REBATES

[karlskorner]

I have never paid much attention to the posts on rebates, my thinking has always been if I have to depend on a rebate to show a profit than my margin is way to narrow to continue to play.

An interesting post over on Derby list made me decide to post it here.

"A player alluded to the problem with rebates in one of his posts, that it changes the essence of the pari-mutual model. Bigger players getting rebates isn't a matter of them getting back money, it's a matter of them getting BETTER PRICES on each race than I do.

This isn't the case in Vegas where even the world's biggest blackjack bettor still gets 3-to-2 on a blackjack. In racing, though the bigger player gets
8.8-1 on a same horse that everyone else gets 8-1 on.

Thanks to that fat 8 percent rebate when a whale bets $1,0000 to win he's really only betting $920.00 to win, so when that horse pays $18, the whale collects $9000 for an about 8.8-1 return.


This becomes unfair when you realize that the 8 percent rebate allows the whale to change the odds for everyone else but themselves.

Let's say there's a horse at 6-to-5 (would pay $4.40 to win) that a whale bets so the horse is now even money. The whale invests $920.00 to win $2,000 for just under 6-to-5 return. So even though he changed the odds for everyone else, he still gets about the same price. That's unfair. (end)

I am glad somebody explained "rebates" to my understanding.

[DeanT]

I am glad somebody explained "rebates" to my understanding.

You might want to throw that poster out with the bath water. Try googling Maury Wolff or David Cuscuna. They will help you understand rebates in a non-judgmental, scientific way.

[Dave Schwartz]

Dean,

Finally, someone who gets it!

Thanks for posting those names. Here are some links to the articles connected to those two gentlemen.


Regards,
Dave Schwartz


http://www.harnesstracks.com/2004_annual_meeting/Rebates_And_Takeout.htm

http://www.nytimes.com/2004/04/26/sports/othersports/26WHAL.html?ex=1398312000&en=9e1a1d255353f861&ei=5007&partner=USERLAND

[DanG]

You might want to throw that poster out with the bath water. Try googling Maury Wolff or David Cuscuna. They will help you understand rebates in a non-judgmental, scientific way.
Good post Dean, :ThmbUp:

Thanks for the links David.

[ddog]

KK

I suggest you did capture the gist of the need perfectly in your first line.

The question I think must be asked is :

We will take as a given that 95% or gtr of players don't have your edge SO,
do you wish more of those players to remain in the pools or drop out as they go bust sooner without a rebate?

If you pull rebates from all(never happen) then if the whales go away you are betting into Evangline Downs sized pools, that's tough on the straight end of things.

It seems so simple.
Like anything else - reward what you wish to have more of.
I think you want more money(dumb)-(like mine) in your pools.

It's not finally about the ROI/ODDS but can you bet enough to win enough to make it worth your time.

I am trying to think of an activity involving placing "bets" on much of anything where over the long haul(at least) the whale can't enhance his chances/odds/return over the greater masses of smaller players??

[foregoforever]

You might want to throw that poster out with the bath water. Try googling Maury Wolff or David Cuscuna. They will help you understand rebates in a non-judgmental, scientific way.

So you're suggesting that I should rely on the opinions of two "whales", who are the beneficiaries of rebates, for non-judgmental, scientific analysis?

[singunner]

When the odds go down on one horse, they go up on another, whether there's a rebate or not.

[karlskorner]

I just knew that all the math/science people would point out the short commings of the mans article. But I am stuck on the last paragraph of that article. If the whale and I both wager on the same horse when it was 6-5, his $1000 wager drives the odds down to even money and I get even money for my wager if it wins, yet he gets almost 6-5 because of his 8 percent rebate. Somehow that is just not my understanding of pari-mutual wagering. I read the articles Dave pointed out and I forget who is who, but if my return was that narrow, I make sure my wife had a job to support me when the ice cracks.

[facorsig]

whale bets $1,0000 to win he's really only betting $920.00 to win

I just couldn't let that one slide by....quite an advantage I would say

The reality is that rebates are not only the domain of the very limited number of $1,0000/race bettors. I know one person earning very attractive rebates $15 at a time. 50% of his profits are derived from the rebate and the other 50% from profitable play, and there's nothing illegal about it. Amazing opportnities abound with some of the products of PA sponsors!!

