NY Residents Can Kiss Their Rebates Goodbye Comes The New Year

[infrontby1]

It looks like the bill proposed early in the year has been finalized and will go into effect comes Jan. 1st.

With the 5% toll on all wagers made, there's no way the ADWs that have been paying us generous rebates can continue to do so.

Now what?

http://www.drf.com/news/new-york-add-5-cent-fee-bets-made-out-state-companies

[Stillriledup]

So, i read this and still don't understand it....does it only hurt NY residents, or everyone?

[infrontby1]

All NY Residents that place wagers through an ADW that is not formed and organized in the state New York. This includes twinspires, TVG, expressbet, drfbets, amwager, darkhorsebet, etc. Pretty much all the sites you can wager from with the exception of those operated by New York racetracks.


Here's another article from one of the wagering sites listed above:

DO YOU LIVE IN NEW YORK?
If the answer is yes, this is an important announcement for you. A law set to go into effect Jan. 1 in New York will require out-of-state account-wagering operators to pay a 5-cent fee for every dollar wagered through their operations by a New York resident. The law calls the 5 percent fee a “market-origin fee,” and it will be applied to any wager made by a New York customer, regardless of whether the customer is betting on a race at a New York track or an out-of-state track.
Sadly, this hurts you, the player, and it hurts horseracing overall. At DHB, we have tried to give back as much in rewards as possible, but this new legislation will force us to lower the rewards structure on our players with NY addresses.

[Stillriledup]

All NY Residents that place wagers through an ADW that is not formed and organized in the state New York. This includes twinspires, TVG, expressbet, drfbets, amwager, darkhorsebet, etc. Pretty much all the sites you can wager from with the exception of those operated by New York racetracks.


Here's another article from one of the wagering sites listed above:

DO YOU LIVE IN NEW YORK?
If the answer is yes, this is an important announcement for you. A law set to go into effect Jan. 1 in New York will require out-of-state account-wagering operators to pay a 5-cent fee for every dollar wagered through their operations by a New York resident. The law calls the 5 percent fee a “market-origin fee,” and it will be applied to any wager made by a New York customer, regardless of whether the customer is betting on a race at a New York track or an out-of-state track.
Sadly, this hurts you, the player, and it hurts horseracing overall. At DHB, we have tried to give back as much in rewards as possible, but this new legislation will force us to lower the rewards structure on our players with NY addresses.

Thanks. I got it now. They're just trying to bilk anyone who won't bet with them and force them to sign up with their own bet takers....sort of like NJ has done.

Even though this doesnt hurt me, i think i'm going to just stop betting their races. (not that i ever pick a winner there anyway)

[thespaah]

It looks like the bill proposed early in the year has been finalized and will go into effect comes Jan. 1st.

With the 5% toll on all wagers made, there's no way the ADWs that have been paying us generous rebates can continue to do so.

Now what?

http://www.drf.com/news/new-york-add-5-cent-fee-bets-made-out-state-companies
I think rather than go through the expense of collecting the tax from their bettors in NY, the ADW's will simply refuse business from NY based accounts.
This is the same thing as a state demanding merchants in another state collect sales taxes from a resident of that state.
The Massachusetts government tried this. That state's government determined that MA residents were crossing into Maine and NH where taxes on liquor by the bottle are much lower. MA demanded merchants of those states identify MA residents and tax them at the MA rate, then collect the tax and pay it the MA government..ME and NH told MA to go jump into Boston Harbor.
Is it conceivable that ADW's refuse to collect the tax?
I view this as another desperate money hungry over spending state committing a money grab.
Like any other 'sin tax', this sort of taxation usually results in loss of revenue.

[Track Collector]

While it will not help the average player, I wonder if those using Schedule C to report their wagering activity can recoup a portion of the lost rebates (perhaps up to 45%-50%) by listing the 5% fees as "expenses" among their other racing business expenses to offset reportable income?

[Tom]

It certainly is an expense when a POS government imposes it.
NY has a lot of cold weather, so the thieves that run the state do this so they don't have wear a mask and wait in dark alleys to rob us. :ThmbDown: :ThmbDown: :ThmbDown:

Seems to be a conflict of interest seeing how Baby Mario has an interest in NYRA tracks.

[proximity]

Now what?


where, i don't know, but you're probably going to have to move. :mad:

pennsylvania just got hit with a similar fee of 10% which killed the rebates. :mad:

of course i counted attendance this afternoon at penn national of 11 in the simulcast theater and 16 in the clubhouse. in a real racing state like new york.... this could spell disaster not for their own handle, but for ny handle coming in on non ny tracks.... like (oh, the irony) penn national. :rolleyes:

[infrontby1]

where, i don't know, but you're probably going to have to move. :mad:

pennsylvania just got hit with a similar fee of 10% which killed the rebates. :mad:

of course i counted attendance this afternoon at penn national of 11 in the simulcast theater and 16 in the clubhouse. in a real racing state like new york.... this could spell disaster not for their own handle, but for ny handle coming in on non ny tracks.... like (oh, the irony) penn national. :rolleyes:

Good point. And where do you think the majority of handle is wagered from on Mondays and Tuesdays at tracks like Parx, Beulah Park and Zia?

They do better business on these days than on their weekends

[098poi]

This is very confusing to me. This is from the article.

Account-wagering companies typically retain 10 to 20 cents per dollar wagered.

I don't understand how everyone gets their piece of the pie. When I wager $50 through Twinspires isn't that money put in the pool where I wagered? Then there is the track take depending on the wager. I thought money got distributed to everyone else (outside of the bettors) from that.

Can someone do a simple breakdown of the flow of a wagered dollar from me making a bet, going to ADW, going to track etc. and where everything gets siphoned off including rebates and how that money fits into the picture. I don't consider myself a newbie but it has always seemed like there is more more money taken out (I don't mean take out) than goes in and I've always found it a bit confusing. I am confused asking the question!

Thanks.

[badcompany]

While it will not help the average player, I wonder if those using Schedule C to report their wagering activity can recoup a portion of the lost rebates (perhaps up to 45%-50%) by listing the 5% fees as "expenses" among their other racing business expenses to offset reportable income?

The problem I see with this is that the fee is being being paid by the operator, not the bettor.

[infrontby1]

This is very confusing to me. This is from the article.

Account-wagering companies typically retain 10 to 20 cents per dollar wagered.

I don't understand how everyone gets their piece of the pie. When I wager $50 through Twinspires isn't that money put in the pool where I wagered? Then there is the track take depending on the wager. I thought money got distributed to everyone else (outside of the bettors) from that.

Can someone do a simple breakdown of the flow of a wagered dollar from me making a bet, going to ADW, going to track etc. and where everything gets siphoned off including rebates and how that money fits into the picture. I don't consider myself a newbie but it has always seemed like there is more more money taken out (I don't mean take out) than goes in and I've always found it a bit confusing. I am confused asking the question!

Thanks.

The article below should help, now after reading this, the ADWs are going to be charged an additional 5% come January from New York residents. It's going to be like somebody that commented earlier, the ADWs are going to drop us, it's makes no business purpose to keep have us as customers if they are not going to profit from us.




ADW by the Numbers: How an ADW Operates

Posted on March 1, 2013 by Eric Troelstra
It can be argued that ADWs (Advance Deposit Wagering) have become to horse racing wagering what E*Trade has become to online stock trading. The ADW has brought the technology and the convenience of wagering on pari-mutuel horse racing to the desktop, laptop and mobile device of everyone that enjoys the game. Not only can you wager, but many ADWs offer you live video streaming, video replays as well as current odds, instant results, analysis, industry news, and player reward programs.

HOW DOES AN ADW MAKE MONEY?
So how does an ADW get compensated or make money for their offerings? There are several components that contribute to the bottom line of an ADW. ADWs negotiate with racetracks around the globe for the permission to offer the product on their ADW platform. In return, ADWs pay the track a negotiated “host fee” for the rights to carry the track signal. These fees can vary dramatically from track to track.

The next major cost component affecting the bottom line of an ADW is the “take out” on each pari-mutuel pool. The take out can be thought of as the tracks commission, or “rake,” if you were to think of it in poker terms. Take-out is set by the tracks and again varies widely by track and pool type. The difference between the take out and the host fee is the gross margin or contribution margin the ADW uses to cover all General and Administrative (G&A) fees, taxes and player rewards.

Let’s take a look at what this may look like in a potential real world example.

NUMBERS BREAKDOWN
Let’s assume the “take out” = 20% in an Exacta Pool at XYZ track. XYZ track charges ABC ADW 8% “host fee” on all volume (handle) that the ADW places through XYZ track. Simple math leaves 12% (20% – 8%) on every dollar wagered through ABC ADW on XYZ track for the ADW to cover all expenses and hopefully make a profit.

Typical racing commission fees, tote fees, interface fees, taxes etc. could range in the neighborhood of 1.5% of handle. General and Administrative (G&A) fees are all of the salaries and benefits, marketing, rent/mortgage, utilities, insurances, legal and professional – you get the idea – all the typical day-to-day operational expenses most businesses incur. Typical G&A could run around 3% of handle.

Now let’s assume XYZ ADW is very player and industry friendly and offers a 5% cash reward on all exacta wagers made at XYZ track. In our example, this leaves the XYZ ADW a 2.5% EBITDA (earnings before interest, taxes, depreciation and amortization).

XYZ Track Take Out on Exact Pool 20%
XYZ Host Fee to ABC ADW - 8%
Gross Margin 12%
Fees and Taxes -1.5%
General & Administrative (G&A) - 3%
Player Rewards - 5%
Earnings (EBITDA) 2.5%

As this illustration points out, ADWs operate on margins similar to that of online stock trading services. Like E*Trade, success is hinged on generating volume while offering its clients service, convenience and ultimately the best overall value.

[acorn54]

thanks for the post
it also begs the question is the gambling on horseraces a viable means to invest for new yorkers.
for me personally with this new law the idea of making any significant money in horse betting has gone the way of the dodo bird,as i am a resident of new york and my company has no operations outside of new york to a bettor friendly state.
i guess it's time to devote less time to gambling on horses and more time on my other pastimes such as astronomy, and stamp collecting of rarities.
it has been a precipitous decline in a very short time anyway. first, the rapidly dwindling opportunites due to short fields in horse races, the increased efficientcy of the parimutuel market, and the exodus of casual bettors from the betting pools, now the elimination of my rebates come january.
keep up the good work nyra, cuomo and company.

[098poi]

infrontby1 Thanks for that post. First time I saw some sort of real breakdown.

[lamboguy]

truly a great comparison. the only bonus an adw gets is the breakage.

when a stock trader places his trade on E-Trade, his order goes in and either gets filled to a market order or a limit order. the clearing house gets filled filled at the very best possible price often times getting the fill 1/2 cent better than the customer. if a customer has an order for 10,000 shares of an equity, the brokerage firm makes the an added $50 over and above the commission.

[mannyberrios]

doesn't Nyra.com offer rebates?

[badcompany]

Online Brokerages like Scottrade have made commissions almost irrelevant even to a small investor.

While rebates help everyone, to get a significant discount, you have to put some serious money through the windows.

[acorn54]

not even close to what you get at a rebate shop, something on the order of 1%
it is a joke and they know it, probably in part the reason for the new law, nyra knows they are not competitive in a free market environment.

[badcompany]

thanks for the post
it also begs the question is the gambling on horseraces a viable means to invest for new yorkers.
for me personally with this new law the idea of making any significant money in horse betting has gone the way of the dodo bird....

Horseracing has never acknowledged this type of thinking.

They believe Horseracing is above the laws of economics, and price increases don't result in a loss of demand.

[mannyberrios]

not even close to what you get at a rebate shop, something on the order of 1%
it is a joke and they know it, probably in part the reason for the new law, nyra knows they are not competitive in a free market environment.ok, that's bad news

[mannyberrios]

I would think that most people in New York City bet with the big 3, and they don't give rebates

[acorn54]

and most lose money, no thanks, count me out
my honest appraisal of my own gambling (i keep records) shows without a rebate horserace gambling is a financial sinkhole
the ONLY experience i have heard first hand from what i consider a trustworthy source is that the rebate is the make or break for a profitable year
if people can claim to show a significant profit without it i salute them, but then why are they gambling significant money with one hand tied behind their back, it doesn't make any sense.

[Saratoga_Mike]

How is this law not a violation of the Commerce Clause? This is a clear attempt by NY State to discriminate against non-NY-based ADWs.

[acorn54]

what we need is a good lawyer to contest this, is HANA considering such a thing?

[Saratoga_Mike]

what we need is a good lawyer to contest this, is HANA considering such a thing?

I would assume the large non-NY-based ADWs will sue if in fact the Commerce Clause can be invoked.

[the little guy]

You guys do understand that source market fees exist in other major states as well, right?

[Dave Schwartz]

This sounds like the same thing PA did. Within days all PA residents lost any accounts that were ADW-based outside of PA.

[Saratoga_Mike]

You guys do understand that source market fees exist in other major states as well, right?

How is it not discriminatory (in any state) against out-of-state ADWs?

[Saratoga_Mike]

This sounds like the same thing PA did. Within days all PA residents lost any accounts that were ADW-based outside of PA.

Yes, I'm sure the same thing will happen in NY. Call it a "market source fee" if you like, but it's a de facto "put non-resident ADWs out of business" fee!

[Saratoga_Mike]

Quote from the Federal District Court judge in Texas who heard Churchill's case against the state's ban on online wagering:

Noting that a state law such as the one being challenged in Texas violates the Commerce Clause if it mandates "differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter," Nowlin said the activities being treated differently must be "substantially similar."

Churchill did not prevail in this case (on appeal, I believe) because TX was differentiating between brick-and-mortar wagering and online wagering. That doesn't seem to be the case in NY.

[acorn54]

are you trying to shrug off a 5% take out of a horseplayers bottom line?
if you have a significant profit with this new law my hat is off to you

[Saratoga_Mike]

are you trying to shrug off a 5% take out of a horseplayers bottom line?
if you have a significant profit with this new law my hat is off to you

Who is shrugging off the new law? TLG simply made the point that other states have similar "fees."

[Vigorish]

thanks for the post
it also begs the question is the gambling on horseraces a viable means to invest for new yorkers.
for me personally with this new law the idea of making any significant money in horse betting has gone the way of the dodo bird,as i am a resident of new york and my company has no operations outside of new york to a bettor friendly state.
i guess it's time to devote less time to gambling on horses and more time on my other pastimes such as astronomy, and stamp collecting of rarities.
it has been a precipitous decline in a very short time anyway. first, the rapidly dwindling opportunites due to short fields in horse races, the increased efficientcy of the parimutuel market, and the exodus of casual bettors from the betting pools, now the elimination of my rebates come january.
keep up the good work nyra, cuomo and company.

Only a delusional optimist would think that the other states will not follow suit with new source market fees and access restrictions. The player is already being squeezed with higher signal fees and increased takeout rates. The opportunity cost of staying engaged as a serious horseplayer keeps on increasing, make the game less and less palatable.

Many serious horseplayers are a lot like horsemen, breeders, and track owners. Our investment in the game is contingent on prevailing and projected business conditions. Although the industry would like to cultivate a generation of entertainment-focused fans willing to pay $80 admissions and wear Todd Pletcher or Bob Baffert jersey's, this type of thinking is pure fantasy. A cursory analysis of nearly every major enthusiast site reveals that nearly all players are after one elusive goal: becoming a long-term winning horseplayer. The 'Zenyatta Ladies' are fickle fans who rally around one or two horses, pay their $10 admittance fees and buy a few drinks, only to fade into oblivion.



Anyway, I am anticipating that within a year or two we will see the rest of the states follow suit, taking their cue from major states like Texas, Illinois, Pennsylvania, New York, and others. They will never succeed in bringing me back to the track, which I left in 1998. I constitute 'a recovered fan' in the sense that I would never have returned to the game if not for the easy access, technological innovation, and rewards (i.e. past performances, rebates, promotions) offered by ADW's. If I am representative of the younger fan (and I think I am in many ways), this game is doomed.

[the little guy]

are you trying to shrug off a 5% take out of a horseplayers bottom line?
if you have a significant profit with this new law my hat is off to you

Are you talking to me? If so, please quote me.

This law doesn't help NYRA. Yes, most of the monies bet will be bet on NYRA races, but a much lesser percentage of the source market fee is given to NYRA. Given that one thing we can agree upon is that this will hurt handle, if one takes the time to read the law, they will realize it won't likely be a net gain for NYRA.

I suggest people here read the entire law, and then learn something about source market fees, and the number of states that already have them in place, before making a lot of claims or pointing a lot of fingers.

[Saratoga_Mike]

Are you talking to me? If so, please quote me.

This law doesn't help NYRA. Yes, most of the monies bet will be bet on NYRA races, but a much lesser percentage of the source market fee is given to NYRA. Given that one thing we can agree upon is that this will hurt handle, if one takes the time to read the law, they will realize it won't likely be a net gain for NYRA.

I suggest people here read the entire law, and then learn something about source market fees, and the number of states that already have them in place, before making a lot of claims or pointing a lot of fingers.

I'm certainly not pointing fingers. I oppose these actions in all states. But I will read the full NY law in order to learn what happens to the bulk of the new source mkt fee.

[acorn54]

Are you talking to me? If so, please quote me.

This law doesn't help NYRA. Yes, most of the monies bet will be bet on NYRA races, but a much lesser percentage of the source market fee is given to NYRA. Given that one thing we can agree upon is that this will hurt handle, if one takes the time to read the law, they will realize it won't likely be a net gain for NYRA.

I suggest people here read the entire law, and then learn something about source market fees, and the number of states that already have them in place, before making a lot of claims or pointing a lot of fingers.


sorry for being rude, i am just hot under the collar at the moment right now.

[wiffleball whizz]

Are you talking to me? If so, please quote me.

This law doesn't help NYRA. Yes, most of the monies bet will be bet on NYRA races, but a much lesser percentage of the source market fee is given to NYRA. Given that one thing we can agree upon is that this will hurt handle, if one takes the time to read the law, they will realize it won't likely be a net gain for NYRA.

I suggest people here read the entire law, and then learn something about source market fees, and the number of states that already have them in place, before making a lot of claims or pointing a lot of fingers.


Agree 100 percent with TLG........

[Saratoga_Mike]

From the bill:

"THE COMMISSION SHALL ALLOCATE CREDITS TO RACING ASSOCIATIONS AND
26 CORPORATIONS, FRANCHISED CORPORATIONS, AND OFF-TRACK BETTING CORPO-
27 RATIONS IN THE FOLLOWING AMOUNTS:

28 A. FORTY PERCENT OF THE AMOUNT RECEIVED FROM THE MARKET ORIGIN FEE
29 PAID PURSUANT TO SUBDIVISION SIX OF SECTION ONE THOUSAND TWELVE-A OF
30 THIS CHAPTER TO REGIONAL OFF-TRACK BETTING CORPORATIONS. ALLOCATIONS TO
31 INDIVIDUAL REGIONAL OFF-TRACK BETTING CORPORATIONS SHALL BE MADE BASED
32 ON A RATIO WHERE THE NUMERATOR IS THE REGIONAL CORPORATION'S TOTAL
33 IN-STATE HANDLE FOR THE PREVIOUS CALENDAR YEAR AS CALCULATED BY THE
34 COMMISSION AND THE DENOMINATOR IS THE TOTAL IN-STATE HANDLE OF ALL THE
35 REGIONAL OFF-TRACK BETTING CORPORATIONS FOR THE PREVIOUS CALENDAR YEAR
36 AS CALCULATED BY THE COMMISSION;


37 B. FIFTY PERCENT OF THE AMOUNT RECEIVED FROM THE MARKET ORIGIN FEE
38 PAID PURSUANT TO SUBDIVISION SIX OF SECTION ONE THOUSAND TWELVE-A OF
39 THIS CHAPTER TO THE RACING ASSOCIATIONS AND CORPORATIONS AND FRANCHISED
40 CORPORATIONS. ALLOCATIONS TO INDIVIDUAL RACING ASSOCIATIONS AND CORPO-
41 RATIONS AND FRANCHISED CORPORATIONS SHALL BE MADE AS FOLLOWS:
42 (I) SIXTY PERCENT TO THOROUGHBRED RACING ASSOCIATIONS AND FRANCHISED
43 CORPORATIONS. FIVE-SIXTHS SHALL BE ALLOCATED TO A FRANCHISED CORPO-
44 RATION AND ONE-SIXTH SHALL BE ALLOCATED TO A THOROUGHBRED RACING ASSOCI-
45 ATION.
46 (II) FORTY PERCENT TO HARNESS RACING ASSOCIATIONS AND CORPORATIONS.
47 ALLOCATIONS TO INDIVIDUAL HARNESS RACING ASSOCIATIONS AND CORPORATIONS
48 SHALL BE MADE BASED ON A RATIO WHERE THE NUMERATOR IS THE ASSOCIATION'S
49 OR CORPORATION'S TOTAL IN-STATE HANDLE ON LIVE RACING FOR THE PREVIOUS
50 CALENDAR YEAR AS CALCULATED BY THE COMMISSION AND THE DENOMINATOR IS THE
51 TOTAL IN-STATE ON LIVE HANDLE FOR ALL HARNESS RACING ASSOCIATIONS AND
52 CORPORATIONS FOR THE PREVIOUS CALENDAR YEAR AS CALCULATED BY THE COMMIS-
53 SION."

