class players out there that wouldn't be intimidated by changing tracks at the drop of a hat or that already bet many different tracks anyway. I'm not one of them, though, and many times I get the feeling that track management is confusing horseplayers with slot players. Probably a lot of fans aren't too concerned with takeouts but even if they are, I don't think lower takeout + track switch necessarily adds up to a good bet. Opinions?

[so.cal.fan]

The only way to get ALL tracks to lower take, is to SUPPORT the tracks that have lowered. Boycott tracks that have excessive takeout.
I bet in So. Cal., but I rarely bet outside the win pool.
If they lower the take on the exacta, quinella, etc. I'll jump in with both hands full of my cash, but it is over 5% higher take in those pools. That adds up, guys.
Support lower take tracks.

I think Kee is a poor example of whether take out will effect on site handle or not. If you have ever been there, racing at KEE is a major event in the city of Lexington Ky, very popular with all age groups and I don't think changing the take out would change the attenance or on site handle for live racing all that much. I would hope that it would increase handle at simucast sites assuming (and this is a reach) that the more aware simulcast player would wager more at tracks with a lower take.

I am aware of tracks with a lower take and I look for opportunities there, but at the same time I'm not going to pass on a race where I think I have an edge just because the take is higher then I would like.

[karlskorner]

If your State has a race track the "takeout" supports some or all of the following:

Administrative costs, agricultural fairs, breeding and development funds, capital improvement, charitable uses, city government, county fair and recreation boards, county government, education, equine research, equine drug research, health and retirement funds, Horsemen's Benevolent and Protective Assoc., horsemen's education, location fees, municipalities, owners funds, pension funds, promotion funds, purses, racetracks, racing commission, simulcasting expenses, Sire Stakes, stable-vanning funds, state adutiors and inspectors, stallion awards, veterinary school research and zoological institutions.

If you are going to cut back the "takeout" which of the above should have their support reduced ? It is easy enough to say reduce the "takeout", but somebody gets hurt. Reverse your thinking and look what you are supporting.

Karl

[so.cal.fan]

Karl,
I really believe that if they lower all takout to a reasonable
level, handle WILL INCREASE, thus increasing all the revenue for these good causes you mention.
It is true, many horseplayers do not know or care about the takout, but what they will know, is that they will have more money to bet with, over a period of time with a lower take.
It will take time for the benefits of this to take hold, and I don't think it has been given a fair shot.
If the takeout was 12% on every type of bet at every track, I am convinced that within a 2year period, you would see a very large increase in handle/tax money for public projects.

[Figman]

The method of making distribution from the total handle by pool must be changed. Currently a total percentage is taken from the handle to be distributed to each of the areas Karl stated (depending on the state). For instance in New York, the State gets 0.5% to 3.5% depending on the type of wager... off of the pari-mutuel pool for that wager.

It should be changed to a percentage of the "total takeout". So in the case stated above, New York State would get 0.5% to 3.5% of the total takeout on the wager rather than on the handle on that wager. In this manner, if a track reduced from 20% to 16%, all of Karl's mentioned distribution recipients would be reduced equally.

I also believe that any reduction will in the "long run" bring about increased handle. So the "distribution recipients" will eventually get as much if not more, and the reduction in takeout should be looked upon as an investment!

[karlskorner]

So. Cal. Fan

Several months backwe pretty well covered the subject of "takeout', but I guess it's open for discussion again and I stand alone in trying to make rhyme or reason out of it.

You feel that if the "takeout' is reduced to a "resonable level" (what is reasonable ?) the handle will increase. Why ? I am assuming you attend daily at the S. Cal. tracks, so you see the same people every day, as I do. On weekends, the attendance increases 20 to 30% because of some giveaway or gimmick. By reducing the "takeout' these people will supposedly play longer, but in the end they still lose. My home track is CRC, they have done everything but stand on their heads trying to increase attendance (although it's up 3% over last year) up to and including giving $5.00 mutal tickets when the patron enters (that covers parking and admittance) and their still $1.00 ahead. They give beer mugs, hats, bags, you name it, trying to increase attendance. Nada.

The average patron attends with a set amount of dollars in his/her pocket and 95% of them go home broke. Do you really believe that reducing the "takeout" by 2 or 3% will increase attendance and thereby increase the handle ? The 95% who went home broke don't even understand the word "takeout'.
The simulcast player or the at home player will not increase in numbers, becasue after awhile 95% of them will realize that pushing a few buttons on a computer will not make them a handicapper. The 5% that succeed have done their homework and understand what this business is all about.

I mean this in a general manner to all and not you personally. If you are that concerned about your ROI at the end of the year, than improve your handicapping and stop trying to figure an angle that may or may not improve your ROI. If you lost money at the end of the year or just eaked out a small win percentage than it's your handicapping that is at fault, not the "takeout"

A couple of posts back someone suggested starting their own mutal pool, isn't that great, cut the tracks right out, who needs them.

Karl

[JimG]

Decreasing takeout would increase the handle from the same 95% that go home broke Karl. They would, in effect churn more money in a given day unless they did not hit a single race. Then it would not matter. The 5% winners would surely bet (churn) more money in a given day with a decreased takeout.

Decreasing takeout would not necessarily increase attendance. Fans that would have once gone to the track are lost to the casinos and lotteries forever.

JimG

[BillW]

Couple comments:

1. mrdezo: you state " I'm not going to pass on a race where I think I have an edge just because the take is higher then I would like." That in itself will improve handle at the lower takeout tracks, without you making any change in your habits re. the lower take. For example, you may peg a horse a play at 5:2. If the take is lower, the chances are higher that the horse will go off at 5:2 or higher due to all the payoffs being higher at a lower take track. So if you are playing multiple tracks, you will naturally have more plays at the lower take tracks (and their handle goes up).