[DeanT]

So you're suggesting that I should rely on the opinions of two "whales", who are the beneficiaries of rebates, for non-judgmental, scientific analysis?

No, I listen to smart people who have walked a mile in this game. Because they know more than I. Then I followed.

I had a good idea that lower prices benefit us all, after all I went to a grocery shop once. I bought a potato, because I wanted one with my steak I was going to bar-b-que. The guy in front of me bought a bag of them and got a unit price under mine. I wondered why I was subsidizing his buy, but then I realized that I paid a gazillion dollars to get a business degree, so I used it and knew that him buying that bag helped my price be lower.

Those of us who now live it know that rebates have saved this game. Horsemen and owners (which I am one) would be running for ribbons and we, as dddog said above, would be betting $600 show pools without them at most tracks. Rebate players are not against you, you have taken money off them time and time again. Join PTC, or some other place that gives you cash rewards and find out. You will help us all.

[DanG]

No, I listen to smart people who have walked a mile in this game. Because they know more than I. Then I followed.

I had a good idea that lower prices benefit us all, after all I went to a grocery shop once. I bought a potato, because I wanted one with my steak I was going to bar-b-que. The guy in front of me bought a bag of them and got a unit price under mine. I wondered why I was subsidizing his buy, but then I realized that I paid a gazillion dollars to get a business degree, so I used it and knew that him buying that bag helped my price be lower.

Those of us who now live it know that rebates have saved this game. Horsemen and owners (which I am one) would be running for ribbons and we, as dddog said above, would be betting $600 show pools without them at most tracks. Rebate players are not against you, you have taken money off them time and time again. Join PTC, or some other place that gives you cash rewards and find out. You will help us all.
Dean,

You’re on a roll my friend! :ThmbUp:

Who cries for Goldfarb when he steps out and crushes an exacta in NY only to lose and inflate the pool wildly?

We should be encouraging large players not force them into day trading IMO.

[Dave Schwartz]

Dean,

Your logic is irrefutable.

Thanks.


Dave

[DeanT]

I like you, love this game Dan (I have read your posts for a long time). The greatest game in the world as far as I am concerned.

And there are so many ways to play. I read that show and place betting is "stupid". I know someone that makes money doing that.

I read that you can't win with databases. I believed that once, now I bought one of the folks heres' program.

I also read some people that say you can't win without one. I know someone that has won two of three years by watching a horse walking short in the ring and betting one with a "goose rump" in a MSW, without a form!

Reading that rebates are somehow against us? Anything that attracts people to this great game of ours is a good thing. The more people and more money we attract, the better we all are, imo. The biggest misconception of rebate players is that they all win. Hooey! They dont, they just bet piles because of them.

I think because we all lose so much, we think like conspiracy folks in this game and have to have someone to blame. If someone wins they are a liar, or they are cheating, or getting a nasty "rebate". We are conditioned to worry about others because we get our head kicked in so much.

People who send it in, people who are reselling at a lower price to help people have a chance to win, people who are innovators like Ian at PTC, Ron Geary at Ellis and others who stand up and be counted we owe two words - thank and you.

Now I gotta get ready for Laurel. Another innovator who is at least trying.

Did I say I love this game? :)

[foregoforever]

I had a good idea that lower prices benefit us all, after all I went to a grocery shop once. I bought a potato, because I wanted one with my steak I was going to bar-b-que. The guy in front of me bought a bag of them and got a unit price under mine. I wondered why I was subsidizing his buy, but then I realized that I paid a gazillion dollars to get a business degree, so I used it and knew that him buying that bag helped my price be lower.

Nice story, but horses ain't potatoes.

By the same logic, casinos could give better odds to "blackjack whales" and get increased handle and possibly be better off financially. That doesn't make it fair.

The math that karlskorner cited in his original post is correct. Rebate players are playing a different game, with a different odds board and payouts, than non-rebate players, and it distorts the parimutuel system as the winners no longer split the pool, minus takeout, EQUALLY. You can argue whether this is good for the industry as a whole all you want -- and you may be correct, with your business degree vs. my engineering one -- but it doesn't change the math, and the excursion into the business model is just a smokescreen to obscure that math.

