Experts Take Aim on Takeout in Tucson. Say " Eliminate Breakage for more Churn"

[Andy Asaro]

Surprised nobody following the story. Had to post it. :headbanger:


Comins said that racing seems more intent on “protecting the cake rather than growing it.”

Bill Nader, principal of Grand Slam Consultancy, LLC, talked about his experience in Hong Kong and noted that horse racing outhandles the Hong Kong lottery 17-1. He said racing needs to make a concerted effort to increase handle through reduced takeout on win-place-show and exacta bets, allowing dollars to turn over and create churn.

He also advocated eliminating breakage.
“That would create churn,” he said. “Breakage is just hidden takeout. Eliminating it will push more money into the place and show pools.”

http://www.thoroughbreddailynews.com/experts-take-aim-on-takeout-in-tucson/#.WiflpSXuSKg.twitter


I and HANA and others have been pushing the same thing for years.

https://www.paulickreport.com/horseplayers-category/asaro-ground-zero-in-fight-for-future-of-horse-racing/

[GMB@BP]

Its been discussed a lot here, and industry wide for a long time raising takeout has been talked about in a negative light, yet its never stopped them from doing it.

[cj]

Its been discussed a lot here, and industry wide for a long time raising takeout has been talked about in a negative light, yet its never stopped them from doing it.

The worst part is the only thing keeping the game afloat are rebates, and what are rebates but a takeout reduction? Dropping the rake clearly works, but the goobers in charge can't / won't talk about rebates.

[GMB@BP]

The worst part is the only thing keeping the game afloat are rebates, and what are rebates but a takeout reduction? Dropping the rake clearly works, but the goobers in charge can't / won't talk about rebates.

Essentially the rebate system virtually guarantees newer players into this game will be losers and in general never have a chance to make it a successful skill based gambling venture....net result is no growth.

The one thing racing may have going for it is the younger people who get into gambling ore more aware of the rake for the games they play thus may force some different thoughts from tracks, I doubt it but its possible.

[ronsmac]

The worst part is the only thing keeping the game afloat are rebates, and what are rebates but a takeout reduction? Dropping the rake clearly works, but the goobers in charge can't / won't talk about rebates.

I think at least 20 tracks currently running would be closed if not for casino/slot money.

[AskinHaskin]

Dropping the rake clearly works



LOL - really???


Like it worked at Canterbury?


Like it worked at Hialeah?


Like it worked at Meadowlands?


When/where has dropping the rake clearly worked ??



Stop drinking the Kool Aid.

[linrom1]

LOL - really???


Like it worked at Canterbury?


Like it worked at Hialeah?


Like it worked at Meadowlands?


When/where has dropping the rake clearly worked ??



Stop drinking the Kool Aid.

I wouldn't bet at these venues if the takeout was zero! What is your point?

[AltonKelsey]

Needs to be a substantial cut to near 10% and at a track that already has a big player base + whale money.

The folks in charge keep dancing around the obvious.

[biggestal99]

He also advocated eliminating breakage.
“That would create churn,” he said. “Breakage is just hidden takeout. Eliminating it will push more money into the place and show pools.”

http://www.thoroughbreddailynews.com/experts-take-aim-on-takeout-in-tucson/#.WiflpSXuSKg.twitter




Breakage is no longer a concern for me as I bet the exchange and know to the penny what I will receive from a wager before the race is off.

The exchange show me my profit/loss on each horse depending on outcome.

Breakage is a dinosaur waiting to become extinct.

Allan

[cj]

LOL - really???


Like it worked at Canterbury?


Like it worked at Hialeah?


Like it worked at Meadowlands?


When/where has dropping the rake clearly worked ??



Stop drinking the Kool Aid.

Like I said, rebates are the real test. They are BIG takeout reductions. Without them, the game would be dead. Try again with a real argument instead of shooting from the hip.

[cj]

Needs to be a substantial cut to near 10% and at a track that already has a big player base + whale money.

The folks in charge keep dancing around the obvious.

Exactly. It already is 10% or less for some players. From the rumors I've heard, it is a LOT less at Gulfstream. They know takeout cuts work.

[Afleet]

LOL - really???


Like it worked at Canterbury?


Like it worked at Hialeah?


Like it worked at Meadowlands?


When/where has dropping the rake clearly worked ??



Stop drinking the Kool Aid.

Oaklawn lowered the take and wagering significantly increased. Put down the crack pipe. Is Karl Marx your hero? Is overall handle up in the last 20 years w/all the takeout increases?

[MonmouthParkJoe]

They should have addressed the robot play destroying pools for all of us

[dilanesp]

I am not as convinced as many people here about the guaranteed effectiveness of takeout reduction. I think it would require very complicated modeling to determine what the optimal takeout is, and it is probably higher on some races (the Triple Crown) and lower on others (the 1st at Aqueduct tomorrow), and I bet the tracks think that charging differential takeout would look bad.

But breakage, in 2017 with online wagering, is just stupid. The reason we needed breakage was so that mutuel clerks didn't have to deal with so much small change. There's no reason that they shouldn't pay off to the penny now, especially online.