2. Decreased takeout will do nothing for the casual attendee (even getting them to play more) they don't even know what takeout or parimutuel betting is all about. HOU has set nationwide attendance records on 4th of July by having the biggest fireworks display in Houston ... their average handle per person in attendance was around $10. (The same total handle as on an average night with 1/5 the attendance)

3. karlskorner: (see #2 on the casual fan). Also the industry has along way to go on doing things of substance to draw fans.

Two examples:

- Yesterday at HOU I noticed they had a neat new gadget, a portable terminal (wireless) that you could use to bet, in association with a house account. A great idea to draw the serious better no? The kick in the teeth was that they were charging rent for the damn thing (also charging for the account, I believe) If I were running the place I would be giving these things away, be happy with the interest I keep on their house account and enjoy the increased business.

- This has happened to me 3 times now, it is starting to appear to be a house policy. When buying a form, the vendor was short on change (I think the price was $4.55) Rather than give me 2 quarters and eat the nickle and taking responsibility for not having change, the vendor tries to short change me by giving me back only 1 quarter. Insignificant amount of money but really demonstrated to me where I stood as a customer.

The point is of this long winded dissertation, is that lower take will have an affect even if players do not consciously change their game, and there are lots of other substantive things mgmt can do to increase attendance, one of which is get rid of the scorn they have for their customers.

Bill W.

[JimH]

Sam Houston charges rent for those things?? That's insane!

Are you sure that it's actually a charge? The reason I ask is that Delaware has the same gizmos. Here's the way THEY do it: When you show up at the desk, you open a "day account". Here's the catch: To open a day account with $100, you give them $120 and they give you the gizmo. BUT, when you return the thing at the end of the day, the $20 is added back to the account when they return the balance. So, it's not really rent. It's a way to hold some of your money so you don't walk off with the darn thing after tapping out the account. After all, these things are computerized equipment and I'm sure they're not free for the track to buy. All it is, is a matter of inventory control.

[BillW]

JimH,

Yea, they are $4.00/day. I can understand the deposit (a nice touch, just holding part of the account rather than requiring the customer to produce a $20 every visit to the track), but they apparently don't count take as income, as they try to get as much out of you before the first bet.

Another point, they save an amount of payroll, as do the autotote machines, another reason for no direct charges.

Bill W.

[karlskorner]

Most of the successful handicappers I know can give me reasons after the race as to why they lost, call it "redboarding", but they grow with their mistakes and you can be damn certain they won't make the same mistake in the future.

To blame ones failure and being a loser or marginal player on the fact that if the "takeout" was lowered he/she would have a better chance of being a winner or that the $500.00 program they purchased doen't work or the 500 hundred hours they spent making their own program that doesn't work is ludicrous.

The answers are right in front of you in the PP"s and it's called handicapping, improve your handicapping and you improve your bottom line.

Lets say you won a trifecta for $150.00 or you hit a $18.00 horse. Quickly, tell me how much more would you have if the "takeout" was 1 or 2% lower. Come gang, get serious.

Karl

[BillW]

An $18.00 horse in a 19% environment would pay $18.44 under a %17 environment. This is an improvement of %2.5 ( %2.444 to be more exact) on the ROI. If your ROI is %25 percent (a very good return ... but used for convenience) your yearly profits go up %10 for just a %2 decrease in take. I guess it depends on how much you play whether it is significant or not.

Bill W.

[Tuffmug]

Reduced takeout won't increase the popularity of horse racing. Consider the fact that the most popular form of gambling in casinos is the slots with a 17% to 20% takeout, which is the highest takeout of any of the games of chance offered.

The allure of the slots is the small wager sizes, the chance for large payouts, the low skill level involved, and the frequent "action".

If you use slots as an analogy to improve racings popularity then you would:

1/ Decrease minimum bet size to 25 or 50 cents
2/ Emphasize exotic bets with high payouts (all races have trifectas, superfectas, pentafectas, and sexafectas)
3/ Decrease field size to reduce the choices the bettor has to make and to increase his chances of winning. The thrill of winning and the possibility of winning BIG is more important to the occasional bettor than the takeout.
4/ Increase the number of races per day from 9 to 20 to provide continuous "action"

If you want a popular industry you have to dumb it down. I understand this is heresy to the good handicapper. However, I see a silver lining in this.

The dumbing down of the average participant should result in a more inefficent "markets" that the good handicapper could exploit better than the current system
of competition between more informed participants. We would have to change but the change might benefit us substantially because the power of logic, discipline, and skill would be rewarded with a higher ROI.

[karlskorner]

BillW

I think you just dazzled me with some fancy mathematical footwork.

With a 2% reduction in "takeout" I lost 44 cents on an $18.00 win mutal. Because of this 44 cent loss I now am loosing 10% of my yearly income. Must be the new math my children learned in school.

My GOD I have lost a small fortune in the past 15 years.

Karl

[BillW]

Karlskorner,

It was a simple calculator, and like I said depending on your play, it's either significant, or it isn't. I was just stating facts, not offering an opinion.

Bill W.

[Tom]

If you are going to cut back the "takeout" which of the above should have their support reduced ? It is easy enough to say reduce the "takeout", but somebody gets hurt. Reverse your thinking and look what you are supporting.

