THE TAKEOUT AND REBATE SHOPS

[karlskorner]

WHERE DOES THE TAKEOUT MONEY FROM THROUGHBRED RACING GO ?

Adminstrative costs
Agricultural fairs
Breeding and development funds
Capital improvement
Chaitable uses
City governments
County fair and recreation boards
County government
Education
Equine research
Equine drug reserch
Government taxes
Health and retirement funds
Horemens Bennevolent and Protective Assoc.
Horsemens education
Location fees
Municipalities
Owners funds
Pension funds
Promotion funds
PURSES, PURSES
Race tracks
Racing commissions
simulcasting expenses
Sire Stakes
Stable vanning funds
State auditors
State inspectorss
STATE TAXES
Stallion awards
Veterinary school research

Not all tracks make all these contributions, but most do

Reduce the TAKEOUT and all the aoove are effected.

But better yet, show me the contributions to the above the REBATE SHOPS, that some of our leading contributors to this board are using. They can offer rebates to those who are interested, but can they convince you that they really contribute to the industry of racing horses ? Is your margin of profit so small that you really need the rebate or reduced takeout ?

[Memogram]

Yeah, reduce the takeout and all that are affected (in your list above) will get more money as handles will rise and likely more than make up for the decrease in takeout. Reducing the takeout seems a no-brainer to me.

[karlskorner]

As a fellow resident of Florida, do you really believe that. The local, county, state and federal governments will increase their cut before it reaches the community. The people in the State Capital are going bannas when they finally realized the loss they are suffering because of the indian casinos.. You cannot find a parking spot at the local Hardrock Casino after 4 PM on a given night and yet they have not passed a law allowing Gulfstream and other local tracks to permit slots, even though it was passed by the voters last November, they can't decide how big a cut they want.

Cut the takeout and the Rebate shops will increase their 7 percent rebates to 10 percent and the 10 percenters will go to 12 percent, they got nothing to lose, as they contribute nothing to the racing industry. Those that use the Rebate shops will be happy, until the tracks cut off all rebate shops.

[rokitman]

How many players have completely left horse-racing in the last 25 years and are contributing nothing to the above list? The rebate players have only "half-left" and are trying like hell to stay.

[Dave Schwartz]

Let's be perfectly clear, here.

The "rebate shops" who get cut-off are the ones who pay for the signal. Those shops are very much "contributors" as they are pari-mutuel. Their handle goes to the track just like the Las Vegas Casinos.

The non-parimutuel rebate shops don't get "cut-off" because they aren't paying anything to begin with. There is nothing to "cut off."


Regards,
Dave Schwartz

[Grifter]

Dave -- If I understand what you're saying, there are two groups of rebate shops:
-- Those that pay for the signal (3-5%), and their monies are included in the parimutuel pool
-- Those that don't pay for the signal, are not in the parimutuel pool, i.e., bookies (although they may well layoff money into the pools, i.e., Pinnacle and others)

Where or how do the rebate shops that do not pay for the signal get it?

--Grifter

[MichaelNunamaker]

Hi grifter,

You wrote "Where or how do the rebate shops that do not pay for the signal get it?"

"The signal" is being in the parimutual pool. If a shop is acting as a bookie and is not entering wagers into the pool, then there is no signal that they need. The shop could look at the results at equibase to find what they needed to pay to winner bettors.

Mike Nunamaker

[Grifter]

Mike -- Thanks for the quick response. I assumed that to do the "housekeeping" necessary to run an operation like Pinnacle (like closing off betting before the break, etc.), they must get some kind of signal. And if they "lay off" money into the pools, I assume they must do that through somebody who is getting the signal.

I think what I'm getting at is that bookies such as Pinnacle would appear to need some kind of help with their operations from someone who is buying the signal. I suppose if a track suspected that someone buying the signal was funneling late money into the pools from a bookie operation, that might be a reason to "cut off" the signal to that shop. Still, all that layed-off bookie money goes into the pools. Although a track might be concerned about the issue of collusion (someone who is buying the signal is collaborating with a bookie shop that is not), or the suspicions raised by sudden odds changes as the race is being run, it still seems counterproductive to cut off those operations that are supporting the tracks.

One can argue whether they're paying enough for the signal, but as Dave points out, those buying the signal are "contributors."

-- Grifter

[Rook]

Karlskorner,

Do you or your brother run a racetrack? I can't believe anybody who actually bets on horses would be happy with the current takeout rates.

You asked: "Is your margin of profit so small that you really need the rebate or reduced takeout ?"

The answer for virtually everybody is an overwhelming, "YES!"

In an average month I bet $100,000. I now receive about $11,000 in rebates. Even with this amount, I have had 4 losing months. Without rebates or a lower takeout, a person would be better off betting on other sports. I know this because I walked away from racing for 9 years and found it far easier to make a profit on baseball and football.

With rebates, horse racing is arguably the most attractive betting option. I am able to show a profit and continue to churn a substantial amount of money through the windows. Instead of getting zip, the industry gets about $3,000 a month from me. If they want more, all they have to do is lower the takeout and/or offer rebates of their own.

The general public is not interested in handicapping because they firmly believe that nobody can make a living on horse racing. If the takeout was less than 10%, there would be several professionals at every track, and this would inspire the public to give our sport a serious try, similar to the effect the players on the poker tour have inspired that mania.

[Valuist]

Rook-

Well said.

Grifter-

Let's face it; plenty of Pinnacle money is going thru the pools (reportedly thru AmericaTab and probably others).

[GameTheory]

Cut the takeout and the Rebate shops will increase their 7 percent rebates to 10 percent and the 10 percenters will go to 12 percent, they got nothing to lose, as they contribute nothing to the racing industry. Those that use the Rebate shops will be happy, until the tracks cut off all rebate shops.Cut the takeout and the revenue will go up, not down (after an adjustment period). That's that Econ 101 that no one seems to know about. However, I understand that point is debatable.

But your second point is undisputably false. If you lower the takeout, the rebates will have to go lower. The rebaters are able to offer a rebate because the takeout is so high. (Why isn't there a rebate for any other sports? Eh?) The non pari-mutuel offshores might seem to have a little more wiggle room since they aren't paying anything to begin with, but they don't really because since they are booking their own bets, they are at risk if they give too much back, and the bigger the rebate they offer the sharper the players they attract. If the takeout was lowered to 10%, that would be the end of rebate shops...

[Valuist]

GT-

There basically is reduced takeout for other sports, at least at places like Pinnacle. -105 for NFL sides certainly beats the old -110.

[cj]

...If the takeout was lowered to 10%, that would be the end of rebate shops...

And that in a nutshell is what will have to happen if racing is to survive, and even flourish, in my opinion.

[ryesteve]

In an average month I bet $100,000. I now receive about $11,000 in rebates.
Just curious, what place offers 11% rebates? This is really attractive...

[joeyspicks]

Quote:
Originally Posted by GameTheory
...If the takeout was lowered to 10%, that would be the end of rebate shops...



And that in a nutshell is what will have to happen if racing is to survive, and even flourish, in my opinion. (CJ)


I agree 100%......just smart business. However I'm not too optomistic:confused:

[Rook]

Ryesteve asked,

"Just curious, what place offers 11% rebates? This is really attractive..."

11% is the average for the tris and supers. There are a bunch of tracks that pay 12%.

Like all the rebate shops, the one I deal with doesn't advertise or draw attention to themselves. I'm pretty sure they would not appreciate me mentioning them, so I won't. However, if you bet more than $5,000 a week and don't live in California, I can ask them to contact you. Send me a private message.

[GameTheory]

And that in a nutshell is what will have to happen if racing is to survive, and even flourish, in my opinion.I don't understand why that isn't obvious to everyone. The effective takeout when you are getting a rebate is around 10%, right? And what's happening -- the rebate shops are flourishing. So what will happen if we have a 10% takeout for everyone everywhere? THERE WILL BE EXPLOSIVE GROWTH IN THE SPORT! More money for everyone, tracks/government and players.

I mean, duh.

[midnight]

The rebate customers will keep going to the rebate shops, because they'll still get a few percent better of a deal then betting directly.

Most of the people who don't go to the rebate shops don't care how much the takeout is. The minority who do might bet a bit more, but overall, the handle wouldn't go up enough, in my opinion, to compensate for the reduction.

I agree that it would be great for the players, but I don't see how it would help the tracks enough overall. It MIGHT work, with a strong publicity campaign. It wouldn't happen overnight, though, and there's no way the tracks and government are going to take a short term reduction for a long term possible gain.

[garyoz]

I don't understand why that isn't obvious to everyone. The effective takeout when you are getting a rebate is around 10%, right? And what's happening -- the rebate shops are flourishing. So what will happen if we have a 10% takeout for everyone everywhere? THERE WILL BE EXPLOSIVE GROWTH IN THE SPORT! More money for everyone, tracks/government and players.