I don't really care myself. But one of these days, a politician who opposes internet wagering on horseracing is going to latch on to rebates, and its potential for big-time money laundering, and it's "whale vs. shrimp" aspects, and all hell is going to break loose. Internet wagering, if it survives, will be regulated to the last penny just like on-track wagers, and the effects of that will make us all poorer.

[bigmack]

But one of these days, a politician who opposes internet wagering on horseracing is going to latch on to rebates, and its potential for big-time money laundering, and it's "whale vs. shrimp" aspects, and all hell is going to break loose.
Balderdash. Loot, particularly large loot, is water to the pool. You're swimming in the same pool and the ones that are right walk off with the spoils. The ones that are wrong walk off without. Don't forget where the rebate comes from.

[Edward DeVere]

They will help you understand rebates in a non-judgmental, scientific way.

I am interested in all arguments regarding the rebate question, pro and con. ( The majority of the arguments, pro and con, seem to be based on naked self-interest. Quite a shock, eh? Still, I persevere.)

To that end, can you explain to me, in terms as precise as possible, what is judgmental and non-scientic about the example posted to lead off this thread?

Thanks!

[Bob G]

As near as I can figure it out:

The rebates come from the rebate shop's end of the takeout. The big bettor may be getting 6-5 odds on a horse, where everybody else is getting even money, but everybody else would still be getting even money if the whale did also, so the bettors aren't out anything.

One other thing to consider is that if the big bettor needs the rebate to make a profit, then the action he puts into the pools has a negative expectation and should therefore help the profit margin of those who can make a profit before any rebates.

Did I miss something there? Sorry if this is obvious to everybody.

[DeanT]

Hi Edward,

I know that the person who wrote that post was judgmental for one reason: I could have wrote it in that tone three years ago. I thought rebates (as a horse owner) were the devil. That is precise as I can get with that one. :)

Non-scientific? It is that, imo. Maury Wolff and Cuscuna share their knowledge of what they are and what they do with a hypothesis, and use empirical data to prove or disprove their case. That person says something that is in effect true, but it does not tell the whole story, so it is (forgive me) nothing more than worthless obfuscation.

That's the best I can do.

I agree with you that people have their biases and self-interests in mind on this issue. That is why I like to look at the math and empirical evidence behind the effects of something like rebates, rather than get stuck in the minutae of racetrack, horsemen, or horseplayer demagoguery.

[K9Pup]

I have never paid much attention to the posts on rebates, my thinking has always been if I have to depend on a rebate to show a profit than my margin is way to narrow to continue to play.

An interesting post over on Derby list made me decide to post it here.

"A player alluded to the problem with rebates in one of his posts, that it changes the essence of the pari-mutual model. Bigger players getting rebates isn't a matter of them getting back money, it's a matter of them getting BETTER PRICES on each race than I do.

This isn't the case in Vegas where even the world's biggest blackjack bettor still gets 3-to-2 on a blackjack. In racing, though the bigger player gets
8.8-1 on a same horse that everyone else gets 8-1 on.



Actually that whale blackjack player DOES get "better prices". He gets free rooms, free flights and his butt wiped when he craps depending on how big a whale he is.

I get rebates, but I don't consider myself a "whale". But I can tell you that because of rebates I play wagers that I KNOW are marginal ahead of time. Without the rebates those wagers might be +/- 5%. But with the rebates they become profitable. Does that help me? Sure. But it also helps the non-rebate guy by adding money to the pools that wouldn't normally be there.

AFA people saying "if I have to rely on rebates to win then maybe I should quit playing" I say HUH????? Would anyone go to buy a car and turn down a discount because without the discount they wouldn't be able to afford the car???

Rebates are nothing more than a discounted take. That discount comes from the profit margin of the ADW site. Rebates are a good thing, for ALL of us.

[cj]

For me, rebates allow me to bet more horses that I otherwise would pass. It doesn't mean I can't win without them. Betting more horses and races helps everyone.

[foregoforever]

For me, rebates allow me to bet more horses that I otherwise would pass. It doesn't mean I can't win without them. Betting more horses and races helps everyone.