Karl

I vote for cutting back or eliminating these:
agricultural fairs
breeding and development funds
charitable uses,
Horsemen's Benevolent and Protective Assoc.,
horsemen's education
location fees,
promotion funds
simulcasting expenses
Sire Stakes
stable-vanning funds
state adutiors and inspectors
stallion awards
zoological institutions

Tom

[BillW]

Tom,

If you were directing your question to me, I wasn't necessarily supporting dropping takeout as a viable step, only providing the math showing its effect. I don't really have an opinion on whether dropped takeout would have a positive affect on handle. It's one thing to have a theoretical affect and quite another to have an affect in reality.

If I were to offer an opinion, I would much rather see the track management work on scorn removal as a first step. ~G~


If you weren't directing your question to me ... never mind. ~G~

Bill W.

[ranchwest]

>When buying a form, the vendor was short on change (I think the price was $4.55) Rather than give me 2 quarters and eat the nickle and taking responsibility for not having change, the vendor tries to short change me by giving me back only 1 quarter. <

Some payoffs at some tracks can be in nickle increments -- especially $1 New York bets. Lone Star cashiers don't have nickles (or at least they didn't the last time this happened to me). It becomes a major delimna in trying to get the payoff. Since Lone Star has frequently ignored my suggestions, I always make them give me the nickle.

[BillW]

Ranchwest,

This was the guy at the program booth selling the racing form, not a mutuel clerk.

Bill W.

[ranchwest]

I understood your post. My point is that it is all part of the tracks treating patrons like they're all high rollers and that you're there to give your money away.

It is difficult to get Lone Star to fully explain how much the total cost of seating is. For instance, some tables have a food minimum. Unless you ask, you don't know that the food minimum is per person, not per table.

I don't really care about the nickle or a quarter, but it is the attitude that gauls me.

My apologies, I'm off topic here.

[tanda]

Random thoughts:

1) Investors/business people should always care about the costs of doing business. The biggest cost that a handicapper investor faces is the wagers fees (takeout and breakage). So, suggesting that they do not matter is like suggesting that a business should never worry about its costs. Karl's arguments are that a winning player will win regardless and vice versa. Does he also believe that a profitable business will make money regardless of its costs? At 50% takeout, can anybody win? Obviously, there is a point where all profitable handicappers cannot make any money. The higher the takeout, the less profit is made.

2) Most bettors do not care about takeout because they are too ignorant of the details. They are casual players. But serious players (who treat it as a business) should care and most do.

3) Takeout decreases should not increase on-track handle much since many of those on-track will bet regardless. They are somewhat of a captive audience. It is simulcasters who can shop for the best product who are likely to migrate to low takeout tracks. However, all bettors will have a longer lasting bankroll and increase handle through a longer lasting bankroll. But, as with all marginal effects, it is almost invisible at the micro level, but can be quite large at the macro level.

4) What I object to is the lack of competition. Karl does not mind the uses of the takeout and all of its recipients. That is fine. What is not fine is that there is no (almost no actually) competition. The states have a monopoly and they grant licenses to tracks who are in cahoots with them and vice versa. The states then require that taxes be paid on handle in addition to customary taxes paid by all businesses. No other industry is treated in this manner. The reason for this extraordinary treatment of the gaming industry is for the "privilege" of being granted a license be the monopolist. These same states actually have the gall to sue Bill Gates for actions 1/10 as anti-competitive as their own monopolies of various industries.

What I want is competition and a free market. No state involvement, other than the payment of the usual taxes paid by all businesses and their employees. That is the major problem with the system. A track ought to be able to reach its own deal with the horseman and determine its own takeout without getting permission from the state. If this happened and prices remained the same, fine, the market will have spoken. Also, I should be able to run a track without getting my competitors permission.

What is not acceptable is a statist, uncompetitive industry that gouges prices. The pricing structure in place is a racket for big government. Why doesn't McDonalds have to pay a license fee to sell hamburgers? The reason is that gambling is a sin which must be regulated by the state but not quite a large enough sin to prevent the public from sucking off of it. Or maybe is is not a sin, maybe that is just a bunch of propaganda to justify big government and its necessary taxation.

5) That is why my partners and I are considering an off-shore alternative to the status quo. We would love to involve the tracks (a main criticism of Karl) but neither the states or their cronies, the tracks, will let us. Karl suggests that my company wants to cut out the tracks. Karl, you are dead wrong. The tracks want to cut us out. In the state where I am located, I cannot get a license to run a pari-mutuel pool EVEN if I was willing to support the horsemen. Why? Because the state protects the tracks from competition by refusing to grant potential competitors a license. I have a few questions, Karl: if Gulfstream pressures Florida to refuse my company a license, why exactly should I feel bad about "cutting them out"? They are not just cutting me out of the industry, they are preventing my company from even coming into existence. These are the tracks you defend? At what point is it okay in your view to seek alternatives? Also, even if I am blessed with a license, I am prevented from offering my services on any other terms than those proscribed by the state with the input of my competitors. Imagine if Wendy's had to get the permission of McDonald's to enter a marketplace and had to agree to use McDonald's price structure. Nice industry you are defending Karl. I would love to set up a company domestically and contribute to the horsemen. But the industry, including the horsemen, will not let me. So Karl, I cannot understand why I am the one cutting them out. It seems the opposite to me.

The truth is that offshore books and future companies along the lines suggested by me will cut the horsemen out because the industry, through the collusion with a monopolist, will not allow domestic competition. And too many horsemen are cheerfully allied with those entities.

I sincerely believe that with the technological revolution and full-card simulcasting there will be a day when off-shore pools rival or exceed host track pools. The reason is simple: the technology exists, the barriers to entry are small and there is a huge financial justification for it.