[ronsmac]

They should have addressed the robot play destroying pools for all of us
Agreed. It's the worst thing that's ever happened to racing.

[cj]

I am not as convinced as many people here about the guaranteed effectiveness of takeout reduction. I think it would require very complicated modeling to determine what the optimal takeout is, and it is probably higher on some races (the Triple Crown) and lower on others (the 1st at Aqueduct tomorrow), and I bet the tracks think that charging differential takeout would look bad.

But breakage, in 2017 with online wagering, is just stupid. The reason we needed breakage was so that mutuel clerks didn't have to deal with so much small change. There's no reason that they shouldn't pay off to the penny now, especially online.


Like I said, the majority of money today is being bet with big rebates which are nothing but takeout reductions for some. Without rebates, the game would be on its last legs. What more proof do you need?

[dilanesp]

Like I said, the majority of money today is being bet with big rebates which are nothing but takeout reductions for some. Without rebates, the game would be on its last legs. What more proof do you need?

Rebates are a form of price discrimination. Price discrimination occurs when different participants in the market have different elasticities of demand.

Rebates do not prove that an across the board takeout cut would be profitable, any more than airlines discounting tickets bought by tourists proves that an across the board fare cut is profitable.

[cj]

Rebates are a form of price discrimination. Price discrimination occurs when different participants in the market have different elasticities of demand.

Rebates do not prove that an across the board takeout cut would be profitable, any more than airlines discounting tickets bought by tourists proves that an across the board fare cut is profitable.

It is both. This is a gambling game, not an airline. Rebates are definitely a takeout reduction. The majority off money in this sport has been bet at lowered takeout for a long time now. If you take away rebates and leave takeout as is the game is instantly DOA.

[Tom]

They should have addressed the robot play destroying pools for all of us

Yeah, who wants to play against a robot?

[dilanesp]

It is both. This is a gambling game, not an airline. Rebates are definitely a takeout reduction. The majority off money in this sport has been bet at lowered takeout for a long time now. If you take away rebates and leave takeout as is the game is instantly DOA.

I am not proposing taking away rebates.

[GMB@BP]

They should have addressed the robot play destroying pools for all of us

They brought it up, I dont think anyone had any creative thoughts though.

[biggestal99]

They should have addressed the robot play destroying pools for all of us

I actually enjoy taking money from the betfair bots on the exchange.

Me against the bots. I win.

Allan

[cj]

I am not proposing taking away rebates.

Of course not, that wasn't the point. The point is rebates are takeout reductions that have worked to at least keep the game afloat. Yes, they are discriminatory, but that doesn't change what they are. You said you weren't convinced takeout reductions are effective. They have kept the sport from dying.

[AltonKelsey]

Got bad news for some of you.

There is no effective way of banning so called bot play.

Most of those late odds changes are adjustments, not big money 'getting down'

You THINK you picked a 2-1 shot but you really picked a 6/5 shot all along.

How are you going to stop someone from betting until they feel the price is too low to bet any more? PS They get it wrong PLENTY

[JohnGalt1]

One reason I like playing NY and Woodbine is the dime breakage, collecting $9.70 instead of $9.60.

[MonmouthParkJoe]

Got bad news for some of you.

There is no effective way of banning so called bot play.

Most of those late odds changes are adjustments, not big money 'getting down'

You THINK you picked a 2-1 shot but you really picked a 6/5 shot all along.

How are you going to stop someone from betting until they feel the price is too low to bet any more? PS They get it wrong PLENTY

So you don't think a simulcast contract can be written specifying certain sites/TRA codes that aren't welcome in their pools?

Similar to the way a track can eliminate a wagering pool from a race, it can specify who is allowed to take their signal and how is not. It can be eliminated at any time.

The thing is, it is a deal with the devil in reality. The industry measures how successful a track is by looking at the top line. Total handle, races, race days, ect.

What is the real bottom line? Handle inflated from robot play in an export world where your margin is basically nothing after rebates? It is easy to get addicted to the numbers. It was mentioned here already, shut out the robots and you will easily lose 10-15% of the total annual handle.

But, you can do it easily.

[toddbowker]

LOL - really???

Like it worked at Canterbury?

Like it worked at Hialeah?

Like it worked at Meadowlands?

When/where has dropping the rake clearly worked ??

Stop drinking the Kool Aid.Quick disclaimer, I was on the panel also.

Well, technically it did work at Canterbury. Their handle was up over the previous year. Unfortunately, it wasn't enough to get them to continue (because revenue suffered).

I for one would have liked to see them continue, as I think given some time it would have worked on the revenue side as well. Unfortunately, they are publicly traded, and shareholders don't react too well to declining revenue reports.

And there are plenty of examples where raising takeout resulted in handle declines.

The hard part about takeout reductions is they don't happen in a vacuum. People can take the extra winnings they received at the lower takeout track and bet them somewhere else (even another low takeout track), so "effectiveness" will always be muted. That's why Bill advocated that the large tracks get together and do it collectively.