I mean, duh.

I agree with you (except I think growth rather than explosive growth). This is analogous to supply side economics (sometimes referred to as the Laffer curve), but look at the political garbage and vitriolic accusations directed at the tax cuts that are part of a supply side policy. Another analogy is to what happened to the securities industry when fixed rate commissions for stock trades were done away with in the mid-1970's. Trading volume exploded because the cost of the transaction (the same as the takeout in horse racing) declined.

It will take some State to lead the way, maybe a state like West Virginia. It sure won't be the morons in New York or California. Overall, I am highly doubtful and see nothing but growth for rebate shops.

[Rook]

Midnight wrote:
"The rebate customers will keep going to the rebate shops, because they'll still get a few percent better of a deal then betting directly."

I am a rebate customer and like most people, I would prefer to deal with a track if they matched the best deal out there. If the tracks offered 12%, they would earn a hell of a lot more than the crappy 3% they get today. As it stands, they don't make the slightest effort to earn the whale's handle and they are paying a huge price for neglecting their best former and potential customers.

"Most of the people who don't go to the rebate shops don't care how much the takeout is. The minority who do might bet a bit more, but overall, the handle wouldn't go up enough, in my opinion, to compensate for the reduction."

I strongly disagree. Do you think the casino business would be the same if their slot machines paid out 75 cents instead 95 cents on the dollar? Do you think there would be a comparable amount of betting on NFL spreads if a guy always had to bet $133 to make $100? If horse racing's takeout were much lower, there would be an explosion of interest because people would actually go home a winner far more often than 5% of the time.

"It wouldn't happen overnight, though, and there's no way the tracks and government are going to take a short term reduction for a long term possible gain."

Agreed. It would take some time and the both the tracks and governments are run by short sighted incompetents, so I'm not holding my breath but if there is ever going to be a change, it's going to come from a massive number of people like us abandoning the tracks for greener pastures.

[GameTheory]

The rebate customers will keep going to the rebate shops, because they'll still get a few percent better of a deal then betting directly.

Most of the people who don't go to the rebate shops don't care how much the takeout is. The minority who do might bet a bit more, but overall, the handle wouldn't go up enough, in my opinion, to compensate for the reduction.

I agree that it would be great for the players, but I don't see how it would help the tracks enough overall. It MIGHT work, with a strong publicity campaign. It wouldn't happen overnight, though, and there's no way the tracks and government are going to take a short term reduction for a long term possible gain.There will be no rebate shops -- they will be squeezed out of business -- that rebate comes out of the the high takeout. REBATE SHOPS EXIST BECAUSE OF THE HIGH TAKEOUT. If the takeout isn't so high, they won't have anything left over if they continue to give rebates. Off-shore books will certainly still exist, but they won't be giving 7%-15% rebates like now -- where's the money going to come from?

No one seems to get that there would be a bunch of NEW people betting with lower takeouts because it would be easier to make money betting horses...but that would take a while as you say. But there would still be a major cash injection from all the bettors who are betting with non-parimutuel books now who would move back into the pools because:

A) The pools would be just as attractive as their rebate shop.

B) Their rebate shop would stop offering a rebate.

Given a level field, most people would prefer to bet "on-shore"...

[Rook]

GameTheory wrote:

"Given a level field, most people would prefer to bet "on-shore"..."

That's for sure. I, of all people, should be averse to off shore bookies since I was scorched for $14k by those Aces Gold theives. But despite that horrible experience, I continued to deal with Pinny, ehorse, etc. because rebates are essential to a serious horseplayer's success.

[midnight]

I am a rebate customer and like most people, I would prefer to deal with a track if they matched the best deal out there. If the tracks offered 12%, they would earn a hell of a lot more than the crappy 3% they get today.

I'd prefer to deal with the track, too, but the only way they can match whatever the rebate shop offers is to not offer them the signal in the first place. As long as there's some leeway between the cost of signal and the takeout, the rebate shops can offer something to the bettors.

Do you think the casino business would be the same if their slot machines paid out 75 cents instead 95 cents on the dollar? Do you think there would be a comparable amount of betting on NFL spreads if a guy always had to bet $133 to make $100? If horse racing's takeout were much lower, there would be an explosion of interest because people would actually go home a winner far more often than 5% of the time.

There would be peopole who played, if that's all they had available. A lot of the Native American casinos in isolated areas offer machines that pay very low (80% or less), and they're jammed with customers. Competition is what drives the percentages down. There are people who would bet the sports at -125 if that's the best they could do. Competition has driven the "juice" down.

People who care enough about the takeout to bet sports and play poker instead of the races won't care if the takeout is reduced to 10%, as that will still be over twice what they pay for sports betting, most casino games, most slots, etc.

[midnight]

Not sure why I couldn't post this in the above thread, but it got truncated.

There will be no rebate shops -- they will be squeezed out of business -- that rebate comes out of the the high takeout. REBATE SHOPS EXIST BECAUSE OF THE HIGH TAKEOUT. If the takeout isn't so high, they won't have anything left over if they continue to give rebates. Off-shore books will certainly still exist, but they won't be giving 7%-15% rebates like now -- where's the money going to come from?


It would come from the 5-7% that they still have after paying the track 3-5% for the signal. Agreed that they would only be able to pay 2-3% instead of 7-10%. But the big bettors are going to want that 2-3%, and they're going to go right on betting at the rebate shops. As said above, the only way that the tracks can cut out the rebate shops is to refuse to offer them a signal.

[GameTheory]

Not sure why I couldn't post this in the above thread, but it got truncated.



It would come from the 5-7% that they still have after paying the track 3-5% for the signal. Agreed that they would only be able to pay 2-3% instead of 7-10%. But the big bettors are going to want that 2-3%, and they're going to go right on betting at the rebate shops. As said above, the only way that the tracks can cut out the rebate shops is to refuse to offer them a signal.Or charge them appropriately for it. I've got no problem with that...

[JackS]

Why not let the tracks themselves offer rebates? Five or ten percent for every $100 dollars wagered could be incentive for small betters to bet more to reach this level or the next one higher. Also an incentive for everyone regardless of bet size.
For many this would cover the cost of the DRF and a few dollars more would also cover the cost of the track program and admission.
As an added incentive, why not have a daily drawing for free track admission for a month (5per day?) or whatever.
Maybe even an automobile once or twice a year based on rebates in $100 increments.
I really don't know the feazability of these suggestions but unless I hear otherwise, they seem reasonable to me.
BTW- Janitorial services would go down 50% or more which might pay for this little program.

[garyoz]

The regulators won't let them. The States want the tax dollars./

[MichaelNunamaker]

Hi Rook,

You wrote "The general public is not interested in handicapping because they firmly believe that nobody can make a living on horse racing. If the takeout was less than 10%, there would be several professionals at every track, and this would inspire the public to give our sport a serious try, similar to the effect the players on the poker tour have inspired that mania."

YES!

Sometimes I get the feeling that many in the horse racing industry believe that if any bettor is making money that something is wrong. This is exactly backwards. The consistently profitable people should be showcased. Where is horse racing's analog to Phil Ivey, Barry Greenstein, or Phil Gordon?

Mike

[Rook]

Midnight wrote:
"I'd prefer to deal with the track, too, but the only way they can match whatever the rebate shop offers is to not offer them the signal in the first place. As long as there's some leeway between the cost of signal and the takeout, the rebate shops can offer something to the bettors."

Agreed. And that's why they should stop sellling their signal for 3% and instead offer what the rebate shops currently do. If they just cut their signal and don't offer rebates, they will only drive the current rebate players to the offshore bookies.

"There are people who would bet the sports at -125 if that's the best they could do."

Yes, there will always be degenerates that are willing to play at any price but the reason casinos and football betting are so popular is that people can play for a reasonably long time before they go broke.

"People who care enough about the takeout to bet sports and play poker instead of the races won't care if the takeout is reduced to 10%, as that will still be over twice what they pay for sports betting..."

I present myself as a rebuttal to that view. I didn't bet on horses for 9 years and instead used my gambling urge to bet on baseball and football. I thoroughly enjoy sports betting have been quite good at it. My best year was a $40,000 profit which was largely made by getting the Patriots at 50 to 1 to win their first AFC title.

Despite this success, I have come back to racing because the combo of rebates and 50,000 races a year, offers a hell of lot more action and potential than the NFL's 270 games a year. Currently, I'm happy with my decision (I'm up over $170k since last October) but a major losing streak could drive me back to the sports world. If the takeouts on exotics were driven below 10%, I have no doubt that my switch back to racing would be permanent.

