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View Full Version : Pinnacle...Neteller..Are we missing the point?


waytogo
01-18-2007, 10:45 AM
OK, so now the **** has really hit the fan, but why?

US tracks rake out around 20% of the para market.

Pinny and the others saw a market here and became COMPETETIVE with the rebates.

Why did the tracks not fight with a more competetive stance and reduce their rake?

Stupidty and greed would be my answer!

If a single track reduced their rake to 5% then they would only have to increase their pools fourfold to make as much money.

Pinny and the others could not then compete!!

Money would stay here in the US... offshore problem sorted!!!

I know as a bettor that I would vastly increase my bets with any track that had a 5% rake. It would not be as low as fourfold, more likely 20 fold.

The days of a $15,000 win pool at the Mountain would be a thing of the past.

If legislation would have been passed to cap the rake out of para pools from the tracks then this would have effectivly put the offshores out of business and save us all a ton of tax dollars in chasing down and arresting people that run legitimate businesses.

Non US people would open accounts with US based betting companies because they would be more COMPETITIVE. Not only would the US money stay here, but also foreign capital would also land on our shores.

Purses would increase, the tax levied on the rake would increase, the racetracks profits would increase. We would have a higher capital yeild which in itself would attract more investors.

The 20% to 5% is only an example here, but is very viable.

Some will say that there is only so much money to go round and some tracks may have to close.... That would be wrong... I know as a bettor that I would increase my investments by more than 4x... and thats just me.. What about the NEW investors AND the ones returning to track betting instead of the offshores?

If tracks cant compete in their own business then they should be running some other business.

Just my 8c worth here (see even my 2c has gone 4x).

Valuist
01-18-2007, 12:04 PM
I agree with you but unfortunately, the fools in the legislature don't. They don't care about the public. In their minds, anyone who gambles is a sick addict and has no idea or cares what the takeout is. If they could pass legislation to try to raise the takeout, I'm sure they would. Meanwhile, people with brains (Pinny and the rebaters offshore) saw a great opportunity and the tracks and politicians didn't like the fact the money was escaping them. Rather than improve their model, they've tried to squash the competition like a bully. Apparently the bullying approach works.

Robert Fischer
01-18-2007, 12:20 PM
Even offering competitive rebates and an online betting interface would keep most of us on-shore. Who really wants to send their money out, if they could get a competitive offer at home??

The horse racing industry is operating on almost zero marketing. Most of the industry is not run like a company looking to grow, it is run at minimum overhead. Much may actually be in the hands of the wealthy breeding industry, because the racing industry is running their business as if it were a short-term investment.

Strange also, that no arrangements could be made with a business like Pinnacle that has in place a powerful and profitable infrastructure.

alysheba88
01-18-2007, 12:25 PM
You can be sure that takeout will only be increased, and sooner than later.

HEY DUDE
01-18-2007, 12:43 PM
I agree. The goverment is like a kid in a candy store. The money is the candy. They cant resist. They take as much as they can as often as they can.

ezrabrooks
01-18-2007, 12:48 PM
OK, so now the **** has really hit the fan, but why?

US tracks rake out around 20% of the para market.

Pinny and the others saw a market here and became COMPETETIVE with the rebates.

Why did the tracks not fight with a more competetive stance and reduce their rake?

Stupidty and greed would be my answer!

If a single track reduced their rake to 5% then they would only have to increase their pools fourfold to make as much money.

Pinny and the others could not then compete!!

Money would stay here in the US... offshore problem sorted!!!

I know as a bettor that I would vastly increase my bets with any track that had a 5% rake. It would not be as low as fourfold, more likely 20 fold.

The days of a $15,000 win pool at the Mountain would be a thing of the past.

If legislation would have been passed to cap the rake out of para pools from the tracks then this would have effectivly put the offshores out of business and save us all a ton of tax dollars in chasing down and arresting people that run legitimate businesses.

Non US people would open accounts with US based betting companies because they would be more COMPETITIVE. Not only would the US money stay here, but also foreign capital would also land on our shores.

Purses would increase, the tax levied on the rake would increase, the racetracks profits would increase. We would have a higher capital yeild which in itself would attract more investors.

