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View Full Version : Keeneland caves and lowers takeout. Does the right thing.


Andy Asaro
02-07-2018, 11:10 AM
https://twitter.com/DRFHegarty/status/961253923238633472

https://twitter.com/DRFHegarty/status/961254105204305920

Andy Asaro
02-07-2018, 11:15 AM
And a tip of the cap to EVERYONE who participated in the boycott and made enough noise to make this happen.

And a tip of the cap to Jeff Platt and HANA. Without them putting out the press release (that news outlets must cover) this takeout reduction may not have happened.

Sometimes a big kick in the balls works. We ought to do more of that IMO.

Boom!

Andy Asaro
02-07-2018, 11:23 AM
https://twitter.com/racetrackandy/status/961258900006711296

Andy Asaro
02-07-2018, 12:36 PM
I see that on social media some people aren't too thrilled with the takeout reduction because they didn't rescind all of the takeout hikes.

It's pretty simple

We didn't knock handle down enough to force all of the changes we wanted. If handle were down 20% or more then they may have rescinded all of the takeout hikes.

Bottom line is that way too many people didn't care about the take hike in the first place or handle would have been down a lot more.

JustRalph
02-07-2018, 12:52 PM
A track responded within a reasonable time to a customer driven movement.

This is a historic moment.........

cj
02-07-2018, 01:09 PM
Still irks me a bit they didn't totally cave on exactas.

Jeff P
02-07-2018, 02:02 PM
Imo, doubles should be the same as exacta.


-jp

.

AltonKelsey
02-07-2018, 02:22 PM
Hmmmmm, maybe players do have some power after all. Glad to have done my part, in various outlets.

Think of what could be done if pressure were brought to bear on takeout in general.

AltonKelsey
02-07-2018, 02:24 PM
Imo, doubles should be the same as exacta.


-jp

.

It should, but they consider that you are potentially (if alive) getting two races of action and they are losing churn.

Jeff P
02-07-2018, 02:24 PM
I was on the phone with them yesterday (ahead of this morning's announcement.)

One of the things they mentioned was Bill Nader's presentation at the AZ Symposium where Nader had suggested the industry had lost its way a bit by forgetting about churn. (And that multi-race bets have a tendency to keep money tied up which reduces churn.)

-jp

.

GMB@BP
02-07-2018, 03:35 PM
I will be betting Kee Win and Exacta's this spring.

Welcome back Keeneland!

JohnGalt1
02-07-2018, 03:41 PM
I boycotted the whole fall meet.

Looking forward to betting Keeneland again.

AstrosFan
02-07-2018, 05:07 PM
I was on the phone with them yesterday (ahead of this morning's announcement.)

One of the things they mentioned was Bill Nader's presentation at the AZ Symposium where Nader had suggested the industry had lost its way a bit by forgetting about churn. (And that multi-race bets have a tendency to keep money tied up which reduces churn.)

-jp

.

That is grossly incorrect regarding what Nader "thinks"


Simulcasting is what killed live on track handles and in turn created greed to raise takeout!

No one NEEDS to go to the track anymore to place a bet, unless you are in Texas or AZ, so all ADW operations make a mint due to the current scale of what they get and their low overhead vs the track and all their operating expenses.

A great example is the poorly ran Penn Gaming tracks:

Charles Town Races: they handled "live"

$96.7 million in 2002
$23.8 million in 2016

Total C. Town handle is down $55 million from 2002 to 2016

The state of WV is down $330 million in bets (including greyhounds) from 2002 to 2016

On page three you can see the "state's share" tank from 1978 to 2016 according to the WV racing commission reports.

The industry did it to themselves

Afleet
02-07-2018, 07:47 PM
some good news, but I'm still a trifecta player first! I will be betting KEE again:headbanger: Thanks to the other boycotters out there and HANA. Those that didn't help-you are welcome!

Jeff P
02-07-2018, 07:57 PM
That is grossly incorrect regarding what Nader "thinks"...

Rightly or wrongly the presentation by Bill Nader at the Symposium in AZ this past December (mentioned in the article below) is one of the many things we were talking about on the phone yesterday...