Look at it this way, at Turf Paradise, it is possible to pay up to 26.67% takeout and breakage on a win wager (a horse that shoud pay 0.199999, etc.:1 pays 0.10 at 20% takeout and dime breakage). Now let's say you bet $100. The fee for that transaction is $26.67. Thus, only $73.33 goes into the pari-mutuel pool. $26.67/$73.33 equals 36.4%. So the fee as a percentage of the amount invested (placed in the pool) is actually higher than customarily thought.

Imagine you went to Charles Schwab and wanted to invest $73.33 and they said "fine, but there is a charge of an additional $26.67 to invest that amount". Are you kidding me? Who would stand for this? When you consider that the amount of work to place a wager is less than that required to place a stock trade, the fees are even more outrageous. And why do these outrageous fees exist? Easy, absence of competition.

So, I really do not see how a revolution cannot take place. Hopefully, my partners and I will lead it and profit from it. Probably it will be somebody else. But the pricing structure requires that a change occur.

[karlskorner]

Tanda;

Since tomorrow is a dark day at CRC, I guess I have the time to sit down and answer your 3 page post (I printed it out, so as not miss anything). You are right the racing industry can be obnoxious at times but so is the auto industry, banking industry, medical profession etc. Lets take it paragraph by paragraph and I will try to condense my thinking.

(1) This is the 3rd or 4th time you suggested a possible 50% takeout, ain't going to happen, you know it and I know it, so I think you are just blowing smoke.
(2) Your are right, most bettors do not care about the takeout. but I don't think I would want to call them ignorant, they are playing just to have fun, a day the races, win or lose. There were approximately 4000 patrons at CRC today and I wold feel safe in saying that 100 were "serious bettors"
(3) CRC dedicated 2 floors for the simulcast player and I am certain that the majority of monies wagered today went into simulcasting, as so with other tracks. As to the bettors having a longer lasting bankroll, JimW was gracious enough to point out to me that if I had an $18.00 mutual, I would earn 44 cents more if the take out was reduced from19% to 17%. Wowiee. In my mind (if I was a $2.00 bettor) and I was fortunate enough to play 10 races and won them all and they all paid $18.00, I would have and additional $4.40 to churn back into the mutual pool, if the takeout was reduced.
(4) The reason I brought up the recipients of the takeout, was to clarify that there are many others who benefit from the takeout and all the monies (as many believe) does not stay with the track. I hope your venture that you and your partners are suggesting takes off, but hold on to your hat, because once the "monied" people see you got something good going, they will leave you standing on the station platform, wondering where everybody went.
(5) I don't know if you ever applied to a State for a licnese or your just assuming that you will be denied one. There are many reasons for the States to deny you a license for what your purpose, but I won't go into that here. Let's assume you start your venture, accept the fact that others will follow you and before long you and your competitors have cornered 85% of the wagering public by the gimmicks you will offer to entice them to wager with you. What will they be wagering on ? You have busted the tracks, so what's left , "MECHANICAL HORSERACING" run by the bent nosed society. There are no horsement left, because of your suggestion to cut them out, reduce the takeout, thereby reducing the purses, thereby getting rid of the horsemen, the tracks, the horses. It's a grandiose idea Tanda, just don't put your own money into it.

You suggest that the States, tracks, owners, trainers, jockeys and whoever else is involved in the industry are in this grand scheme to defraud the wagering public. Like I asked the gentleman who sat next to me one day and constantly complained how all the race are fixed and the track is crooked. Why are you playing ?

Like i have suggested before, if you feel your ROI isn't what it should be, work on your handicapping.

Karl

[tanda]

Karl,

One, I said that many bettors are ignorant of the details which is why they are causal bettors. There is nothing wrong with playing the races for entertainment only and in a casual manner.

Second, I do not believe that the various parties are in a scheme to defraud anybody. I am not a conspiracy theorist and do not believe much in race fixing or think it is the cause of any of my beats. What I did say is that the state and the industry do collude to prevent competition. That is clear. First, you need a license. That in of in itself is anti-competition. Second, your potential competitors have a say in whether you get a license and are allied through various means with the state who has final say so on the license. Third, even if you get a license, you must agree to price your product within guidelines proscribed again with the input of your competitors.

That is the crux of our disagreement. You have no problem with all the parties who receive distributions/welfare/subsidies from the take. Great. I want a country free enough that I can run my track my way and you run yours your way. The market will decide who (maybe one, maybe both, maybe neither) will succeed. Maybe my model would not succeed. Maybe horsemen would not race at my track because of the purse schedule. Who knows? The problem is I have no opportunity to try my model in this country.

As much as I hate the current model, I respect the tracks' rights to run their business that way. However, those same tracks do not respect my right to run a track the way I choose. And I perceive (maybe wrongly) that you are defending the status quo which embodies those ideas.

Third, if offshore pools were very successful (just as could happen with offshore books), the game would be weakened. I know that and have addressed that in other posts. My partners and I have discussed it and have some ideas. I have no desire to hurt the racing industry. I do not have any problem with the track making a profit or the horsemen making money. They are all entitled to profit. If the take was for operating expenses (I consider purses to be part of that) and competition existed, the take would be 10% or less in all likelihood. Thus, it the excess over that figure (casued by no competition and state monopoly on gambling) to which I object. Most of the items you listed are not operating expenses or essential to the running of the race although I am sure they all have some value. But as to those items, I find it interesting that special interest groups have lobbied politicians to add those to the take and distribution. Does a stock investor have to pay a transaction fee to the Stockbrokers' Benevolent Fund or to fund derivative research every time he makes a trade? What would the reaction be if pork-barrel lobbiests got that type of surcharge added to transaction fees? The take is loaded with political pork. All I want is some competition from tracks/betting companies who are free to offer their products without all this taxation and regulation peculiar to the industry.