I'll take you at your word on the first sentence. But you could just as easily bet the same and make more money (or lose less, as the case might be). How do I know which is which?

Remember "trickle-down economics"? That tax cuts for the rich benefit everyone because the rich spend or invest all the money and it eventually finds its way down to the lower classes? All the pro-rebate arguments remind me of this. There may be an element of validity in the theories, but I'm not inclined to take the word of the recipients for it.

Every argument for rebates could just as easily be applied to an across-the-board reduction in takeouts, which would increase handle while keeping everyone playing the same game.

[cj]

Every argument for rebates could just as easily be applied to an across-the-board reduction in takeouts, which would increase handle while keeping everyone playing the same game.

I don't know of a single player that would be against takeout reduction to a level that allows them to have the same effective takeout they are getting with rebates. However, other than a scattered few limited items, do you see any effort by the racing industry to lower takeout?

[parlay]

The whole discussion about rebates is getting very
repetitive. This is a regurgatation of posts from
2 and 3 years ago.
The mispricing of the simulcast fee opened the door
for this practice. It is clear that a higher fee is in order.
The world has changed and racing must change with it.
IT IS OBVIOUS THAT THE TAKEOUT RATES IN THIS
INDUSTRY ARE WAY TO HIGH. CUT THEM ACROSS
THE BOARD FOR ALL.
If a ADW then wants to compete for clients they can
offer better service, platforms etc.
And last but not least, IF I CAN'T WATCH IT I WILL
NOT BET IT.

[K9Pup]

I'll take you at your word on the first sentence. But you could just as easily bet the same and make more money (or lose less, as the case might be). How do I know which is which?

I don't understand. How could he bet the same and make MORE money?


Remember "trickle-down economics"? That tax cuts for the rich benefit everyone because the rich spend or invest all the money and it eventually finds its way down to the lower classes? All the pro-rebate arguments remind me of this. There may be an element of validity in the theories, but I'm not inclined to take the word of the recipients for it.


Again "rebates" are nothing more than a reduced take, except some people either choose to not get them or don't qualify. So I don't see any way that rebates can hurt.


Every argument for rebates could just as easily be applied to an across-the-board reduction in takeouts, which would increase handle while keeping everyone playing the same game.

EXACTLY!! If all the tracks reduced their take to the level rebate players receive then the rebate shops would go out of business (sorry Ian). But we also know that isn't going to happen.

[Premier Turf Club]

As near as I can figure it out:

The rebates come from the rebate shop's end of the takeout. The big bettor may be getting 6-5 odds on a horse, where everybody else is getting even money, but everybody else would still be getting even money if the whale did also, so the bettors aren't out anything.

One other thing to consider is that if the big bettor needs the rebate to make a profit, then the action he puts into the pools has a negative expectation and should therefore help the profit margin of those who can make a profit before any rebates.

Did I miss something there? Sorry if this is obvious to everybody.

You have it exactly. The rebates we pay come out of OUR pockets, not yours. As an ADW we are entitled to keep the takeout on any wagers we accept, less the host fee we pay to the track.

If you bet a $100 super at MNR we keep about $18 after the host fee, tote fees, taxes, etc. If we give you a 15% rebate ($15 in this case) that $15 comes out of our share, our profits. In other words, we make you partners in a sense, in our business. We then have to use what's left, the $3 here, to cover our overhead and the remainder, we keep as profit. If we DIDN'T play rebates NONE of the players would end up with more, WE would. Our gross margins would approach the non-rebaters.

Rebates help EVERYONE. They keep players alive longer, and help the pools grow. All studies I have seen indicate that every dollar returned to the player creates an additional $7 in handle. Handle shared by the track (host fee), the horsemen (larger purses), the state (pari-mutuel tax) and other players (bigger pools to play into). How can it be bad for me to share my profits with you?

And yes Bob, most rebate players have a negative expectation without the rebate.

[Premier Turf Club]

EXACTLY!! If all the tracks reduced their take to the level rebate players receive then the rebate shops would go out of business (sorry Ian). But we also know that isn't going to happen.

No offense taken, but I'll point out the fallacy in that argument, a common one by the way.

The poll I put up (what would happen if there were no more ADWs) pretty much turned out like I thought it would; 70% of the respondents said their handle would fall by 50% or more.