By Matt Hegarty
12/05/2017 3:25PM
Symposium panel urges lower takeouts:
http://www.drf.com/news/symposium-panel-urges-lower-takeouts

--this:
"It has to start with the industry leaders," said Bill Nader, a former chief operating officer of the New York Racing Association who was also the executive director of racing at the Hong Kong Jockey Club for eight years, ending in 2016. "And they have to make a big leap. This will not work in isolation."

In a larger context, the comments from the panelists could be viewed as an unusually sharp rebuke to Keeneland, the central Kentucky racetrack that drew widespread criticism from the horseplaying community earlier this year when it raised the takeout rates for its bets for the fall meet. All three panelists cited the Keeneland decision while making their remarks, with several taking particular issue with Keeneland’s justification of needing more revenue from wagering to boost purses.

--and this:
To optimize the impacts of churn, Gramm and the other two advocates for lower takeout rates said that racetracks needed to prioritize single-race bets such as win, place, show, exacta, and trifecta for the takeout reductions. They also claimed that lowering or maintaining low takeout rates for multi-race wagers like the pick 4 and pick 5, along with jackpot-style bets that only pay out if there is a single winner, is counter-productive, contradicting a handful of recent decisions by racetracks. (Keeneland raised all of its takeout rates with the exception of the pick 5, which it lowered.)

Imo, racing faces many different issues/challenges.

Imo, empty grandstands are certainly one of those challenges.

But so is ever higher takeout.

And promotion of new jackpot wagers at insanely high net effective takeout rates that result in ever smaller churn.

And odds that change after the bell.

And drugs.

And regulators who are afraid to hand out penalties with teeth.

And horses that barely make six starts per year (when they used to make ten to twelve.)

Imo - all of the above (and more) lead to empty grandstands. And ever shrinking handle numbers.

We have to start somewhere. :)


-jp

.

Denny
02-07-2018, 10:02 PM
I wouldn't exactly call it that.

The only good rate they offer is the 15% P5.

Redboard
02-07-2018, 11:04 PM
A track responded within a reasonable time to a customer driven movement.

This is a historic moment.........

I agree. The first HANA-led boycott worked. :ThmbUp:

Maybe other tracks out there thinking about raising takeout will reconsider.

cj
02-08-2018, 02:05 AM
You guys do realize all the other pools that were raised are still up, right? Talk about a pyrrhic victory. If this is considered a win I'd hate to see what losses look like.

highnote
02-08-2018, 04:19 AM
If tracks want to draw larger crowds they need more races per day at shorter intervals. A track could have an undercard of, say, seven low level handicap claiming races with larger fields with short intervals between races. The reason to have handicap races is to level the field and make the race competitive. A competitive race should draw larger fields because more entrants will feel they have a chance to win. Then later in the day the last five to seven races could be for high level claiming, allowance, and stakes horses where the fields tend to be smaller. Maybe race three or four days per week rather than six.

Whatever model tracks are using now they need to throw out the window and start over because what they're doing is not working.

It makes sense on the one hand that a bet like the Daily Double has less churn, but on the other hand, if you take time to handicap two races in a row chances are you are betting multiple bets in both races. In effect, the Daily Double can be seen as a loss leader that draws more bets into the pool of the second race.

It would be easy to find out how much effect the Daily Double has on handle. Just eliminate it for about 30 racecards and then measure the difference in handle on the second race compared to days when the Daily Double was offered.

If handle on the second race declines on days when the Daily Double is not offered then it makes sense to lower the takeout on the Daily Double to attract even more wagering.

Rightly or wrongly the presentation by Bill Nader at the Symposium in AZ this past December (mentioned in the article below) is one of the many things we were talking about on the phone yesterday...

By Matt Hegarty
12/05/2017 3:25PM
Symposium panel urges lower takeouts:
http://www.drf.com/news/symposium-panel-urges-lower-takeouts

--this:


--and this:


Imo, racing faces many different issues/challenges.

Imo, empty grandstands are certainly one of those challenges.

But so is ever higher takeout.

And promotion of new jackpot wagers at insanely high net effective takeout rates that result in ever smaller churn.

