A post from an Oaklawn Official - Rebate Shops

[cj]

Pasted from the Del Mar message board, very good reading.


I’ve spent the past couple of days peeking into various chat/bulletin rooms gauging the buzz regarding computer bettors. This board contains the greatest number of fans trying to understand the issue. I’ve enjoyed reading the posts.

Two nights ago I received an email from a poster on this board (scorequick). He asked me to offer some thoughts on the issue.

As most of you know, Oaklawn removed rebate/computer wagering shops from its pools during the 2004 season. The motivation for the decision was to ensure fairness for the racing fans, especially those supporting the game in the nation’s grandstands and OTB’s. It was the right thing to do.

Last week, the NTRA released the results of a study which examined the effects of rebate/computer players. Oaklawn participated in the NTRA study by providing its 2003 and 2004 wagering data. The study analyzed the dynamics of Oaklawn’s wagering pools with the rebate/computer shops participating in 2003. Those dynamics were contrasted with the behavior of Oaklawn’s pools after the rebate/computer shops were removed in 2004.

The conclusion, which is included in the final report, is that Oaklawn’s effective takeout rate for its remaining simulcast sites went down 1.64% after removal of the rebate/computer shops.

As a result, some $3 million that would have been siphoned out of the pools by the rebate/computer shops went instead to stateside racing fans holding winning tickets.

Also…the late odds drop phenomenon disappeared at Oaklawn when the rebate/computer shops were removed.

HOW DO THE COMPUTER/REBATE SHOPS OPERATE

Some basic knowledge of the industry’s economic model is required.

When Oaklawn sends its signal to California, the fans in California are betting into Oaklawn’s pools, not separate pools (you already knew that).

Oaklawn’s WPS (win place show) takeout is 17%. So, California wagering sites offering the Oaklawn signal take 17% of the handle off the top. The other 83% is returned to winning wagers wherever they occur in the Oaklawn network.

From this 17% California must pay Oaklawn for its signal...let’s say the fee is 3% of handle.

Now California has 14% left (17% - 3%). Forgetting state and workmen’s comp obligations for the sake of simplicity, this 14% is split (7% & 7%) between the California wagering site and California’s horsemen (purses).

The 3% paid to Oaklawn is split between Oaklawn and the Oaklawn horsemen, building Oaklawn’s purses.

As you can see…the horsemen benefit on both sides of the equation, sending and receiving. They should, owning and training thoroughbreds is an expensive business. Solid purses will bring good owners to the game. If we don’t have thoroughbreds we don’t have a sport.

THE REBATE SHOP

Most rebate/computer shops are secondary pari-mutuel organizations (SPMO’s). The NTRA study defines SPMO’s as follows:

Does not conduct live racing;

Provides rebates to bettors, up to 10% or more;

Is based primarily on telephone account wagering with a limited customer base with some customers using personal computers in their handicapping and wagering activity and being afforded special pari-mutuel access or service;

Owners and/or operators are not clearly defined;

Is out-of-country, an Indian gaming facility, or is not in the geographical mainstream of U.S. racing locations;

Has little or no U.S. regulatory oversight;

Has significant level of business contrasted by no visible marketing or advertising;

Has consistent and often substantial money settlements due from host track; and

Tax withholding policies and practices in relation to U.S. regulations are unverified.

These SPMO’s have a tremendous advantage over U.S. sites. They have no obligation to local purses.

Let’s revisit the economic model. Here’s what happens to the same 17% takeout at an SPMO:

3% to Oaklawn (fee)
4% to the SPMO
10% rebate to the player (no purse obligation frees up this cash)

U.S. horsemen and track management were foolish to allow this model to evolve. I’ll agree with Steven Crist on that point.

Big players from U.S. grandstands moved their handle to these sites. They set up accounts and wagered by phone. Tracks were unable to match the rebate offer because of the obligation to place half of the takeout into purses (where I think it belongs).

The NFL supports player salaries by selling broadcast rights to television for billions. Racing, with no such luxury, funds the sport by committing a piece of the wagering dollar to purses.

The off-shore rebate shops circumvent the purse obligation, jeopardizing the sport’s foundation.

THE COMPUTER PLAYER

SPMO’s offer select players direct wagering connectivity to the tote system. In the aftermath of the pick-6 scandal, that fact alone is ominous.