Fifth, as to your points that we should just improve our handicapping instead of complaining about the take, that reminds me of liberals who, when it is complained that taxes are too high, reply that we should just work harder. What the hell, let's adopt your advice but apply it to all parties, not just handicappers. Let's cut the take to 5% and when the trainers complain we will just suggest that they win more races to make up for the lower purses. After all, it is not the low take that hurts them in that case, it is thier poor training capacity. Right? And when track employees complain about less wages, we just tell them to work harder. If is good advice for us, it must be good for them. Quite frankly, that whole argument is a non-sequiter.

By the way, I love a good debate/discussion, so I hope I have not offended you. I have a thick skin but sometimes don't realize that others are upset by things that do not bother me.

All the best.

[hurrikane]

Just to chime in....I will agree with everyone that is appauled at the attitude the track personel have towards thier customers. Most treat people like dirt.
On top of that....how many gambling establishments have you pay for parking, entry, program..many times 2 programs..one for day one for night...and a place to sit down. All this before you have even looked at a race. The casinoes would not be in business long with that attitude.

On the matter of takout. I don't see a 2% reduction in wps mutual having a big effect. However, nyra, md racing, and kentucky all reduced takeout on the big exotics...namely the pick4 . Now I am a big fan of the pic 4 and when you reduce the take 5-10% on this exotic bet..in a 80.000 pool..that has a big effect on the payout. And when people are sitting around someone who hits 4-5000 tickets they get excited. I see no reason why the take should be different for the exotics.
It doesn't cost the track any more money to take an exacta bet as it does a win. So..why the larger take. This I believe is where tracks could make a huge difference because the payouts would be significantly higher.

Just an opinion...

Tufmug- Couldn't agree more with you and something I harp on , but no one seems to care. If you want more people to go to races and bet more, then lower the min bet amount in exoctics. It is the lure of betting a little to win alot that brings people to lotteries and slot machines. Let'em bet $5 bucks on lots of tri combo's so that they can cash a ticket now and then and they will be back.

Karl - I agree with your premise that the impact of takeout is lost on most who go to the track and does little to attract new fans to the sport, after all you have to have a wining ticket to cash before you're actually affected by the take. but can't agree on taking the action off shore. If everyone were to do this there would be no racing to wager on.

[ranchwest]

hurrikane,

Great points.

The cost of doing business is the same for exotics as WPS. There should be some national guidelines that the tracks and states strive to match, with all wagers having the same or a similar takeout. The disparity is unreasonable.

BTW, at Lone Star, there is often a morning, afternoon and evening program, plus a separate one for Lone Star. By the time you pay to park, enter, sit and have programs, that's about $16 minimum. For the $2 bettor, he has to have a lot of wins to get his $16 back. That's not including eats and drinks.

[tanda]

The reason (allegedly) given for the higher take on exotics is that you are making multiple wagers. So a 19% double take taken once from the two component bets is better than a 15% win take taken twice from two successive wagers. So, .85 x .85 = .7225 which is worse than a .81 return on a double. Superficially, it appears that the bettor is better off with the higher exotic take.

The reasoning is seductive because it is akin to the benefits of qualified retirement plans (pay tax once on distribution as opposed to each year on contributions) which can be proven mathematically to be beneficial.

However, for reasons too complex to get into now, I believe that there may be a flaw in the idea's application to exotics (at least to exotics which are not multiple race, such as exactas). If you believe that the tracks' argument is sound, then there is some sense to it.

I do think a take reduction would, eventually, attract more fans. Many people I talk to (who are not horse racing bettors or fan) say that the game cannot be beat due to the high take (although they may not use the precise word "take"). Most of those people have a general idea that only 1% of players can turn a profit. Again, they may not know the precise figure (nor may I) but they have a fairly accurate general idea.

Now, how the hell do we attract people if we say that only 1% can ever, with the mathematics of the sytem, turn a long-term profit?

Let's say the take was reduced to 8% with no breakage, enough for the horsemen and the tracks i.e. operating expenses and reasonable profit (no other garbage fees).

I would estimate that it would now be possible for 10%-20% of players to show a profit. Eventually (emphasis on eventually), people would realize that the game is much more beatable. This would lead to more fans and bettors.

As long as the game has the image that it is more difficult for a person to become a brain surgeon than profitable at handicapping (and that statement is true in my opinion), there will be a problem attracting fans and bettors.

[BIG HIT]

Tanda they also think most race are fixed or they did not try on there horse which they bet and a host of other reasons.It is rare to here some one say i was wrong.But playing casino games your not wrong you are unlucky.Not wrong which people hate to admit.They should promote the idea you can win and your odds are better at the track then the casino.At the casino your best chance of wining is your frist bet you got a 50/50 chance after that% is in favor of the house.A horse race with any number of horses you possibly could have a winner that pays $100.00 or$30.00 are not on herd of.Also i assume there are more people makeing a liveing playing horse then at the casino.We had a harness track telling people to come out and play your number hell they had been bettor off saying bet the program picks.And promote how well they do.But alas they just dont get it.Enough rambleing have a good day

[Tom]

IMHO, I think the reason that the tracks rake so much off the top of the pools is that the way racing is set up, it rewards failure. Losing trainers, losing jockeys, losing horses, losing owners, pathetically bred state bred horses getting a reward for being slow.......the whole system is based on a form of welfare. It costs money to support all this baggage and guess who pays the bills? Casinos are based on a building, bright lights, and machines with an organized professinal staff to administer the action. Tracks are based on frail animals, lsnack bar revenue, and any Tom-Dick-or-Harry that can saddle a horse and pass a test. TV shows us the Lukas's. the Baffert's, all dressed up with an entourage, smiling in the winners circle, high-fiving sheiks and other rich owners. Come to Finger Lakes and look at the place. TV ain't the real world. Yet those $4,000 nags eat as much as Point Given and cost more in vet bills. So what is the solution? Pay out big state-bred money for even worse horses?
Racing cost money and it only comes from one place - you and me.
Tom

[tanda]

You do have to wonder as the game moves more and more to simulcasting why it makes sense to have so many damn tracks. Seems to me that if the number of tracks went down by 20%, the handle would not necessarily go down as much. Many who bet on the closed track would just move to another track's signal. Thus, the industry could maybe get 90% of the current handle with 80% of the costs.