And odds that change after the bell.

And drugs.

And regulators who are afraid to hand out penalties with teeth.

And horses that barely make six starts per year (when they used to make ten to twelve.)

Imo - all of the above (and more) lead to empty grandstands. And ever shrinking handle numbers.

We have to start somewhere. :)


-jp

.

One Eye
02-08-2018, 06:56 AM
This looks a sneaky strategy on the part of Keeneland. You raise takeouts, knowing they will antagonize price conscious bettors. Then later you partially rescind the takeout hikes. Players, having been repeatedly beaten down with oppressive takeouts, believe they have secured a significant victory. However, the end result is Keeneland simultaneously raises takeouts while recreating interest in their product.

Andy Asaro
02-08-2018, 10:14 AM
Total victory looks like 20% down or more. We weren't even close to that. I'm surprised they lowered it at all but glad they did on the higher churn wagers. I heard that a certain radio show host implied that Keeneland did us a favor and if true I take strong exception to that. They were hurt financially (revenue would have been up significantly) because those of use who worked everyday to push the boycott did so.

If we want total victory a lot more people have to do a lot more work to make it happen. Pretty hard to make the case to boycott them again while California still has 22% take exactas.

lamboguy
02-08-2018, 10:21 AM
for 50 years that i know of, you lay $110 to win $100 on football games. they have never gone up. some places actually give you a deal if you bet on a Friday night and give you the juice at $105 to win the $100. why should racing ever go up in their takeout? they are competing with sports gambling for their handle.

i admit that tracks do need more revenue. but to me you get more revenue by building up the product not charging more or giving away more to purses. you build it right back up by doing something stupid, offering up integrity. its pretty simple.

JustRalph
02-08-2018, 11:48 AM
You guys do realize all the other pools that were raised are still up, right? Talk about a pyrrhic victory. If this is considered a win I'd hate to see what losses look like.

I almost used the “p” word yesterday in a question about why they didn’t lower the other pools....but I had not looked at the details....didn’t want to comment until I heard more.......but I have to tell you I’m shocked they did anything at all.

GMB@BP
02-08-2018, 11:51 AM
I am only betting the pools that have the lower takeout.

I am cheap, what can I say

Andy Asaro
02-08-2018, 01:22 PM
https://twitter.com/racetrackandy/status/961651334683357184

Afleet
02-08-2018, 08:53 PM
You guys do realize all the other pools that were raised are still up, right? Talk about a pyrrhic victory. If this is considered a win I'd hate to see what losses look like.

I agree, but they lowered some take out rates, which is borderline shocking

Andy Asaro
02-08-2018, 08:57 PM
I agree, but they lowered some take out rates, which is borderline shocking

They didn't expect the backlash and the bad publicity. I'm surprised they lowered some of it back as well. They'll lower all of it back if someone is smart enough to figure out a way to get them down 20% or 25%. And that goes for any track. We can change the game in a month if people came together.

Afleet
02-08-2018, 09:04 PM
They didn't expect the backlash and the bad publicity. I'm surprised they lowered some of it back as well. They'll lower all of it back if someone is smart enough to figure out a way to get them down 20% or 25%. And that goes for any track. We can change the game in a month if people came together.

its too bad people can't work together for the common good, too selfish I guess. It was very difficult for me to boycott this track. I love playing MSW races and they usually have the best along w/Saratoga. Also, no state bred races is a huge plus to me

Andy Asaro
02-08-2018, 09:07 PM
its too bad people can't work together for the common good, too selfish I guess. It was very difficult for me to boycott this track. I love playing MSW races and they usually have the best along w/Saratoga. Also, no state bred races is a huge plus to me

People were fired up during the Ca. boycott in 2011 and that was great. But, after they didn't lower takeout further than the 14% take P5 and the DD's back down to 20% a lot of people gave up and I can't say that I blame them.

Afleet
02-08-2018, 09:09 PM
People were fired up during the Ca. boycott in 2011 and that was great. But, after they didn't lower takeout further than the 14% take P5 and the DD's back down to 20% a lot of people gave up and I can't say that I blame them.

I don't play CA, but isnt their handle still going down?