Direct access to the wagering network enables the computer player to electronically scan and analyze wagers placed by all other players. Just prior to the start of a race, the “linked” computers comb pools seeking underplayed wagering combinations relative to the merits of the horses. The program pays special attention to exacta combinations; it can look at all of them in a b l i n k.

When the program robotically pulls the trigger, a complex array of wagers, mostly exotics, is spread over the underplayed combinations. Essentially claiming all overlay value the pools for that race had to offer. They are taking the cream off the top.

Getting this electronic “last look” enables the computer program a consistent win of 97-cents on each dollar wagered. That’s a steady loss of three cents on the dollar.

However, add the ten cent rebate and it’s a seven cent winner on the dollar. Consistently!

That’s how it works. It’s a sure thing. If they wager $100 million in a month they will make $7 million. There’s no risk. NO RISK! That’s why I call it siphoning, not wagering.

The effective takeout for these computers is 3%, not 17%. That means the effective takeout on everyone else playing in the pools is greater than 17%.

The NTRA study spells this out very clearly. U.S. players are guaranteed to lose faster when participating in pools accessed by rebate/computer shops.

These robotic wagering computers scan every race…at every track…every day. You’re always competing with them, unless you are wagering on Oaklawn or Tampa Bay Downs.

Many racing jurisdictions worldwide have banned computer robotic wagering. Australia is one of them. With no place left to go, all computer bettors are trying to plug into U.S. pools. The result will be more strain on purses and even smaller payouts for the U.S. grandstand player.

IS IT UNFAIR

Some say these are just smart handicappers with no real advantage. Others see it as progress. “Don’t stand in the way of technology” a friend of mine in the racing business argued the other day.

Consider these analogies:

If you sit for a game of poker in a casino you’ll soon discover that the house does not care which player wins the pot. The house gets a cut of every pot, regardless of winner

Pari-mutuel wagering is much the same. A cut is deducted from the pools and the balance is returned to winning tickets. The tracks care nothing about who wins the pools.

Imagine yourself at one of these poker tables. There are six of you playing when a seventh player arrives. The new player pulls a laptop computer from a bag and sets it up on the table. The laptop has a sophisticated lens that scans the cards on the table as well as the amount of chips in the pot. Everyone at the table laughs at the geek and his computer. Play continues.

The laughing soon stops as the computer player consistently wins pots. With more chips in front of him the computer player begins betting more aggressively…winning even bigger pots.

Exasperated, the players complain to the dealer that the computer player has an unfair advantage. The dealer scoffs…saying that the computer player is creating bigger pots, a portion of which goes to the house.

Now…what would you do? Would you stick around and lose, or would you get up and leave?

The critical difference between the poker table analogy and the pari-mutuel network is at the poker table you can see the computer player. In the pari-mutuel pools you can’t. He’s hidden.

Is that fair?

One more analogy…

A small set of investment traders quietly obtain computer access to the pipeline of trades. They view these trades just before they transact on the major exchanges.

With this unique access, the investors are able to see how all other investors are about to trade. Placing their trades based on this privileged knowledge, the investors consistently beat the market.

Is this fair? Would the SEC shut this down? Would people go to jail?

The rebate/computer wagering model is bad for racing and fundamentally unfair to 99% of the fans.

That’s why we cut ‘em off at Oaklawn.

Bobby Geiger

[BillW]

One thing that has always bugged me is how do these off-shore operations get hold of the tote info "instantaneously" without the tracks going out of their way to supply it? An OTB does not need any faster access to the tote data than the on-track tote board in order to operate.

Something I found interesting is that the host state does not collect the handle. My assumption was wrong on this issue..

Bill

[cj]

The question I want to know is why tracks only charge 3%?

The takeout needs to be lowered, the simulcast fee raised, or a combination of the two. Charge a 6% fee against a 10% takeout, and I don't think the rebate shops will be around very long. Not only that, the increase in handle would be HUGE.

[Valuist]

It should be that way. But until then, its time to use the rebaters. I wouldn't worry about Pinnacle. They've been around for a few years. They are putting some pressure on some of the other offshores to follow suit.

[sq764]

I have no sympathy for the tracks.. This is a free market societ and it's a business..