The bill was sponsored by Senator Bonacic (Monticello Raceway is in his district), and his co-sponsors were Senators Gallivan and Grisanti (Western Regional OTB and/or Batavia/Buffalo Raceways are in their districts).

The bill appears to favor OTBs and harness tracks. Why any OTB would receive a dime of this money is beyond me.

[WJ47]

I live in New York and currently bet with Twinspires. How is NYRA rewards? Does it have a nice interface? I'm thinking I should open an account there. I don't want to get cut off.

[the little guy]

Some States that already have source market fees....California, Florida, Illinois, Virginia, Pennsylvania and New Jersey. There are also others. Two of those States, Virginia and Pennsylvania, have a 10% source market fee.

[the little guy]

I live in New York and currently bet with Twinspires. How is NYRA rewards? Does it have a nice interface? I'm thinking I should open an account there. I don't want to get cut off.

You can check out the current interface at nyrarewards.com. However, given that NYRA and GBE have just gone ahead to substantially improve our betting platform going forward, things will change in a very positive way in the near future.

[wiffleball whizz]

Just wondering how you guys are gonna be in the black betting ponies now??

Now u guys can try to bet to make money and not try and break even and scoop the rebates :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:


I have zero sympathy for anybody that this is costing money too

Now we will see who the real gamblers and handicappers are......


Posts that will be becoming less and less frequent:

" I just bet and look to push and get rebates"

" my ADW gives me back 12.7 percent on tris"

"Hey whizz why don't u try out this ADW"

" hey whizz you can't beat this game without rebates"


I got news for you guys......the whizz is up over the 3.5 years betting horses without rebates.....real gamblers can win without the assist


Try being like me and cjs dad and bet live at the track without rebates and let us know how u do!!!!!!

[Saratoga_Mike]

Some States that already have source market fees....California, Florida, Illinois, Virginia, Pennsylvania and New Jersey. There are also others. Two of those States, Virginia and Pennsylvania, have a 10% source market fee.

I know Churchill sued TX, but it was a different set of circumstances. I need to logon to PACER and see if there are pending suits in the states you enumerated.

[Saratoga_Mike]

I got news for you guys......the whizz is up over the 3.5 years betting horses without rebates.....real gamblers can win without the assist


Try being like me and cjs dad and bet live at the track without rebates and let us know how u do!!!!!!

You're the first self-described "degenerate" in the history of time who is ahead of the game - congrats.

[wiffleball whizz]

You're the first self-described "degenerate" in the history of time who is ahead of the game - congrats.


Noooooooooooooooooo.............

Up since 2010 about 13,700


From 1997-2009 prob stuck 50,000 to 80,000........nice rite :lol:

[WJ47]

You can check out the current interface at nyrarewards.com. However, given that NYRA and GBE have just gone ahead to substantially improve our betting platform going forward, things will change in a very positive way in the near future.

Thanks! I liked the interface. I'm going to sign up for an account. :)

[lamboguy]

if you bet $50,000 a month or more, you can go to Capital OTB in New York state and get a 5% rebate, if you bet more you might be able to negotiate a higher one. that's not a bad rebate for NYRA players. that rebate is for W-P-S and exacta's.

[thespaah]

Does anyone here see action being pushed to off shore or Canadian books?

[wiffleball whizz]

Does anyone here see action being pushed to off shore or Canadian books?


That's the smart move......nice sign up bonuses and reload with some offshore sites


Or find a local book that takes horses and if u win u collect if u lose stiff......


Take a look at some offshore places

[badcompany]

Free Market Capitalism: Producers and Entreprenuers compete to supply goods and services to consumers. Profits determine which are doing the best job.

Crony Capitalism: Politicians and favored businesses conspire to hobble competitors at the expense of the consumer.

Which one does this sound like?

[Track Collector]

Just wondering how you guys are gonna be in the black betting ponies now??

Now u guys can try to bet to make money and not try and break even and scoop the rebates :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:


I have zero sympathy for anybody that this is costing money too

Now we will see who the real gamblers and handicappers are......


Posts that will be becoming less and less frequent:

" I just bet and look to push and get rebates"

" my ADW gives me back 12.7 percent on tris"

"Hey whizz why don't u try out this ADW"

" hey whizz you can't beat this game without rebates"


I got news for you guys......the whizz is up over the 3.5 years betting horses without rebates.....real gamblers can win without the assist


Try being like me and cjs dad and bet live at the track without rebates and let us know how u do!!!!!!

Sorry whizz, but real professional gamblers eschew pride and take advantage of of all available avenues (including rebates), particularly when their livelihood depends on all or a significant amount of that income. Almost all have the ability to produce a profitable ROI without rebates, but why would they when rebates allow them to wager more and perhaps end up earning 2,5, even 10 times the amount of money?

I have a feeling too that your viewpoint is not much different in some regards with those whom you have been critical of. Take your casino job for example. If all aspects were completely equal job-wise, would you not take the job that pays twice as much over another?

I'm also curious as to how you would feel if circumstances were similar in your universe of poker and sports betting. How about if takeout (juice) were raised to the 20% to 25% levels? How popular and actively involved would you and your fellow players be, and would it be worth the effort?

I think you are a knowledgeable and interesting guy, but this resentment towards rebates is not based on rational thinking. :p


Chris

[wiffleball whizz]

Sorry whizz, but real professional gamblers eschew pride and take advantage of of all available avenues (including rebates), particularly when their livelihood depends on all or a significant amount of that income. Almost all have the ability to produce a profitable ROI without rebates, but why would they when rebates allow them to wager more and perhaps end up earning 2,5, even 10 times the amount of money?

I have a feeling too that your viewpoint is not much different in some regards with those whom you have been critical of. Take your casino job for example. If all aspects were completely equal job-wise, would you not take the job that pays twice as much over another?

I'm also curious as to how you would feel if circumstances were similar in your universe of poker and sports betting. How about if takeout (juice) were raised to the 20% to 25% levels? How popular and actively involved would you and your fellow players be, and would it be worth the effort?

I think you are a knowledgeable and interesting guy, but this resentment towards rebates is not based on rational thinking. :p


Chris


I'll be dead honest with you........I may be the stupidest person on the planet for as much as I gamble on horses not ever looking into rebate shops........I vividly remember being in the walkway on the 2nd floor of the Timonium when u told me what u got back in rebates on tri and super rebates......my jaw hit the ground


I do feel sorry for yourself and proximity in losing or potential loss in rebates

[lamboguy]

i agree with The Wiz. i would be doing better without the rebates. there would be only about 25 races a year that i might bet. instead with rebates i am forced into betting about 1000 of them. i know i lose on the 975 of them that i really have no business betting on.

[wiffleball whizz]

On a selfish note people losing rebates can only benifit me.......example...

There are 5 people betting into a pool including me so that's 6....here are the 6 people.....:

Whizz
Cj
The little guy
Ultimate selector
Ronsmac (solid as it gets I saw firsthand)


Now rebates are pulled and cj says "**** this I'm not betting 80 races a day no more" ......and now bets only 5 a day


Isn't cj not betting better for myself or anybody else gambling?

Anything that drives away sharp money I like


Just using cj as a example cuz he is the master......

Am I right or wrong

[PaceAdvantage]

nyra knows they are not competitive in a free market environment.I'm going to take a wild guess and say that nyra isn't legally able to offer anything more than they are offering.

Call it a hunch... :rolleyes:

[Robert Fischer]

Am I right or wrong

you've got some guys betting multiple horses(to win or to spread) to maximize rebates.

If those players stop "the spread", and simply play for advantage (before rebate), that could actually hurt your value significantly.

[ronsmac]

On a selfish note people losing rebates can only benifit me.......example...

There are 5 people betting into a pool including me so that's 6....here are the 6 people.....:

Whizz
Cj
The little guy
Ultimate selector
Ronsmac (solid as it gets I saw firsthand)


Now rebates are pulled and cj says "**** this I'm not betting 80 races a day no more" ......and now bets only 5 a day


Isn't cj not betting better for myself or anybody else gambling?

Anything that drives away sharp money I like


Just using cj as a example cuz he is the master......

Am I right or wrongYou're 100% correct, myself excluded. I'm pretty good but not in that esteemed company. It's a no brainer, take out the smartest money and long run you have a better chance. It's how I feel about the whales betting every decent combination last second in a blink of the eye. Whizz you always have my vote as the mother f***ing man

[Track Collector]

I'll be dead honest with you........I may be the stupidest person on the planet for as much as I gamble on horses not ever looking into rebate shops........I vividly remember being in the walkway on the 2nd floor of the Timonium when u told me what u got back in rebates on tri and super rebates......my jaw hit the ground


I do feel sorry for yourself and proximity in losing or potential loss in rebates

I would not use the word stupid, for that clearly is not the case. More accurately, I think, would be that you are afraid of change to a routine that has served you well over the past number of years. Odd thing is, the change would really only be a small modification to what you are already doing.

I am a prime example that rebates are no guarantee that a person will be profitable with them. One still has to identify and tweak a profitable strategy, then implement the plan as best as possible to perfection. Still believe it is possible. :)

[wiffleball whizz]

I would not use the word stupid, for that clearly is not the case. More accurately, I think, would be that you are afraid of change to a routine that has served you well over the past number of years. Odd thing is, the change would really only be a small modification to what you are already doing.

I am a prime example that rebates are no guarantee that a person will be profitable with them. One still has to identify and tweak a profitable strategy, then implement the plan as best as possible to perfection. Still believe it is possible. :)


If I had rebates I may lose but I couldn't be buried with getting rebates....

I should know better

On a side note the b m club used to give bettors that bet 30k a month like $4.20 on a $100.......that's solid for a actual racetrack kickback



I have faith that the TRACK COLLECTOR will always find the number 1 rebate shop!!!!!!

[proximity]

Just wondering how you guys are gonna be in the black betting ponies now??

Now u guys can try to bet to make money and not try and break even and scoop the rebates :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:


I have zero sympathy for anybody that this is costing money too

Now we will see who the real gamblers and handicappers are......


Posts that will be becoming less and less frequent:

" I just bet and look to push and get rebates"

" my ADW gives me back 12.7 percent on tris"

"Hey whizz why don't u try out this ADW"

" hey whizz you can't beat this game without rebates"


I got news for you guys......the whizz is up over the 3.5 years betting horses without rebates.....real gamblers can win without the assist


Try being like me and cjs dad and bet live at the track without rebates and let us know how u do!!!!!!

first off, I mentioned the Pennsylvania situation towards the beginning of the thread in post 8. what am I, the jan brady of pace advantage?

second, I was at 0.97 and change for the summer before rebates. I guess i'm not as good as you and cj's dad, but since I actually like and RESPECT you both, I can live with that. I guess i'll have to get used to living with the fact that i'm not a "real gambler" though.

third, track collector is a damn good man and despite your above comments i'm sure he'd still try and get you in the rebate shop if he could.

finally, to anyone out there who can merely "push"..... you have my respect and admiration.

[lamboguy]

the main problem with getting rebates as a large player these days is that to get the big rates you have to be a big player. the places that have big pools have bad rebate deals, you are paying higher takeouts in places like Churchill Downs, California racing and NYRA. the places that are left have some pretty sharp money in those pools and all you are doing is banging head's against the wall with those guys. what a good player can do is go to a race track like Penn National, have their basic handicapping done before they walk in and look at the horses in the paddock and and on the track and try to pick something out good or bad that will enhance the already done handicapping. that will give a good eye an edge over the computer and number's people shooting their money in the pools.

[Seabiscuit@AR]

Soon all states will likely have source market fees which will reduce the rebates available

A better and simpler approach would be for all states to outlaw rebates. In return the tracks could lower their takeout rates by 2% or so across the board

I know a lot of people are saying it will be impossible to win without a rebate. I don't think this will be the case so long as they remove rebates for everybody without exceptions. For a lot of players there will be more value available in the pools than has existed for years. The current big rebate players will be worse off but so they should be as they have had it too good for too long. In fact Bad Company's definition of Crony Capitalism sounds like the world of rebating exactly

The problem with the source market fee approach is that big syndicates will set themselves up outside of America (if they aren't outside America already) and continue to bet with full rebates. The American tracks will likely welcome this money but that would be a big mistake and would make the situation worse than it is now

[GMB@BP]

first off, I mentioned the Pennsylvania situation towards the beginning of the thread in post 8. what am I, the jan brady of pace advantage?

second, I was at 0.97 and change for the summer before rebates. I guess i'm not as good as you and cj's dad, but since I actually like and RESPECT you both, I can live with that. I guess i'll have to get used to living with the fact that i'm not a "real gambler" though.

third, track collector is a damn good man and despite your above comments i'm sure he'd still try and get you in the rebate shop if he could.

finally, to anyone out there who can merely "push"..... you have my respect and admiration.

I normally can get around break even, the only time I was + was when I was getting a rebate but that got kabashed about 5 years ago.

Its a very difficult game, and even more difficult for the casual player it appears.

[Vigorish]

Soon all states will likely have source market fees which will reduce the rebates available

A better and simpler approach would be for all states to outlaw rebates. In return the tracks could lower their takeout rates by 2% or so across the board

I know a lot of people are saying it will be impossible to win without a rebate. I don't think this will be the case so long as they remove rebates for everybody without exceptions. For a lot of players there will be more value available in the pools than has existed for years. The current big rebate players will be worse off but so they should be as they have had it too good for too long. In fact Bad Company's definition of Crony Capitalism sounds like the world of rebating exactly

The problem with the source market fee approach is that big syndicates will set themselves up outside of America (if they aren't outside America already) and continue to bet with full rebates. The American tracks will likely welcome this money but that would be a big mistake and would make the situation worse than it is now

Greetings SeaBisquit,

From a philosophical point of view, I think your stance is the most equitable. Up until recently, I played excluslively without rebates except the roughly .5% (plus hand histories and the value of live programming) I got from my ADW. Now I play with significant rebates even though I am not a huge whale.

The industry is adopting a bone-headed approach to rebating that is focused only on short-term revenue and not growing the game. For example, an elite player is virtually guaranteed of getting stellar rebates. They either get exceptions based on handle or can simply move to a friendlier jurisdiction. If you want to get new players into the game, you need to make the game more reinforcing to new players. I recently read Jeff Platt's article with interest because it parallels my own experience in many ways. When I got into horseracing, I hung out with a group of eleven regular players. They have all either died, went on to poker or casino gambling, or found new hobbies.

The racing industry needs to decrease takeouts for EVERYBODY. Can you imagine walking into a sportsbook and getting a different line depending on whether you wagered $10 or $1000 on the NY Giants. That is effectively what happens with rebates. With high takeouts, a decision that has a slightly negative ROI becomes a positive ROI when you play with meaningful rebates.

My criticism of rebates consists of the following items:

1) They are covert and average players cannot make truly informed decisions without knowing what they are up against with these special arrangements

2) They effectively raise takeout on nearly all players by stripping equity out of the pools. Oaklawn's refusal to deal with computer batch bettors is principled in my opinion

3) In many cases they are extremely regressive. The tracks want players who already 'prove' they wagering 300-1000K+/year. This creates a built-in advantage for skilled gamblers who got in the rebate game early, at the expense of new and lower volume players.

4) They make it harder for tracks to institute takeout reductions. This is the case with both OTB's and ADW's. Some will refuse to carry the signal if the takeout reduction eats into their profit margins.

All this being said, I would still argue for rebates. My most basic question is this: "In the absence of rebating, would the tracks have significantly lowered takeout, or even lowered it all?" To me, the answer is obvious: NO!

Furthermore, the idea of rebating is firmly entrenched in the gaming industry and players have come to expect player rewards (i.e. rebates). When I go to Las Vegas, I am treated like a whale and get back 40% of my expected losses. The rebate is a major inducement to attract repeat business and makes the players feel valued. An interesting exercise is to look at the player reward's programs at every track in North America. You will find that a sizable number offer small cash rebates as well as other incentives such as free past performances, valet parking, club house admission, and food vouchers.

Thus, I reluctantly support rebates. What bothers me most are the pathetic rebates offered to customers with modest bankrolls. The ultimate goal of most serious horseplayers is to eventually become a winning player. If you look at the rebate scheme at NYRA rewards for example (which is actually one of the better sites in terms of fairness), the rewards offered to customers in the top bracket dwarf those in the modest brackets. The players who already are doing well are getting all the relief. You destroy the hopes and dreams of inexperienced and losing players by creating an un-level playing field; the disparity in rebates is analogous to a small business owner trying to survive and expand in a world with regressive taxes and fat corporate subsidies.

[Seabiscuit@AR]

Vigorish

All the arguments you make against rebates are good. I agree with all of those

As for your argument in favour or rebates that the tracks would never have lowered takeouts if not for rebates. This is an interesting argument and the only possible one in favour of rebates. I still don't agree with it though. The solution in the USA was for fixed odds betting to enter the marketplace in competition to the tote (again maybe this would never have happened but it was the best answer)

The problem now is that after 15 years or so of rebates the non rebate section of the market has copped a beating and is shrinking. Non rebate players are slowly waking up to the fact that the best strategy for them is not to bet into rebated pools. And as you correctly point out rebates are a major barrier to entry for young/new players to join the game. So now tracks are raising takeouts to make up the lost revenue. And they will be raising them further in the future if rebates persist

If there had been no rebates maybe takeouts would not have gone down. But there was a real chance they would not have gone up either as turnover might have stayed on track with expectations

[acorn54]

this thread has a very intelligent discussion going on about the present state of affairs of wagering and how to improve upon it going forward. i hope people of influence in the racing establishment are following the conversation and seriously
implementing the ideas put forward.

[OTM Al]

It should actually be amazing to us all that the arbitrage situation the ADWs had lasted as long as it did. By giving rebates they were demonstrating to all that they were making extra normal profit. It was only a matter of time before other players became involved to drain off those profits. That is the capitalistic-free markets working as they should and as should be expected.

[riskman]

It should actually be amazing to us all that the arbitrage situation the ADWs had lasted as long as it did. By giving rebates they were demonstrating to all that they were making extra normal profit. It was only a matter of time before other players became involved to drain off those profits. That is the capitalistic-free markets working as they should and as should be expected.

I am sure you read post 38 concerning the distribution of THE MARKET ORIGIN FEE.Do you think that NY horse bettors that have out of state betting accounts will be rushing to NYRA,NYS Regional OTB's and NYS domiciled tracks to open up betting accounts? Do you think the out of state ADW's will terminate the NY players? Maybe Yonkers Raceway will get into the ADW business as well?
I respect your opinion and would like to hear your thoughts concerning the distribution of the market fee and if you think this is a fair way help the average player by instituting this fee.

[badcompany]

It should actually be amazing to us all that the arbitrage situation the ADWs had lasted as long as it did. By giving rebates they were demonstrating to all that they were making extra normal profit. It was only a matter of time before other players became involved to drain off those profits. That is the capitalistic-free markets working as they should and as should be expected.

It's amazing they exist at all, as tracks could give these deals directly to customers and cut out the middleman.

[Saratoga_Mike]

It should actually be amazing to us all that the arbitrage situation the ADWs had lasted as long as it did. By giving rebates they were demonstrating to all that they were making extra normal profit. It was only a matter of time before other players became involved to drain off those profits. That is the capitalistic-free markets working as they should and as should be expected.

Prior to being acquired, youbet (which had decent scale) was generating gross margins around 33% and operating margins around 4% to 5%. Of course, besides technology investments the biz doesn't require much capital.