The 20% to 5% is only an example here, but is very viable.

Some will say that there is only so much money to go round and some tracks may have to close.... That would be wrong... I know as a bettor that I would increase my investments by more than 4x... and thats just me.. What about the NEW investors AND the ones returning to track betting instead of the offshores?

If tracks cant compete in their own business then they should be running some other business.

Just my 8c worth here (see even my 2c has gone 4x).

20% to 5%? Do you even know what makes up the takeout?

Ez

waytogo
01-18-2007, 01:11 PM
20% to 5%? Do you even know what makes up the takeout?

Ez

Yes...As said in my original post it saw only an example.

Different states have different levels of tax (here in Tx is 1%).

Cash goes to purses, and many different others and the course usually around 10%.

To make the 5% then all would have to reduce their %ages by 75%.

Like I said when the pool increases 4x then they would still make the same money. When it increases by even more then they all make more.

More cash is returned to the bettor which in turn gives the bettor more cash to recirculate. At 20% the bettor money is dead money at 5% then the bettor can re-invest and the money turns over again and again.

To give an example of this. In the UK there WAS a 4% tax on track and 8% off course tax... Just for the pleasure of having a bet.

This was crippling the industry.

Along came the internet and offshore accounts with ZERO tax.

Sound familiar?

The UK government took action.... Sound familiar?

They ABOLISHED betting tax.

Now the bettor had more cash to play and the cash came back to the UK and now the government make MORE money than it did before from the increased profits from the bookmakers and therefore more tax revenue.

By not killing the capital with high takeout (the tax) the money was re-invested and attracted even more money from new investors.

cj
01-18-2007, 02:04 PM
The government takes 50% of lottery handle, so they probably will try for more from racing as time goes on.

garyoz
01-18-2007, 02:59 PM
The only political advantage that racing has is the "agriculture" or horseman component. I doubt they will increase takeout because a downturn in the industry would hurt horseman and breeders. Any increase in takeout would kill the industry--and jobs and rural businesses. I think the legislatures would turn to taxing cainos or legalizing the casino industry before they would increase takeout rates in most cases. For example, Albany would not want to kill the heavily subsidized (from takeout) New York Breeding Industry.

On the downside, Supply-side economics is dead in the current polticial era--it makes too much sense and decreases the influence of the hand of government--so you won't get takeout decreases, even if it makes economic sense.

I'd argue you'll see status quo in track takeout--not sure how the rebate industry will evolve. It all depends on the tracks willingness to comingle offshore betting. I guess track comingling with offshore sites is still legal?

boomman
01-18-2007, 08:12 PM
Valuist wrote: I agree with you but unfortunately, the fools in the legislature don't. They don't care about the public. In their minds, anyone who gambles is a sick addict and has no idea or cares what the takeout is. If they could pass legislation to try to raise the takeout, I'm sure they would. Meanwhile, people with brains (Pinny and the rebaters offshore) saw a great opportunity and the tracks and politicians didn't like the fact the money was escaping them. Rather than improve their model, they've tried to squash the competition like a bully. Apparently the bullying approach works.



You are 100% right on the button Valu: This is EXACTLY what happened. The people that passed the legislation to bully the offshores could absolutley care less about the horseplayer!:ThmbDown: Boom

jballscalls
01-18-2007, 08:30 PM
You are 100% right on the button Valu: This is EXACTLY what happened. The people that passed the legislation to bully the offshores could absolutley care less about the horseplayer!:ThmbDown: Boom

Boomer, what are u doin posting on these boards! get handicappin you got work to do! LOL

trying2win
01-18-2007, 08:46 PM
Horseplayers who won't speak out to the U.S. Government birdbrain advocates of this anti-gambling legislation, are not 'victims'...they are being 'volunteers'.

T2W

boomman
01-19-2007, 12:25 AM
jballscalls wrote: Boomer, what are u doin posting on these boards! get handicappin you got work to do! LOL

Jason: You're absolutley right!! Had 6 horses @ 12x1 or higher run 3rd today!! Grrrr!!:( But, was able to cash a few live tickets to make the dismal tournament start not sting quite so much!! LOL Boom