Andy Asaro
02-08-2018, 09:52 PM
I don't play CA, but isnt their handle still going down?

Santa Anita is up.

dilanesp
02-12-2018, 05:49 PM
for 50 years that i know of, you lay $110 to win $100 on football games. they have never gone up. some places actually give you a deal if you bet on a Friday night and give you the juice at $105 to win the $100. why should racing ever go up in their takeout? they are competing with sports gambling for their handle.

i admit that tracks do need more revenue. but to me you get more revenue by building up the product not charging more or giving away more to purses. you build it right back up by doing something stupid, offering up integrity. its pretty simple.

I went to Vegas a couple of weeks ago and they definitely are no longer consistently setting football lines at 110-100, and some of the lines are not 105-100 either. I saw some 115-100 and 120-100 on point spreads on playoff games.

I have a bit of inside knowledge of this, and that is that they are no longer necessarily setting lines to generate exactly even betting action (the traditional way a sports book operates, so that the house can never lose) and are now pursuing exploitative strategies that allow the book to make more money, including by modifying the vigorish to take in additional money.

So yes, they are screwing with takeout.

ultracapper
02-13-2018, 01:11 AM
I went to Vegas a couple of weeks ago and they definitely are no longer consistently setting football lines at 110-100, and some of the lines are not 105-100 either. I saw some 115-100 and 120-100 on point spreads on playoff games.

I have a bit of inside knowledge of this, and that is that they are no longer necessarily setting lines to generate exactly even betting action (the traditional way a sports book operates, so that the house can never lose) and are now pursuing exploitative strategies that allow the book to make more money, including by modifying the vigorish to take in additional money.

So yes, they are screwing with takeout.

Now, even betting NFL games, "value" will become a component in the decision making on whether to bet or not.

AndyC
02-13-2018, 11:21 AM
I went to Vegas a couple of weeks ago and they definitely are no longer consistently setting football lines at 110-100, and some of the lines are not 105-100 either. I saw some 115-100 and 120-100 on point spreads on playoff games.

I have a bit of inside knowledge of this, and that is that they are no longer necessarily setting lines to generate exactly even betting action (the traditional way a sports book operates, so that the house can never lose) and are now pursuing exploitative strategies that allow the book to make more money, including by modifying the vigorish to take in additional money.

So yes, they are screwing with takeout.

Way too many places to shop for a price to believe that vig will go up in sports betting. The only thing that could screw up the free market for vig is heavy government intervention.

dilanesp
02-13-2018, 02:51 PM
Way too many places to shop for a price to believe that vig will go up in sports betting. The only thing that could screw up the free market for vig is heavy government intervention.

Tell that to all the players in Las Vegas who are now playing 6 to 5 blackjack.

Seriously, A LOT OF GAMBLERS DO NOT CARE ABOUT TAKEOUT. Some do. Gambling businesses make more money by separating the two groups and charging them different rates. This is why we have rebate shops.

If you are a whale sports bettor, you can probably find a sports book to take your action at 115 rather than the 120 they were posting. But all the casual players don't care.

Andy Asaro
02-15-2018, 06:15 PM
http://horseracingbusiness.com/

Excerpt:

A more likely explanation is that management was alarmed by the intensity of the bettor backlash–and the resultant decrease in handle–and decided it could not take the chance of the ill will spilling over into the April 2018 meet.

thaskalos
02-18-2018, 10:39 PM
I went to Vegas a couple of weeks ago and they definitely are no longer consistently setting football lines at 110-100, and some of the lines are not 105-100 either. I saw some 115-100 and 120-100 on point spreads on playoff games.

I have a bit of inside knowledge of this, and that is that they are no longer necessarily setting lines to generate exactly even betting action (the traditional way a sports book operates, so that the house can never lose) and are now pursuing exploitative strategies that allow the book to make more money, including by modifying the vigorish to take in additional money.

So yes, they are screwing with takeout.

If you had looked at the board a little closer...you would have seen that, when the takeout is raised on one team...it's reduced on the OTHER team. If one team is listed at -3 (-115)...then the other team is listed at +3 (-105). And if one team is listed at -3 (-120)...then the other team is offered at +3 (-100). The oddsmakers are simply shifting the takeout, in order to attract money on a given team without having to raise the actual spread on the game.