[cj]

It's amazing they exist at all, as tracks could give these deals directly to customers and cut out the middleman.

That would take lots of cooperation and a lot of new legislation I would imagine. Tracks dug themselves this hole, and now are trying to dig out. Not sure they are going about it the right way though.

[proximity]

On a selfish note people losing rebates can only benifit me.......example...

There are 5 people betting into a pool including me so that's 6....here are the 6 people.....:

Whizz
Cj
The little guy
Ultimate selector
Ronsmac (solid as it gets I saw firsthand)


Now rebates are pulled and cj says "**** this I'm not betting 80 races a day no more" ......and now bets only 5 a day


Isn't cj not betting better for myself or anybody else gambling?

Anything that drives away sharp money I like


Just using cj as a example cuz he is the master......

Am I right or wrong

sure, the game would probably be easier if some combination of higher take/lower rebates pushed cj and some other elite players to the sidelines.

but when Caesar's started taking the extra bad beat dollar you were (rightfully) cursing the move, not looking at it as potentially being good for the Caesar's games by driving more price conscious players to taj and Borgata.

also, i'd expect it to be in the nature of a "real gambler" to relish the challenge of playing in pools with a master like cj. :)

[proximity]

It's amazing they exist at all, as tracks could give these deals directly to customers and cut out the middleman.

initially, it seemed like a lot of tracks were just too lazy to deal with this part of the business. they'd take any extra money they could get from out of state adws, but when more and more people started using these adws eyebrows started getting raised and instead of (finally) developing their own more competitive and heavily marketed programs they started to look for ways to shut the outsiders out.

aside from being a Pennsylvania resident, the Pennsylvania situation sickens me because earlier this year penn national itself "outsourced" its entire telebet operation to Oregon. when the slots were coming all these racing related jobs were supposed to be created, but fast forward and several penn national off tracks are closed and telebet is outsourced to Oregon.

a company with a monopoly on central Pennsylvania gambling can freely outsource parts of its business to where ever it wants but a central pa resident who wants to bet horses has to bet through penn national. WHAT IS WRONG WITH THIS PICTURE.

[thaskalos]

On a selfish note people losing rebates can only benifit me.......example...

There are 5 people betting into a pool including me so that's 6....here are the 6 people.....:

Whizz
Cj
The little guy
Ultimate selector
Ronsmac (solid as it gets I saw firsthand)


Now rebates are pulled and cj says "**** this I'm not betting 80 races a day no more" ......and now bets only 5 a day


Isn't cj not betting better for myself or anybody else gambling?

Anything that drives away sharp money I like


Just using cj as a example cuz he is the master......

Am I right or wrong

You are absolutely right. Anything that drives away sharp money is desirable.

I would gladly sacrifice my own rebates in order to get the "whales" out of the game.

[riskman]

aside from being a Pennsylvania resident, the Pennsylvania situation sickens me because earlier this year penn national itself "outsourced" its entire telebet operation to Oregon. when the slots were coming all these racing related jobs were supposed to be created, but fast forward and several penn national off tracks are closed and telebet is outsourced to Oregon.

a company with a monopoly on central Pennsylvania gambling can freely outsource parts of its business to where ever it wants but a central pa resident who wants to bet horses has to bet through penn national. WHAT IS WRONG WITH THIS PICTURE.

Has NYRA Rewards outsourced any of its betting operation and to who if anyone has info. With the previous close out of NYC OTB, I am certain NYRA took on a lot of new accounts. I recall there was some problems in the beginning with telephone accounts but have not heard of any problems since because of volume. Assume NYRA is running the betting operation in house.

[Jeff P]

State source market fee does not impact the big whale teams. The biggest of the whale teams aren't located in the US where they are subject to some state's source market fee. They are located internationally, in Hong Kong for instance, where they are not subject to state tax.

However, source market fee can and does hurt the mid range volume bettor (guys like CJ, Thaskalos and myself) and source market fee can and will chase our money from the pools.

As an aside, yes: Every dollar bet by winning players that you chase from the pools makes it easier for the remaining bettors to get to break even. But is that a road you want to go down? (Where do you draw the line?) One of the things that makes racing attractive from a value-gambling standpoint is that, unlike a casino offering games like craps or 21 where the player is playing against the house, the track is merely a stakeholder who doesn't or shouldn't care who wins or how much they win so long as there isn't a minus pool. Start chasing winning players from the game as a matter of policy and see what happens to handle.

I've had some really interesting conversations with members of the bigger whale teams. Most of them have told me that yes they are highly price sensitive - and that they wouldn't be betting nearly as much as they are without rebates - but that it's not about the rebate per se.

It's about effective takeout rate.

To them, the rebate is simply a vehicle that lowers the effective takeout rate to the point to where betting on horses becomes attractive from a value standpoint.

I have been told point blank they would gladly give up their rebates on the back end - provided that takeout rate on the front end were lowered to the point to where their effective takeout rate remained essentially the same.

Frankly, I would be in favor of that if it could somehow be accomplished because I think it would be good for the long term health of the game.

But I also believe very strongly that implementing source market fee everywhere - or hiking signal fees in general - so that rebates are cut on the back end - without a corresponding decrease in takeout rates on the front end is just a 'hidden' form of takeout increase - and as such is something extremely harmful to the long term health of the game.


-jp

.

[foregoforever]

It should actually be amazing to us all that the arbitrage situation the ADWs had lasted as long as it did. By giving rebates they were demonstrating to all that they were making extra normal profit. It was only a matter of time before other players became involved to drain off those profits. That is the capitalistic-free markets working as they should and as should be expected.

I respect your opinions on these sorts of things, but I take issue with the notion that this is the free market at work. The New York law is an interstate tariff, erected for the purpose of protecting in-state businesses and redistributing the money involved. It's the antithesis of a free market.

Of course, governments have been figuring out ways to violate the Commerce Clause all along, and the fact that other states are getting away with it is always a temptation to join the crowd. I'm very sorry to say that my home state, that of Jefferson and Madison, was in the lead in all of this and is an even more egregious example.

A free-market approach would have been to increase signal fees by 5%, or improve the rebates for in-state residents to be more competitive. But engaging in actual competition is always risky, so it's much easier to rely on politicians.

[Stillriledup]

You are absolutely right. Anything that drives away sharp money is desirable.

I would gladly sacrifice my own rebates in order to get the "whales" out of the game.

But, if the game gets "easier" per se, doesnt that mean it gets effectively harder?

The old saying is that if it was easy "everyone would win". do you want a game where "everyone is winning".?

Personally, i think that the problem isnt necessarily the whales, the problem is that there isnt enough of them. If a US track had "hong kong type pools" the game would be easier to beat just because of the volume of money.

If a typical 5k claimer at Penn National had a 20 million dollar win pool handle, don't you think that place would be the easiest place in the world to beat? With a 20 million dollar pool on the cheapest maiden 5k claimer, that would mean a no hoper type horse who would normally go off at 99-1, might be only 50-1 and have hundreds of thousands of dollars on him to win. That makes the game fun and easy.

As is stands, ONE PERSON with a great opinion who has a large bankroll can essentially determine the price of the favorite. If that big bettor, only one bettor is needed, decided to stick 5k to win on the "most likely winner" at Charlestown in the 3rd race, that horse is going to pay 2.80 to win or something really low and there's not enough big bettors to 'buffer" that wager, there's nobody out there betting hundreds or even thousands on rival horses and thus, that one person turns that betting race into a situation where you are essentially paying 15 to 20 percent takeout to bet against one person. (remember when you were a kid and made a 5 dollar super bowl bet against your schoolmate? There was no vig, he put up 5 and you put up 5)

I hope Lambo is right and Hong Kong becomes available and the US is let into their pools as co-mingled....you will have racing of the highest integrity and pools that will swallow up any "whale" Action, the whales won't matter at Hong Kong because there's so much money on all the other horses (like the Ky Derby who has 20 horse fields and the longest shot, a no hoper, is under 50-1)

I like the track i bet to have no hopers sitting there at 30-1, 40-1 or 50-1.

[thaskalos]

State source market fee does not impact the big whale teams. The biggest of the whale teams aren't located in the US where they are subject to some state's source market fee. They are located internationally, in Hong Kong for instance, where they are not subject to state tax.

However, source market fee can and does hurt the mid range volume bettor (guys like CJ, Thaskalos and myself) and source market fee can and will chase our money from the pools.

As an aside, yes: Every dollar bet by winning players that you chase from the pools makes it easier for the remaining bettors to get to break even. But is that a road you want to go down? (Where do you draw the line?) One of the things that makes racing attractive from a value-gambling standpoint is that, unlike a casino offering games like craps or 21 where the player is playing against the house, the track is merely a stakeholder who doesn't or shouldn't care who wins or how much they win so long as there isn't a minus pool. Start chasing winning players from the game as a matter of policy and see what happens to handle.

I've had some really interesting conversations with members of the bigger whale teams. Most of them have told me that yes they are highly price sensitive - and that they wouldn't be betting nearly as much as they are without rebates - but that it's not about the rebate per se.

It's about effective takeout rate.

To them, the rebate is simply a vehicle that lowers the effective takeout rate to the point to where betting on horses becomes attractive from a value standpoint.

I have been told point blank they would gladly give up their rebates on the back end - provided that takeout rate on the front end were lowered to the point to where their effective takeout rate remained essentially the same.

Frankly, I would be in favor of that if it could somehow be accomplished because I think it would be good for the long term health of the game.

But I also believe very strongly that implementing source market fee everywhere - or hiking signal fees in general - so that rebates are cut on the back end - without a corresponding decrease in takeout rates on the front end is just a 'hidden' form of takeout increase - and as such is something extremely harmful to the long term health of the game.


-jp

.

There is a secrecy surrounding the rebate business that can no longer be tolerated...IMO.

Certain players had been receiving rebates for years, and yet, the average player had never heard that rebates even existed...nor did he know what kinds of rebates were available out there -- and under what conditions he could avail himself of them.

Now...the average player does not know what the actual laws are which prohibit players living in certain states from receiving any rebates at all.

Why are rebates such a mysterious topic?

[thaskalos]

But, if the game gets "easier" per se, doesnt that mean it gets effectively harder?

The old saying is that if it was easy "everyone would win". do you want a game where "everyone is winning".?

Personally, i think that the problem isnt necessarily the whales, the problem is that there isnt enough of them. If a US track had "hong kong type pools" the game would be easier to beat just because of the volume of money.

If a typical 5k claimer at Penn National had a 20 million dollar win pool handle, don't you think that place would be the easiest place in the world to beat? With a 20 million dollar pool on the cheapest maiden 5k claimer, that would mean a no hoper type horse who would normally go off at 99-1, might be only 50-1 and have hundreds of thousands of dollars on him to win. That makes the game fun and easy.

As is stands, ONE PERSON with a great opinion who has a large bankroll can essentially determine the price of the favorite. If that big bettor, only one bettor is needed, decided to stick 5k to win on the "most likely winner" at Charlestown in the 3rd race, that horse is going to pay 2.80 to win or something really low and there's not enough big bettors to 'buffer" that wager, there's nobody out there betting hundreds or even thousands on rival horses and thus, that one person turns that betting race into a situation where you are essentially paying 15 to 20 percent takeout to bet against one person. (remember when you were a kid and made a 5 dollar super bowl bet against your schoolmate? There was no vig, he put up 5 and you put up 5)

I hope Lambo is right and Hong Kong becomes available and the US is let into their pools as co-mingled....you will have racing of the highest integrity and pools that will swallow up any "whale" Action, the whales won't matter at Hong Kong because there's so much money on all the other horses (like the Ky Derby who has 20 horse fields and the longest shot, a no hoper, is under 50-1)

I like the track i bet to have no hopers sitting there at 30-1, 40-1 or 50-1.

You and I have gone back and forth on this several times, SRU...and we just can't seem to agree.

It does us no good to sit here and salivate at the huge betting pools that they have at Hong Kong; we play in the USA, where are betting pools are tiny by comparison. And in our tiny USA betting pools, the whale is truly an intimidating presence...and I, for one, wouldn't miss him if he were gone...

[cj]

Why are rebates such a mysterious topic?

That is the $64,000 question.

[Jeff P]

Q. Why are rebates such a mysterious topic?

A. It's that way because we are not talking about an open marketplace.

Historically, when an ADW or rebate house openly advertises its rates to players (something you'd expect to be taking place in a competitive marketplace) track management and horsemen have threatened to pull the signal.

Because of that the only mechanism "allowed" for players to find rebates is through word of mouth.


-jp

.

[cj]

Historically, when an ADW or rebate house openly advertises its rates to players (something you'd expect to be taking place in a competitive marketplace) track management and horsemen have threatened to pull the signal.



Why?

[Jeff P]

Q. Why?

A. I think it's obvious. (They don't want players to have an easy time discovering a better deal might be available.)


Edit:

Q. Why?

A. Because over time that would lead to an actual open marketplace. (Something that just cannot be allowed to happen.)



-jp

.

[Stillriledup]

Why?

Because enough people are willing to bet without one.

[proximity]

But I also believe very strongly that implementing source market fee everywhere - or hiking signal fees in general - so that rebates are cut on the back end - without a corresponding decrease in takeout rates on the front end is just a 'hidden' form of takeout increase - and as such is something extremely harmful to the long term health of the game.


eventually probably every state will have these source market fees, but you will NEVER get this corresponding decrease in takeout required to make this racing competitive with other forms of gambling outside of the lottery. some tracks may implement "better" rewards programs, but it will only be an insulting couple percent.... maximum... far short of the 10% needed to get things going in the right direction.

[OTM Al]

I respect your opinions on these sorts of things, but I take issue with the notion that this is the free market at work. The New York law is an interstate tariff, erected for the purpose of protecting in-state businesses and redistributing the money involved. It's the antithesis of a free market.

Of course, governments have been figuring out ways to violate the Commerce Clause all along, and the fact that other states are getting away with it is always a temptation to join the crowd. I'm very sorry to say that my home state, that of Jefferson and Madison, was in the lead in all of this and is an even more egregious example.

A free-market approach would have been to increase signal fees by 5%, or improve the rebates for in-state residents to be more competitive. But engaging in actual competition is always risky, so it's much easier to rely on politicians.

When extra normal profits exist somebody will come and get them. That's all I'm saying about a free market. I'm sure some tracks would have liked to have done what you said but weren't allowed to by law. I'm sure NYRA would love to be allowed to offer their platform all over the US. Non-track ADWs however are arbitragers no matter how you look at it and arbitragers just don't last.

[acorn54]

Q. Why are rebates such a mysterious topic?

A. It's that way because we are not talking about an open marketplace.

Historically, when an ADW or rebate house openly advertises its rates to players (something you'd expect to be taking place in a competitive marketplace) track management and horsemen have threatened to pull the signal.

Because of that the only mechanism "allowed" for players to find rebates is through word of mouth.


-jp

.
and they take full advantage- i just went to the nyra rewards site because i remembered hearing on a tv show (which shall remain nameless) one of the tv personalities (who also shall remain nameless), that nyra rewards has "racings's highest rebates"

[Saratoga_Mike]

When extra normal profits exist somebody will come and get them. That's all I'm saying about a free market. I'm sure some tracks would have liked to have done what you said but weren't allowed to by law. I'm sure NYRA would love to be allowed to offer their platform all over the US. Non-track ADWs however are arbitragers no matter how you look at it and arbitragers just don't last.

I don't think ADWs have generated "extra normal profits." An operating margin of 4% to 5% just isn't that unusual. The avg S&P 500 company generated an EBIT margin of 15.3% last yr.

[lamboguy]

Go to Capital OTB, they will give you a fair shake and the website looks pretty good.

[Saratoga_Mike]

Go to Capital OTB, they will give you a fair shake and the website looks pretty good.

I hope people go to NYRA instead - every OTB in NY state is a leech on the racing industry. I still want to know why any of the OTBs will receive a portion of the 5% fee. What do they provide? Oh yeah, they convinced a couple of state senators it was a good idea.

[lamboguy]

i found out about them because i was in Albany this summer at their simulcast facility, which i found pretty nice. the guy that ran the place didn't charge me to get in, and he didn't make me pay for lunch in his place. i had just got back from Saratoga, i had an owner with me that brought his wife and 3 kids with him. i had to pay the admission for his wife and his kids. we wound up eating at the buffet in a tent there and they charged me $75 a person plus the drinks. on top of that, the horse ran dead last around the track.

[Jeff P]

Re: The topic of source market fee somehow being "good" for the game because it chases the handle of winning players from the pools--

One thing that hasn't been touched on...

Source market fee doesn't selectively chase the business of guys like CJ, Thaskalos, or myself from the pools. For every plus EV bettor that gets chased from the pools there are hundreds of accounts belonging to rebated but minus EV bettors currently betting through smaller ADWs and rebate houses about to be closed.

The handle generated by hundreds of minus EV bettors is about to be chased from the pools too.

Yet the true whales, because they are international, remain unaffected.

Be careful what you wish for.


-jp

.

[ronsmac]

Greetings SeaBisquit,

From a philosophical point of view, I think your stance is the most equitable. Up until recently, I played excluslively without rebates except the roughly .5% (plus hand histories and the value of live programming) I got from my ADW. Now I play with significant rebates even though I am not a huge whale.

The industry is adopting a bone-headed approach to rebating that is focused only on short-term revenue and not growing the game. For example, an elite player is virtually guaranteed of getting stellar rebates. They either get exceptions based on handle or can simply move to a friendlier jurisdiction. If you want to get new players into the game, you need to make the game more reinforcing to new players. I recently read Jeff Platt's article with interest because it parallels my own experience in many ways. When I got into horseracing, I hung out with a group of eleven regular players. They have all either died, went on to poker or casino gambling, or found new hobbies.

The racing industry needs to decrease takeouts for EVERYBODY. Can you imagine walking into a sportsbook and getting a different line depending on whether you wagered $10 or $1000 on the NY Giants. That is effectively what happens with rebates. With high takeouts, a decision that has a slightly negative ROI becomes a positive ROI when you play with meaningful rebates.

My criticism of rebates consists of the following items:

1) They are covert and average players cannot make truly informed decisions without knowing what they are up against with these special arrangements

2) They effectively raise takeout on nearly all players by stripping equity out of the pools. Oaklawn's refusal to deal with computer batch bettors is principled in my opinion

3) In many cases they are extremely regressive. The tracks want players who already 'prove' they wagering 300-1000K+/year. This creates a built-in advantage for skilled gamblers who got in the rebate game early, at the expense of new and lower volume players.

4) They make it harder for tracks to institute takeout reductions. This is the case with both OTB's and ADW's. Some will refuse to carry the signal if the takeout reduction eats into their profit margins.

All this being said, I would still argue for rebates. My most basic question is this: "In the absence of rebating, would the tracks have significantly lowered takeout, or even lowered it all?" To me, the answer is obvious: NO!

Furthermore, the idea of rebating is firmly entrenched in the gaming industry and players have come to expect player rewards (i.e. rebates). When I go to Las Vegas, I am treated like a whale and get back 40% of my expected losses. The rebate is a major inducement to attract repeat business and makes the players feel valued. An interesting exercise is to look at the player reward's programs at every track in North America. You will find that a sizable number offer small cash rebates as well as other incentives such as free past performances, valet parking, club house admission, and food vouchers.

Thus, I reluctantly support rebates. What bothers me most are the pathetic rebates offered to customers with modest bankrolls. The ultimate goal of most serious horseplayers is to eventually become a winning player. If you look at the rebate scheme at NYRA rewards for example (which is actually one of the better sites in terms of fairness), the rewards offered to customers in the top bracket dwarf those in the modest brackets. The players who already are doing well are getting all the relief. You destroy the hopes and dreams of inexperienced and losing players by creating an un-level playing field; the disparity in rebates is analogous to a small business owner trying to survive and expand in a world with regressive taxes and fat corporate subsidies.I appreciate your post, it's one of the best I've read since I've been on PA.

[OTM Al]

I don't think ADWs have generated "extra normal profits." An operating margin of 4% to 5% just isn't that unusual. The avg S&P 500 company generated an EBIT margin of 15.3% last yr.

Apples and oranges. As it was said before, all they need is a platform. Then sell sell sell. 4-5% can be quite a bit when there is little to no risk and no overhead at all. 13% can be awful if it is extremely high risk. By offering rebates they are clearly saying that they are making money, so much they are willing to pay certain people back part of it in the hopes that they will even further increase the spending of those people. Someone always comes for money like that and in some cases, well they should. Arbitragers create nothing either side couldn't have already had. They just suck cash out of both sides of the market.