As bettors continue to move off-track, this profit potential will only increase.

[smf]

Tanda,

I've already given an opinion (negative) on offshore books but I had to comment on this view of yours pasted below:

>>>Imagine if Wendy's had to get the permission of McDonald's to enter a marketplace and had to agree to use McDonald's price structure. Nice industry you are defending Karl. I would love to set up a company domestically and contribute to the horsemen. But the industry, including the horsemen, will not let me. So Karl, I cannot understand why I am the one cutting them out. It seems the opposite to me. <<<

Tanda...., the difference here is that Wendy's is offering their own product (burgers, etc) as is McDonalds. What you're speaking of doing is the equivalent of selling a big mac underpriced before it gets to McDonalds, without opening your own burger joint. You're simply taking someone else's product (the horsemen's product) and selling it for your own gain and cutting out the people responsible for getting the horses on the track.

If someone tried to sell big macs (cheap) before McD's trucks got the beef, fries, etc to their stores there's no doubt they'd put a quick end to the practice. The tracks will do the same soon enuff I'm sure.

As for your comments about the possibility of cutting 20% of the tracks, I hope it doesn't happen. There are (real) jobs that w/b lost that affects (real) people. I'd think that we, even in our search of a "perfect betting world" w/ think about those, uh, what do you call them--people, yeah, employed people!

[tanda]

SMF:

My comment applied even if I was running an actual track (not just a betting service). In most states, all tracks have to charge the same takeout within very narrow parameters. So, even if I produce the product, I have to use my competitors pricing.

Also, the tracks do not own the exclusive rights to run a wager service on their events. The NFL cannot require Las Vegas books to give them a slice of the pie bet on pro football. Your analogy of stealing (at least I think that is what you meant) McDonald's property and then reselling it is not accurate. Gulfstream has no property rights in its race results. But McDonald's does in the property you described.

There seems to be confusion. I want horsemen and track personnel to profit. I just reject the notion that the current model is the ONLY way they can profit. Since much of the take goes to people other than those you are sympathetic to, I do not see how a take reduction would hurt them, so long as it came at the expense of pork barrel recipients.

Also, my suggestion on cutting tracks was in response to the belief that many tracks, horsemen, etc. are losing money. If true, then a cost reduction with little revenue reduction makes sense. And that may be possible.

[Dave Schwartz]

smf & others,

The arguments raised here are valid... and somewhat analagous to the airline industry.

There we have an industry that is in financial trouble, is insensitive to its customers, has a pricing structure that does not work, gouges the customer, refuses to change and needs to be subsidized.

The only company that has avoided the standard paradigm (Southwest) is doing famously (even since Sept. 11) and, ironically, nobody else will follow their lead. This, in spite of the fact that the "Southwest Way" is well known!

The race tracks essentially say, "We aren't making it. Guess we'd better get subsidized by slots." That works, but makes one wonder why they don't simply go into the slot machine business. They are not open to change.

And the ones that do opt for (some degree of) change, do so in a half-assed manner. ("Let's change the take in one pool and see if our bottom line improves measurably.")

Boggles the mind.

For us to worry about whether or not we are supporting the industry is, IMHO, misplaced loyalty. If enough people go "off shore" the tracks will eventually get the message that they must compete for customers. Suddenly they will ask those questions rarely uttered by track management like, "What will bring the bettor back to the track?"

I don't know of anyone that wagers significant money who is truly comfortable betting off shore. Hey, if a book goes belly up and you lose $500 you'll be angry but it won't turn you into a bridge jumper. But how would you feel going to bed each night knowing that your $50k bankroll is in an electronic sleep on a different continent where your only connection to the custodians of your money is a telephone line?

My point is that most people who go off shore because:

A. They have no alternative; no wagering available from their state unless they drive to the track everyday.

or

B. They cannot get as good a deal as they can off shore.

In the case of A, the tracks are the ones that employ the lobbyists that would (could?) affect the necessary change to bring the customer back to the track (in co-mingled funds).

In B, if the track provides a competitive product I believe the bettor would prefer to wager stateside.

As for getting us to come to the track everyday, they need to get this: Those days are over. Why should we? At my house there is no admission, the food is better (and cheaper), nobody has to "watch my stuff" while I go place my wagers, and I can bet any track I want.

Go to the track? Four or five trips a year is plenty. Okay, twice a month if you are a real die hard. (Except for Delmar and the Spa.)


Just my opinion.

Regards,
Dave Schwartz

[ranchwest]

>Also, my suggestion on cutting tracks was in response to the belief that many tracks, horsemen, etc. are losing money. If true, then a cost reduction with little revenue reduction makes sense. And that may be possible.<

Tracks are, for the most part, owned independantly of one another. I don't have any idea how you can think that closing some tracks will help the bottom line of others. In fact, I would assert that the opposite is likely true. If Track A can only hae live racing x months a year, then it is to their advantage that most of the people and animals at the track be able to operate at Track B when Track A is not open because at least some of them will be making a profit.