This doesn't mean that the takeout has been raised higher than its normal 110-100 level. The totality of the wager is still offered at 110-100.

toddbowker
02-19-2018, 12:39 PM
Seriously, A LOT OF GAMBLERS DO NOT CARE ABOUT TAKEOUT. Some do. Gambling businesses make more money by separating the two groups and charging them different rates. This is why we have rebate shops.
EVERY GAMBLER CARES ABOUT TAKEOUT, even if they don't know what it is.

Because they absolutely know how fast they go broke.

Take your average Joe who sits down at a slot machine. He puts his $100 in a machine and plays for an hour and loses the $100. Then he moves to another machine (or another casino) and plays for two hours before he loses his $100.

Which machine do you think he plays next time? He may not know that machine #1 had a 25% takeout and machine #2 was at 10%, but he knows he got 2x the play out of machine #2, and is going to gravitate there the next time he sits down to play.

Same thing if Joe goes to the track with $100. He plays the races and maybe loses the last of his $100 in the 8th race of the card each day. Then the track raises the takeout, and he finds himself done after the 6th. How do you think he feels about the value he is getting for his $100? He might not have a clue what the takeout is, or if the track raised it, but his wallet knows.

It's actually worse on the parimutuel side because of churn. Joe's $100 might have led to $700 in wagering before, but now it's down to $500.

Smart gambling businesses tweak their takeouts (or house advantage on the casino side) to maximize player experience and revenue. As an example, Tampa Bay Downs was always good at this. For several years they moved their takeouts around to see what worked and what didn't, before settling into a pretty good program. To their credit, I expect Keeneland is now doing the same. There was probably a realization somewhere that they might have gone a bit too far, and now they are making a few changes to see if they work better. Wouldn't surprise me if they made another set of adjustments after they see how the Spring Meet goes.

dilanesp
02-19-2018, 03:43 PM
EVERY GAMBLER CARES ABOUT TAKEOUT, even if they don't know what it is.

Because they absolutely know how fast they go broke.

Take your average Joe who sits down at a slot machine. He puts his $100 in a machine and plays for an hour and loses the $100. Then he moves to another machine (or another casino) and plays for two hours before he loses his $100.

Which machine do you think he plays next time? He may not know that machine #1 had a 25% takeout and machine #2 was at 10%, but he knows he got 2x the play out of machine #2, and is going to gravitate there the next time he sits down to play.

Same thing if Joe goes to the track with $100. He plays the races and maybe loses the last of his $100 in the 8th race of the card each day. Then the track raises the takeout, and he finds himself done after the 6th. How do you think he feels about the value he is getting for his $100? He might not have a clue what the takeout is, or if the track raised it, but his wallet knows.

It's actually worse on the parimutuel side because of churn. Joe's $100 might have led to $700 in wagering before, but now it's down to $500.

Smart gambling businesses tweak their takeouts (or house advantage on the casino side) to maximize player experience and revenue. As an example, Tampa Bay Downs was always good at this. For several years they moved their takeouts around to see what worked and what didn't, before settling into a pretty good program. To their credit, I expect Keeneland is now doing the same. There was probably a realization somewhere that they might have gone a bit too far, and now they are making a few changes to see if they work better. Wouldn't surprise me if they made another set of adjustments after they see how the Spring Meet goes.

You are ignoring that variance is huge in gambling. You have to bet a LOT of money to hit the convergence point.

Slots have so much churn that they are a special case, although reducing takeout isn't the only way to increase Time On Device. They also use bonus rounds.

But for most forms of gambling, the casual player takes a LONG time to bet enough where the main causal factor isn't short term luck. Hence, the need to discriminate and charge them higher takeout while charging less to players who care.

toddbowker
02-22-2018, 08:08 PM
You are ignoring that variance is huge in gambling. You have to bet a LOT of money to hit the convergence point.

Slots have so much churn that they are a special case, although reducing takeout isn't the only way to increase Time On Device. They also use bonus rounds.