[Seabiscuit@AR]

Jeff P

I agree with you about the international whales. The market source fee approach will fail because of this aspect

However racing needs a sustainable long term business model. And rebating is not sustainable long term. The whole basis of rebating is that you can enjoy a free lunch by lowering takeout for some players while leaving the other players on full takeout. The free lunch only happens if the players on full takeout keep betting the same amounts as they did before rebates started. But if the pool determined odds after takeout make a horse a 10-1 shot and you pay one group 10.5-1 and another group 9.5-1 you are living in dreamland if you think those copping 9.5-1 about a 10-1 shot will maintain their turnover levels before rebates

And once the non rebated players drop their turnover then the rebated players must drop their turnover in response

The simple and fair solution is to outlaw rebates without exceptions. Rebates have failed to grow turnover as promised in any case

[Seabiscuit@AR]

Stillriledup

Interesting you mention HK pools

I don't play HK myself but I know people who do. From what I have been told, HK is very hard to beat these days. The time to play HK was back in the 1990s not now. When I asked why HK is so hard to beat these days, the response I got was simple - "rebates"

[baconswitchfarm]

The simple and fair solution is to outlaw rebates without exceptions. Rebates have failed to grow turnover as promised in any case


You should outlaw weed and prostitution at the same time. You will have the same success rate.

[Seabiscuit@AR]

So how will you get your rebate once it is outlawed?

[Seabiscuit@AR]

The thing is it is in the tracks own interests to stop offering rebates

If they sit down and think through the issues clearly they will realise no rebates mean more turnover for them and less leakage to rebate players

So there is no need to outlaw them really. But track executives have been so slow to work this all out they need a helping hand to put them on the right track

[thespaah]

So how will you get your rebate once it is outlawed?
Simple...When business is faced with the imposition of new regulations, the owners or the industry as a whole immediately being working on finding ways around the new regs.
Horse racing managements, if they have the stones and enough desire to keep their best customers happy, will figure out a way to get around this.

[JustRalph]

How in hell do you play Hong Kong races?

[proximity]

But track executives have been so slow to work this all out they need a helping hand to put them on the right track

maybe they could turn to the casino industry to learn how to properly price their product?

[Dave Schwartz]

When I go to Las Vegas, I am treated like a whale and get back 40% of my expected losses.

Vigorish,

If you are getting that re-imbursement on horse racing they are in direct violation of NV gaming statutes. I am certainly not dropping a dime on anyone, but be clear that rebating on horse racing is against the law in NV.

[Seabiscuit@AR]

Just Ralph

At the moment you pretty much have to be in HK or have an account with the HKJC to play there (although you can bet on HK in Australia and elsewhere)

Soon HK pools will be opened up to overseas markets which should include the USA

[Jeff P]

If you outllaw rebates on the back end without an offsetting reduction in takeout on the front end:

You will convert almost all of the game's million dollar a year plus players into casual "fans" almost overnight. (And angry fans at that.)

If your goal is to decimate the game handle-wise, you're on the right track.


-jp

.

[Seabiscuit@AR]

thespaah

who are racing's best customers? The big syndicates who demand rebates to bet millions a year? Or the little players who bet $2 or $10 a race and bet away all their money every Saturday?

The UK bookies reckon it is the little customers who bet all their money away. And the UK bookies make squillions. So they might be on to something. The UK bookies will never take a bet from the big syndicates

Now I don't agree with how the UK bookies go about their business, they should not be allowed to do what they do. But they are right in identifying who racing's best customers are

[JustRalph]

Just Ralph

At the moment you pretty much have to be in HK or have an account with the HKJC to play there (although you can bet on HK in Australia and elsewhere)

Soon HK pools will be opened up to overseas markets which should include the USA

Thanks

[Seabiscuit@AR]

Jeff P

the issue is all the million dollar players who would leave would never have bet much in the first place if there were no rebates. They only want to play with an unfair advantage stacked in their favour

If the maximum you can extract from the pools with no rebates is $1 million per year but you go set up a form analysis system that costs $3 million per year to run on the basis you can win $5 million per year thanks to rebates then you are not playing fair as you are running a form system that would send the no rebate player broke

[baconswitchfarm]

So how will you get your rebate once it is outlawed?


Just explain who has the authority to outlaw rebates. Since it is no one , rebates will go on.

[proximity]

the issue is all the million dollar players who would leave would never have bet much in the first place if there were no rebates. They only want to play with an unfair advantage stacked in their favour


i never met a player getting rebates that was against any other player receiving equivalent rebates.

just because i lost my (pennsylvania) rebates doesn't mean i want new yorkers to meet a similar fate. it just means i'll bet fewer races.

[Seabiscuit@AR]

baconswitchfarm

Any state government which has racing has full power to outlaw rebates

[Seabiscuit@AR]

proximity

rebates are by definition unfair because they give you a headstart over other players

if all players got equivalent rebates then it will all cancel out and nobody is getting rebates (so that situation would be fair but that is not what happens in the real world)

[Hoofless_Wonder]

Just Ralph

At the moment you pretty much have to be in HK or have an account with the HKJC to play there (although you can bet on HK in Australia and elsewhere)

Soon HK pools will be opened up to overseas markets which should include the USA

Don't tease us. Those of us who love Hong Kong have heard this before - Andy Beyer had a write up in the Form a couple of years ago on how commingled Hong Kong pools were going to be available in North America.

http://www.drf.com/news/hong-kongs-big-pools-command-attention

I don't believe it happened, or if it did, it was for only a very short time....

[thaskalos]

thespaah

who are racing's best customers? The big syndicates who demand rebates to bet millions a year? Or the little players who bet $2 or $10 a race and bet away all their money every Saturday?

The UK bookies reckon it is the little customers who bet all their money away. And the UK bookies make squillions. So they might be on to something. The UK bookies will never take a bet from the big syndicates

Now I don't agree with how the UK bookies go about their business, they should not be allowed to do what they do. But they are right in identifying who racing's best customers are

If the Saturday $2 bettors are the game's "best customers"...then what do you call those guys who flock to the OTBs and bet several thousand dollars a day without getting any rebates at all?

I am well-acquainted with 2 guys who are all by themselves responsible for about 50% of the weekday handle at Lucky Magee's OTB in Niles Illinois. Both are foreigners with thriving outside businesses...who have elected not to partake of the "rewards" program that the OTB offers. They both bet thousands of dollars every day...and the inept management of the place is so lousy in performing their jobs that these players are not even comped the racing forms that they use in their betting.

I know bartenders and waiters who bet more on one race than those Saturday $2 bettors of yours bet in a month.

THOSE are the game's best customers...and the industry is so incompetent that these players are totally ignored.

If I were the manager in one of these OTBs, I would make history...

[Track Collector]

The thing is it is in the tracks own interests to stop offering rebates

If they sit down and think through the issues clearly they will realise no rebates mean more turnover for them and less leakage to rebate players

So there is no need to outlaw them really. But track executives have been so slow to work this all out they need a helping hand to put them on the right track

Tracks clearly understand the bolded text is not true. Outlawing rebates while maintaining the current takeout rates will most likely reduce overall handle by something like 15% to 20% minimum. There is no way remaining players (or new players) will be able to wager enough to even put a small dent in this huge drop in handle. Many will be impacted negatively.......players, tracks, horsemen, etc.

The real problem here (echoed by many others) is that racing has a pricing model problem. Rebates are simply an effort to rectify that problem. Consider too some of the alternatives for a person's gaming dollar. Poker has a takeout rate of something like 5%, slots around 8%, and sports wagering something like 5% to 10%. With horseracing at a blended takeout rate of something like 20% to 22% (without rebate assistance), do you see where the problem is? Hint: It is not with rebates.

[Seabiscuit@AR]

Hoofless Wonder

This story from Australia in October tells you HK opening up its pools is not far away and I reckon this time it is true. They will probably go with Australia first and then not long after they will do the same deal with the USA and other places

http://www.smh.com.au/sport/horseracing/comingling-of-tab-pools-with-hk-a-big-winner-20131007-2v4by.html

[proximity]

proximity

rebates are by definition unfair because they give you a headstart over other players


it isn't a contest. the new yorkers getting rebates until the end of the month don't have any advantage over me. where before if a horse was 3-1 i might bet him, but now i might pass him. i'll simply bet fewer races.

also, as a pennsylvania horseplayer it's in my best interest if ny players keep getting rebates. they stay more liquid that way and can keep helping to seed our pools, giving us the potential to possibly bet more money in the unlikely circumstance that we do find an overlay.

[baconswitchfarm]

baconswitchfarm

Any state government which has racing has full power to outlaw rebates

That would only apply to that state. No state government has any say about what goes on in any other state. No federal oversight means rebates will never go away. The only way to stop rebates is to price your signal fee so high no one can rebate. In response , your handle will plummet and your business will free fall as players play better priced products. Suicide mission.

[Seabiscuit@AR]

thaskalos

a bigger player who just bets all their money away is a better customer than a $2 customer for sure

But a $2 customer who pays full freight is better than a huge syndicate which demands big rebates then deposits 200K and pulls millions a year out of the pools without ever having to deposit money again

[ronsmac]

it isn't a contest. the new yorkers getting rebates until the end of the month don't have any advantage over me. where before if a horse was 3-1 i might bet him, but now i might pass him. i'll simply bet fewer races.

also, as a pennsylvania horseplayer it's in my best interest if ny players keep getting rebates. they stay more liquid that way and can keep helping to seed our pools, giving us the potential to possibly bet more money in the unlikely circumstance that we do find an overlay.
I'm a broken record, but the problem is our 3-1 overlay gets bet down to 2-1 by the whales at the last possible second, and we're sitting there pissed as he opens up by 5 at the 1/8 pole as his price drops. Once in a while it will go the other way and you get extra poker money when he comes home at 7/2 but not enough for my liking.

[Seabiscuit@AR]

Track Collector

Perhaps the cleverest aspect to the rebates scheme is that there is a dislocation between the big rebater entering or leaving the pools and the effect they have on the pools

But this is not unusual with financial dealings. Think of it like subprime mortgages. The subprime mortgages blew up the banks in 2007. But the bad loans were written several years beforehand. They were always bad loans but it took a few years for this to be revealed

With rebates if you grant a syndicate a big rebate at first the pools will go up as the syndicate adds its money to the pools. At first the other players won't be aware the new syndicate is now operating so they will continue to bet as before. So it looks like we have the free lunch happening and the magic of rebates is working. But over time the non rebate players start to drop out of the pool as they are losing their money faster than before and the game no longer is as fun

If you try to remove a big rebated syndicate from the pools then the opposite happens and you will get a big overnight drop in your turnover. But the tracks have to realise that the syndicate would never have been there but for rebates. In the long run the pools will stabilise without the rebaters eroding the majority of the pool away

[Jeff P]

Jeff P

I agree with you about the international whales. The market source fee approach will fail because of this aspect

However racing needs a sustainable long term business model....

Seabiscuit@AR,

While I disagree with you about rebates...

I emphatically agree with you about the need for a sustainable business model.

This isn't 1968. Racing doesn't have a monopoly on gambling outside of Las Vegas anymore. The gambling market space is now one one in which the participants who would be successful must compete for customers and market share.

In such a market space: PRICING MATTERS.

In such a market space, I contend that 22% blended takeout rates are anything but pricing the product in a way that ensures a sustainable business model.

I contend that current 22% blended takeout rates make racing unattractive vs. ALL other forms of gaming from a prize payout percentage standpoint except lotteries. Lotteries can price their product the way they do because they enjoy a significant advantage over racing: Superior jackpot size. Jackpots paying 100's of millions of dollars for a quick pick are FAR more attractive to the public from a demand curve standpoint than anything offered by racing.

What racing does have going for it are churn bets where the decisions based on critical thinking made by the player have the ability to shape expected returns.

Most of us would intuitively think that a 16 percent takeout rate produces a prize payout percentage close to 84 cents per each $1.00 wagered for the player making random selections in WPS pools.

But if you think that you'd be wrong.

Believe it or not the player making random selections in WPS pools at a 16 percent takeout rate actually faces long term net losses bordering on minus 25 percent.

Turning Fans into Horseplayers:
http://blog.horseplayersassociation.org/2013/12/turning-fans-into-horseplayers.html
Q. How many 'zeroes' do you have to add to a roulette wheel to turn roulette into the equivalent of what a newbie horse bettor faces? (Where random WPS selections produce long term net losses bordering on minus 25 percent?)

A. Believe it or not you have to add TEN ADDITIONAL ZEROES - until the layout itself has TWELVE ZEROES ON IT! – in order to turn roulette into the equivalent gamble (net losses of minus 25 percent) faced by a horse bettor making random WPS selections at 16 percent takeout!

Go ahead. Outlaw rebates if you want.

But without an offsetting reduction in takeout you are essentially left trying to market a gamble to "fans" that's the equivalent of a roulette table with 12 freaking zeroes on it - while at the same time competing with other forms of gaming that offer games of chance where the prize payout percentage is more in line with the demand curve dictated by the market.

Good luck with that.



-jp

[thaskalos]

thaskalos

a bigger player who just bets all their money away is a better customer than a $2 customer for sure

But a $2 customer who pays full freight is better than a huge syndicate which demands big rebates then deposits 200K and pulls millions a year out of the pools without ever having to deposit money again

When I started in business many years ago...I bought a truck and delivered fruits and vegetables to restaurants and grocery stores in the Chicago area. I had a chance to pick up the account of Bob Chinn's restaurant in Wheeling Illinois...a restaurant which eventually became the highest-grossing restaurant in the US. I elected not to take the account, because the restaurant's owner was too price-conscious and demanding...and made it difficult for me to serve the other 29 accounts that I had.

In retrospect...I should have kept Bob Chinn's, and gotten rid of everybody else.

The huge customers are pure gold for a business...even if you have to offer them deep discounts in order to keep them.

[proximity]

I'm a broken record, but the problem is our 3-1 overlay gets bet down to 2-1 by the whales at the last possible second, and we're sitting there pissed as he opens up by 5 at the 1/8 pole as his price drops. Once in a while it will go the other way and you get extra poker money when he comes home at 7/2 but not enough for my liking.

anticipating where money is going to go is part of our modern game that say an 80s dick mitchell didn't have to deal with. i don't even think it has to do with "whales" so much as there are so many different places that the money is coming in from. but of course you already know that and certainly have the talent to be able to adjust to these conditions.

[Seabiscuit@AR]

baconswitchfarm

all it needs is for the main states to outlaw rebates at their tracks

pricing your signal fee high sounds a good way to do it in fact, good suggestion

[proximity]

btw, ronsmac i think we are pretty much in the same boat as far as a lot of this stuff trying our patience. i think you might be a little ahead of me with one foot out the door while i just have my hand on the (door) knob.

hated to see your post last week about 2014 possibly being your last year. that should speak volumes to this industry.

[baconswitchfarm]

baconswitchfarm

all it needs is for the main states to outlaw rebates at their tracks

pricing your signal fee high sounds a good way to do it in fact, good suggestion



Once again, states have no control over what happens at businesses in another state. Main states , small states , it makes no matter.



Raising your signal price too high is only a good idea if you want to kill racing and keep the slots. Many management people have that dream.

[Track Collector]

With rebates if you grant a syndicate a big rebate at first the pools will go up as the syndicate adds its money to the pools. At first the other players won't be aware the new syndicate is now operating so they will continue to bet as before. So it looks like we have the free lunch happening and the magic of rebates is working. But over time the non rebate players start to drop out of the pool as they are losing their money faster than before and the game no longer is as fun

If you try to remove a big rebated syndicate from the pools then the opposite happens and you will get a big overnight drop in your turnover. But the tracks have to realise that the syndicate would never have been there but for rebates. In the long run the pools will stabilise without the rebaters eroding the majority of the pool away

What do you think this stabilization will look like? With a 20% reduction in handle, there will be less money to fund purses and pay expenses. Tracks will close or run less races, owners will reduce their stables and or get out of the game for good. (Do you really think many owners are going to move hundreds of miles to race at the next closest track?). Field sizes are going to shrink, which means less opportunities to find value regardless of who is left playing the game.

Again, rebates and those who take advantage of them are not the problem. Too high of an "effective" takeout rate is for ALL players is.

[Seabiscuit@AR]

thaskalos

I agree that huge customers are pure gold for business

but I think racing is different for a few reasons

First the model I would use to compare betting on the races to is not the running of a business but more the playing of a game or contest. In games or contests you have rules to determine fair play. In the 100m at the Olympics everyone starts from the same line. Usain Bolt cannot offer $10 million in return for a 10m headstart. In tennis if some scientist designs some supersonic tennis racquet which falls outside the rules you cannot use it. In swimming a few years back all the swimmers started using these swimsuits designed by scientists. This did not last long as the sport became a farce where the winner was the swimmer with the best swimsuit not the best swimmer. So rules were brought in regarding swimsuits. In car racing the car must be built within specifications etc etc

Betting on the horses should be viewed as a contest between the players with each player starting from the same point at the starting line as in a running race (i.e. same takeout rate)

For most players betting on the horses is a hobby not a business

Secondly, any player who wants to bet big and pay full takeout should be welcomed by the tracks with open arms. But the problem with allowing big players to bet with rebates in a tote system is they can lock in the odds for the non rebate players at losing ROIs for all bets or almost all bets. So every possible bet might be a loser for the non rebate player. That fundamentally changes the game. The great thing about horse racing is the odds are in your favour because nobody knows the true odds for every runner. So while the track takeout might be -20% for the race one horse might be a +10% ROI bet in that race while another horse might be -50% ROI. If you can use your skill in this contest and find enough +10% or even +1% ROI horses you can finish in front despite the track takeout of -20%. But if a big rebate player comes into the pools and makes it so that 99% of bets have ROIs of -1% or less for the non rebate player then the game is no longer a game of skill with the odds in your favour. Now this is more like a casino game or a slot machine where mathematics dictate that the player cannot possibly win as all plays are long term negative ROI plays. The problem which racing then has is that its takeout rate is uncompetitive with the casino games so it is bound to lose business

If there are no rebates there will be some value bets up there for all players as the biggest players cannot remove the value bets from the pools by over betting the value plays in the knowledge they will collect the rebate

Finally even the biggest rebate player will only be contributing a few percent of most pools. The biggest syndicate in the USA a few years back was reported to turnover $250 million a year which would have been about 2% of total turnover at the time. So add up the biggest syndicates and they only contribute 10% or so. But they will have a negative impact on thousands of little players who make up the bulk of the total betting pools

[Seabiscuit@AR]

Track Collector

Yes I agree too high takeout is the problem. But rebate players raise the effective takeout on the non rebate players and these non rebate players still make up a large percentage of the total pool. In fact if we pool all the bets of the non rebate players together they will become the biggest player in the game and entitled to the biggest rebate of all

the total bets of non rebate players and token rebate players will dwarf those of the biggest rebate syndicates

[Stillriledup]

thaskalos

I agree that huge customers are pure gold for business

but I think racing is different for a few reasons

First the model I would use to compare betting on the races to is not the running of a business but more the playing of a game or contest. In games or contests you have rules to determine fair play. In the 100m at the Olympics everyone starts from the same line. Usain Bolt cannot offer $10 million in return for a 10m headstart. In tennis if some scientist designs some supersonic tennis racquet which falls outside the rules you cannot use it. In swimming a few years back all the swimmers started using these swimsuits designed by scientists. This did not last long as the sport became a farce where the winner was the swimmer with the best swimsuit not the best swimmer. So rules were brought in regarding swimsuits. In car racing the car must be built within specifications etc etc

Betting on the horses should be viewed as a contest between the players with each player starting from the same point at the starting line as in a running race (i.e. same takeout rate)

For most players betting on the horses is a hobby not a business

Secondly, any player who wants to bet big and pay full takeout should be welcomed by the tracks with open arms. But the problem with allowing big players to bet with rebates in a tote system is they can lock in the odds for the non rebate players at losing ROIs for all bets or almost all bets. So every possible bet might be a loser for the non rebate player. That fundamentally changes the game. The great thing about horse racing is the odds are in your favour because nobody knows the true odds for every runner. So while the track takeout might be -20% for the race one horse might be a +10% ROI bet in that race while another horse might be -50% ROI. If you can use your skill in this contest and find enough +10% or even +1% ROI horses you can finish in front despite the track takeout of -20%. But if a big rebate player comes into the pools and makes it so that 99% of bets have ROIs of -1% or less for the non rebate player then the game is no longer a game of skill with the odds in your favour. Now this is more like a casino game or a slot machine where mathematics dictate that the player cannot possibly win as all plays are long term negative ROI plays. The problem which racing then has is that its takeout rate is uncompetitive with the casino games so it is bound to lose business

If there are no rebates there will be some value bets up there for all players as the biggest players cannot remove the value bets from the pools by over betting the value plays in the knowledge they will collect the rebate

Finally even the biggest rebate player will only be contributing a few percent of most pools. The biggest syndicate in the USA a few years back was reported to turnover $250 million a year which would have been about 2% of total turnover at the time. So add up the biggest syndicates and they only contribute 10% or so. But they will have a negative impact on thousands of little players who make up the bulk of the total betting pools

There's no hobby in losing money, everyone desperately needs to win whether or not they are a pro or rec. player.