[Dave Schwartz]

I believe there is still a serious misunderstanding here. You must get this:

There are two kinds of off shore betting operations: Parimutuel and bookies.

The only "bad guys" are the bookies. They keep the "take" (or equivalent thereof) and give nothing to the tracks, horsemen or racing in general.

The parimutuel books are just like most Las Vegas casinos and, for that matter, race tracks handling simulcast wagering for other tracks. The handle from a parimutuel racebook whether it is in Nevada, off shore or at a race track goes to the home track. As such, this handle "helps" racing.

Please do not confuse paying for the picture with being parimutuel.

In northern Nevada we have a casino called the Nugget. They are not parimutuel. They do, however, pay for the right to broadcast the races.

Do they add anything to racing? Nope. They just take. In my mind, this qualifies them as one of the "bad guys."


So, my point is that the issue is "Parimutuel or Not."


As for rebates, it is simply a tool to encourage bigger action from a given player.

Why should we applaud a track for giving rebates but not a parimutuel racebook? If Santa Anita decides to pay a rebate for on-track customers that is wonderful. If they decide to pay that same rebate (out of their commission) for simulcast wagers that is even more wonderful. It is also exactly what the off shore parimutuel shops are doing.

Rebaters are not the bad guys; bookmakers are.


Regards,
Dave Schwartz

[Fastracehorse]

I always loved the old Sabres Jersey.

fffastt

[Rook]

ffasstt wrote:
"I always loved the old Sabres Jersey."

Using the jersey as my icon was the least I could do to keep the old blue and gold alive. I will always be bitter that the real Sabres uniform was replaced by a bastardized goat head. My only comfort is the asshole who changed the colours to match his corporation, John Rigas, is rotting in jail for life.

My family had season's tickets from '70 thru '86 (back when a teacher could afford such a luxury). We had seats almost directly across from Punch Imlach. Imagine a modern day general manager having the guts to sit surrounded by real paying customers game after game. I miss those good 'ole days.

[ryesteve]

Rebaters are not the bad guys; bookmakers are.

So how would one classify an outfit like Pinnacle? Yes, they're bookmakers, but at the same time, they'll lay off your action into the pool, and perhaps piggyback with some of their own money, so to some extent, they ARE contributing.

[Dave Schwartz]

Rye,

In my opinion, they are simply "bookmakers" and, as such, they fall into the same category as other bookmakers.


Dave

[GameTheory]

So how would one classify an outfit like Pinnacle? Yes, they're bookmakers, but at the same time, they'll lay off your action into the pool, and perhaps piggyback with some of their own money, so to some extent, they ARE contributing.If they piggyback, that is bad for everyone else (the players) because they are only dumping smart money into the pools -- that's basically not only giving the people that play with them a rebate, but increasing the takeout on everyone not playing with them.

Still, I blame the industry and the politicians -- all these off-shore books are enabled by the high takeout, an INENVITABLE consequence...

[ryesteve]

If they piggyback, that is bad for everyone else
Without a doubt... I was just wondering what the perspective would be from industry's side.

[Rook]

Let's not use the words, "if" and "perhaps" to describe whether Pinnacle piggybacks. There should not be a shadow of a doubt with players that they will exceed your bets if you start beating them for serious money.

Review my posting on this thread if you want to know why I feel so strongly about this:


http://www.paceadvantage.com/forum/showthread.php?p=204630#post204630

[bobbyb]

by David Willmot Woodine Entertainment Centre, March 5th, 2004
(spoken in open forum, chaired by Stan Bergstein Ex VP HTA)

"What we have to look at is a pricing structure. We have a player reward system at Woodbine. I can tell you our very biggest customers get ten percent on win, place, show bets. On win, place, show, we are as low as ten percent takeout. Why don’t we go down to where the rebates are at 5 percent? Because below ten percent, given the cost of processing the bet, the cost of operating, purses, and everything else, it does not make any sense for us to take that bet. I must say we have thousands of account holders who benefit from player rewards. We believe in player rewards and we believe in racetrack operated account wagering, racetrack player rewards, and lower takeout as a general statement, we believe in that. What we don’t believe in are opportunistic, parasitic operators that have come into this business and now claim that these are their customers, and say that they are doing us a service offering a Porche Boxster to one of our biggest customers to move his wagering over from about 12 percent on our player rewards program to three percent. As Chris said earlier when we were talking about the pirates of the Caribbean, they are not doing anything illegal in the sense that they are coming into our pools, but when they walk onto our racetrack and overtly poach racetrack customers, it may not be illegal, but it sure is unwelcome. We as an industry have got to address that. What we should not be having is dollars going out to opportunistic, third party operators who don’t operate racetracks unless they pay an appropriate price".

Question for Rook

Are you aware of this REBATE practice at Woodbine? My questions go unanswered.

bobbyb

[Rook]

Bobbyb, Thanks for giving me the opportunity to bash Woodbine once again. It's always one of my favourite topics.

I watched the video of that conference a few months ago. Wilmot came across as a complete jackass. This is not surprising considering how well run his company is. Here is a review I posted several months ago about their betting service:

http://www.paceadvantage.com/forum/showthread.php?t=19688

As for their rebate program, here is the link to their official policy:

http://www.horseplayerinteractive.com/hpirewards.asp

In summary, after you bet $5,000 a month, they will refund a whopping 0.5% for all tracks except Woodbine, which is 0.75%. You have to bet $75,000 a month to make it all the way to 2.00% (3% for Woodbine). Their Horseplayer rewards are also a joke, as they give you back $10 for every $3200 ($2133 at Woodbine) you wager.

A $100,000 a month strictly Woodbine bettor would have a takeout of 16.9% minus 3% rebates + 0.5% for the HorsePlayer rewards. This equals an effective 13.4% WPS takeout. Wilmot is either a bald faced liar or an incompetent for not advertising their higher rates.

Regardless of the real WPS takeout, the tri and super takeout after rebates for $100k bettors is 22.9%. Obviously, this is not remotely competitive.

As I stated in an earlier post, Woodbine sent me a letter 2 weeks ago, advising their customers that comingled tracks would no longer be eligible for the rebate progam, since the super takeouts were now at the low, low price of 22.5% compared to the earlier 25%. What a bargain!

I love the idiocy behind Wilmot's quote: "Because below ten percent, given the cost of processing the bet, the cost of operating, purses, and everything else, it does not make any sense for us to take that bet."

So, if I'm ready to make a $500 super bet, they don't want to take it if they can only make $45 on it!? :eek: What do they do, give their tellers or ISP a 10% cut on all wagers!? Their purses and maintenance costs are going to be the same whether they handle my bet or not, so that's not an issue. By their stupidity, Woodbine has thrown away the opportunity to make tens of thousands of dollars each year from people like me.

[MichaelNunamaker]

Hi Bobbyb,

You wrote "Are you aware of this REBATE practice at Woodbine?"

As Rook already pointed out, it appears that this rebate practice at Woodbine actually does not exist. I googled it as well and it appears to me not to exist. Do you know if it does and how one could actually do it?

Mike Nunamaker

[bobbyb]

Hey Mike,

Oh I'm sure their is a rebate program in place at Woodbine - but it's a scam for the small investor. Churn a small fortune thru the windows, and we'll give ya'll a program or 2 (maybe). :mad:
My take is Willmot was refering (reading between the lines) to his owner/trainer cronies, where special perks DO exist, IF your in the loop.
I'm sure Rook remembers the Club House at old Greenwood.

You can read the rest of the article chaired by Bergstein - re Rebates by doing a search on PA - Subject: Problem with Slots, July/05
I posted a link to that article in that thread.

bobbyb





bobbyb

[Buckeye]

Excuse me, but I'm looking for the best deal, and I don't care who gives it to me! War is war and if the tracks don't want to play, please refer to Econ 1 oh one. If they "collude" or play other games that destroy the off-shores, I for one will remember that and penalize them, because I'm not going to give the tracks my money period.

I'm just not that generous.

Call it a "character flaw."

[twindouble]

Excuse me, but I'm looking for the best deal, and I don't care who gives it to me! War is war and if the tracks don't want to play, please refer to Econ 1 oh one. If they "collude" or play other games that destroy the off-shores, I for one will remember that and penalize them, because I'm not going to give the tracks my money period.

I'm just not that generous.

Call it a "character flaw."

Buckeye; I remeber having the same feelings when I found out about the rebates. It lasted oh about------that long. :cool: How ya been?

[Rook]

BobbyB,

I have a very good memory of Woodbine treating even one of their best customers like crap. From 1988 to 1995, I was at either Fort Erie or Woodbine (at the time they were both owned by the OJC) every day in the summer and 3 days a week plus holidays the rest of the year. By the end of that stretch, I was betting $1,000 a race. I always sat in the same section of the track but in '95 on Queen's Plate day I arrived to discover that my section was roped off and only "VIPs" were allowed access.