Instead of combatting the offshore rebate shops, the tracks would rather bitch and complain about how unfair they are.. Well, the more they complain, the more money goes offshore..

They don't want to see the big picture in what would happen if they lowered takeouts and offered incentives.. They would likely reclaim some of the bigger bettors and would be a viable alternative to offshore books.. Instead they only see the immediate profits they would lose by cutting takeout..

I don't blame people for playing offshore.. It's their money and they have the right to take advantage of the best deal.. So far, the tracks are not the best deal.

[cj]

I agree about the no sympathy. One thing to keep in mind though is that the tracks don't set the takeouts, its the pinhead politicians.

[Steve 'StatMan']

And if they tracks change their pricing together, that's called collusion in the market/price fixing, and they'll get sued up the wazoo.

Plus in many states, the OTB parlors would not be as profitable, so they'll throw a fit - and be among those suing.

So the big problem is, they screwed up long ago, perpetuated it for the long time, the politicains have the rates locked in, horsemen have their spits in contracts, etc. It isn't something that can be changed easily - if it were, it'd been done long ago.

[MV McKee]

Have to admit that I found the posting from the Oaklawn official was a bit comedic.
How he arrived at the 3% takeout figure I'll never know, this entire NTRA study is beginning to look like a political campaign (well, I guess technically it is). The one and only agenda here is to justify and gain support for keeping the current takeout structure in place, and ignore a number of natural economic realities that are moving thoroughbred racing's "pricepoint" to a realistic, competive level.
It seems to always be represented that the offshore money in the pools was at one time onshore money, somehow diverted away, that the "average bettor" is the one getting hurt, etc. etc. etc.
The evil foreign entity that presents a danger to the common man, it just sounds so much like a prototypical campaign ad that I simply can't give this NTRA study any creedence whatsoever. There is a whole lot of missing math, and the benefits/caveats of offshore wagering are not nearly as cut and dried as the "committee" is representing them as being.

[InsideThePylons-MW]

That post was a beauty.

Getting this electronic “last look” enables the computer program a consistent win of 97-cents on each dollar wagered. That’s a steady loss of three cents on the dollar.

Nobody can be this stupid.

That’s how it works. It’s a sure thing. If they wager $100 million in a month they will make $7 million. There’s no risk. NO RISK! That’s why I call it siphoning, not wagering.

Oh my! He is this stupid.

Imagine yourself at one of these poker tables. There are six of you playing when a seventh player arrives. The new player pulls a laptop computer from a bag and sets it up on the table. The laptop has a sophisticated lens that scans the cards on the table as well as the amount of chips in the pot. Everyone at the table laughs at the geek and his computer. Play continues.

The laughing soon stops as the computer player consistently wins pots. With more chips in front of him the computer player begins betting more aggressively…winning even bigger pots.

Exasperated, the players complain to the dealer that the computer player has an unfair advantage. The dealer scoffs…saying that the computer player is creating bigger pots, a portion of which goes to the house.

Now…what would you do? Would you stick around and lose, or would you get up and leave?

I'm now beginning to think drugs might be involved.


A small set of investment traders quietly obtain computer access to the pipeline of trades. They view these trades just before they transact on the major exchanges.

With this unique access, the investors are able to see how all other investors are about to trade. Placing their trades based on this privileged knowledge, the investors consistently beat the market.


Now all of a sudden rebate players can see into the future and know who everybody is going to bet. Why don't they just use this power to look into the future and see the results of the race before it is run?

What a joke!

[linrom1]

Thank you very much for this excellent post, it does worry me though, that there are some who still think that they can beat this game when you introduce more efficiency into the game by allowing free reigning arbitrageurs. This would be almost funny, if it wasn't so misguided.

[Equineer]

Originally posted by BillW
One thing that has always bugged me is how do these off-shore operations get hold of the tote info "instantaneously" without the tracks going out of their way to supply it? An OTB does not need any faster access to the tote data than the on-track tote board in order to operate.

Something I found interesting is that the host state does not collect the handle. My assumption was wrong on this issue..