The idea that every possible bet could be a loser for the non rebate player is just something that's in your head that's not backed up by any sound math. The takeout is what it is for you, if its 20% than the odds are figured out according to that rate, they don't figure out the odds at different rates, here's a better way to explain it to you.

Lets say there's a race coming up at your favorite track and for one odd reason or another, the only two people betting into the win pool are you and a little old lady from Pasadena. Now, lets say the win takeout is 20% to make it a nice round number. The little old lady is a big bettor (inheritance or something like that) and she bets 200k to win on the 1 horse and gets a 10% rebate (just a nice round number for illustration purposes). You bet 100 bucks on the #2 horse and get 0 Rebate. So, you're essentially betting against the "whales" its you against them. The handle for the race is 200,100 and there's a 20% takeout, so they take 40,020 right off the top. They take 40,000 from her and 20 bucks from you.

Now, if you win, you cash for 160,080. If the little old lady from Pasadena did NOT get a rebate, you would still cash for the exact same amount, 160,080 if my math is correct. There's 0 difference to your personal payout whether she gets a huge rebate behind the scenes or not.

The idea that somehow all these rebate players are able to cause underlays on every horse is poppycock because when one player bets a horse, the other horses automatically go up in price. Horse racing is a hard game, sometimes there will be races where there are no overlays, the public will get it right, but if the public gets it right, and all the horses in the race are exactly the price they should be, that has nothing to do with rebates and everything to do with the intelligence of the crowd.

[Vigorish]

Vigorish,

If you are getting that re-imbursement on horse racing they are in direct violation of NV gaming statutes. I am certainly not dropping a dime on anyone, but be clear that rebating on horse racing is against the law in NV.


Greetings Dave,

I should have been clearer with my post. The rebate I receive is for combined casino play (not horse racing). It's interesting that the issue of rebating has recently become very contentious in Las Vegas, with some race books wanting to implement them to retain and attract customers.

Anyway, great thread guys. And a major thanks to the person who said my previous post was one of their favorites. I will address some of the responses I received when I have more time. My basic premise is that flat (or flatter) rebates for everybody is the way to go. The existing infrastructure makes the draconian takeout reductions needed almost impossible to implement.

I think one thing that is missing from this debate is that race tracks are ALREADY rebating their players. The question is a matter of degree. For example, my local track gives everybody a 1%+ rebate (pretty pitiful, but it still is better than nothing). This does not include other perks like free valet parking, better seating, club house, special VIP parties, etc.

[lamboguy]

i am going to use Santa Anita as an example and use some very round numbers.

Santa Anita real estate worth $1 billion

total handle per day $10 mlllion X 100 days=$1 billion

total hold from takeout after off the top expenses such as taxes and purses could be as much as 3% which would bring the total income before expenses to $30 million per year.

as a rule of thumb, real estate is worth up to 10 times income

when one factor's in the day to day expenses to run a track most of that 30 million would be gone. sure there are other forms of income to be derived from the race track like parking and admissions along with souvenirs and food. maybe on a great day, add up all the other things and there might be another $10 million income.


if one were to rip the race track Santa Anita down and do something else with the thousands of acre's of land there like put up hotels and shopping center's i am pretty sure that property would yield at least $200 million per year and probably a lot more.

of course Stronach paid less than $200 million for the property and might not have additional carrying cost's such as a mortgage

i am sure that most racetracks today have the same business viability problems. for horse racing to be on solid footing, there needs to be at least a 10 fold increase in handle. race track business model's haven't changed to much in the last 75 years when real estate was 1/20th of what it is today, and minimum wage was less than .40 per hour. the handle in Santa Anita averaged $2 million per per day back then.

in short expenses and intrinsic real estate values have increased over 20 fold while revenues have only increased 5 fold. there is the whole deal in a nutshell.

the only thing that hasn't changed that much through the years are people's love of horse's, the sport and the intrigue of the game even though we have done a great job of scaring people away from the sport.

[TexasDolly]

There's no hobby in losing money, everyone desperately needs to win whether or not they are a pro or rec. player.

The idea that every possible bet could be a loser for the non rebate player is just something that's in your head that's not backed up by any sound math. The takeout is what it is for you, if its 20% than the odds are figured out according to that rate, they don't figure out the odds at different rates, here's a better way to explain it to you.

Lets say there's a race coming up at your favorite track and for one odd reason or another, the only two people betting into the win pool are you and a little old lady from Pasadena. Now, lets say the win takeout is 20% to make it a nice round number. The little old lady is a big bettor (inheritance or something like that) and she bets 200k to win on the 1 horse and gets a 10% rebate (just a nice round number for illustration purposes). You bet 100 bucks on the #2 horse and get 0 Rebate. So, you're essentially betting against the "whales" its you against them. The handle for the race is 200,100 and there's a 20% takeout, so they take 40,020 right off the top. They take 40,000 from her and 20 bucks from you.

Now, if you win, you cash for 160,080. If the little old lady from Pasadena did NOT get a rebate, you would still cash for the exact same amount, 160,080 if my math is correct. There's 0 difference to your personal payout whether she gets a huge rebate behind the scenes or not.

The idea that somehow all these rebate players are able to cause underlays on every horse is poppycock because when one player bets a horse, the other horses automatically go up in price. Horse racing is a hard game, sometimes there will be races where there are no overlays, the public will get it right, but if the public gets it right, and all the horses in the race are exactly the price they should be, that has nothing to do with rebates and everything to do with the intelligence of the crowd.

As so many times in the past you've assumed the little old lady only bets one horse,which of course, isn't how it goes down with the syndicates. They bet both horses down to the point that regardless who wins there is no profit for the non rebate player. This topic has been discussed to the point you should,by now,have the proper understanding of the game with rebate players.
TD

[Saratoga_Mike]

Apples and oranges. As it was said before, all they need is a platform. Then sell sell sell. 4-5% can be quite a bit when there is little to no risk and no overhead at all. 13% can be awful if it is extremely high risk. By offering rebates they are clearly saying that they are making money, so much they are willing to pay certain people back part of it in the hopes that they will even further increase the spending of those people. Someone always comes for money like that and in some cases, well they should. Arbitragers create nothing either side couldn't have already had. They just suck cash out of both sides of the market.

Comparing EBIT margins to EBIT margins is apples and apples. You could argue that the ADW business should scale well (at a certain point) and not require much in the way of incremental capital, driving high returns on incremental invested capital.

No risk? No overheard? First, there's risk in any business venture, not sure why an ADW would be different. Second, there's overhead in any business (see Youbet SEC filings before they were acquired).

[Jeff P]

i am going to use Santa Anita as an example and use some very round numbers.

Santa Anita real estate worth $1 billion

total handle per day $10 mlllion X 100 days=$1 billion

total hold from takeout after off the top expenses such as taxes and purses could be as much as 3% which would bring the total income before expenses to $30 million per year.

as a rule of thumb, real estate is worth up to 10 times income.

when one factor's in the day to day expenses to run a track most of that 30 million would be gone. sure there are other forms of income to be derived from the race track like parking and admissions along with souvenirs and food. maybe on a great day, add up all the other things and there might be another $10 million income.


if one were to rip the race track Santa Anita down and do something else with the thousands of acre's of land there like put up hotels and shopping center's i am pretty sure that property would yield at least $200 million per year and probably a lot more.

of course Stronach paid less than $200 million for the property and might not have additional carrying cost's such as a mortgage

i am sure that most racetracks today have the same business viability problems. for horse racing to be on solid footing, there needs to be at least a 10 fold increase in handle. race track business model's haven't changed to much in the last 75 years when real estate was 1/20th of what it is today, and minimum wage was less than .40 per hour. the handle in Santa Anita averaged $2 million per per day back then.

in short expenses and intrinsic real estate values have increased over 20 fold while revenues have only increased 5 fold. there is the whole deal in a nutshell.

the only thing that hasn't changed that much through the years are people's love of horse's, the sport and the intrigue of the game even though we have done a great job of scaring people away from the sport.Accurately described. Agree with you 100 percent.

There's a reason racing finds itself in the state that it's in:

Poor business decision making.

Example:
all it needs is for the main states to outlaw rebates at their tracks

pricing your signal fee high sounds a good way to do it in fact, good suggestionPitching the above line of thinking to politicians over and over again - and getting them to act on it - time and time again - in state after state - has taken its toll.

Make no mistake. The never ending series of poor business decisions based on the above line of thinking is responsible for racing's current predicament.

More bad business decisions based on the same line of thinking are not what is needed to turn things around.

Sticking it to the customer only works when your business is a monopoly.

In the event you've been living under a rock for the past 30 years, allow me to point out the obvious:

Racing is no longer a monopoly.

The gambling market space today is one where the participants must compete for customers and market share.

The single best way to turn things around - the way with highest probability of success - is to quash the above line of thinking.

Instead we somehow need to get horsemen and politicians on board with a new line of thinking that has race tracks operating their businesses like - well - businesses.

How do successful Fortune 500 companies operate their businesses?

Every successful Fortune 500 company that you can name does the following:

1. They identify their target (niche) markets and the customers/demographics in each of their market segments.

2. They identify the needs and wants of each customer segment.

3. They MAKE IT THEIR MISSION to satisfy those customer needs and wants.

That's what successful companies do.

That's what racing (so far) has refused to do.

And that's why racing finds itself in the state that it's in today.


-jp

.

[GMB@BP]

If you outllaw rebates on the back end without an offsetting reduction in takeout on the front end:

You will convert almost all of the game's million dollar a year plus players into casual "fans" almost overnight. (And angry fans at that.)

If your goal is to decimate the game handle-wise, you're on the right track.


-jp

.

If rebates went away but takeout went down, offset by higher signal fees for the tracks, that would grow the game.

Chance of that happening.......0%

[ronsmac]

btw, ronsmac i think we are pretty much in the same boat as far as a lot of this stuff trying our patience. i think you might be a little ahead of me with one foot out the door while i just have my hand on the (door) knob.

hated to see your post last week about 2014 possibly being your last year. that should speak volumes to this industry.
if I had your talent as a poker player I'd probably be 3/4 ths of the way out the door

[Robert Goren]

I was one of the fools who thought when simulcasting came in that race tracks would actually compete with other tracks for the simulcasting dollar. They never did, I have not exactly figure out why unless there is collusion. Everything the econ 101 books said they should have. Now with slot money being so great, there is reason to compete.

[ronsmac]

As so many times in the past you've assumed the little old lady only bets one horse,which of course, isn't how it goes down with the syndicates. They bet both horses down to the point that regardless who wins there is no profit for the non rebate player. This topic has been discussed to the point you should,by now,have the proper understanding of the game with rebate players.
TDDitto

[Stillriledup]

As so many times in the past you've assumed the little old lady only bets one horse,which of course, isn't how it goes down with the syndicates. They bet both horses down to the point that regardless who wins there is no profit for the non rebate player. This topic has been discussed to the point you should,by now,have the proper understanding of the game with rebate players.
TD

Ok, so lets say the old lady bets 200k to win on both horses and they're both 4-5 or 3-5 or whatever price they would be, what's the difference TO YOU if the 400k comes from rebate bettors or from a grandma and her inheritance? The odds would still be the same for you.

[lamboguy]

I agree with SRU on this. its the batch betting that i think Texas Dolly is against.

the batch bettors also get the highest rebates. i would like to be batch betting even without the rebate. add the rebate and those guys are printing money in a high takeout game.

[TexasDolly]

Ok, so lets say the old lady bets 200k to win on both horses and they're both 4-5 or 3-5 or whatever price they would be, what's the difference TO YOU if the 400k comes from rebate bettors or from a grandma and her inheritance? The odds would still be the same for you.

I only care in that the rebate player will be around permanently.
No one but a rebate player in the game that you describe can stay in that game long ,since the takeout will grind them out. High dollar volume non rebate players can't last in your scenario ,or would they even care about it.
TD

[Stillriledup]

I only care in that the rebate player will be around permanently.
No one but a rebate player in the game that you describe can stay in that game long ,since the takeout will grind them out. High dollar volume non rebate players can't last in your scenario ,or would they even care about it.
TD

rebate players are still paying 10 to 15 percent in rake, they still have to be really good to win in the long run, they have to be twice as good as the best sports bettor (who has to beat a 5% rake) they're not going to be around unless they're elite. Also, a factor that doesnt get talked discussed much by the anti rebate crowd is that rebate players bet quite a few combinations, they might box up 8 or 9 horses in the tri, which means with an 8 horse box, they're sticking 1 dollar on 336 different combinations......you should WANT players spreading money around like that....if there was no rebates, players wouldnt be as reckless with their wagering, which would mean not only would the pools go way down if rebate players left the pools, but players with no rebates would be much more careful to NOT make bad bets, the non rebate players are benefitting greatly from the rebate players who are spreading money around to get their handle higher.

[wiffleball whizz]

Seabiscuit@AR,

While I disagree with you about rebates...

I emphatically agree with you about the need for a sustainable business model.

This isn't 1968. Racing doesn't have a monopoly on gambling outside of Las Vegas anymore. The gambling market space is now one one in which the participants who would be successful must compete for customers and market share.

In such a market space: PRICING MATTERS.

In such a market space, I contend that 22% blended takeout rates are anything but pricing the product in a way that ensures a sustainable business model.

I contend that current 22% blended takeout rates make racing unattractive vs. ALL other forms of gaming from a prize payout percentage standpoint except lotteries. Lotteries can price their product the way they do because they enjoy a significant advantage over racing: Superior jackpot size. Jackpots paying 100's of millions of dollars for a quick pick are FAR more attractive to the public from a demand curve standpoint than anything offered by racing.

What racing does have going for it are churn bets where the decisions based on critical thinking made by the player have the ability to shape expected returns.

Most of us would intuitively think that a 16 percent takeout rate produces a prize payout percentage close to 84 cents per each $1.00 wagered for the player making random selections in WPS pools.

But if you think that you'd be wrong.

Believe it or not the player making random selections in WPS pools at a 16 percent takeout rate actually faces long term net losses bordering on minus 25 percent.

Turning Fans into Horseplayers:
http://blog.horseplayersassociation.org/2013/12/turning-fans-into-horseplayers.html


Go ahead. Outlaw rebates if you want.

But without an offsetting reduction in takeout you are essentially left trying to market a gamble to "fans" that's the equivalent of a roulette table with 12 freaking zeroes on it - while at the same time competing with other forms of gaming that offer games of chance where the prize payout percentage is more in line with the demand curve dictated by the market.

Good luck with that.



-jp


Might be the sickest thing I've ever read in 22 years around gambling....if that's true I may never bet win again......SICK POST!!

[RXB]

Also, a factor that doesnt get talked discussed much by the anti rebate crowd is that rebate players bet quite a few combinations, they might box up 8 or 9 horses in the tri, which means with an 8 horse box, they're sticking 1 dollar on 336 different combinations......you should WANT players spreading money around like that....if there was no rebates, players wouldnt be as reckless with their wagering, which would mean not only would the pools go way down if rebate players left the pools, but players with no rebates would be much more careful to NOT make bad bets, the non rebate players are benefitting greatly from the rebate players who are spreading money around to get their handle higher.

Completely wrong, as I explained to you in that thread from several months ago (which I believe was deleted for subsequent unrelated reasons, unfortunately).

[Seabiscuit@AR]

Jeff P

As I mentioned earlier in the thread, racing needs to make itself a sustainable business

I agree with racing needing to cater to customer needs and wants

The problem is that I don't see how paying rebates to some customers constitutes catering to the needs and wants of that large pool of customers who get no rebate. In fact it is the opposite and involves racing selling out this large pool of non rebate customers

Let me put it this way. Looking at the last 15 years

- probably no racetrack in the USA has improved its financial position in the last 15 years

- more customers have stopped betting the horses in the last 15 years than have started betting the horses (net loss of customers)

- total betting turnover on the horses in the USA is down a lot in the last 15 years

- BUT in the last 15 years a few big betting syndicates with rebates have improved their financial position, in some cases by a long way

Now if the racetracks had improved their financial position in the last 15 years and the big rebate syndicates had also improved their financial position then you could say that rebates were working as promised. Under this scenario it would be a good idea to continue with rebates

But when the deal is that the biggest rebaters are better off and everyone else is worse off you have to question if rebates are a good policy for the overall health of the game. Does offering rebates truly cater to the needs and wants of racing's customers? Rebates sure cater to a small segment of customers but not to a much larger segment of racing's customers

I have always said that the overall takeout should be reduced as a tradeoff for rebates being removed

[TexasDolly]

rebate players are still paying 10 to 15 percent in rake, they still have to be really good to win in the long run, they have to be twice as good as the best sports bettor (who has to beat a 5% rake) they're not going to be around unless they're elite. Also, a factor that doesnt get talked discussed much by the anti rebate crowd is that rebate players bet quite a few combinations, they might box up 8 or 9 horses in the tri, which means with an 8 horse box, they're sticking 1 dollar on 336 different combinations......you should WANT players spreading money around like that....if there was no rebates, players wouldnt be as reckless with their wagering, which would mean not only would the pools go way down if rebate players left the pools, but players with no rebates would be much more careful to NOT make bad bets, the non rebate players are benefitting greatly from the rebate players who are spreading money around to get their handle higher.

Large rebate players DO NOT pay 10-15% in rake . You need to restudy the takeout/rebate math.
TD

[Robert Goren]

sure, the game would probably be easier if some combination of higher take/lower rebates pushed cj and some other elite players to the sidelines.

but when Caesar's started taking the extra bad beat dollar you were (rightfully) cursing the move, not looking at it as potentially being good for the Caesar's games by driving more price conscious players to taj and Borgata.

also, i'd expect it to be in the nature of a "real gambler" to relish the challenge of playing in pools with a master like cj. :)Of all the dumb things that have been stated here over the years, this has to be the dumbest. You are usually pretty smart in your comments, so I will chalk it up to the "heat of the moment". Playing in pools with people like cj is like taking on a source fee, only it is going to them instead of NY state. I play in pools with people like cj because I have to, not because I want. If I want to go an ego trip and not make money, I'd play in a bridge tournament.

[Robert Goren]

I firmly believe that anyplace that runs a Racino like NY state wants to out of the racing business as fast as possible because that is what makes sense financially. Brother, does it ever. Source fees are a means to that end. Expect more of the same until there is a complete disconnect between racing and casino gambling. As long as racing receives money from casinos, the casinos will be looking for ways to stop that expense. If they can't do it directly, they will try the back door. Take a look behind the curtain of this law and I strongly suspect you find state senators with ties to the casino end of the business.
Nobody outside of themselves gives a damn about the bettors. I am amaze by what is in threads like this. Some posters seem to think somebody cares about them. Not the state because the money in the big picture of state budgets is next to nothing. Not the horsemen, who have at best consider them a necessary evil. Not track management who think of them as geese laying golden eggs but who are too greedy to let a few of the hatch to make more geese. Not track owners who are just waiting for the right deal to come along in order to tear down the tracks.

[classhandicapper]

Could someone get to the bottom line on this so I don't have to try to understand the law and the ADW business model?

It seems to me they are building in a "potential" economic incentive for NY residents to bet through NYRA or the NY OTBs instead of other ADWs. The idea being to keep NY gambling money (handle) within NY because it's such a massive market.

Since those out of state ADWs will face additional charges when NY residents bet through them, they are less likely to offer "perks" to get or keep those NY customers.

I don't see it as a tax on players "unless" the out of state ADWs pass the cost along to customers in the form of lower rebates or fees (especially to NY customers). But even if that happens, if you are NY resident just open an NYRA account instead. The software is fine and they have rebates.