Who were these "VIPs"? My best guess is that they were second cousins and casual acquaintences of the owners and trainers in the race. They sure weren't horseplayers because I hadn't seen one of them within a mile of the grandstand before.

The incompetent business that Woodbine was and is decided that these $2 bettors were more important than the guys like me who paid the bills.

I had put up with 8 years of being ignored and not receiving even a dime in perks or rebates, but telling me that I wasn't good enough to sit in my regular section, really got my blood boiling.

Did Woodbine pay a price for treating me this way? You betcha. Within weeks of this incident, I hit a losing streak and instead of perservering through it like I had in the past, I quit cold turkey. I can count on two hands the number of times I have gone to Woodbine in the last decade and 100% of the money I now bet goes to anybody but them.

So, when I take a few shots at the management of my old hangout, this is some of the background that makes me a little intense.

[Buckeye]

Twindouble,

I'm fine, thanks for asking.

I agree with Game Theory, the high take-out is the reason the rebate shops attract business. Is this a surprise to anyone? Bookmakers can and will take advantage of the situation so long as it exists. Is this a surprise to anyone? I support the shops for putting money in my pocket. Is this a surprise to anyone? The ball is firmly in the tracks court, and I expect them to lower the take-out, or else. Is this a surprise to anyone? I earn my money and will not throw it away by supporting the highest price option.

[ezpace]

CJ an others are right on this.Less will be more. Art Laffer one of the contributors to supply side economics proved it. IF people are taxed less , thus generating more commerce by spending more the tax reciepts are MORE>..

Google key words .. LAFFER CURVE... for a more detailed but simple explanation

[Geekyguy]

The rebate shops aren't stealing from the track, but instead are just giving kickbacks to the horseplayers that otherwise would have had to go to maintaining an OTB facility.

From what I know about Pinnacle, they apparently profile their horseplayers, laying off what they believe is sharp action, and keeping what they believe is not, while scoring a 10 percent rebate on what they lay off, giving the horseplayer 7 percent and keeping the other 3.

[Dave Schwartz]

Geek,

No way do they get 10% on CD or Magna tracks. Nobody does.


Dave Schwartz

[rokitman]

The tracks could have distributed their product themselves and gave a price break to the players. Instead, they sold it for a glib 3% to 5% and added another layer of Fat to the proceedings. Now, the Fat is doing what the tracks didn't to begin with. And the tracks have a problem with that. Boohoo. Obviously, there is a whole lotta money to go around with a 20% takeout. The Fat is paying their 3% to 5%, giving out rebates, and still running successful businesses.

Now, the tracks again have an opportunity to sell their product direct to the players at same 3% to 5% in the form of a betting exchange. Instead of sprinting to this exciting opportunity to have a new product in a business that it is very hard to have a new product, they trot out some nonsense about fixed races. As if that isn't happening already. A betting exchange is a very real opportunity to have brand new players. A different type of player. Players that would benefit us all. But they have their ridiculous reasons to stonewall that too.

Racing is a fat, tired , lazy incestuous family business that is going to have to be forcibly revolutionized every step of the way. Nothing is going to happen that isn't imposed on them. The rebate shops are doing that now. Hopefully, Betfair or someone else will come up with a way to forcibly impose an exchange on them. And then, my friends, we will be free.

[rrbauer]

Dave Schwartz wrote:
"Rebaters are not the bad guys; bookmakers are."

Comment:
Bookmaking rebaters exist profitably for a number of reasons:
1. Losing players.
2. Bad betting terms for the players which makes the betting market inefficient for the players; or, in the case of some exotic wagers, the betting market simply doesn't exist for the players which mitigates the bookmakers risk.
3. Low-overhead operators in a high gross-margin business.

Pari-mutuel rebaters exist profitably for two reasons:
1. Bad betting terms for the players which makes the betting market inefficient for the players.
2. Low-overhead operators in a high gross-margin business.

I have no idea how much horserace-betting handle goes through these two classes of bet takers, and I wouldn't be surprised if there are hybrid types that both book some bets and send others through the pools. Two things are clear:
1. The product that we are being offered regardless of how, and with whom we bet, is overpriced.
2. The business model that is being followed by most racetracks is not efficient from a revenue-generation/cost-containment perspective and requires subsidies.

Speaking for myself, I simply refuse to do serious business with racetracks that put on a lousy show and continue to charge top dollar for it; and, if I can get a percentage of my bets returned to me without other compromises then I will do that.

This is a good thread and as players we need to stand our ground because nobody else is going to do it for us.

[stuball]

I was a truck driver for 30 years and saw it happen to trucking companies...

For much of my career trucking rights were regulated....if your trucking company had the rights to a certain area no one else was allowed to pick up or deliver in that area.....the companies that had the rights controlled it...
Companies were more or less guaranteed a profit by maintaining the status quo. Then deregulation came along and all the companies that were able to
run profitably with all the family and inefficiency at work within...suddenly it
was a competitive business...and the whole industry changed...

The companies that were able to adjust and hire efficient mangers moved to the front and the ones that couldn't dropped out. Many tried merging with other small companies only to go under because they never changed...

I think the same has to happen eventually in racing...creating a better
environment for the customer....as for the larger customers getting a better price...well if you had to buy say 100,000 items and the next guy bought just 1 and got the same price --would you not look for a better deal?

This is just an old truck drivers view of things...I don't post a lot because
there a lot more knowledgeable people on this site than me, but this time I could not resist.

Stuball :bang: :bang: :bang:

[twindouble]

I was a truck driver for 30 years and saw it happen to trucking companies...

For much of my career trucking rights were regulated....if your trucking company had the rights to a certain area no one else was allowed to pick up or deliver in that area.....the companies that had the rights controlled it...
Companies were more or less guaranteed a profit by maintaining the status quo. Then deregulation came along and all the companies that were able to
run profitably with all the family and inefficiency at work within...suddenly it
was a competitive business...and the whole industry changed...

The companies that were able to adjust and hire efficient mangers moved to the front and the ones that couldn't dropped out. Many tried merging with other small companies only to go under because they never changed...

I think the same has to happen eventually in racing...creating a better
environment for the customer....as for the larger customers getting a better price...well if you had to buy say 100,000 items and the next guy bought just 1 and got the same price --would you not look for a better deal?

This is just an old truck drivers view of things...I don't post a lot because
there a lot more knowledgeable people on this site than me, but this time I could not resist.

Stuball :bang: :bang: :bang:


Good morning Stu, how do you like your eggs? I spent the first 10 years of my business career serving truck drivers, didn't take me long to figure out they were one unique group of people and came from all walks of life. They are all I miss when it comes to that business, it was a pleasure to serve them. I found serving the general public much less enjoyable and there was more brains out there shifting gears that's for sure. :)

[Dave Schwartz]

Richard,

You are right on the money with your assessment. Permit me to add this:

Any change that comes at a cost to tracks (such as lowering the take) will come as the direct result of an economic decision by the tracks. The only way that such an economic decision will be made is if it becomes obvious to the tracks that the wagers of horse players have gone down because of their inaction.

My point is that it will not come because it seems like a good idea or is the fair thing to do. It will only happen if the players (that would be us) force them to change by withholding action.

In another thread, BetHorses suggested:

Would it hurt that bad to reward the bettors with at least one race a weekend with a zero takeout?

No disrespect for BH, but that is similar (in the minds of a track owner) to saying, "Would it be so terrible if I collected up a few thousand dollars and just gave it to people?"

Of course, the truth is, it wouldn't hurt that much. But the track owner is (logically) saying, "What will it do for me?" and without a concrete answer he will assume that the answer is "nothing but lose you money."

Over and over we say that track owners are stupid. Well, they aren't. Obviously they aren't. After all, we continue to make bets into an arrangement that is near-impossible for us to show profit from.


Here is what I take from this:

Horse players must form a union in order to improve their lot. Without this, they have no voice that is loud enough to affect change.

Any expectation that tracks will make change based upon an altruistic sense of doing what is right is simply a pipe dream.

Players who take large (and especially "huge") action away from the tracks are actually doing something to help the game because their actions are pushing in the direction that could force change.



As you have said, the business model of horse racing does not work. They will need to change or perish.

As Marshall Matt Dillon said to a fugitive who had just hollered, "You'll never take me alive, Marshall:"

"I can bring you in as pig or pork, that is up to you. But one way or another I am bringing you in."

The tracks can change the business model and make it work or they can perish, leaving the tracks that have made it work. This may benefit the horse player.

We can force the industry to change its ways in our favor or they will continue to exploit us as an answer to making their faulty business model work.