But for most forms of gambling, the casual player takes a LONG time to bet enough where the main causal factor isn't short term luck. Hence, the need to discriminate and charge them higher takeout while charging less to players who care.
Not ignoring it at all. By virtue of you stating slots having a lot of churn and are a special case, you've just proved my point. They are the closest casino game to compare parimutuel wagering with because a slot machine operates off a straight takeout model also.

My point was all customers care, even if they don't consciously know it. But if we are to assume your premise that not all customers care and therefore should be treated differently, then ponder this.

If it's necessary to lower the effective takeout rate for "customers who care" why is it not the right thing to do for everyone? If the "customers who care" will bet more because of their lower effective takeout, wouldn't everyone bet more if the takeout were lower? After all, if the "customers who care" aren't going to bet more, then why bother charging them less?

The data I presented on our panel in Tucson showed that our customers churn rate was over 42% (a factor of 3x) higher when factoring rebates (which is how the industry currently lowers effective takeout).

Many people seem to forget we are in the churn business. Putting more money in the customer's hands will always increase churn rates. Optimizing that number to maximize revenue is the challenge, and it's not an easy solve, especially when everyone isn't doing it at the same time. That's why Bill was suggesting that tracks band together to do it.

dilanesp
02-23-2018, 12:28 PM
Not ignoring it at all. By virtue of you stating slots having a lot of churn and are a special case, you've just proved my point. They are the closest casino game to compare parimutuel wagering with because a slot machine operates off a straight takeout model also.

My point was all customers care, even if they don't consciously know it. But if we are to assume your premise that not all customers care and therefore should be treated differently, then ponder this.

If it's necessary to lower the effective takeout rate for "customers who care" why is it not the right thing to do for everyone? If the "customers who care" will bet more because of their lower effective takeout, wouldn't everyone bet more if the takeout were lower? After all, if the "customers who care" aren't going to bet more, then why bother charging them less?

The data I presented on our panel in Tucson showed that our customers churn rate was over 42% (a factor of 3x) higher when factoring rebates (which is how the industry currently lowers effective takeout).

Many people seem to forget we are in the churn business. Putting more money in the customer's hands will always increase churn rates. Optimizing that number to maximize revenue is the challenge, and it's not an easy solve, especially when everyone isn't doing it at the same time. That's why Bill was suggesting that tracks band together to do it.

Slots are not close to horse racing.

A slot bettor has over 100 wagering cycles an hour. A casual horseplayer has 2. So if variance were equal, it would take 50 times as long for a casual horseplayer to outrun variance. (In actuality, variance is higher in horse racing.)

And even in slot machines, there is a trend towards higher takeout machines that use bonus rounds to increase time on device. The players don't care as long as they get to stay longer.

Your churn statistics are a mixture of casual and serious players. What you need to do is back out the rebate players and the large handle players. Then take the remainder of players and calculate how much they are affected by churn. The answer is going to be "almost no effect". A bettor who plays 6 races a week would have to play for decades before the main determinant of her results isn't luck. That bettor is not takeout sensitive.

We are all governed by the laws of math.

RunForTheRoses
02-23-2018, 04:52 PM
Tell that to all the players in Las Vegas who are now playing 6 to 5 blackjack.

Seriously, A LOT OF GAMBLERS DO NOT CARE ABOUT TAKEOUT. Some do. Gambling businesses make more money by separating the two groups and charging them different rates. This is why we have rebate shops.

If you are a whale sports bettor, you can probably find a sports book to take your action at 115 rather than the 120 they were posting. But all the casual players don't care.

When I lived in Vegas some 25 years ago casinos started charging -120 on NBA totals, they apparently were losing or just making enough.

The spread of 6 to 5 blackjack is atrocious.

RunForTheRoses
02-23-2018, 05:01 PM
If you had looked at the board a little closer...you would have seen that, when the takeout is raised on one team...it's reduced on the OTHER team. If one team is listed at -3 (-115)...then the other team is listed at +3 (-105). And if one team is listed at -3 (-120)...then the other team is offered at +3 (-100). The oddsmakers are simply shifting the takeout, in order to attract money on a given team without having to raise the actual spread on the game.