I'm not generally in favor of this kind of thing and it will probably suck some money out of the game if any of the costs are passed onto consumers, but on the flip side I can see why NY would want to keep the money at home and support it's own industry.

What am I missing?

[Tom]

Screw NY - boycott NY tracks.
I don't need some slime ball pols telling me where to bet.
Support out-of state tracks and ADW's.

[classhandicapper]

Screw NY - boycott NY tracks.
I don't need some slime ball pols telling me where to bet.
Support out-of state tracks and ADW's.

It's a form of protectionism. It's kind of like adding tariffs on imported goods at the national level. Things like that are almost always bad long term economics (which is I why I tend to be against them), but I don't see any major negative implications for bettors unless you happen to hate NYRA or NYRA's software. I already have an account.

[Jeff P]

Could someone get to the bottom line on this so I don't have to try to understand the law and the ADW business model?

It seems to me they are building in a "potential" economic incentive for NY residents to bet through NYRA or the NY OTBs instead of other ADWs. The idea being to keep NY gambling money (handle) within NY because it's such a massive market.

Since those out of state ADWs will face additional charges when NY residents bet through them, they are less likely to offer "perks" to get or keep those NY customers.

I don't see it as a tax on players "unless" the out of state ADWs pass the cost along to customers in the form of lower rebates or fees (especially to NY customers). But even if that happens, if you are NY resident just open an NYRA account instead. The software is fine and they have rebates.

I'm not generally in favor of this kind of thing and it will probably suck some money out of the game if any of the costs are passed onto consumers, but on the flip side I can see why NY would want to keep the money at home and support it's own industry.

What am I missing?

Short answer:
Source market fee means you are harmed as a consumer because:

1. The number of choices open to you are reduced because what would normally be an open competitive marketplace is transformed into a quasi-monopoly.

2. The "fee" part of source market fee raises prices at the wholesale level.

3. Higher wholesale prices translate into higher retail prices.

Bottom line: As a consumer you will find fewer places to shop and you can expect to pay higher retail prices for the same goods.



Grocery Store Analogy
Suppose for the sake of argument a nearly identical law had been passed in NY. But instead of out of state ADWs, the statute had been crafted to penalize out of state grocers.

Suppose for the sake of argument that you had been (for years) a VERY satisfied customer purchasing lunchmeat, cheese, bread, produce, etc. from a boutique corner deli that's part of a privately owned but well known small chain.

Let's also suppose for the sake of argument, that the Local Grocery Workers Union, a larger grocery chain or two, and maybe the Local Truck Driver's Union (all headquartered in the state of NY) get together and lobby the NY Legislature and Governor's Office to write a state law for them. The new law requires the following of ALL grocery stores whose corporate headquarters are located outside the state of NY:

1. Must obtain a "license" to do business in the state of NY. (Annual cost for the license $20k. As part of the "costs" related to obtaining a "license" must undergo a NY state approved "background check" initial cost $30k... Total cost to be "licensed?" $50K that first year.)

2. Must pay a new "market origin fee" (it's a tax) to a new "state fund." Taxable amount equal to 5 percent of sales made to NY residents.

3. From there, the new "state fund" shall distribute 40% of market origin and license fees collected to the Local Grocery Workers Union, the larger grocery chains, and the Local Truck Driver's Union who lobbied the Legislature and Governor's Office to get the new law put in place.

As a result of the new law, the owners of the smaller boutique corner deli chain (whose headquarters happen to be in Oregon) make a business decision.

They look at the combined costs of doing business in the state of NY... $50k in costs to obtain the 1st year license along with the ongoing 5% tax... a tax that their direct competitors do not have to pay... along with the added insult of watching a not insignificant percentage of the new costs they are required to pay simply be handed over to their direct competitors...

And they decide to stop doing business in the state of NY.

What does this mean to you the consumer?

As a consumer (whether you realize it or not) you have been harmed by this.

As a result of the new law: The number of choices open to you is negatively impacted.

The marketplace where you had previously been shopping was an open competitive marketplace.

As a result of the new law: That marketplace is now a quasi monopoly... a monopoly created by and for the benefit of those who lobbied for the new law... the Local Grocery Workers Union, the larger grocery chains, and the Local Truck Driver's Union.

Maybe you're ok with this... Maybe your brother in law is a union truck driver. Or maybe you never set foot in the boutique corner deli that is now a thing of the past.

On the other hand, maybe you would have really LIKED shopping in the corner deli had you discovered it.

At any rate, as a consumer, you have been harmed.

You cannot go to the corner deli because it is not there anymore. If you want to buy the same items... if you can find the same selection at all (and that's a topic worthy of its own thread)... you have to do so from the larger chains who lobbied for the new law.

And wonder of wonders, when you do finally shop the larger chains in hopes of finding the same selection you notice that the price is higher.

THAT'S what this new law is all about.

And wonder of wonders, when you do finally shop the larger chains in hopes of finding the same selection you notice that the price is higher.
I quoted that last part for emphasis because there's one more point I want to touch on.

A number of NY players have reported to me that NYRA Rewards is not (repeat not) offering rates commensurate with what had up until now been available to them at their corner deli.... make that ADW... where they had been happy satisfied customers for years.



-jp
.

[riskman]

I am a NYC resident. For the past 30 years I have been wagering on the horses both at NYRA and out of state tracks. I have had several betting accounts over the years both at NYRA, OTB's and out of state ADW's. All my action at present is with an out of state ADW. The rebate I receive on NYRA action is a small percentage compared to the other tracks I wager. I have a decent bankroll and wager in the high six figures annually split approximately 50/50 between NYRA and other out of state tracks. I support NYRA racing despite the lower rebate I receive. It is all not economics but as I sit here, maybe it should have been. I carefully select the out of state tracks I wager on based on handicapping ability, pool size and many other factors including rebate offered by the ADW.
Anyone who wagers on the races on a consistent basis knows the how difficult it is to keep a straight head and also to put time into handicapping, record keeping, betting and to keep up to date with goings on in the industry as well as testing new ideas to determine if they hold promise in future betting. Bottom line, it is tough and I question wether it is worth it from an economic and sanity standpoint. This forum is a great place to hear opinions and to research further ideas that are presented. Personally, I do not contribute that much to the forum. There are many others here and the past that I learned from as well as my own mistakes that keep me going.. PA does an admirable job as well as the other moderators both on and off topic. It is a good resource for me and I appreciate it.
Despite all that I torture myself with everyday about this game I completely missed the legislation that was posted by Inffront in this thread. I also do not remember anything
being posted in this forum prior in Infront's post. The DRF article goes back to last August yet it went completely over my head. I must be losing it and had a senior citizen moment. At the very least, I would have contacted and wrote to my state senator in Albany. His office is only two blocks from where I live. My bad, I surely missed the boat on this one.It appears the legislation is signed sealed and delivered and is effective 1/1/14.Did anyone on the forum know of this legislation? I think it would have been a hot topic wether you are a New Yorker or not.
The question is, where do we go from here as classhandicapper said in his post. Sartogamike also brought up a lot of questions that are valid concerning this legislation. It appears this legislation was slipped in with some bill on Casino or other legislation to make it look innocuous and voted on without knowing its repercussions. This deliberate act totally turns me off on any future wagering with NYRA since they are now part of New York State. I doubt if the tracks were privatized that this legislation would have been passed.Who knows what the end game is of a bunch of. corrupt and ignorant legislators in NYS. I do not fault NYRA in this instance as their cut is minimal and they stand to lose handle from people like me.The regional OTB's getting a cut is shameless and embarrassing. The whole scheme is a piece of garbage at the expense of the horseplayer.
I do not know what my ADW will do concerning my account. I have not contacted them and they have not contacted me. I have to see where this leaves me after every thing shakes out. The future of riskman in betting horses does not look promising nor does it for hundreds or thousands of New Yorkers with out of state adw's.

[Stillriledup]

Large rebate players DO NOT pay 10-15% in rake . You need to restudy the takeout/rebate math.
TD

Instead of me "restudying" math, why don't you just explain in detail what i'm missing. I'm willing to learn.

[Jeff P]

Riskman,

Yours was a very poignant and well thought out post.

Where do we go from here?Indeed.

The answer to that question troubles me deeply.

Based on demographics gleaned from HANA member sign up data, NY has a greater number of serious horseplayers - and the horseplayers in NY generate significantly more handle - than the horseplayers of any other state in the US - or any province in Canada.

If they are anything like Riskman - and my gut instinct tells me they are - this new law will cause them to bet significantly less on NY races than they are betting now.

If that should come to pass - and I predict it will - there will be a domino effect:

If NYRA tracks really are going to be privatized (roll eyes) and make it on revenue from racing alone (you know... decoupled from slots... roll eyes again) then they will eventually cut dates. And when that doesn't stop the bleeding there will be layoffs. (The same thing happened in CA. The workers whose union heads supported CA source market fee and then later two takeout increases ended up first having their hours cut and then later faced layoffs... This as a direct result of what they supported.)

But it doesn't stop there... We still have more dominoes.

NY horseplayers don't just bet NYRA races. As Riskman pointed out, about 50% of his handle is on out of state races.

It follows then that as Riskman and others like him bet less and less as a result of this law - handle and pool size for out of state races will fall too.

That means tracks, unions, and horsemen (who supported source market fee in states like CA, IL, PA, VA, etc,... and tracks and horsemen in states that are considering it such as KY... as well as tracks and horsemen in states that outlawed ADW wagering outright such as AZ, MI, and TX) are going to get squeezed too.

It's a case of "Be careful what you wish for."

If you are a horseman based in a US state other than NY or even in Canada: The new law in NY will eventually mean purse cuts for you.

If you are a track operator and your track is based in a US state other than NY or even in Canada: The new law in NY will eventually mean lower total revenue for your track.

If you are a horseplayer betting on races in a US state other than NY or at a track in Canada: The new law in NY means you will be betting into ever smaller pool sizes.

But wait... we still have more dominoes.

Fast forward 10-12 years.

Racing is still being run the same way. None of the economic fundamentals have been changed. Takeout is even higher now than it was back in 2013. Signal fees are higher now than they were in 2013. Source market fee is everywhere too.

But none of that stopped the bleeding or fixed the problem. The problem all along was failure to recognize and satisfy customer needs and wants. (And at no point in time was any meaningful effort made to address that.)

Price sensitive guys like CJ, Thaskalso, Track Collector, Riskman, and myself aren't betting large amounts any more. Those days have passed. But we're still fans of the game. And as such (not wishing to speak for the others so I'll just speak for myself) I'm betting a mere fraction now vs. what I used to bet back in the day.

Handle has fallen from $11 billion in 2013 (remember the good olde days?) and is on pace to come in at $6 billion this year (2025.)

Tracks, the ones that are still open, are bleeding money. FYI, most have been reduced to running FRI-SAT-SUN only.

Horsemen are still crying that in the face of falling customer demand for the product they need bigger purses. (And the heads of their aplphabet groups go right on acting as if things like takeout, odds that change after the bell, and drugs cannot possibly have played any part in racing's continued decline.)

So here's the last domino...

Policiticians can still be bought.

In state after state, tracks, horsemen, and union heads keep perpetuating the cause of their own self made problem. They go back in for another round - lobbying their collective Legislatures for ever higher takeout, ever higher signal fees, and ever tighter hoops players will have to jump through in order to bet races over the internet, etc.

I'm a betting man. Anyone care to take me up on my prediction? (I would love to be proven wrong.)


-jp

.

[lamboguy]

good reply jeff.

when it comes to this game, i am always optimistic. i can't argue with the points that you have brought up, the picture you paint sure looks like what the future has in store for it.

from what i can see, Frank Stronach is dead set against lasix and other drugs. while he is in his 80's and a pretty healthy looking man after seeing him early November. he is interested in seeing this game survive. his children run his race tracks these days. so far they are the only ones that are negotiating Hong Kong racing out of the major adw's to bring to this country. probably one of the major reason's that company wants to bring it here is to show how successful racing is there because they have a different way of doing things. this is the kind of product that people want to bet. i promise you that after 3 months of watching the racing there and seeing the numbers that it will put up at odd hours of the night, someone will pickup on it and change racing all-together.

some of the things that i have wanted here, Hong Kong has. if anyone remembers, i begged for the racing form to include the medications and missed training days for horses that run in this country. i said i would gladly pay $20 a day to get it. in Hong Kong you get that information for free right on their website. they also tell you if a horse is going to wear a shadow roll or a tongue tie for the very first time along with front wraps. i mentioned before that the odds board does not change that much from 12 minutes to post all the way to post time. i have never seen odds change during a race. if there are 14 horses in a race there are 14 stewards watching those horses. if a horse doesn't show speed that usually does show speed the people involved in the horse have questions to answer. if a horse doesn't run within 3 weeks, the trainer gets fined unless he has a great reason for it. if you win a race you move up in class.

these are the things that horse players all over North America are looking for and will come out of the woodwork to bet on. Hong Kong is going to shock everyone how well its going to do here.

[Track Collector]

Originally Posted by proximity

also, i'd expect it to be in the nature of a "real gambler" to relish the challenge of playing in pools with a master like cj. :)



Of all the dumb things that have been stated here over the years, this has to be the dumbest.

Looks like you missed it Robert. The above was a tongue in cheek remark with regards to a side discussion on the attributes of a "real gambler" earlier in this thread. :)

[TexasDolly]

Instead of me "restudying" math, why don't you just explain in detail what i'm missing. I'm willing to learn.
There have been any number of posts dealing with the rebate issue. You might want to start with those. I have no interest beyond what I have posted both here and in the past to spend anymore time trying to convince you that large rebate bettors cause the smaller players to foot most of the takeout.
TD

[classhandicapper]

Short answer:
Source market fee means you are harmed as a consumer because:

1. The number of choices open to you are reduced because what would normally be an open competitive marketplace is transformed into a quasi-monopoly.

2. The "fee" part of source market fee raises prices at the wholesale level.

3. Higher wholesale prices translate into higher retail prices.

Bottom line: As a consumer you will find fewer places to shop and you can expect to pay higher retail prices for the same goods.



Grocery Store Analogy
Suppose for the sake of argument a nearly identical law had been passed in NY. But instead of out of state ADWs, the statute had been crafted to penalize out of state grocers.

Suppose for the sake of argument that you had been (for years) a VERY satisfied customer purchasing lunchmeat, cheese, bread, produce, etc. from a boutique corner deli that's part of a privately owned but well known small chain.

Let's also suppose for the sake of argument, that the Local Grocery Workers Union, a larger grocery chain or two, and maybe the Local Truck Driver's Union (all headquartered in the state of NY) get together and lobby the NY Legislature and Governor's Office to write a state law for them. The new law requires the following of ALL grocery stores whose corporate headquarters are located outside the state of NY:

1. Must obtain a "license" to do business in the state of NY. (Annual cost for the license $20k. As part of the "costs" related to obtaining a "license" must undergo a NY state approved "background check" initial cost $30k... Total cost to be "licensed?" $50K that first year.)

2. Must pay a new "market origin fee" (it's a tax) to a new "state fund." Taxable amount equal to 5 percent of sales made to NY residents.

3. From there, the new "state fund" shall distribute 40% of market origin and license fees collected to the Local Grocery Workers Union, the larger grocery chains, and the Local Truck Driver's Union who lobbied the Legislature and Governor's Office to get the new law put in place.

As a result of the new law, the owners of the smaller boutique corner deli chain (whose headquarters happen to be in Oregon) make a business decision.

They look at the combined costs of doing business in the state of NY... $50k in costs to obtain the 1st year license along with the ongoing 5% tax... a tax that their direct competitors do not have to pay... along with the added insult of watching a not insignificant percentage of the new costs they are required to pay simply be handed over to their direct competitors...

And they decide to stop doing business in the state of NY.

What does this mean to you the consumer?

As a consumer (whether you realize it or not) you have been harmed by this.

As a result of the new law: The number of choices open to you is negatively impacted.

The marketplace where you had previously been shopping was an open competitive marketplace.

As a result of the new law: That marketplace is now a quasi monopoly... a monopoly created by and for the benefit of those who lobbied for the new law... the Local Grocery Workers Union, the larger grocery chains, and the Local Truck Driver's Union.

Maybe you're ok with this... Maybe your brother in law is a union truck driver. Or maybe you never set foot in the boutique corner deli that is now a thing of the past.

On the other hand, maybe you would have really LIKED shopping in the corner deli had you discovered it.

At any rate, as a consumer, you have been harmed.

You cannot go to the corner deli because it is not there anymore. If you want to buy the same items... if you can find the same selection at all (and that's a topic worthy of its own thread)... you have to do so from the larger chains who lobbied for the new law.

And wonder of wonders, when you do finally shop the larger chains in hopes of finding the same selection you notice that the price is higher.

THAT'S what this new law is all about.


I quoted that last part for emphasis because there's one more point I want to touch on.

A number of NY players have reported to me that NYRA Rewards is not (repeat not) offering rates commensurate with what had up until now been available to them at their corner deli.... make that ADW... where they had been happy satisfied customers for years.



-jp
.

I understand the basic economics. That's why I am opposed to them. But those costs have NOT been passed on to the consumer yet, no one has left the market yet, and there are several options for horse players in NY that are equal or better anyway.

Imagine your grocery store scenario except there are several other grocery stores right in the neighborhood without such additional costs. Yea, I've lost an option, but I still have plenty of equal or better choices that ensure a competitive landscape without any costs passed on to me.

That's where we are.

It's a non issue right now even though I agree on the basic economics and am against actions like these as a general rule. Plus, like TLG said, rules like this are not unique to NY. States and tracks are trying to protect their handle.

Open a NYRA account. The software is good. The rebates are good. They are investing in the product trying to make it better. No problemo.

[Robert Goren]

BEL went 65k mdn races in 2011 to 95k mdn races in 2013 with bigger purses to come. Where did that extra 30k come from? The handle sure in Hell didn't go up 50% in the last 2 years. It came from slots that's where. And the slot money has even began to come yet. In another 5 years, they'll be running 150k mdn races and the handle will be less than it is now. The days of telling NY horsemen that we pay their bills are over. The slots pay the bills. The only people who care about the horse bettor is the casino owner and they want them to go away so they can close the track which is costing them a lot of money. At some point there will be a bunch of casinos in NYC. There is too much money to be made by a lot of people for that not happen. If you think they are go to stand still for a big much of their profits going to 300k mdn races, you are crazy. NY racing may shine bright for a few years, but sooner or late greedier heads will prevail and the gravy train will end and it will be 2010 all over again if there is racing at all. Slot money perverts everything racing until racing becomes so perverted that it can't survive.

[riskman]

I understand the basic economics. That's why I am opposed to them. But those costs have NOT been passed on to the consumer yet, no one has left the market yet, and there are several options for horse players in NY that are equal or better anyway.

Imagine your grocery store scenario except there are several other grocery stores right in the neighborhood without such additional costs. Yea, I've lost an option, but I still have plenty of equal or better choices that ensure a competitive landscape without any costs passed on to me.

That's where we are.

It's a non issue right now even though I agree on the basic economics and am against actions like these as a general rule. Plus, like TLG said, rules like this are not unique to NY. States and tracks are trying to protect their handle.

Open a NYRA account. The software is good. The rebates are good. They are investing in the product trying to make it better. No problemo.

I agree with you on your first paragraph. Nothing has happened "yet" I will sit tight and see what happens with my out of state ADW and if anything comes down with NYRA to clarify this subject ,if anything. With respect to NYRA Rewards Schedule it is competitive with my ADW for NYRA races.
A half-point for every dollar wagered on a simulcast(out of state) event is not competitive with my ADW but may be after my ADW puts me through the ringer as a result of the new law.
Again, was anybody aware of this new law until Infront posted about in this thread. The DRF article was written in August. I completely missed the boat on this one. It just may be there are few that care about the legislation and it does not affect them. Just surprised at the response. Oh, other states did it so we will do it to protect our handle.What BS this was if you look at the distribution of fees in the law and the way it was passed under cover if in fact this was the case.

[cj]

...and there are several options for horse players in NY that are equal or better anyway.



There are? I'm not so sure about that one.

[baconswitchfarm]

I understand the basic economics. That's why I am opposed to them. But those costs have NOT been passed on to the consumer yet, no one has left the market yet, and there are several options for horse players in NY that are equal or better anyway.