Bill I think the "instantaneous" access to toteboard/pool info has been a misunderstood issue and a "stalking horse" when you consider that a massive share of handle gets co-mingled into the pools from the hubs after the gate opens. So before the gate opens, even a direct "instantaneous" peek into the host track pools has limited value because 50% or more of the handle has not yet been co-mingled when the gate opens. In the end, these so-called computer syndicates must logically depend on statistical models to forecast handle that has not yet been co-mingled; otherwise, only the truly ominous specter of past-posting can explain some of the documented success stories, especially those characterized by high-volume wagering.

What I presume is really meant by privileged "special access" is a special link into pari-mutuel computers at SPMO's that enable the computer syndicate to submit wagers at extremely high rates, several hundred per second. I do not mean by automating the web interfaces that we are all familiar with, using macros or plug-in software to speed up BRISNet or XpressBet. I mean a link interface that is equivalent to a pari-mutuel teller station driven by special software. If the computer syndicate can emulate a pari-mutuel teller station rather than an account-based web interface, all the wager-level hinderances of account-based wagering are bypassed... in addition, full emulation of a teller station might offer high-speed wager cancellations as an added "special" benefit. At the end of the day, the computer syndicate could settle up with the SPMO just like real tellers settle up their machines.

[cj]

Originally posted by InsideThePylons-MW
That post was a beauty...



I don't agree with most of the post, but it did shed some light on track management's stance on the issues.

Your post added absolutely nothing to the board.

[Blackgold]

All this talk about rebate shops really points to the real change that is needed and that is in the management of the tracks themselves and the industry.

Most tracks make it hard to park. Hard to place a wager. Offer substandard food. And for all that, we pay 17% off the top.

I don't care that the computer guys scan for overlays, I do much the same thing- just at a much slower pace. And I am constantly increasing my ability to use technology to find value.

Just look at the Magna BS from last season at GP. It's really just a pimple of the arrogance of the industry.

I've got to have 3 U.S. based wagering accounts just to bet the U.S. tracks. One won't let me bet BEL, another will but only over the phone. The stupidity just goes on and on.

One of the biggest advantages of the Internet for the world is- everyone with a computer hook-up can have better access to information and can vote for or against lunacy with the click of a mouse.

I'll probably move to Pinnacle shortly because it just makes economic sense for me and anyone else wagering daily.

Forever the tracks have focused on themselves and now they have to focus on the customer and they simply don't know how to do it, so they do what all bureaucrats do. . . they whine for more money to waste.

It's like I heard Donald Trump say in an interview. He said it doesn't matter what your eductaion is. . .nor what your connections are. . . nor how much money you have. When it comes down to it, it matters if you are efficient or not.

The racing industry is very inefficient in their delivery of everything and the Internet world will force out the inefficient operators, thank god.

[brdman12]

This post is why I am a member here! A supposedly enlightened and interested party posts some information. I read it. Interesting. I have no answers but am not totally sold. Just wait. The people here at Paceadvantage, however skeptical they might be, are not fooled and have more questions and a few good answers. Very interesting.
But where are the horseracing customers? The tracks are usually almost empty. The otb lacks customers. A lot of the horseracing dollar comes from the internet customers. The internet is horseracing's friend. Off shore betters are too!

[delayjf]

I must confess ignorance on this issue, as I read the article, it seems straight forward to me. Several here have posted their disagreement, but can those that disagree get more specific?

[Equineer]

The NTRA definition of an SPMO (Secondary Pari-Mutuel Organization) encompasses all the requirements to give rebate players, including sophisticated computer teams and ordinary punters, a sufficient edge over non-rebate players to cause the stated differences in effective returns that penalizes stateside players to the tune of 1% to 3%. You may choose to say disadvantaging rather the penalizing, but the bottom line is the same.

Example: A "very good" stateside player averaging .96 ROI from NYRA win wagers has every incentive to improve his handicapping but not to increase his handle. A "very good" 10% rebate player averging .96 ROI from NYRA win wagers operates at a net 1.06 ROI after rebates. This player has every incentive to improve his handicapping, but also an incentive to increase his handle until he feels the pinch of diminishing returns. As winning rebate players respond to this incentive, payoffs decline and the "very good" stateside player can no longer average .96 from NYRA win wagers, but the "very good" rebate player can still press his action until his net ROI declines to breakeven (1.00). So for two equally adept players, the winning rebate player will ulimately cause a decline in returns to his stateside peer.