And we cannot simply blame the tracks for not doing this voluntarily. Any change in fiscal policy is going to be forced rather than voluntary.


Okay, I'll be done with the soapbox for today.


Regards to all,
Dave Schwartz

[karlskorner]

You keep using the words "track owners", thats just the point, they "own" the tracks, you and I are "guests", invited to wager track side, simulcast or legal rebate shops You speak of the demise of the tracks, someone started a list of the tracks that have gone out of business over the years, someone should mention the "new" tracks that have appeared in the past 5 years. I believe it was Richard Bauer that started a "boycott" of Magna a year or so ago, never really got off the ground, maybe a few 100 went along with it for awhile, but guranteed they are back playing Magna tracks. Studebaker went out of business, but the automobile business is bigger than ever. Some of the tracks are older than most of the board members. Imagine, if you will telling a Vegas casino operator you intend to boycott unless the odds come in to your favor., better yet, let the employess on this board tell their ther employers that he is making to much profit and the employer should start sharing with the employees. I, along with other, would like to see the "takeout" reduced, but I'll be damned if I will put myself in harms way.

[Dave Schwartz]

Karl,

I do not see that we are in disagreement.

Actually, you helped make some of my points.

There is no organization for horse players that has any clout. Hence, a boycott under the current circumstances has no power. It is almost as silly as those "don't buy gasoline today" boycotts. Like the oil companies aren't smart enough to know that what isn't sold today has an impact on what is used today.

Continuing with the gasoline analogy, what would have an impact would be if people began purchasing more fuel efficient cars (something they are doing) and began using mass transit. But this is not a one-day thing. There is no instant gratification coming.

As for harm's way, I translate that into "I am not going to stop making money at the races without a long term advantage for doing so." And that is as it should be.

Simply put, the tracks have no reason to change, at least not in favor of the horse player. This is never more evidient than the fact that takes are going up as often (or more so) than down.


Dave

[twindouble]

Karl,

I do not see that we are in disagreement.

Actually, you helped make some of my points.

There is no organization for horse players that has any clout. Hence, a boycott under the current circumstances has no power. It is almost as silly as those "don't buy gasoline today" boycotts. Like the oil companies aren't smart enough to know that what isn't sold today has an impact on what is used today.

Continuing with the gasoline analogy, what would have an impact would be if people began purchasing more fuel efficient cars (something they are doing) and began using mass transit. But this is not a one-day thing. There is no instant gratification coming.

As for harm's way, I translate that into "I am not going to stop making money at the races without a long term advantage for doing so." And that is as it should be.

Simply put, the tracks have no reason to change, at least not in favor of the horse player. This is never more evidient than the fact that takes are going up as often (or more so) than down.


Dave

I see you your point of view but what no one wants to discuss is what it take to operate a track today compared to the earl 60's forward. I know one thing the smaller take out back in those days went a heck of lot further. Like wise, when I made a good score back then, that money would buy me a lot more in goods and services. I would think the tracks have had reason to change concidering the latter. They have two new products to boost handle, online wagering and regretfully rebates otherwise they are selling the same product way back when with higher overhead. Your right, the player like labor today has very little power when it comes to such things.

I would be curious to find out how many new players online wagering and slots brought into the game including the rate of growth in handle overall. When ever I go to OTB I see the same old faces and not many young ones. Not a good indicator I would think.

[karlskorner]

Name one orginazation for Sports Bettors, aside from GA, and thats for losers. You mention the take out going up more so than down, so is the price of gasoline, food, movies, cars, insurance etc. etc. etc. Let the owners of gas guzzlers move down to an economy gas user and they just will vist the places they stop going to in the SUV, this is America, land of the free. Enjoy what you got with the "take out" and make the most of it.

[rrbauer]

Karl wrote:
"I believe it was Richard Bauer that started a "boycott" of Magna a year or so ago, never really got off the ground, maybe a few 100 went along with it for awhile, but guranteed they are back playing Magna tracks."

Comment:
I did start a boycott of Magna in Jan 2004. Over 650 people put their names on our boycott list at our web site. Many more (some fairly well connected in the game) contacted me privately to express support but wouldn't put their names on the boycott roster for fear of retribution due to their positions.

Magna changed their posture in Jan 2005 with regard to opening up their tracks to all account-wagering firms, not just XpressBet; and, they voiced an attitude of cooperation with the other tracks in the industry. These were two major issues that started the boycott. Hence, we suspended the boycott when Magna capitulated.

As to effectiveness, I can point to the decline in handle on a year-over-year basis from 2003 to 2004. Over $60 million at just SA and GP. For sure, that decline wasn't entirely due to the boycott. Indeed some of it was due to Magna's own action of shutting out bettors if they didn't embrace XpressBet. But, $60M is $60M, and it was Magna changing their tune that caused us to suspend the boycott; not, the lack of support for the boycott.

Finally, Karl, I can only say that you can't make a difference if you don't try. It's easy to spend your life on the fence pissing on those of us who are trying to make something better in order for everyone to benefit. You should come off the fence sometime and lay yourself down for something that extends beyond yourself. You might fail. You might not. Hey! You're a horseplayer....you know about risk.

[Dave Schwartz]

Karl,

Actually, the price of gas relative to income levels has not actually gone up. (That has been in the news lately.)

Of course, things that are controlled by a free market should naturally find their "correct" price. The problem is that horseplayers do not change their wagering habits based upon the takeout.


Richard,

While there has been a drop it takeout, I am not sure that it can be contributed to your 650 players either. IMHO it would take perhaps ten or even one hundred times that many players to make a significant impact.

Meantime, I decided I would join them since I couldn't beat them. <G>


Regards,
Dave Schwartz

[classhandicapper]

I don't think lowering the take will materially increase the total gambling pie. I think the gambling pie is more or less related to incomes, entertainment preferences, social acceptance etc...

What lowering the take might do is shift the gamling pie around a little - from sports to horses, from lotteries to horses etc....

Government often doesn't have a vested interest in shifting the gambling dollar around. I'd guess that government gets a bigger piece of the gambling dollar from lotteries than it does from racing (net of everything).

So if anything, "raising" the take might make some sense to GOVERNMENT if it drives some people (some dummies) away from horses and to lotteries. Even if they lose some horse players, they may still more than make up the difference from increased lotteries.

Obviously this is an oversimplified model and I'm not advocating raisng the take. I'm just pointing out that most horseplayers presume that lowering the take will increase everything without thinking of where those new dollars being bet on horses may come from (other forms of gambling) and who could lose as a result. The result is not always attractive for everyone.

[Dave Schwartz]

CLass,

That was well-stated.

The cross-over from lottery to horses is distant at best. Sports to horses is another story.

Lowering takeouts may in fact, raise handles, because it allows the losers' (and I don't mean that in an insulting fashion) money to churn longer. Remember that most people play with some money and when that money is gone they replenish it, but perhaps not until pay day, the first of the month, next bonus check, whatever.

Truthfully, if I was a track owner, I would offer an on-track rebate of some significance. In other words, if you bother to come to the track and bet a few extra dollars you get a better deal. (The track should recoup much or all of this in parking, hot dogs, tip sheets, and other concession profits.)

One could even expand this thinking to simulcast wagering at the track.


You know, "daily loss" is something that the casinos in Nevada take very seriously. Casinos in Reno (where I live) are in trouble because for years they have "sold price." (About a month ago, at a gaming meeting in Las Vegas, a casino executive said that the buffet, a long-time Las Vegas tradition, is going away. His quote was that they expect to make a profit on every phase of the operation now.)

Anyway, in Reno the average daily loss was listed in the paper as a measly $89 per person! Comparing that to a large Indian casino in California (that lies between the customer and Reno), showed that the average daily loss was $289 in the Indian casino! No wonder we are in trouble.

Of course, at the track it is handle that matters rather than loss. I would bet (no pun) that the average daily handle of the on-track player is quite a bit less than the bet-from-home player.

Richard, do you think that this has a lot to do with why the tracks' business model typically doesn't work so well?


Dave Schwartz

[karlskorner]

Your reference to gas prices and income levels and how they even out. Consider this, in the late 30's and 40's the "averge" Joe was making $50.00 a week and making $2.00 wagers at Belmont ( and there were crowds ). Today the "average" Joe is pulling down $1000.00 a week and "STILL" making $2.00 wagers at Belmont. If we use your analysis of gas prices and income heard on the news, than the tracks have every right to raise the mmimun wager to $50.00 ( I can hear the moans all the way down here in S.Fla,). It took a lot of balls to make five $2.00 wagers in 1939. RRBauer accuses me of sitting on the fence, hardly, I contribute daily to the items I mentioned that started this thread. I consider the "take out" as part of doing business and "enjoy" every moment of every day I am at the track.