A dramatic cut in the take would be terrific for the players (myself included) but ADWs would cease to operate. While the reduced take would incent some of those 70% in the above to come back to the track, my guess is a majority of us would still bet less than half of what we had been with ADWs.

One of my closest gambling partners lives 200 miles from a racetrack. The take could be zero, he's still not going out more than a couple of times a year. Another friend had 3 kids under 10 years old and a wife that works too. He's not stopping into the OTB on the way back from work to spend 3 hours playing some races from MNR, and he sure as hell isn't getting permission from the MRS. to spend any more than a handlful of Saturdays at the track. It's not just that the game has changed over the years, the WORLD has changed. We work longer hours (and many of our wifes now work too) and conversely have much less free time. We also spend much more time on our's children's activities (my wife spends most of her week driving my son to tennis, the zoo, baseball, etc. When I was a kid my parents opened the front door and told me to play outside). We couldn't spend the time at a simulcast facility even if we really wanted to, just don't have the time.

Don't misunderstand me. I'm not arguing this in self-interest. The tracks don't give a damn what I think one way or the other so I'm not trying to persuade them or disuade them from doing anything. The Ellis PK4 experiment is a noble one, a great idea offered up by a good guy, a fellow horseplayer. The reality is Ron's taking it in the shorts on this. Handle isn't up, many simulcast outlets (ADW and otherwise) refuse to take the wager, and he can't make anything on the host fee. This is much more complicated than simply cutting the take across the board.

As for me, I've been in this business a grand total of one year and I'd simply go back to corporate America.

[Imriledup]

I have never paid much attention to the posts on rebates, my thinking has always been if I have to depend on a rebate to show a profit than my margin is way to narrow to continue to play.

An interesting post over on Derby list made me decide to post it here.

"A player alluded to the problem with rebates in one of his posts, that it changes the essence of the pari-mutual model. Bigger players getting rebates isn't a matter of them getting back money, it's a matter of them getting BETTER PRICES on each race than I do.

This isn't the case in Vegas where even the world's biggest blackjack bettor still gets 3-to-2 on a blackjack. In racing, though the bigger player gets
8.8-1 on a same horse that everyone else gets 8-1 on.

Thanks to that fat 8 percent rebate when a whale bets $1,0000 to win he's really only betting $920.00 to win, so when that horse pays $18, the whale collects $9000 for an about 8.8-1 return.


This becomes unfair when you realize that the 8 percent rebate allows the whale to change the odds for everyone else but themselves.

Let's say there's a horse at 6-to-5 (would pay $4.40 to win) that a whale bets so the horse is now even money. The whale invests $920.00 to win $2,000 for just under 6-to-5 return. So even though he changed the odds for everyone else, he still gets about the same price. That's unfair. (end)

I am glad somebody explained "rebates" to my understanding.

Actually, its the other way around. If a 2 dollar bettor bets on a 3-1 shot, he gets an 8 dollar mutuel. If a whale (without a rebate) bets 5,000 to win, he knocks down that 8 dollar mutuel to, depending on the track and the size of the win pool, to, lets say for arguments sake, 7.00.

So, the 2 dollar bettor gets an 8 dollar win price, but the whale gets a 7 dollar win price. he 'wins' 1 dollar on every 2 dollars wagered of 'his own money'. The rebate just gives him back that money he 'should' have won and gives him incentive TO wager that 5,000 to win.

[ezrabrooks]

Nice story, but horses ain't potatoes.


I don't really care myself. But one of these days, a politician who opposes internet wagering on horseracing is going to latch on to rebates, and its potential for big-time money laundering, and it's "whale vs. shrimp" aspects, and all hell is going to break loose. Internet wagering, if it survives, will be regulated to the last penny just like on-track wagers, and the effects of that will make us all poorer.

I don't know if a politician opposing internet wagering will be the trigger, or if it will be some kind of class action lawsuit based on a consumer protection angle...but something is getting ready to happen.

Ez

[DeanT]

I'd like to see them stop giving John Daly a free room in Vegas when he comes to lose a few hundred K in slots :)

The day volume discounts are stopped in North America is the day we better start buying S and P puts.