[smf]

Dave,

You're right about Southwest vs other airlines and I know what you're saying. I wish Herb Kelleher w/ sit down w/ our track mgmnt here and teach them a thing or 2 about customer service and competence. But..

I think Karlskorner is right when he says the takeout (set up as it is presently) has little to do with a player's success. If someone really wanted to make (more) money at wagering they'd do 2 things; Be more selective, and learn to handicap better.

I c/ go on and on here about this but I'd just be rehashing the same old stuff. Funny how karlskorner has made his living for 20 years betting on horses and doesn't let 18% takeout on straight wagers deter him. Gotta be a lesson in there somewhere.

[ranchwest]

If we follow Tanda's suggestions, we'll end up betting on cockroach races from someone's hotel room. Try figuring out which one could get a mile and 1/4!

srf, you're right about handicapping. I once thought that if I could get the race information in file format and have a powerful computer, I could figure out how to make a bundle in about 6 hours. Not only is it not that easy, it isn't close. You have to really study and think for advantages.

However, I do wish the tracks would have less variation in their takes. This does impact handicapping because if you're examining data from multiple tracks, then results from a low takeout track won't yield the same ROI as from a high takeout track. Still, it is possible at the current takeout levels.

And as for Kelleher type management being used at the track, could we start that yesterday?

[tanda]

What some do not understand is that I do not want to destroy the tracks.

I want a viable alternative.

Why?

Because, as Dave Schwartz mentioned above, until tracks lose customers, they have no incentive to improve (not just their prices but other features as well).

My idea is to create a lever for handicappers to create an incentive for change. That incentive can only be created through the perceived threat (and occasional implementation) of customers leaving for competitors.

To change the subject from take out, how is it that tracks cannot update their odds within seconds of the pools closing? The technology is there.

This is one of many examples of the entire industry refusing to modernize to please its customers. Or how about the suggestion that bets be placed in increments other than dollars. Hell, most tracks won't even let you bet in increments of $1 on some wagers (Pick 6, etc.) Is it because the tracks do not possess the computing power to process odd wager sizes? Of course not.

Improving their services is not a priority.

Then, we have a group of disgruntled customers who say they will not desert the tracks. Geez, I wonder why they are not responsive to us.

The biggest fear any business has is losing a customer. If the customer refuses to use that leverage (and that requires be willing to leave and at times actually leaving) it should come as no surprise when that customer is poorly treated.

And since domestic tracks do not offer significantly different product or services, the only real alternative may involve off-shore. And when the industry addresses your concerns, you can return.

[ranchwest]

Return to what? The cockroach races that are left?

There are other alternatives. Bettors could organize and determine the best ways to aggressively get the attention of the tracks. That has not been done.

Throwing out the whole system and sending money to someone offshore is far too drastic for me.

[karlskorner]

SMF, Ranchwest, Dave Schwartz etal

The one thing I learned when I ran my own business was never concern myself with what my competitors were doing, it could drive you nuts. Today I could care less what the person sitting next to me is wagering on.

I assure you Mr. Herb Kelleher of Southwest Airlines doesn't give a tinker's dam what American or United is doing, never has, never will.

Dave Schwartz;

ANALAGOUS

Great word. I had to look it up in my Random House and wrote it down in my notebook. I am sitting here wondering how I can squeeze it in on the crumbbums I hang out with.

Karl

Karl

[tanda]

And when we organize and we say "improve this [blank] or else" and the tracks say "ok, what does or else mean" and we say "oh, nothing, we'll keep supporting you either way" I am quite sure the tracks will move quickly to respond.

The truth is that all people and entities respond most to discomfort/pain. If you leave, that will have many times the impact of cookie pusher meetings with management.

It's like pacifists who say that we should always talk without resorting to action. Once the other party knows the person/government is a pacifist, why should they care about the demands? After all, nothing will be done if the demands are not met.

By the way, I really do not think that the only two possible scenarios are the status quo and cockroach races. Of course, the tracks do appreciate dupes who believe that. It discourages them from leaving.

[ranchwest]

Pacifists don't suggesting moving the war.

[Dave Schwartz]

Karl,

>>>ANALAGOUS

Great word. <<<

Okay, so I mispelled it.

ANALOGOUS

I knew it was anal-something. <G>

Dave

[karlskorner]

Tanda;

Couple of posts back you called the general attendance at the track ignorant, now you use the word dupes.

WHAT YOUR POINT ?

I am still working on Dave Schwartz's word ANALOGUS, so taking your time in answering.

Karl

[ranchwest]

Tanda, the first thing that could be done would be to provide a list of the things that would cause our betting and our frequency at the track to increase. This doesn't involve an either you meet my demands or I do nothing scenario. It is an "I already do nothing, now get me to do something" scenario.

If that type of dialog could be established, then the question would be whether the track would be receptive to other suggestions.

Having clout doesn't have to involve the alternative being to bet offshore.

For one thing, it would be possible to organize handicapper escapes, finding which track would offer the best deal for a busload or whatever of serious handicappers for a day and everyone meeting up at that track.

There's a lot that nobody has ever tried that could be tried before just throwing out the baby with the bath water.

[karlskorner]

I just figured out how to use the word ANALOGOUS with the 2 ignorant dupes Doctors who have a box next to where I sit and the guy who publishes Lawton tip sheet who sits in front of them.

Karl

[Dave Schwartz]

Karl,

See? Anal. I told you so. <G>

Dave

[karlskorner]

Dave;

I am afraid I hav gone off on a tangent again, as I have in the past, but I have a hard time with people who use adjectives to describe their dislikes or disdain for other human beings. I guess it's something from my childhood. I realize it is only their opinion and I should accept it as such. \

Karl

[Dave Schwartz]

Karl,

I don't know what you mean.