This doesn't mean that the takeout has been raised higher than its normal 110-100 level. The totality of the wager is still offered at 110-100.

Yes, I see that is much more common now, still a dime line but weighted. To a certain respect this was always done especially in football on or off 3 or 7.

cj
02-23-2018, 06:11 PM
A slot bettor has over 100 wagering cycles an hour. A casual horseplayer has 2. So if variance were equal, it would take 50 times as long for a casual horseplayer to outrun variance. (In actuality, variance is higher in horse racing.)



Unless you are talking about somebody betting only the local product on track, horseplayers have way more opportunities than 2 per hour.

toddbowker
02-23-2018, 06:45 PM
Slots are not close to horse racing.

A slot bettor has over 100 wagering cycles an hour. A casual horseplayer has 2. So if variance were equal, it would take 50 times as long for a casual horseplayer to outrun variance. (In actuality, variance is higher in horse racing.)

And even in slot machines, there is a trend towards higher takeout machines that use bonus rounds to increase time on device. The players don't care as long as they get to stay longer.

Your churn statistics are a mixture of casual and serious players. What you need to do is back out the rebate players and the large handle players. Then take the remainder of players and calculate how much they are affected by churn. The answer is going to be "almost no effect". A bettor who plays 6 races a week would have to play for decades before the main determinant of her results isn't luck. That bettor is not takeout sensitive.

We are all governed by the laws of math.Because of my work schedule I am at best what you would call a casual player. I still make thousands of bets a year, and can make 100's in a day when I have time to play. My hypotheticals are about the amount of wagering (churn) someone can do within a fixed loss amount, and how that could impact future behavior if they felt they were no longer getting their perceived value for the spend.

Your slot time argument is also flawed because for the purposes of making my point, I was assuming all factors other than the machine's takeout are equal.

Unfortunately, I can't remove rebate players from my calculations, as all of our players get rebated. If I re-ran the reports by handle level, I would still see the profitable (high ROI) players at all levels will have higher churn rates than the unprofitable ones, and that all of them (regardless of ROI or bet level) would have a higher churn rate because of the rebates than they would if they had not received them.

I noticed you didn't answer my question. If reducing takeout for those players that you deem to be "the one's who care" is necessary, then why is reducing takeout for everyone else therefore not necessary?

I'll take a stab at answering it for you. Revenue.

Lowering takeout raises handle. There are enough real-world examples to prove this out, but often times it doesn't raise handle enough to off-set the loss in revenue from the takeout reduction (Canterbury in 2016 for example). Raising takeout lowers handle (again, plenty of examples), but sometimes the drop in handle is offset by the higher revenue received from the increase (Keeneland Fall 2017 for example). Finding the right mix to maximize both is the $64 question.

The other issue the industry faces regarding reducing takeout is simulcasting, which can also skew the numbers because a customer can take his added winnings from a lower takeout track and bet it on a different track. This causes the lower takeout track to not get the full revenue benefit from lowering its takeout. That's why I have frequently used the phrase "lowering takeout always works in a vacuum" in my speeches, and why Bill said on our panel that the major tracks needed to work together on this.

I totally understand the thinking that there are customers that are immune to takeout. I did too before I started dealing with rebates, and sat down and talked to Math and Economics professors and did some research on parimutuel pools and the efficiency of betting markets. Really opened my eyes.

LemonSoupKid
02-24-2018, 07:10 PM
Few here (not all) realize how sportsbooks are run, so please let me inform you of just a couple of things:

The only bets Vegas really juices on people (stupid or entertainment bettors) are parlays, teasers and certain props. You could throw futures into this as notoriously bad re:expected return/a certain type of prop.

There's already too much competition for them to change the industry standard of -110, and many offshores already beat them big in this way, but Vegas has a convenience or no-hassle (catch-all term) advantage on them that allows for this. What's going to be very interesting is how much the sportsbooks change when SCOTUS decisions comes out.

As a slight aside, in 2017 did you know that sports betting revenues were 1/12 of slot revenues in the state of Nevada? 248 million vs 3.1 billion.