[HorseRun]

I love the idea of rebates, however i have NO idea if they are fair or not....i would think they are as they should increase the churn, thus thats a good thing but something makes me think that if PTC is able to make 18% (and i only use PTC as an example because he is man enough to post here and i have nothing against PTC) just for taking a bet, being a middle man, than the business model MUST be INCORRECT and the Takeouts are TOO HIGH .... thus the Takeouts can AND should be dropped on ALL WAGERS AT ALL TRACKS, to a level where PTC is ONLY able to make that same 3% he is trying to run his business on, if he is content on giving away 15% then he must be able to run his business and the 3%, however he just will not have the "advantage" of promoting REBATES and his customers will have to be good enough TO WIN ON THEIR OWN at the track with LOWER TAKEOUTS AND NO REBATES!!

[Foolish Pleasure]

Right where else but at the extremely anti competitive welfare set aside program known as gambling in the US would some idiot that gives a place $2 in business expect the same deal as someone giving a place $20 in business.



Let me understand this properly,
even though your lousy $2 bets actually cost the track money you fully expect the same deal as a Dave Schwartz who puts through 10's of millions of dollars?

[trigger]

I don't know if a politician opposing internet wagering will be the trigger, or if it will be some kind of class action lawsuit based on a consumer protection angle...but something is getting ready to happen.

Ez

I get the same feeling especially when CRW (the type with special access to the tote system) is combined with rebates and millions in bets per individual.

[bigmack]

I don't know if a politician opposing internet wagering will be the trigger, or if it will be some kind of class action lawsuit based on a consumer protection angle...but something is getting ready to happen.
Consumer protection? :lol::lol::lol: You should do stand-up comedy.

Go over the posts in this thread again and get in touch with where the rebate comes from. It will enlighten your bulb.

[cj]

If the pricing model was fixed and takeout reduced, it wouldn't end online betting sites. It would cause them to actually give a shit about the customers and COMPETE for them.

Let us say that PTC, Winticket, and Youbet all get the same price, say 4% of the take. Now, none of them can afford to give rebates. So, how are they going to draw customers? Innovation and top notch customer service will set some apart. I know most in the industry will need a dictionary to look those things up.

[trigger]

Right where else but at the extremely anti competitive welfare set aside program known as gambling in the US would some idiot that gives a place $2 in business expect the same deal as someone giving a place $20 in business.
Let me understand this properly,
even though your lousy $2 bets actually cost the track money you fully expect the same deal as a Dave Schwartz who puts through 10's of millions of dollars?

This is not a business; this is a betting pool.
Definition of Pari Mutuel betting:
"A system of betting on races whereby the winners divide the total amount bet, after deducting management expenses, in proportion to the sums they have wagered individually."

Seems to me there is an explicit assumption that each winning bettor is supposed to get paid off in proportion to how much they have bet in a pari-mutuel system.
So, I would say that a $2 bettor is not an idiot to question whether this is really happening with rebates..

[bigmack]

Seems to me there is an explicit assumption that each winning bettor is supposed to get paid off in proportion to how much they have bet in a pari-mutuel system.
So, I would say that a $2 bettor is not an idiot to question whether this is really happening with rebates..
Read Ian's post #25. That's what we call the fact of the matter. Now if your able to comprehend where the rebate comes from you'll never have to sit wherever it is that you sit and wonder if rebates make the world unfair for you.

[parlay]

If the pricing model was fixed and takeout reduced, it wouldn't end online betting sites. It would cause them to actually give a shit about the customers and COMPETE for them.

Let us say that PTC, Winticket, and Youbet all get the same price, say 4% of the take. Now, none of them can afford to give rebates. So, how are they going to draw customers? Innovation and top notch customer service will set some apart. I know most in the industry will need a dictionary to look those things up.

CJ Once again you have ot it exactly right!
YOU AS UNCOMMONLY LOGICAL AS YOUR FIGURES.

What level of betting deserves a rebate?
Why is a million the right number?
What if i like to play certain meets, for example
Turfway, and i am willing to bet 15k a day. I may only
be willing to give that action to that track for 60 days a year. Should i be precluded from qualifying for a rebate?
The only equitable solution is across the board takeout
reduction.
Has anyone bothered to attempt to quantify the number
of new players and dollars that would be attracted to this fairer game?