[highnote]

Very interesting thread, Gentlemen. I look forward to hearing more of what you have to say.

[ryesteve]

Actually, the price of gas relative to income levels has not actually gone up. (That has been in the news lately.)
Must've been Fox...

I don't know about you, but gas was barely more than a buck a gallon 4 years ago, and my income sure as heck hasn't tripled since then...

[Dave Schwartz]

Steve,

Long term, apparently gas was more expensive in the '70s.

At least that is what they keep saying on TV.
(Hey, I don't make the news, I just report it. <G> Okay, so I'll never be Walter Cronkite.)


Dave

PS: I rarely watch Fox.

[Dave Schwartz]

Karl,

Again, I don't believe we are in disagreement.

Your opinion, as always, is well-stated and thought provoking.


Dave

[JackS]

Lets dream a little. These tracks need to take a few tips from Vegas.
First change,- free admisssion and free scratch sheet(people wiil bet names, numbers, and favorite jocks). People will spend money if they don't have to pay to get in. Second- Reduce the grandstand area by about half and in the other half ,install some heavy duty carpet. Third- Install some student type seating ala LV books and charge a nominal fee for these seats. Fourth- Besides the usual snack bars, open up 3-4 upscale quick food cafe's (Chic'Filet, Boston Market types). Fifth- Open 3-4 small botique shops(must be unique to downtown malls). A small mall that offers car rentals, hotel reservations and a travel agency. Sixth- Roving waitresses who will bring you coffee or a drink if thats your wish.
I must be outta my mind to think anything that resembles the above scenerio could every become reality but then ,I can dream can't I?

[ryesteve]

Steve,

Long term, apparently gas was more expensive in the '70s.
There was an embargo! That's hardly the basis for a comparison to today.

[twindouble]

Lets dream a little. These tracks need to take a few tips from Vegas.
First change,- free admisssion and free scratch sheet(people wiil bet names, numbers, and favorite jocks). People will spend money if they don't have to pay to get in. Second- Reduce the grandstand area by about half and in the other half ,install some heavy duty carpet. Third- Install some student type seating ala LV books and charge a nominal fee for these seats. Fourth- Besides the usual snack bars, open up 3-4 upscale quick food cafe's (Chic'Filet, Boston Market types). Fifth- Open 3-4 small botique shops(must be unique to downtown malls). A small mall that offers car rentals, hotel reservations and a travel agency. Sixth- Roving waitresses who will bring you coffee or a drink if thats your wish.
I must be outta my mind to think anything that resembles the above scenerio could every become reality but then ,I can dream can't I?

Jack; There's some good ideas above Esp the seats, better food service. The mall can be attached but seperate from the track and add a facility for kids. I can remember taking the wife and kids to the track packing a picnic, folding chairs, something they could play with but they had to sit outside the fence in the parking lot and I would be on the other side. There really wasn't much to keep the kids occupied so I always cut it short, made my bets and left. That was different story when the fairs started their meets, kids could mingle in, enjoy the food, rides, games, so we made a day of it. Sure there's a lot things they could do but I would want them to keep the track in it's triditional format and decorum.

T.D.

[rrbauer]

David:

Don't understand your reference to "drop in takeout" vis-a-vis my last post. I was referring to Magna's drop in handle. I make no claims as to the effectiveness of our boycott. I was told by a person who is very close to Magna that we were considered a "major annoyance". That was enough for me!

[karlskorner]

If all the tracks dropped their "takeout" to 10 percent across the board and the Off Shores offered 10 percent rebates, there would still be a group of plaAyers whio can't cut it and demand additional cut backs. It's THEM not me. As I mentioned on another post at our local Indian Casino it's difficult to find a parking space on any given day after 4 PM ( they are building an additional 5 story parking garage ).My reasoning for this, it's neither Art or Science ( or craft as I like to call it ) to play the slot machines.

[Dave Schwartz]

Richard,

Don't understand your reference to "drop in takeout" vis-a-vis my last post. I was referring to Magna's drop in handle. I make no claims as to the effectiveness of our boycott. I was told by a person who is very close to Magna that we were considered a "major annoyance". That was enough for me!

My mistake. I meant drop in rebates.


Dave

[AngelEyes]

Let's not use the words, "if" and "perhaps" to describe whether Pinnacle piggybacks. There should not be a shadow of a doubt with players that they will exceed your bets if you start beating them for serious money.

Review my posting on this thread if you want to know why I feel so strongly about this:


http://www.paceadvantage.com/forum/showthread.php?p=204630#post204630

From my experience Pinnacle accepts bets right up to post time for most tracks. Why not place your bets as close as possible to post time ? Wouldn't this resolve issue you claim above ?

[AngelEyes]

Can someone list examples of rebate shops discussed above ? Since I am from Canada I am mostly interested in the ones that cater to non US citizens.

[Rook]

AngelEyes wrote:

"From my experience Pinnacle accepts bets right up to post time for most tracks. Why not place your bets as close as possible to post time ? Wouldn't this resolve issue you claim above ?"

No. This would only resolve the issue if they had a guy sitting around waiting for me to bet, so that he could phone in my wager to a rebate shop. You can be sure that Pinnacle is a little more sophisticated than that. My $1 Superfecta bets were routed through Pinny's computers into the pools as $2 bets.

[Geekyguy]

Some various comments:

1. A lower takeout hurts the track because it creates more winners, and those winners take their money from the pools before the track has a chance to get it from the losing players. If anything, the takeout should remain where it is or maybe be 14 percent like it is at NYRA.

2. The real problem is the low price (3-5 percent) that is charged for the signal. This is where the tracks have to close the gap, charging more like 11-13 percent.

3. The way it's set up now, racetracks and OTBs are at a disadvantage because they have to pay overhead, whereas a rebate shop can give that money back to the public. The game needs to be repriced so that OTBs can compete (see 2 above for charging more for the signal).

[GameTheory]

1. A lower takeout hurts the track because it creates more winners, and those winners take their money from the pools before the track has a chance to get it from the losing players. If anything, the takeout should remain where it is or maybe be 14 percent like it is at NYRA.By that logic they should set the takeout to 100% so they can get all the money right away. You're forgetting the fact that no one is being forced to bet. Lowering the takeout would create more winners AND losers -- it would create new bettors.

And then there is the matter of the increased churn keeping both winners and losers around longer, but we've already covered that...

[Rook]

GeekyGuy wrote:

"1. A lower takeout hurts the track because it creates more winners, and those winners take their money from the pools before the track has a chance to get it from the losing players. "

Maybe you belong to an S&M club where people prefer to be in pain, but I've got to tell ya, most normal horseplayers are far more inclined to bet more when they are winning. When I've had a great day betting, I am 98% likely to be back in the trenches the following day. When I've had my clock cleaned, there is a 50% chance that I will spend my day doing something else like tinkering with my handicapping program or working on my portfolio of stocks.

High takeouts drove me away from the horses for 9 years. The tracks made bupkis from me. Big rebates (ie. lower takeouts from my perspective) were the key that allowed me to be successful enough to take a leave of absence from my job. Now the tracks make a substantial amount of money off of me, even at their crappy 3% rate.

[Geekyguy]

GeekyGuy wrote:

"1. A lower takeout hurts the track because it creates more winners, and those winners take their money from the pools before the track has a chance to get it from the losing players. "

Maybe you belong to an S&M club where people prefer to be in pain, but I've got to tell ya, most normal horseplayers are far more inclined to bet more when they are winning. When I've had a great day betting, I am 98% likely to be back in the trenches the following day. When I've had my clock cleaned, there is a 50% chance that I will spend my day doing something else like tinkering with my handicapping program or working on my portfolio of stocks.

What good is it if you bet more if bettng more only leads you to remove more and more money from the pools? The track would much rather nobody won at all. If you "win" $200 in rebate money a week after breaking even, that $200 is coming from losing players who would otherwise churn each other to death. Drop the takeout to 7 percent and the sharks would cut into the track's profits too much. At 17 percent, only the best of the best can make money. I'm profitable without rebates, but having them is like that scene in Batman:

JOKER (to his assistant): "Can I borrow your gun?"

ASSISTANT: <hands gun to Joker>

JOKER: <BLAM!>




[High takeouts drove me away from the horses for 9 years. The tracks made bupkis from me. Big rebates (ie. lower takeouts from my perspective) were the key that allowed me to be successful enough to take a leave of absence from my job. Now the tracks make a substantial amount of money off of me, even at their crappy 3% rate.

The tracks make less off of you than they would off of a group of losing players who churned it out of existence. Any money you win is money that wasn't churned and money the track could have had all of.

The only reason it's possible to make money at the track is that the losers don't know when to give up. In theory, everyone who can't win shouldn't be playing.