[MV McKee]

There are a whole lot of additional facts being ignored in the Oaklawn official’s posting. In the NTRA findings it is stated that there is a "1-2%" increase in the effective takeout, because of the presence of a successful large denomination bettor who is getting a 96% or better ROI. The math here is very simple, and correct. If an individual, or some other entity is getting a 96% ROI, and their wagers comprise 8.25% of all monies wagered, they would effectively raise the takeout (15% for example) for all other monies wagered by 1% (to 16%).
The NTRA stopped the calculations here, and stated that this "effective takeout" increase affected the "average player" and "reduced churn", implying that all players are affected both negatively and equally by the presence of this whale with amazing pool triage' capabilities.
The reality is that the presence of the whale's money in the pools most negatively impacts those players whose methods most closely mimic those of the whale, and whose winning selections most often intersect with those of the whale.

There are a number of bits of reality that the NTRA has (I am hoping by design and not by oversight) chosen to exclude from its findings:

1) The whale will lose more wagers than it wins. Therefore, more payoffs will increase than decrease. For example, take a case in which a highly successful, large denomination bettor has a 30% "hit rate" on his win bets. This player’s large bet does lower his odds, but it also increases the odds on all other betting interests. So in this example, 7 out of every 10 races has a higher win payout than it would were the whale (and the money he wagered into the pool) not present.

2) The "average" player (referenced in the NTRA/Oaklawn messages) will actually benefit from the presence of the whale's money.
This is plain simple logic:
By definition, the "average" player, meaning the majority of players (or more precisely the majority of the money in the pools) will not have bet the overlaid horse that the whale seeks and will eventually negatively impact the odds on. Therefore, the majority of win payouts that the "average" player cashes will actually be larger. (If using a strict (albeit unrealistic) definition of "average" dollar/player, ALL win payouts cashed would be higher.)

3) The degree to which other winning (by winning I mean an ROI above the mutual take) will be positively/negatively impacted is wholly dependant on how often their winning selections are the same as the whales.
If my selections mirror the whales selections exactly, and the whale (as in a previous post) wagers enough to reduce his ROI from .96 to .91 (while maximizing his total return after rebate), then my ROI from than my ROI, whether I have been wagering $5 a race or $5000 a race will also drop from .96 to .91.
If I have a "pre-whale" ROI of .96, and the whale wagers on 2 out of every 3 of my winners, then my ROI will be negatively impacted to a lesser degree, as the increase in the payout on one horse will be negatively offset by the reduction on the other 2.
If my methods and selections as a winning player differ markedly from those of the whale, then I may actually see an increase in my ROI due to the whale's presence.
The bottom-line is that a winning player’s selections are by definition more likely than an average player's selections to intersect with those of the whale, or for that matter other winning players.

It really does surprise me that both the NTRA and Oaklawn Park could come to the conclusion that rebate shops and the presence of whales (I am not talking about the possible technological privileges they may be extended) is a negative. I really feel that this is a case in which these organizations wanted to see a statistical/quantitative validation of a hypothesis they formulated, and when they saw an initial indication of the answer they wanted, they hesitated to take the next logical step and truly investigate the "who is impacted" part of the equation.

[schweitz]

Originally posted by MV McKee
There are a whole lot of additional facts being ignored in the Oaklawn official’s posting. In the NTRA findings it is stated that there is a "1-2%" increase in the effective takeout, because of the presence of a successful large denomination bettor who is getting a 96% or better ROI. The math here is very simple, and correct. If an individual, or some other entity is getting a 96% ROI, and their wagers comprise 8.25% of all monies wagered, they would effectively raise the takeout (15% for example) for all other monies wagered by 1% (to 16%).
The NTRA stopped the calculations here, and stated that this "effective takeout" increase affected the "average player" and "reduced churn", implying that all players are affected both negatively and equally by the presence of this whale with amazing pool triage' capabilities.
The reality is that the presence of the whale's money in the pools most negatively impacts those players whose methods most closely mimic those of the whale, and whose winning selections most often intersect with those of the whale.

There are a number of bits of reality that the NTRA has (I am hoping by design and not by oversight) chosen to exclude from its findings:

1) The whale will lose more wagers than it wins. Therefore, more payoffs will increase than decrease. For example, take a case in which a highly successful, large denomination bettor has a 30% "hit rate" on his win bets. This player’s large bet does lower his odds, but it also increases the odds on all other betting interests. So in this example, 7 out of every 10 races has a higher win payout than it would were the whale (and the money he wagered into the pool) not present.