Imagine your grocery store scenario except there are several other grocery stores right in the neighborhood without such additional costs. Yea, I've lost an option, but I still have plenty of equal or better choices that ensure a competitive landscape without any costs passed on to me.

That's where we are.

It's a non issue right now even though I agree on the basic economics and am against actions like these as a general rule. Plus, like TLG said, rules like this are not unique to NY. States and tracks are trying to protect their handle.

Open a NYRA account. The software is good. The rebates are good. They are investing in the product trying to make it better. No problemo.


This would be a nice post except that everything in it is incorrect. There are no options at any state run entity that will compete with a private run adw. That is why they want to hold you hostage. If they wanted to give you a fair rebate these adws wouldn't exist. You are getting less options at a far worse price. Great decision.

[Jeff P]

Riskman,

Here's a link to the bill history itself on the NY State Assembly website:
http://assembly.state.ny.us/leg/?default_fld=&bn=A08101&term=2013&Summary=Y&Actions=Y&Memo=Y&Text=Y

I became aware of the bill after it was signed on July 30, 2013. I don't think the outcome would have been any different had I been aware beforehand.

In my estimation, because the bill had support from the Unions, the OTBs, the Horsemen, and Track Management (including the new NYRA Board) it would have taken (at a minimum) tens of thousands of mailed in letters from angry horseplayers to keep the legislature from passing it and/or get the Governor to think twice about signing it.

A little history if I may...

I have been told the idea behind the bill is nothing new - that in each of the past several years a similar lobbying effort was made by the Unions (with approval from the Horsemen) to get such a bill passed by the Legislature.

However, I have also been told that Charlie Hayward (the former head of NYRA) was opposed to the idea - opposed to it for many of the same reasons I have posted in this thread - and as the head of NYRA Mr. Hayward had enough political clout to quash previous efforts at such a bill.

Fast forward to 2013...

The Governor (it's politics... roll eyes and read into that what you will) had a hand in ousting Hayward and installing a brand new NYRA Board.

The new NYRA Board, knowing little about the history of past efforts at such a bill (and in my opinion knowing little or next to nothing about the consequences source market fee might bring) gave their ok... and with NYRA now officially on board:

The bill went through.


-jp

.

[Dave Schwartz]

What ADWs are NY-based? Are there any?

[Tom]

NYRA, Batavia Bets, and Finger Lakes just started one.

[badcompany]

BEL went 65k mdn races in 2011 to 95k mdn races in 2013 with bigger purses to come. Where did that extra 30k come from? The handle sure in Hell didn't go up 50% in the last 2 years. It came from slots that's where. And the slot money has even began to come yet. In another 5 years, they'll be running 150k mdn races and the handle will be less than it is now. The days of telling NY horsemen that we pay their bills are over. The slots pay the bills.

My guess is that in five years, the Racino model will be exposed as obsolete (see pic below), and horsemen welfare will be a thing of the past, unless they can figure out a way to leech off of internet slots money.

http://i95.photobucket.com/albums/l142/thinlizzy21/9144171ca2abf40fbb8cf6ceec3dedd9_zps136b5d78.jpg

[riskman]

Jeff P
Thanks for the history on the NY legislation.
My rant is over for the day. Tomorrow is another day.

[GMB@BP]

My guess is that in five years, the Racino model will be exposed as obsolete (see pic below), and horsemen welfare will be a thing of the past, unless they can figure out a way to leech off of internet slots money.



I have been saying this for quite a while, this is a dangerous road racing has gone down.

[Stillriledup]

There have been any number of posts dealing with the rebate issue. You might want to start with those. I have no interest beyond what I have posted both here and in the past to spend anymore time trying to convince you that large rebate bettors cause the smaller players to foot most of the takeout.
TD

My question to you was this: How has YOUR takeout increased since Rebate bettors came into the pools? If the listed takeout rate on Santa Anita's website was 15.43 percent in 1990 (not sure if it was) and it is listed as 15.43 percent today in 2013, how are you exactly paying more than approximately 15 cents per dollar to wager? Now while the rebate players takeout has gone down, yours has stayed the same.

[riskman]

What ADWs are NY-based? Are there any?

"SaratogaBets offers online horse wagering and allows you to earn daily or weekly rewards when you wager on all your favorite tracks online or by phone from your home, office, or anywhere you're connected. Enjoy your internet & phone horse betting experience without ever having to pay a surcharge!"
(from their ad)
This is owned by Saratoga Casino and Raceway, I think.

[the little guy]

Riskman,

Here's a link to the bill history itself on the NY State Assembly website:
http://assembly.state.ny.us/leg/?default_fld=&bn=A08101&term=2013&Summary=Y&Actions=Y&Memo=Y&Text=Y

I became aware of the bill after it was signed on July 30, 2013. I don't think the outcome would have been any different had I been aware beforehand.

In my estimation, because the bill had support from the Unions, the OTBs, the Horsemen, and Track Management (including the new NYRA Board) it would have taken (at a minimum) tens of thousands of mailed in letters from angry horseplayers to keep the legislature from passing it and/or get the Governor to think twice about signing it.

A little history if I may...

I have been told the idea behind the bill is nothing new - that in each of the past several years a similar lobbying effort was made by the Unions (with approval from the Horsemen) to get such a bill passed by the Legislature.

However, I have also been told that Charlie Hayward (the former head of NYRA) was opposed to the idea - opposed to it for many of the same reasons I have posted in this thread - and as the head of NYRA Mr. Hayward had enough political clout to quash previous efforts at such a bill.

Fast forward to 2013...

The Governor (it's politics... roll eyes and read into that what you will) had a hand in ousting Hayward and installing a brand new NYRA Board.

The new NYRA Board, knowing little about the history of past efforts at such a bill (and in my opinion knowing little or next to nothing about the consequences source market fee might bring) gave their ok... and with NYRA now officially on board:

The bill went through.


-jp

.

Better to remain silent, and have others believe you're dumb, than to open your mouth and remove all doubt.

[Jeff P]

If that's the case then I am being given bad info - and I would ask that you please enlighten me.


-jp

.

[lamboguy]

"SaratogaBets offers online horse wagering and allows you to earn daily or weekly rewards when you wager on all your favorite tracks online or by phone from your home, office, or anywhere you're connected. Enjoy your internet & phone horse betting experience without ever having to pay a surcharge!"
(from their ad)
This is owned by Sa ratoga Casino and Raceway, I think.i think that
Frank Calabrese owns a good chunk of that place, i wonder if he has a betting account there?

[proximity]

I do not know what my ADW will do concerning my account..

hopefully the 5 % is small enough and there are enough ny players (and $) that the shop will take measures to keep you on in some capacity. of course you'll still lose the 5 % which sucks. :mad:

good luck to all of you ny players.

[proximity]

Originally Posted by proximity

also, i'd expect it to be in the nature of a "real gambler" to relish the challenge of playing in pools with a master like cj. :)





Looks like you missed it Robert. The above was a tongue in cheek remark with regards to a side discussion on the attributes of a "real gambler" earlier in this thread. :)

this.

was just giving the whizz a little grief over his statement implying that people getting rebates aren't "real" gamblers. :)

[Dave Schwartz]

"SaratogaBets offers online horse wagering and allows you to earn daily or weekly rewards when you wager on all your favorite tracks online or by phone from your home, office, or anywhere you're connected.

All I could find was today's schedule. Based upon that, they seem a little short on tracks.

Worse, their rebates are woefully short of what the NY resident has currently available with a full menu.

[classhandicapper]

NYRA, Batavia Bets, and Finger Lakes just started one.

I believe you can also open accounts at the OTBs

[SchagFactorToWin]

Worse, their rebates are woefully short of what the NY resident has currently available with a full menu.

I currently get 10.49%. Yonkers offers 8%. Saratoga and Batavia offer 1.25-5% (but the 5% is for betting levels higher than I play).

If I lose the 5%, I guess I'll have to go to the Yonkers ADW but I hate to. If there service is anything like their track service, there will be problems.

Maybe I'll get an out of state residence set up.

[ronsmac]

this.

was just giving the whizz a little grief over his statement implying that people getting rebates aren't "real" gamblers. :)
Since you've made that clear, I'm sure you'll be getting an apology from RG for daring to question your intelligence. For the record, I've met Proximity twice, and he's one of the sharpest people I've ever talked to.

[proximity]

Since you've made that clear, I'm sure you'll be getting an apology from RG for daring to question your intelligence. For the record, I've met Proximity twice, and he's one of the sharpest people I've ever talked to.

rg is cool. there's so much different stuff in the thread that I can definitely see how what I said could have been taken literally.

btw, you need to talk to more people. :D

[ronsmac]

rg is cool. there's so much different stuff in the thread that I can definitely see how what I said could have been taken literally.

btw, you need to talk to more people. :D
It is true that I don't get out much.

[badcompany]

I have been saying this for quite a while, this is a dangerous road racing has gone down.

You mean hitching its wagon to an industry that wants to jettison it, and has an obsolete business model, itself?

Yeah, I'd have to agree.

We have some really smart guys, here. Perhaps one can explain why all that Racino infrastructure is necessary.

http://i95.photobucket.com/albums/l142/thinlizzy21/null_zps16edadbd.png

[DeanT]

Good, interesting thread. Some passion here.

I think we'll see another 15% handle drop by 2016. As long as slots are turning, and a slightly bigger slice of the handle is withheld, I think that will be enough to stifle any positive change for the customer. Incrementalism and harvesting whatever is left until its gone has pretty much been a staple of the business the last ten years. I doubt that changes.

JMO.

[Stillriledup]

Good, interesting thread. Some passion here.

I think we'll see another 15% handle drop by 2016. As long as slots are turning, and a slightly bigger slice of the handle is withheld, I think that will be enough to stifle any positive change for the customer. Incrementalism and harvesting whatever is left until its gone has pretty much been a staple of the business the last ten years. I doubt that changes.

JMO.

As long as the tracks are running the races for the horsemen and not the bettors, you will see the game continue to go down the tubes.

[classhandicapper]

I currently get 10.49%. Yonkers offers 8%. Saratoga and Batavia offer 1.25-5% (but the 5% is for betting levels higher than I play).

If I lose the 5%, I guess I'll have to go to the Yonkers ADW but I hate to. If there service is anything like their track service, there will be problems.

Maybe I'll get an out of state residence set up.

Where are you getting 10.49%?

I assume that's for exotics not win/place/show.

[riskman]

I currently get 10.49%. Yonkers offers 8%. Saratoga and Batavia offer 1.25-5% (but the 5% is for betting levels higher than I play).

If I lose the 5%, I guess I'll have to go to the Yonkers ADW but I hate to. If there service is anything like their track service, there will be problems.

Maybe I'll get an out of state residence set up.

Empire City Bets offers 8% only on Yonkers Raceway bets. There are three other rewards schedules 5-3-1% depending on the tracks they carry.
Place and show bets are excluded for all tracks.

[riskman]

hopefully the 5 % is small enough and there are enough ny players (and $) that the shop will take measures to keep you on in some capacity. of course you'll still lose the 5 % which sucks. :mad:

good luck to all of you ny players.

Do not know how this will shake out. If they keep me on in "some capacity" that will not do it for me.There are several places I can wager that is NY based but I will not receive the rebates that I did previously for my out of state wagers.

Seriously considering reducing my wagering substantially. Just do not think it is worth it for me to put the effort and time into this at this point. Wagering on the horses will not make me or break me even if I busted my bankroll. Financially, I am ok, with or without the horses. Life goes on.

[Pacingguy]

To make it even simplier, you ADW which provides you a rebate leaves forcing you to go to a NY ADW. With no competition, why should NYRA offer you a rebate?

[SchagFactorToWin]

Empire City Bets offers 8% only on Yonkers Raceway bets. There are three other rewards schedules 5-3-1% depending on the tracks they carry.
Place and show bets are excluded for all tracks.

Thanks- I didn't notice that (although most of my wagering is at YR). Looks like I'll be getting an out-of-state address!

[SchagFactorToWin]

Where are you getting 10.49%?

I assume that's for exotics not win/place/show.

It's for YR exactas. 8.49 for WPS, 15.49 for TRI. If interested, PM me.

[classhandicapper]

To make it even simplier, you ADW which provides you a rebate leaves forcing you to go to a NY ADW. With no competition, why should NYRA offer you a rebate?

That might be a risk if there weren't other betting options in NY, but if they all did the same thing a flood of money would probably move off shore.

There was a time when most people couldn't get legal rebates. So they went off shore. Then the risks started rising off shore, the rebates were lowered offshore, and you could get small rebates legally. The risk/reward ratio shifted and some money came back. Change the risk/reward and it will leave again.

[riskman]

To make it even simplier, you ADW which provides you a rebate leaves forcing you to go to a NY ADW. With no competition, why should NYRA offer you a rebate?

Why should NYRA offer me a rebate?
Because I am a New york resident and I legally qualify under all the rules of NYRA rewards. I have had an account with NYRA for many years and I will get a rebate under the schedule for wagering activity on file with NYRA.
There is competition, do your research and find out.

[Robert Goren]

The answer is to move to another state. But don't unpack your bags, because you might have move again. An stupidity plague seems to have hit the people that run racing in the past couple of years. I have always heard that stupidity is contagious. I guess this proves it.

[riskman]

The answer is to move to another state. But don't unpack your bags, because you might have move again. An stupidity plague seems to have hit the people that run racing in the past couple of years. I have always heard that stupidity is contagious. I guess this proves it.

The poster that said he would move to another state. Agree, do not unpack your bags at your new location. Never know what is around the corner.
The poster claims he wagers primarily on Yonkers Raceway. If that is the case, Empire Bets is offering 8% rebate on this track from first dollar excluding place and show wagers. Grab it while you can get it, as they must have something planned to increase wagering at Yonkers. Knew Empire was working on an ADW for awhile and was surprised it is up and running. Unfortunately, this does help me but I noticed they are offering 5% at Keenland.
Voigorish a poster on this board started a thread on this a few days ago but I did not see any comments posted.

[Hoofless_Wonder]

Hoofless Wonder

This story from Australia in October tells you HK opening up its pools is not far away and I reckon this time it is true. They will probably go with Australia first and then not long after they will do the same deal with the USA and other places

http://www.smh.com.au/sport/horseracing/comingling-of-tab-pools-with-hk-a-big-winner-20131007-2v4by.html

Thanks for the link, Seabiscuit. Wish I shared your optimism. There was a company lined up to take the HK signal last go 'round, but I'd lay a fair amount of dough on what happened is that the NA tracks and their cronies squashed it.

I look forward to the day I can wager, commingled, into Sha Tin's pools, or better yet play via some racebooks - but I'll only believe it when I see it...

In the meantime, I'll try to play a track or two in North America that doesn't charge outrageous takeout, signal fees, provide huge rebates to whales or otherwise penalize the smaller player. I think I'm down to Tampa, Oaklawn, and the Kentucky tracks....

[thespaah]

Thanks- I didn't notice that (although most of my wagering is at YR). Looks like I'll be getting an out-of-state address!
Out of state address?
What will that do for you?
It is my understanding most ADW's run credit checks on applicants. The credit reporting agencies reveal the applicant's location, last known address, banking info, etc. Not only that, it is also my understanding that some ADW's use IP address tracking methods. This reveals the location of the computer being used to interface with the ADW.
I could be wrong about this..
I live in a state where it is illegal to bet with US Based ADW's..it sucks.
I'd could use use friend's or family member's addresses but I gave up on the idea.

[SchagFactorToWin]

It is my understanding most ADW's run credit checks on applicants. The credit reporting agencies reveal the applicant's location, last known address, banking info, etc. Not only that, it is also my understanding that some ADW's use IP address tracking methods. This reveals the location of the computer being used to interface with the ADW.

I have had 8 ADW accounts, never a credit check. DL, bank account, yes.

I've contacted ADWs about the IP address issue. I have some plans to travel and asked them if they go by my mailing address at sign-up or by IP address, as I would be travelling through states that do not allow online gambling. Every one said: address on file.

[thespaah]

I have had 8 ADW accounts, never a credit check. DL, bank account, yes.

I've contacted ADWs about the IP address issue. I have some plans to travel and asked them if they go by my mailing address at sign-up or by IP address, as I would be travelling through states that do not allow online gambling. Every one said: address on file.
So how do you get around the driver's license and bank account issues?
If your DL and bank accounts are in a state that is restricted or does not permit ADW betting, what do you do then?

[SchagFactorToWin]

Get those things in a state that does.

[acorn54]

Better to remain silent, and have others believe you're dumb, than to open your mouth and remove all doubt.


yes i am sure the rest of us would like know what you know that is contrary to the conclusions being drawn on this new law.

[Robert Goren]

yes i am sure the rest of us would like know what you know that is contrary to the conclusions being drawn on this new law.Don't hold breath!

[Saratoga_Mike]

Better to remain silent, and have others believe you're dumb, than to open your mouth and remove all doubt.

Andy, this seems unfair at least without elaboration. You asked posters to actually read the bill. I did and I posted the most relevant language. From my read of the bill, it doesn't make sense that NYRA would have supported its passage. Is that what you're saying is incorrect about Jeff P's claims?

[Robert Goren]

Get those things in a state that does.Not very easily done these days. Thank you 9/11.

[davefulche]

Haven't posted here in a little while. But I have almost completely stopped playing the game. I lost my ADW that I liked because of the Pennsylvania law. And I rather swallow nails then give Penn National more money. They treat their loyal OTW customers like garbage and the rewards program is an absolute joke. Wager $1000 and maybe get a program or $5 rewards. I have continued to play a contest here and there on derbywars.com and I have basically funneled all my money into Daily Fantasy Sports.

[Hoofless_Wonder]

Better to remain silent, and have others believe you're dumb, than to open your mouth and remove all doubt.

I've never understood the logic of this "wise saying". Probably because I really don't give a rat's ass what others think about me - I'm too lazy to have that much vanity.

It'll be interesting to see the fallout from this law. If non-New York based ADWs actually close accounts or otherwise inconvenience the NY residents, then NYRA bears the responsibility of dropping the ball here, assuming their mission is to promote business practices and changes in laws that promote the sport.

[the little guy]

It'll be interesting to see the fallout from this law. If non-New York based ADWs actually close accounts or otherwise inconvenience the NY residents, then NYRA bears the responsibility of dropping the ball here, assuming their mission is to promote business practices and changes in laws that promote the sport.

None of this makes any sense.

[the little guy]

Andy, this seems unfair at least without elaboration. You asked posters to actually read the bill. I did and I posted the most relevant language. From my read of the bill, it doesn't make sense that NYRA would have supported its passage. Is that what you're saying is incorrect about Jeff P's claims?

Posters should read the bill given that they want to talk about it, and point fingers, and IMO it is only fair that they actually know what they are talking about. It's also fair that they understand that source market fees, whether they feel they are " fair " or not ( though from a player's standpoint they only make a difference if they are getting a rebate ), are already prevalent in many States. I cant imagine you think it is unreasonable that people become well informed...especially when they want to make accusations ( see the above poster I responded to ).

As for Jeff, I don't know him, and have no reason to believe he isn't a nice person. I do think he should divulge his professional relationship with rebates, and how a source market fee will affect him financially, especially if he wants to repeat hearsay as though it is fact, which in this case, as you pointed out, makes no logical sense once someone bothers to try to understand the facts.

Have a great Holiday.

[acorn54]

Posters should read the bill given that they want to talk about it, and point fingers, and IMO it is only fair that they actually know what they are talking about. It's also fair that they understand that source market fees, whether they feel they are " fair " or not ( though from a player's standpoint they only make a difference if they are getting a rebate ), are already prevalent in many States. I cant imagine you think it is unreasonable that people become well informed...especially when they want to make accusations ( see the above poster I responded to ).

As for Jeff, I don't know him, and have no reason to believe he isn't a nice person. I do think he should divulge his professional relationship with rebates, and how a source market fee will affect him financially, especially if he wants to repeat hearsay as though it is fact, which in this case, as you pointed out, makes no logical sense once someone bothers to try to understand the facts.

Have a great Holiday.

from my understanding, (no i did not read the entire bill as most of it was irrelevant to the horsebettor's bottom line), the adw's that new yorkers use that are out-of-state, will incurr a 5% source market fee, which the out-of-state adw's will have to either pass on to their ny customers or share the increased cost. to me this is anti free-market and stinks. the bettor should have the choice of where to bet in an open and competitive market.