[MichaelNunamaker]

Hi Geekyguy,

You wrote "The tracks make less off of you than they would off of a group of losing players who churned it out of existence. Any money you win is money that wasn't churned and money the track could have had all of."

That is true. However, that isn't exactly the choice the tracks have. I read a while back about some research about how people react to winning wagers. The observation was the smaller the payoff, the more likely churn was to happen. Also, the less likely it would be someone would bet. The larger the payoff, the lower the probability of churn, but the greater probability people would wager. You can see part of this in pool sizes. Win pools are almost always greater than place pools which are then in turn greater than show pools.

The other part says that people will draw money out when there are large payoffs. But professional's don't do that. If a professional with a 3% profit margin takes down a 5K trifecta, he will be putting most of that money back into wagering. A casual better might take a vacation with the 5K.

At least for the exotic pools, I would argue that it is possible that the tracks are far ahead of the game by having the pros take down as many of the large payoffs as possible.

As far as the show pools are concerned, yes, you are almost certainly correct.

Mike Nunamaker

[yak merchant]

Horseracing (and dog racing for that matter) is in trouble plain and simple. Maybe not today, but soon enough.

Even if the tracks and horsemen wanted it, the lawmakers aren't about to allow an economic experiment that takes revenue away while THEY are in office even if it is in the best interest of the industry and the state in the long run.

Plus the whole idea of customer service is completely absent. I've been treated better at the DMV. If I'm the average gambler that loses $500 dollars a month (who thinks they can win in the long run), why should I pay to park, pay for a crappy xerox sheet, pay to sit in a smoke infested barn where a large percentage of the clientele have serious hygiene issues. When I can save that $500 dollars a month, and every three months get two cheap tickets to Vegas, get a hotel room for the weekend, and have a thousand dollars to blow where I get treated like a Middle Eastern Prince.

The average age of the horseplayer is a full fledged card carrying member of AARP. I'm 32 and when I used to go to the track regularly I was basically the youngest regular there, the only people there younger than me, were one day types with dates that bet $2 a race while they drink beer and attemp to get in their dates pants, or the the GA crowd that comes on pay day and bet on horseracing because it's the only thing running daily. With the ability to get your pay check direct deposited, your money Netellered right into a sports book, and sports on TV every night; why go get treated like crap by disgruntled tellers when you can get your fix right at home on your couch.

And for me the over-riding reason Horseracing is in trouble comes down to this. While the professional horseplayer does exist, the idea that the game is beatable is pretty much disappearing. The math on winning at horseracing is bad enough, but like it was mentioned before, show me one person who is making cash hand over fist as an example? Just so I know that it is possible. Poker has it's examples, Stock Investing has it's examples, and you can even find a few Lem Banker types to prove it can be done with Sports betting. But by the nature of Pari-mutuel wagering even the professionals that do exist try to keep profiles on the same level as Witness Relocation transplants. Nobody says, I'm quitting my job to be a professional horseplayer these days. Poker player, Football handicapper, or day trader maybe, but anybody smart enough to actually make money at horseracing that doesn't already play horseracing as a love, isn't going to sit down one day and say, "gee I really think I can beat this 20% takeout I'll spend the next 5 years coming up with a viable betting system". Lots of other easier ways to make money with half the stigma. And if for some reason they do, they move to Hong Kong.

The average American thinks Survivor is mentally stimulating. The challenge of figuring the puzzle out is what drove many of us to horseracing . I really think the next generation who grew up with nothing but no logic action video games and Real World reruns as stimulus aren't really going to take up racing for the love of the game or the puzzle for that matter. Seems that Poker is the new puzzle for the next generation. Which makes sense, less up front planning, and lots of spur of the moment gut insticts. Real life fast action video game for money. The tracks main customers are dying off and the birth rates aren't meeting replenishment levels. Within 15 years, the Cyberathelete games will replace the Belmont on prime time TV. Mark my words.

The arguments that always pop up about how the industry is fine, handle is going up, new tracks are being built, etc, do have some valid points, but just like I wouldn't want to own stock in a company with no real long term business plan, I'm not betting on the industry. Horse racing will be fine for quite a while, and then all the problems will hit a tipping point (Book by Malcolm Gladwell is an interesting read by the way). It won't be short fields, it won't be being the welfare bastard child of slots, it won't be insurance, it won't be rising labor costs, it won't be rebate shops, it won't be one thing. It will be all these things and when it goes it will go in a bad way. The degenerate gamblers that show up day in and day out at the tracks, that have given the industry and track owners the attitude towards takeout and customer service, will either die off or find a new easier more customer friendly form of action. Only thing stopping that for years now is the fact that horseracing happens every day. And that is already changing if you ask me. Why do you think they are scheduling College Football on Tuesdays, Wednesdays, Thursdays, Fridays, and Saturdays now? To avoid conflicts with study hall of course.

[Rook]

GeekyGuy wrote:
"Any money you win is money that wasn't churned"

Any money that I win goes towards supporting my ability to be a full time horseplayer. When things are going well, I bet in the $10,000 a day range. When I've had a losing streak, I spend a week or several weeks, updating databases and formulas and testing to verify if the changes have been improvements. Pool sizes at tracks like Remington take a substantial hit when I'm on the sidelines.

If I have a losing streak that stretches into several months and eats away at $40k of my $180k profit, I will once again walk away from this game and spend my time devising a stock market and/or baseball betting system. The remaining profit won't ever make its way back into the pools.

It's true that my betting has made the pools slightly more efficient and has taken some cash out of the losing horseplayers pockets but as you've stated, "losers don't know when to give up" and I'm sure that the degenerate gamblers have found a way to come up with another source for their $2 bets.

Mike wrote:
"If a professional with a 3% profit margin takes down a 5K trifecta, he will be putting most of that money back into wagering"

This is absolutely correct. The money I have put back into the pools is 10 times more than the profit I have made.

If track managment had any brains, they'd be making $1,000 on my large wagering days but as many of us have pointed out on this thread, their stupidity has resulted in such a meager cut.

Yak Merchants post was excellent. I agree that horse racing is in deep trouble and deperately needs to get rid of the negative stigma.

One guy on my teaching staff, Rob, has a buddy that works at Woodbine. When Rob told him that I spent all of the 2004 summer working on a horse betting program, the Woodbine employee told him that I was a fool because nobody makes money at this game. This was hardly an isolated opinion as I have received tons of unsolicited advice about the dangers in what I was doing. I expect this reaction from the general populace but when I heard this coming from a guy in the business, I was extra determined to prove him wrong.

So, you can imagine the delight I had in showing Rob my first $40k check and sitting him down to look at my monthly Pinnacle summaries. Being able to afford a year off (and if I'm successful more than that) from teaching has certainly elevated horse racing's reputation in my little corner of the universe. Just imagine how popular this game would be if thousands of people were able to quit their jobs and pursue this lifestyle.

So, GeekyGuy when you say that horseracing is better off when there are no winners, I say that your vision is very clouded.

[JackS]

Although a very small bettor, I win small amounts of money all the time. This adds up over a period of a year to be pretty substantial. I live on a very small pension, am able to pay all my bills, buy most of the things I really want and always refund my credit card with much more than the minimum due.
I do not tout my success at horseracing to anyone . Very few would beleive me anyway.
Like the guy in the Progressive Insurance commercial but substitute the question-" Do you profit from horsracing?" answer: "yes" ,reply: " Sure you do"

[highnote]

Some various comments:

1. A lower takeout hurts the track because it creates more winners, and those winners take their money from the pools before the track has a chance to get it from the losing players.

Geeky,
I'm not sure this statement is correct or if can even be varified. It might be the case that the ratio of losers to winners is the same as it has always been. It could be that rebate losers are losing less due to rebates and that on-track losers are losing less because there is more money in the pools making for good opportunities for the "sharp" loser. ( Just because someone loses money does not mean they can't spot a good betting opportunity )

My point is, it's hard to know the truth when statistics are hard to come by. So all we can do is speculate.

I believe tracks benefit from rebates. The decline of racing began long before rebates. Tracks started selling their signals to generate extra revenue. Tracks got a cut of the simulcast betting, too, which was extra revenue. Still, racing was in decline. Then rebate shops came online -- which was made possible by the tracks selling their signals. Bettors started betting huge amounts through rebate shops -- which created even more revenue for racetracks. Many of those bettors were not previously betting when takeout rates were so high. So this is found money for the tracks. Yet racing is still in decline.

I don't know how to solve the problems of the racing industry, but I do not think that cutting off rebate shops is the way to solve them.

[twindouble]

This has been an interesting read, only because I'm getting an idea as to how you all think about racing, gambling and the economics involved.