2) The "average" player (referenced in the NTRA/Oaklawn messages) will actually benefit from the presence of the whale's money.
This is plain simple logic:
By definition, the "average" player, meaning the majority of players (or more precisely the majority of the money in the pools) will not have bet the overlaid horse that the whale seeks and will eventually negatively impact the odds on. Therefore, the majority of win payouts that the "average" player cashes will actually be larger. (If using a strict (albeit unrealistic) definition of "average" dollar/player, ALL win payouts cashed would be higher.)

3) The degree to which other winning (by winning I mean an ROI above the mutual take) will be positively/negatively impacted is wholly dependant on how often their winning selections are the same as the whales.
If my selections mirror the whales selections exactly, and the whale (as in a previous post) wagers enough to reduce his ROI from .96 to .91 (while maximizing his total return after rebate), then my ROI from than my ROI, whether I have been wagering $5 a race or $5000 a race will also drop from .96 to .91.
If I have a "pre-whale" ROI of .96, and the whale wagers on 2 out of every 3 of my winners, then my ROI will be negatively impacted to a lesser degree, as the increase in the payout on one horse will be negatively offset by the reduction on the other 2.
If my methods and selections as a winning player differ markedly from those of the whale, then I may actually see an increase in my ROI due to the whale's presence.
The bottom-line is that a winning player’s selections are by definition more likely than an average player's selections to intersect with those of the whale, or for that matter other winning players.

It really does surprise me that both the NTRA and Oaklawn Park could come to the conclusion that rebate shops and the presence of whales (I am not talking about the possible technological privileges they may be extended) is a negative. I really feel that this is a case in which these organizations wanted to see a statistical/quantitative validation of a hypothesis they formulated, and when they saw an initial indication of the answer they wanted, they hesitated to take the next logical step and truly investigate the "who is impacted" part of the equation.

Thank you---excellent post---and if you play small tracks you are less likely to have whale play---and if you are a longshot player or trainer angle player you are more likely to see your payoff go up from whale play.

[cj]

Monmouth is just awful, I just bet a horse that was 10-1 as they loaded, 5-1 down the backstretch, 7-2 in the stretch, and paid $9.60.

Whether anything funny is going on is irrelevant, it effing stinks!

[OTM Al]

I gave up betting Monmouth early this year for partly that and the fact that too often the field were too small and chalky. Even when I'd find an exacta setup I felt good about, the returns stunk before the gates closed and got worse after.

[andicap]

They scratched four horses out of a 10-horse field today!!!
How can the racing secretary let that happen unless they all happened to get sick.

Too bad since Monmouth runs to form.

[linrom1]

1) The whale will lose more wagers than it wins. Therefore, more payoffs will increase than decrease. For example, take a case in which a highly successful, large denomination bettor has a 30% "hit rate" on his win bets. This player’s large bet does lower his odds, but it also increases the odds on all other betting interests. So in this example, 7 out of every 10 races has a higher win payout than it would were the whale (and the money he wagered into the pool) not present.

2) The "average" player (referenced in the NTRA/Oaklawn messages) will actually benefit from the presence of the whale's money.
This is plain simple logic:
By definition, the "average" player, meaning the majority of players (or more precisely the majority of the money in the pools) will not have bet the overlaid horse that the whale seeks and will eventually negatively impact the odds on. Therefore, the majority of win payouts that the "average" player cashes will actually be larger. (If using a strict (albeit unrealistic) definition of "average" dollar/player, ALL win payouts cashed would be higher.)

3) The degree to which other winning (by winning I mean an ROI above the mutual take) will be positively/negatively impacted is wholly dependant on how often their winning selections are the same as the whales.
If my selections mirror the whales selections exactly, and the whale (as in a previous post) wagers enough to reduce his ROI from .96 to .91 (while maximizing his total return after rebate), then my ROI from than my ROI, whether I have been wagering $5 a race or $5000 a race will also drop from .96 to .91.
If I have a "pre-whale" ROI of .96, and the whale wagers on 2 out of every 3 of my winners, then my ROI will be negatively impacted to a lesser degree, as the increase in the payout on one horse will be negatively offset by the reduction on the other 2.
If my methods and selections as a winning player differ markedly from those of the whale, then I may actually see an increase in my ROI due to the whale's presence.
The bottom-line is that a winning player’s selections are by definition more likely than an average player's selections to intersect with those of the whale, or for that matter other winning players.