[Robert Goren]

Amazing! Bad laws in other states justify having a bad law in NY. I don't live in NY so it won't effect me directly. As for rebates, almost everybody who bets through an ADW gets some sort of rebate even if it is my case is very small. If an ADW(s) is forced out business because these laws, it will effect me because I will fewer choices. Since I am not a big bettor, so I have "no horse in this race". But I will say this, there seems to be a war on big bettors who bet through an ADW. With new "fees " to cut their rebates in several states to down right banning of wagering over the net in Texas, you have wonder what is going on and who is behind it. I am not much on conspiracies, but it seems to be happening in too many places for it to be just a local thing. And there doesn't seem to be any state that is safe. There can't be two states more far apart politically than Texas and NY.

[the little guy]

Amazing! Bad laws in other states justify having a bad law in NY.

No BS too ridiculous for you Robert.

Have a happy Holiday. I hope someone puts some responsibility under your tree.

[Saratoga_Mike]

No BS too ridiculous for you Robert.

Have a happy Holiday. I hope someone puts some responsibility under your tree.

This is a great line, but I have to side with RG on this one, which probably means I'm wrong. Throughout this thread, you've consistently pointed to other states having already implemented these fees. Therefore, his statement isn't illogical or ridiculous (perhaps a first). I'm NOT saying you or NYRA supported the bill. As you've pointed out, the bill isn't helpful to NYRA. In my opinion, it's a wealth transfer to the state's OTBs and harness racing. But you're obviously much better informed on this issue than anyone here, so please correct me if I'm wrong.

[the little guy]

This is a great line, but I have to side with RG on this one, which probably means I'm wrong. Throughout this thread, you've consistently pointed to other states having already implemented these fees. Therefore, his statement isn't illogical or ridiculous (perhaps a first). I'm NOT saying you or NYRA supported the bill. As you've pointed out, the bill isn't helpful to NYRA. In my opinion, it's a wealth transfer to the state's OTBs and harness racing. But you're obviously much better informed on this issue than anyone here, so please correct me if I'm wrong.



You should have gone with your instinct.

All I pointed out was that other States have them. That's it. Go nuts. Read my posts. Find that smoking gun.

The major reason I don't engage here is that people make comments like your last one. It's too bad.

[Robert Goren]

No BS too ridiculous for you Robert.

Have a happy Holiday. I hope someone puts some responsibility under your tree.What part of it is ridiculous? That it is bad law? I think you will find most poster here think that. That is bad law in other states too. I think most poster will agree on that? Please explain how this is good for any NY resident bettor that bets through an ADW. You seem to have developed a new tactic of just calling anybody who doesn't like what is going on in racing, NY and elsewhere a fool. You can get away with that when you do it to me, but when you attacked Jeff, you lost a bunch of posters and a lot of your creditability.
Have a Happy Holiday.

[Saratoga_Mike]

You should have gone with your instinct.

All I pointed out was that other States have them. That's it. Go nuts. Read my posts. Find that smoking gun.

The major reason I don't engage here is that people make comments like your last one. It's too bad.

You seriously need to relax. I hope you have a better rest of the day.

[acorn54]

What part of it is ridiculous? That it is bad law? I think you will find most poster here think that. That is bad law in other states too. I think most poster will agree on that? Please explain how this is good for any NY resident bettor that bets through an ADW. You seem to have developed a new tactic of just calling anybody who doesn't like what is going on in racing, NY and elsewhere a fool. You can get away with that when you do it to me, but when you attacked Jeff, you lost a bunch of posters and a lot of your creditability.
Have a Happy Holiday.

i agree with loss of credibility of the poster "the little guy", jeff is a leader in hana
an organization that serves the best interests of the bettor and the growth of racing. i know of the nyra show called "talking horses" and i am disgusted with the mendacious comments made such as "nyra rewards gives the largest rebate".
personally i would find it difficult to rationalize saying such a thing.

[thespaah]

Get those things in a state that does.
That's a bit impractical, don't you think?

[thespaah]

Get those things in a state that does.
Did you do that?

[thespaah]

Amazing! Bad laws in other states justify having a bad law in NY. I don't live in NY so it won't effect me directly. As for rebates, almost everybody who bets through an ADW gets some sort of rebate even if it is my case is very small. If an ADW(s) is forced out business because these laws, it will effect me because I will fewer choices. Since I am not a big bettor, so I have "no horse in this race". But I will say this, there seems to be a war on big bettors who bet through an ADW. With new "fees " to cut their rebates in several states to down right banning of wagering over the net in Texas, you have wonder what is going on and who is behind it. I am not much on conspiracies, but it seems to be happening in too many places for it to be just a local thing. And there doesn't seem to be any state that is safe. There can't be two states more far apart politically than Texas and NY.
Bad laws in other states... The term is "political me too"...

[Hoofless_Wonder]

None of this makes any sense.

From NYRA's web site:

Mission: Meeting the highest standards in thoroughbred racing and equine safety.

My take on "highest standards" is to promote the sport by treating players with some well deserved appreciation. If, and only if, the result of this new fee makes NY horseplayers have to switch ADWs to avoid the fee or drives players away from the sport, then that's hardly the "highest standard".

I'm willing to wait and see what the fallout truly is - but if it's negative for players and handle alike, I believe it makes perfect sense to hold NYRA responsible....

[Dave Schwartz]

For the record, if this practice expands it will absolutely kill racing.

This is trying to put the manure back into the horse and force people to go back to betting regionally.

Some of the biggest players in the world (I am not talking about $100m per year guys) are used to playing a lot of tracks. These (typically) localized ADWs (typically) just do not have enough tracks.

Between the taxation in Boston (and where is Suffolk now), PA and now NY, racing will take a hit.

[Stillriledup]

You should have gone with your instinct.

All I pointed out was that other States have them. That's it. Go nuts. Read my posts. Find that smoking gun.

The major reason I don't engage here is that people make comments like your last one. It's too bad.

Its amazing to me that you can come in here and take an "anti player" stance and get away with it. If NYRA fired you and you were a "Free agent" would you come in here and have the same exact opinions, or, are your opinions "for sale" to the highest bidder?

[the little guy]

Its amazing to me that you can come in here and take an "anti player" stance and get away with it. If NYRA fired you and you were a "Free agent" would you come in here and have the same exact opinions, or, are your opinions "for sale" to the highest bidder?

I realize nobody listens to you here, but this is even an impressive line of BS coming from you.

How PA has allowed you to continue to destroy this board is way beyond me.

[DeanT]

For the record, if this practice expands it will absolutely kill racing.


This is not an unpopular opinion out there right now Dave, as I am sure you know.

Unchecked I have heard some people I respect say that racing is on its way to $8B in handle with these policies. I don't think that would surprise too many people.

[GMB@BP]

Is it an anti player opinion to think rebates are a bad thing for racings long term future?

[proximity]

Is it an anti player opinion to think rebates are a bad thing for racings long term future?

not only is it anti-player, it is anti-racing because 20-30% takeouts are nowhere near efficient.

[cj]

Is it an anti player opinion to think rebates are a bad thing for racings long term future?

The system, in my opinion, is an absolute mess right now. The very fact that ADWs can make a profit after giving big rebates and sign-up bonuses and referrer rewards makes that painfully obvious. I don't blame ADWs for taking advantage of the situation. It was mostly created by horsemen and racetracks together. Not only that, but tracks have continued to allow it to continue, and even grow. Tracks like Churchill bought BrisBet and do everything they can to encourage people to bet through them rather than on track.

That doesn't mean the current system should go on ad infinitum. Some tracks are trying to take back what they gave away long ago, or enter the ADW business. It may very well be that the system has to reset and be rebuilt. If that happens, there will be pain for all involved---except non-rebate bettors. Rebate bettors, tracks, and horsemen will feel the crunch.

Eventually, the sport needs lower takeouts for all (not just a secret society clouded in mystery), and for the tracks to reap more of the takeout than they currently get. There is no doubt these source market fees suck for rebate bettors, but lets be honest, the current model isn't working for anyone but ADWs and select bettors. Maybe it really is time to break it down and start over. Your typical non-rebate bettor is probably going to be better off with big rebate players betting less and/or dropping out. I'm surprised nobody has really mentioned that, since I imagine at least 90% of the bettors on PA fall into that category.

All that said, if this is just a matter of tracks taking back more money for themselves and not lowering takeout for all to rates near what those getting rebates can get, nothing will save horse racing anyway. The death spiral will continue.

[Stillriledup]

Is it an anti player opinion to think rebates are a bad thing for racings long term future?

"Racings" problem is that the price to wager is too high. If the price wasnt too high, rebates might have never existed in the first place. It essentially costs 5 cents per dollar to wager on the NFL (10 cents to wager on losers, free on winners, 5 cents if you select half the winners, which a person should be able to do flipping a coin) and it costs 20 cents to wager on a horse race. 4 times as much (blended).

Also, another factor is that the largest bettors depress their own prices more than the 2 dollar bettors...so, if the 2 dollar guy bets on a 7 dollar winner, he gets 7 bucks, if the 2k bettor bets on the 7 dollar winner, it becomes 6 dollars when he's done with it (for example)....without rebates, you're essentially charging the "better customer" a higher price.

Racing will be ok long term if they address the integrity problem, but i'm not holding my breath that they will, they'll just do enough to "get by" and give off the perception that they're trying to clean things up.

[cj]

"Racings" problem is that the price to wager is too high. If the price wasnt too high, rebates might have never existed in the first place.

But why is it too high? It is too high because of the silly system that is currently in place. Tracks simply gave away too much of the takeout when simulcasting began. But, they don't need to be stuck with the fruits of one obviously terrible decision that was made with no foresight. When the system was set up, all betting was on track. They didn't envision that the majority would move off track and even into people's homes, where they get a much smaller cut.

[Stillriledup]

The system, in my opinion, is an absolute mess right now. The very fact that ADWs can make a profit after giving big rebates and sign-up bonuses and referrer rewards makes that painfully obvious. I don't blame ADWs for taking advantage of the situation. It was mostly created by horsemen and racetracks together. Not only that, but tracks have continued to allow it to continue, and even grow. Tracks like Churchill bought BrisBet and do everything they can to encourage people to bet through them rather than on track.

That doesn't mean the current system should go on ad infinitum. Some tracks are trying to take back what they gave away long ago, or enter the ADW business. It may very well be that the system has to reset and be rebuilt. If that happens, there will be pain for all involved---except non-rebate bettors. Rebate bettors, tracks, and horsemen will feel the crunch.

Eventually, the sport needs lower takeouts for all (not just a secret society clouded in mystery), and for the tracks to reap more of the takeout than they currently get. There is no doubt these source market fees suck for rebate bettors, but lets be honest, the current model isn't working for anyone but ADWs and select bettors. Maybe it really is time to break it down and start over. Your typical non-rebate bettor is probably going to be better off with big rebate players betting less and/or dropping out. I'm surprised nobody has really mentioned that, since I imagine at least 90% of the bettors on PA fall into that category.

All that said, if this is just a matter of tracks taking back more money for themselves and not lowering takeout for all to rates near what those getting rebates can get, nothing will save horse racing anyway. The death spiral will continue.

Good post.

Question. You said that the system works for ADWs and "Select bettors". Are you proposing a system that works for NO bettors? In other words, if the system works for "some" isnt that a good thing in the sense that everyone has a chance to become that "special someone"? If the system works for nobody, where's the incentive to bet tens of thousands per day?

[Vigorish]

not only is it anti-player, it is anti-racing because 20-30% takeouts are nowhere near efficient.


I don't know if rebates are the ideal mechanism for lowering takeout, but they appear to be the only viable alternative as tracks stubbornly cling to 22% blended takeouts. One advantage to a lower direct takeout (as opposed to rebates) is that they are more democratic, with everybody getting the same odds.

[cj]

Good post.

Question. You said that the system works for ADWs and "Select bettors". Are you proposing a system that works for NO bettors? In other words, if the system works for "some" isnt that a good thing in the sense that everyone has a change to become that "special someone"? If the system works for nobody, where's the incentive to bet tens of thousands per day?

Of course not, and this is the very kind of post that you need to cut out. I said in that very post you quoted that if takeout isn't cut for all, the game will die anyway. Just read the whole post.

[TJDave]

For the record, if this practice expands it will absolutely kill racing.

This is trying to put the manure back into the horse and force people to go back to betting regionally.


Unless someone figures out how to get people back to the track it won't matter much anyways.

I don't see how you can bet on horse racing without having a horse race.

[proximity]

I don't know if rebates are the ideal mechanism for lowering takeout, but they appear to be the only viable alternative as tracks stubbornly cling to 22% blended takeouts. One advantage to a lower direct takeout (as opposed to rebates) is that they are more democratic, with everybody getting the same odds.

rebates/player rewards are way easier to implement in practice. way easier.

[Stillriledup]

Unless someone figures out how to get people back to the track it won't matter much anyways.

I don't see how you can bet on horse racing without having a horse race.

The on track player needs incentive to go there and watch the live races. The live product isnt as "Valuable" if large bettors can make detailed notes by watching the live races and the gallop outs. What can a live on track bettor see with his eyes that a person at home CANT see? If you can see the warmups on television with closeup cameras and for the national broadcasts, in HD, where's the "Edge" for a bettor to be on track? You have to give people an "edge" to go back live, racing needs to give the on track player some incentive to start up his car and spend the money heading out to the live facility.

[proximity]

Your typical non-rebate bettor is probably going to be better off with big rebate players betting less and/or dropping out. I'm surprised nobody has really mentioned that, since I imagine at least 90% of the bettors on PA fall into that category.


whizz did allude to this earlier in the thread. said we're all going to have to be "real gamblers" now like him and your dad and the other four regulars at laurel. :)

[TJDave]

racing needs to give the on track player some incentive to start up his car and spend the money heading out to the live facility.

How's this?

Races are not run in the TV or on a computer screen. They are run on racetracks like the one that closed on Sunday. They are not opening new ones. The trend is just the opposite.

[Stillriledup]

How's this?

Races are not run in the TV or on a computer screen. They are run on racetracks like the one that closed on Sunday. They are not opening new ones. The trend is just the opposite.

My point was that if horseplayers can see the races fine on tv, where's the 'edge' to be there live? People need a reason to go and spend the money, if you're not going to see anything more than what people at home are seeing, there's no advantage.

[thaskalos]

New York is only the beginning. ALL the "major tracks" will soon follow suit...and this 5% fee will be implemented widely. And NO...these racetracks will not reduce the overall takeout for the rest of the patrons. If anything, the takeouts will be INCREASED...in order to make up for the lost revenue from the expected cessation of rebate betting at these racing jurisdictions.

What is particularly upsetting about New York being one of the leaders in this...is the fact that the NYRA is currently swimming in casino profits. The horseplayer has been wondering for some time now if some of these casino profits would eventually be passed on to him in some way; now he's got his answer.

The fault here lies squarely with the player. He shows loyalty to certain racing jurisdictions...and, consequently, makes them think that there is something "special" about their product. And then he sees the prices of these "special" products skyrocket.

The horseplayer should only be loyal to his wallet.

[Dave Schwartz]

Thask,

I totally agree with you. In fact, I think that the very heart of the problem is that the tracks refuse to get this.

We live in a digital age! They should re-invent themselves and the entire game. Or else someone will do it for them (such as something LIKE BetFair) and run away with the new golden goose.

[Vigorish]

People who do not have rebates do have the ability to get them. It's just that they might have to move to a different jurisdiction, increase their betting handle, or do some research. Hell, I sometimes wonder why I grouch about computer-assisted batch bettors. Theoretically, I could become one too if I had enough money and technical know-how.

At least with today's fractured market, you can find relief if you're bound and determined. The opportunity cost might be very high. By punishing all players with high takeout, you make game unpalatable for all players. Furthermore, you create a new precedent that reverses lower takeout policies.

The idea that the tracks need more money through an increased piece of the existing pie seems absurd to me. Today's gamblers are simply too savvy and demanding to pay the requisite takeout. The only growth sector in horseracing is the ADW's. I suspect the reason has everything to do with making the game less expensive, both in terms of time and money.

Rather than rebates ruining the game (by making it too expensive and attractive for new and existing players), they probably stop the bleeding and result in reclaimed or new customers. Horseracing's bed partner, casino gambling, is the real assassin. Every casino game has dramatically lower takeout than horseracing. Furthermore, the casinos have pleasant atmospheres, liberal comps and rebates, and employees who are trained to treat guests with respect. I stopped playing the horses in 1998, as I was lured away by casino gaming. The value just wasn't there with horseracing. After admission, forms, concessions, and extremely high rake, I almost always walked out a loser. My money went farther and I got much better value when playing casino games.

If horseracing is to thrive and have a renaissance like the poker revolution, it will have to make radical changes in favor of increased access, lower takeout, technological innovation, marketing, and customer service. It's hard to market horseracing to younger generations who grew up with Pokerstars, Full Tilt, and card rooms that offer 5% rakes with a cap. Furthermore, sports betting typically charges a 4.55% vig. When a game has visible winners, it gives players the idea that they too have a chance to become a winning player. The only way this sport can survive, beyond subsidies, is to do more of what works and less that doesn't work. Given that ADW's have proven a legitimate growth sector, the sport should embrace and encourage online wagering as well as rebates.

[PaceAdvantage]

I realize nobody listens to you here, but this is even an impressive line of BS coming from you.

How PA has allowed you to continue to destroy this board is way beyond me.Now hold on here a second...destroy the board? How so? And compared to what other boards?

OK, yeah, he's always posting about the latest supposed fixed race or other player-hating controversy, either real or perceived (mostly perceived)...but I don't think he's destroying the board. If I did, he would no longer be posting here.

[the little guy]

New York is only the beginning. ALL the "major tracks" will soon follow suit...and this 5% fee will be implemented widely. And NO...these racetracks will not reduce the overall takeout for the rest of the patrons. If anything, the takeouts will be INCREASED...in order to make up for the lost revenue from the expected cessation of rebate betting at these racing jurisdictions.

What is particularly upsetting about New York being one of the leaders in this...is the fact that the NYRA is currently swimming in casino profits. The horseplayer has been wondering for some time now if some of these casino profits would eventually be passed on to him in some way; now he's got his answer.

The fault here lies squarely with the player. He shows loyalty to certain racing jurisdictions...and, consequently, makes them think that there is something "special" about their product. And then he sees the prices of these "special" products skyrocket.

The horseplayer should only be loyal to his wallet.


This is shocking in its complete disregard for facts.

Wow.

One would think there would be at least some interest on your part to at least read up on what you are talking about. Jeez.

[PaceAdvantage]

This is shocking in its complete disregard for facts.

Wow.

One would think there would be at least some interest on your part to at least read up on what you are talking about. Jeez.Was it the "swimming in casino profits" line that got you? That's the one that got me...then again, I'm an idiot, so I might be off base...

[thaskalos]

This is shocking in its complete disregard for facts.

Wow.

One would think there would be at least some interest on your part to at least read up on what you are talking about. Jeez.
I've read plenty on what I talk about. And I also know that your opinion is not exactly the one to take to the bank whenever any criticism is levied against the NYRA.

I understand fully why you cannot express yourself completely in NYRA matters...but I just don't understand why you resort to ultra-brief retorts and one-liners.

If you can't state your disagreements clearly...then why bother responding at all?

[the little guy]

Was it the "swimming in casino profits" line that got you? That's the one that got me...then again, I'm an idiot, so I might be off base...

Well, making the statements he did considering how many States have source market fees already demonstrated that he didn't even bother to read this thread, much less read up on the issue, or this particular law.

But that's just part of it.

I have the utmost respect for opposing positions that are well formed based on facts, knowledge, and research. I have the opposite feeling towards those formed without any of those. CJ seems to be one of the few here that is willing to look at all sides of this issue. Unfortunately I cannot take a side here. I just wish people would take the time to try to form a well thought out opinion. If nothing else, it's in their own best interests.

[PaceAdvantage]

And I also know that your opinion is not exactly the one to take to the bank whenever any criticism is levied against the NYRA.I think this is pretty unfair of you to state. You have a pretty rigid set of preconceived notions when it comes to those of us whom you have in your head as being nothing but NYRA fanboys. When in fact, most of the time, those of us (and I'm sure you include me in this sample set) who APPEAR to be fanboys are simply relaying the other side of the story that escapes certain people for whatever reason.

Have you ever considered that you yourself might be the antithesis of the NYRA fanboy, and that in and of itself might make your opinion a little unbankable as well?