Dave

[tanda]

Dave:

I think he means me supposedly calling casual fans ignorant. Of course, I did not write that, but that hasn't stopped Karl from ranting that I did.

Let's examine what I wrote:

"Most bettors do not care about takeout because they are too ignorant of the details. They are casual players. But serious players (who treat it as a business) should care and most do."

In numerous posts, Karl has accused me of calling those who attend races as ignorant. Apparently, he is unable to understand the basic sentences above, so I must explain in detail.

Notice, I did not say that casual fans were ignorant. I said that they were ignorant of the details. For example, many casual fans do not know what breakage is. Obviously, many do not know the exact takeouts on various wagers. Many do not know when a filly becomes a mare or if there is a difference between a damsire and broodmare sire.

We are all ignorant of somethings, so the above quote merely states a universal truth that really is not even insulting.

Although a person may be ignorant of the details of a discipline, they are not necessarily ignorant overall. A nuclear physicist is quite probably ignorant of the details of neurosurgery. Too state as much is not the same as stating that the nuclear physict is ignorant.

The difference is this:

1) Most bettors are too ignorant of the details of the industry.

2) Most bettors are ignorant.

These have completely different meanings.

Although I wrote 1), Karl believes I wrote 2).

This is about the 5th time that Karl has misquoted/misunderstood clearly written positions.

For example, even though I have never in my life suggested that races are fixed or that tracks are defrauding its customers, Karl has accused my of that as well. I have suggested they are providing a lousy product at times. Again, the extreme distinction from producing a bad product and engaging in deliberate fraud is lost on Karl. I would ask that, unless Karl can find a post where I clearly accused track management of defrauding customers and/or fixing races, that he do the honorable thing and acknowledge this error (and his others while he is at it).

[tanda]

Ranchwest:

I don't have much faith in your idea (as you don't in mine) mainly because it would take sooo much damn committment from everybody. Since I bet from home 9(and many others do as well), I really have no desire to get on a bus anywhere (not to mention i really do not live near any decent tracks). So I question how many people would make the committment to a SUSTAINED program that you suggest. And it would have to be sustained. One such meeting/bus ride is not going to make or maintain change.

Nonetheless, our ideas are not exclusive. Both and more should be tried. Anything we can do to make the tracks compete for our business is good.

Also, I was not referring to you as a pacifist (if you thought I was). I was making the point that a person who is unwilling to take action is unlikely to have his talk respected. That is the problem with pacifists who always say we should talk things out. I am not sure why, if a pacifist made a demand on you, you would give a damn since they acknowledge they will do nothing to enforce the demands (referring to pacifism in world/military affairs).

The other problem I have with your suggestion is this.

Imagine we organized 10,000 handicappers. Well, we could go groveling to the tracks for some crumbs. Or one of us could say that they would act as a stakeholder for a pari-mutuel pool run by the 10,000 handicappers a minimum cost. In other words, why beg the tracks for something we have the power to give ourselves? Then the tracks can organize and ASK US for our business. After all, there are some of us who believe that the players are the most significant part of the industry (we fund it by and large). Maybe the others should come to us.

[takeout]

Originally posted by Dave Schwartz

The race tracks essentially say, "We aren't making it. Guess we'd better get subsidized by slots." That works, but makes one wonder why they don't simply go into the slot machine business.

I think they probably would if they could. They're going to have them in NY and now Kentucky is starting to talk about them. Penn Gaming (and probably other companies) makes no bones about the fact that they own tracks only because of their slot potential. (Well, at least their honesty is refreshing.) When the purse of the feature at Mountaineer Park and Churchill Downs is only 7,000 apart, something's got to give.

As slots slowly (or not so slowly) take over the industry, the horsemen should be fine as long as they stay joined at the hip with the slot revenue. And, with all these new millions of slot money subsidizing racing in the future, I see no reason why the takeout can't be reduced to a reasonable 10% or even be done away with completely. (Yeah, that'll happen!):rolleyes:

"Kentucky lawmakers say racetrack slots should be considered"
http://www.thoroughbredtimes.com/todaysnews/newsview.asp?recno=17597&subsec=1

[BillW]

takeout,

The worry I have about slots is that in most states they are only legal at tracks. Because slots are more profitable, track management will become more and more focused on the slot business and the racing will become more and more of a "front" operation for the "casino". As soon as states come under more financial pressure and start legalizing casinos for revenue, the track owners have a foot in the door with a non-profitable side business attached (horse racing).

It's tough enough to make a profit in horseracing, but with mgmt's. attention distracted to a more profitable business, it will degrade even further.


BTW: saw an item on CNN today re. states becoming more interested in legalizing casinos due to economic pressure and new security costs.

Bill W.

[ranchwest]

Delta Downs has gone to slots. The casinos hate them and fight them tooth and nail. The track has changed tremendously in appearance, but I haven't been there for live racing, so I don't know how that is going. What I do know is that this sleepy little track out in the backwoods is suddenly worth huge money. If I heard right, the last selling price was about $135 million.

[ranchwest]

Tanda,

There's a lot of alternatives for handicappers today. My point is that it would be worth trying to open a dialog with the track before turning to drastic alternatives.

[takeout]

Originally posted by BillW

It's tough enough to make a profit in horseracing, but with mgmt's. attention distracted to a more profitable business, it will degrade even further.

That's probably exactly what's going to happen but I can't see anything stopping it at this point. The more that gambling is opened up across the country, the weaker the position of the tracks. The only reason many of them aren't out of business already is the slots. I'm not sure if that's ultimately a good thing or not but slots are definitely the wild card in the deck.