What a bunch of hypothetical rubbish. It makes no difference how one plays, whales plays are based on EXPECTED RETURN.

[mikekk]

What a bunch of hypothetical rubbish. It makes no difference how one plays, whales plays are based on EXPECTED RETURN. [/B][/QUOTE]

Always pre-supposing that there's only one whale fishing those particular waters. If 2 (or 3 or 4) Whales are going after the same Expected Return doesn't that knock the Expected Return down well below Expectations?

Do these guys have a club? "Whale 1...you do Belmont this week, then move your action to Hawthorne"

Mikekk

[linrom1]

Do these guys have a club? "Whale 1...you do Belmont this week, then move your action to Hawthorne"

Why wouldn't you believe that the answer is yes? Do hot dog vendors need a franchise license to claim their exclusive stake in a street corner?

[Equineer]

Let's go back in history for an example of how a friendly environment for whales might be supported by an SPMO rebate shop.

During the 70s, on-line tellers were introduced at Vegas racebooks/sportsbook before co-mingling was legalized. At the time, the thrift industry was the model for real-time transaction processing. So the Vegas books implemented banking terminals programmed to emulate pari-mutuel machines. Programmable teller equipment at each racebook enabled local options and control measures to be implemented by racebook managers. Also, the first co-operative network of racebooks actually contracted with a thrift industry processing center to act as their pooling host (equivalent to today's pari-mutuel computers that process and pool wagers at remote locations before aggregated wager totals are co-mingled into host track pools).

Now, even though there was no co-mingling into host track pools, the racebooks always knew where they stood in real-time vis-a-vis their own handle (i.e., from their own local odds/probabilities within their own pools). Associated racebooks could also monitor blended odds/probabilities for a co-operative network without seeing each others specific details. This is how a progressively better set of software traps were developed to detect and stem "wiseguy action" at and among the early on-line racebooks/sportsbooks.

Of course, the difference between then and now is that before co-mingling it mattered whether the players beat the racebook, but the SPMOs have absolutely no reason to worry about this (as long as they co-mingle)... and SPMOs even have every incentive to attract whales and perhaps help them succeed.

Today, what precludes an SPMO from linking up to a whale's computer that is programmed to emulate a super-fast pari-mutuel teller station? And what prevents the SPMO's from sharing real-time blended feedback with the whales until the final set of wager totals are transmitted for co-mingling? And since past-post teller cancellations are legal, what prevents some degree of this activity from occurring? In essence, what isn't possible offshore?

So what the racebooks did in the 70's can easily be seen as a model for implementing a whale-friendly environment today.

[cj]

Originally posted by andicap
They scratched four horses out of a 10-horse field today!!!
How can the racing secretary let that happen unless they all happened to get sick.

Too bad since Monmouth runs to form.

Delaware topped this one, scratched 5 out of a 9 horse field for a stakes race, and the track was FAST.

Sad...

[Valuist]

Too bad to hear that about Monmouth. I was thinking of playing it next year.

[entropy]

I really feel that this is a case in which these organizations wanted to see a statistical/quantitative validation of a hypothesis they formulated, and when they saw an initial indication of the answer they wanted, they hesitated to take the next logical step and truly investigate the "who is impacted" part of the equation.

absolute rubbsih!

the original analysis is essentially correct inasmuch as any winning player adds to the takeout on the general public

the tracks across the US who have offerred special deals to the SPMO''s should have all their executives fired for incompetence.

[InsideThePylons-MW]

Originally posted by cj
I don't agree with most of the post, but it did shed some light on track management's stance on the issues.

Your post added absolutely nothing to the board.

Let me post track management's position then.

They tried to double the rates they charged to the rebate shops so they could make more money. When the rebate shops refused to pay, the tracks claimed, out of the goodness of their heart, that they cut off the winning players for the good of the losers while failing to mention that they could have kept playing if they would have paid the track more money.