First let me say, I don't think horse racing will ever go by the wayside, it's to ingrained in our culture, consoladation yes. There's very few small farmers left but we still produce more food than any other country in the world. The rich have allready set the stage for consolidation to happen, just look at the yearling sales and the purses offered today let alone the existance of Magna.

These signels from the tracks are contractual and contracts expire or are made to be broken, if anything won't last I would hope to think it's the rebates as they exist today.


I laugh when anyone tries to define the horse player, the favorite words are degenerate and loser, that's why we get the stigma everyone complains about. We all have to deal with it and it has nothing to do with our ability to handicap or make money. What it does do is seperate in ones mind a class of people that don't stink, at least they don't think they do. Like it's above them to step in dog crap and call the cops because your dog got loose. My, what a perfect world they live in. I got on a bus to Atlantic City, the freaking purfumes were putrid to my nose, I couldn't wait to get off and smell a cigar.
To each his own. There's many differnent type players out there, not just degenerates or losers, I've rushed to the track after work looking and smelling like a loser and on given days wore a 3 piece suit, who's who? I've also known a very successful gambler that wore the same three seasonal outfits that interchanged for years and I might add the same pair of cordovan shoes, more than likey resoled a few times.

Yes, that's right who's who when it comes to success at the horses, we can only trust in what's being said here when it comes to that but this is the ideal place to deceive let alone all the decption that goes on at the track. You can't believe what I've seen some people do and say to convince others they are a winner. Stories to be told some other time but that ego can impress people, win over or kill ones self at the same time. Horse players will never cease to fascinate me. I've always got down with the grunts of this game and I think there's a lot to learn at that level, to just snub it is a mistake. Today who has the time for such human contact, why bother we have our computers but when you lean over and kiss or kick that sucker your in real trouble.:bang:

[midnight]

A guy here in town who plays the horses for a living has a stock answer; when he's asked what he does for a living, he says he's a "futures investor", which is truthful enough, I suppose.

[Rook]

"First let me say, I don't think horse racing will ever go by the wayside, it's to ingrained in our culture,"

I hope you're right but from what I see at my home track, Fort Erie, the place is a shadow of what it was in the late 80s which in turn was a shadow of what it was in the 60s. In the Niagara region, going to the races has gone from a major form of recreation to a fringe event for a few hundred diehards.

"I laugh when anyone tries to define the horse player, the favorite words are degenerate and loser, that's why we get the stigma everyone complains about."

You're right. I feel kinda bad about using the term degenerate. It's a funny sounding word and I used it because I got caught up in the emotion of the post which centered around strictly money issues. One of the people I love most in the world is a degenerate when she is at the track because she only makes show bets on grey horses and/or #6 and will never listen when I try to talk her into betting a decent horse. Despite this obvious character flaw, my 85 year old grandma will always be tops in my book.

"Yes, that's right who's who when it comes to success at the horses, we can only trust in what's being said here when it comes to that but this is the ideal place to deceive let alone all the decption that goes on at the track."

Since I am one of the few people to post actual dollar figures, I feel this is somewhat directed at me, so for those of you who have their doubts about my claims, I'll let CJ verify that I am on the level. This morning I sent him an email that contained my Pinnacle user name and password. I gave it to him because I pulled all of my money out of the account after they coninued to exceed my bets.

"Today who has the time for such human contact, why bother we have our computers but when you lean over and kiss or kick that sucker your in real trouble."

Yeah, going to the track is a very pleasant day, as I find it very relaxing to be able to focus on one track and have 25 minutes to think about what I am doing instead of my usual 5. My 9 month old is off to a promising start as she screams with excitement when the horses arrive, so hopefully a love for the sport will develop and we will have hundreds of fun family days together in the future.

[twindouble]

"Yes, that's right who's who when it comes to success at the horses, we can only trust in what's being said here when it comes to that but this is the ideal place to deceive let alone all the decption that goes on at the track."


Rook, I was talking in general with that statement myself included , not directed at anyone and I do trust what you say is true and I hope likewise.

Your not the first one to use the words degenerate or loser, I've used them myself but they are a minority at the track and online. My point was, you can't tell a book by it's cover so I'm a little sensitive to labeling people.

Like I said, "who's who." I'll be dammed if I know, because like me no one truly knows who we are in this medium. Trust and benefit of doubt is all we have. In the real world we can make better dicisions as to who we are dealing or comunicating with and that goes without saying.


Good luck,

T.D.

[Pony Up FAQ]

You can wager through www.ponyupbet.com (http://www.ponyupbet.com) they offer many tracks with rebates as high as 11.60%!

[Rook]

You can wager through www.ponyupbet.com (http://www.ponyupbet.com) they offer many tracks with rebates as high as 11.60%!

Why don't you accept Canadian customers?

[midnight]

From my experience Pinnacle accepts bets right up to post time for most tracks. Why not place your bets as close as possible to post time ? Wouldn't this resolve issue you claim above ?

No. The bets are auto-forwarded to the rebate shop (sometimes with a piggyback). If the shop refuses the bet (race betting closed), Pinnacle sends "Race is closed" to you. It's all handled by computers.

[twindouble]

Lets dream a little. These tracks need to take a few tips from Vegas.
First change,- free admisssion and free scratch sheet(people wiil bet names, numbers, and favorite jocks). People will spend money if they don't have to pay to get in. Second- Reduce the grandstand area by about half and in the other half ,install some heavy duty carpet. Third- Install some student type seating ala LV books and charge a nominal fee for these seats. Fourth- Besides the usual snack bars, open up 3-4 upscale quick food cafe's (Chic'Filet, Boston Market types). Fifth- Open 3-4 small botique shops(must be unique to downtown malls). A small mall that offers car rentals, hotel reservations and a travel agency. Sixth- Roving waitresses who will bring you coffee or a drink if thats your wish.
I must be outta my mind to think anything that resembles the above scenerio could every become reality but then ,I can dream can't I?

Hi Jack; Just read this on the DRF, don't know if you caught it or not but it supports some of what you said.


Promotion lures big crowd

"Santa Anita drew an ontrack crowd of 8,487 for Wednesday's program, a figure that is almost double the typical weekday audience. The track offered free admission, racing programs, and issues of Daily Racing Form to members of its Thoroughbreds group, a program for frequent customers. The customers were notified of the promotion in a recent mailing.

The large crowd surprised Sherwood Chillingworth, the executive vice president of the Oak Tree Racing Association, which conducts the fall meeting at Santa Anita. Track officials had expected an increase of 1,000 to 1,500 customers, Chillingworth said. According to Chillingworth, the promotion could be offered again before the end of the meeting on Nov. 6."

T.D.

[highnote]

Hi Jack; Just read this on the DRF, don't know if you caught it or not but it supports some of what you said.


Promotion lures big crowd

"Santa Anita drew an ontrack crowd of 8,487 for Wednesday's program, a figure that is almost double the typical weekday audience. The track offered free admission, racing programs, and issues of Daily Racing Form to members of its Thoroughbreds group, a program for frequent customers. The customers were notified of the promotion in a recent mailing.

The large crowd surprised Sherwood Chillingworth, the executive vice president of the Oak Tree Racing Association, which conducts the fall meeting at Santa Anita. Track officials had expected an increase of 1,000 to 1,500 customers, Chillingworth said. According to Chillingworth, the promotion could be offered again before the end of the meeting on Nov. 6."

T.D.

If I was in charge of racing at SA and I was able to double the crowd with this promotion then I'd offer this promotion everyday until the crowd stopped responding -- assuming the extra 4 thousand people covered the cost of the promotion.

[PaceAdvantage]

You can wager through www.ponyupbet.com (http://www.ponyupbet.com/) they offer many tracks with rebates as high as 11.60%!

You get one free warning. No unauthorized advertising is allowed on this board. Not fair to the folks who pay money (currently through Google, but soon to expand) to advertise.

[rokitman]

Pony up, Pony up!

I had to say it.

[GameTheory]

If I was in charge of racing at SA and I was able to double the crowd with this promotion then I'd offer this promotion everyday until the crowd stopped responding -- assuming the extra 4 thousand people covered the cost of the promotion.The previous Wednesday was actually slightly bigger, but that was opening day, wasn't it? Compared to every other weekday, their on track handle was up 500K! And the off-track handle did not go down. I'd say it paid for itself, yes.

Unless I'm off-base and all Wednesdays at Santa Anita are big for some reason...

[JackS]

TD- It sounds like they dipped their big toe in to test the water. Maybe a year or two from now, they'll have one entire foot in.

[twindouble]

TD- It sounds like they dipped their big toe in to test the water. Maybe a year or two from now, they'll have one entire foot in.

Sounds to good to be true, they should expand their promotion to online players. As it stands now, it's like we don't exist.


T.D.