[K9Pup]

No offense taken, but I'll point out the fallacy in that argument, a common one by the way.

The poll I put up (what would happen if there were no more ADWs) pretty much turned out like I thought it would; 70% of the respondents said their handle would fall by 50% or more.

A dramatic cut in the take would be terrific for the players (myself included) but ADWs would cease to operate. While the reduced take would incent some of those 70% in the above to come back to the track, my guess is a majority of us would still bet less than half of what we had been with ADWs.



Yeah you are right. Personally without online wagering I would quit myself.

[Premier Turf Club]

If the pricing model was fixed and takeout reduced, it wouldn't end online betting sites. It would cause them to actually give a shit about the customers and COMPETE for them.

Let us say that PTC, Winticket, and Youbet all get the same price, say 4% of the take. Now, none of them can afford to give rebates. So, how are they going to draw customers? Innovation and top notch customer service will set some apart. I know most in the industry will need a dictionary to look those things up.

That would be bliss for us. I think we stack up pretty well on customer service and innovation. I'd find it hard to believe that there are many that try harder than I do.

All we've ever asked for was a level playing field. Let the market decide.

[Dave Schwartz]

This is not a business; this is a betting pool.
Definition of Pari Mutuel betting:
"A system of betting on races whereby the winners divide the total amount bet, after deducting management expenses, in proportion to the sums they have wagered individually."

Trigger,

Tell me - Do you feel the same way about Federal income tax? Do you feel that everyone should pay the same flat percentage? Or do you feel that those who make more should pay a higher percentage?


Regards,
Dave Schwartz

[trigger]

Trigger,

Tell me - Do you feel the same way about Federal income tax? Do you feel that everyone should pay the same flat percentage? Or do you feel that those who make more should pay a higher percentage?


Regards,
Dave Schwartz

I don't know what difference it makes but I feel that the current Federal progressive income tax system approach is ok (rates could be lower though) but the federal tax system has nothing to do with how a pari-mutuel pool is supposed to work. They both are set up under different rules.

[trigger]

Read Ian's post #25. That's what we call the fact of the matter. Now if your able to comprehend where the rebate comes from you'll never have to sit wherever it is that you sit and wonder if rebates make the world unfair for you.

And where does Ian's profit for rebates come from? If you can comprehend that, then , maybe you could also comprehend that pari-mutuel pools were originally set up with underlying rules and assumptions that did not take into account modern day ADW rebates and just ,maybe, these rebates have tilted the advantage to rebatees at the detriment to non-rebatees.
Comprendo?

[DeanT]

Boy I never knew some people hated Ernie Dahlman in the pools so much :)

Keep betting Ernie. Dang it, with your rebate money allowing you to send it in so hard and pay for purses, I bet you are personally responsible for field size being 8 instead of 7 at some places.

Thanks Ernie. We appreciate it :ThmbUp:

[foregoforever]

Tell me - Do you feel the same way about Federal income tax? Do you feel that everyone should pay the same flat percentage? Or do you feel that those who make more should pay a higher percentage?

Dave, it's not a question of what it should be.

My state has legalized parimutuel wagering. The enabling regulations in most all states use the same term, as does every track. It's been the way tracks operated for decades. In fact, if you go way back, it was the adoption of the parimutuel system that got horseracing "un-banned" back in the early days of the 20th century.

Rebates clearly break that model, yet none of the proponents will admit it. Instead, they shift the question to how it should be (as you did), or they make up some "track takeout" vs. "ADW takeout" nonsense that's immaterial.

I don't necessarily disagree that larger wagerers should get some consideration. The payout rates on dollar slots are often higher than on quarter machines. But that's written into the law, the information is freely available, and any person is free to choose which machines they play.

In contrast, tracks only show a single set of odds and payouts. On-track customers don't have access to rebates. The access to rebate shops, legally, varies from state to state. My state requires that all ADW's be licensed, and no rebate shops have been. I realize that enforcement is difficult, and I'm not above ignoring a stupid law. But if we all keep using the internet to circumvent the laws, sooner or later it's going to bite us in the ass. My state is on the verge of suing a well-known ADW now.

I despise CDI for a variety of reasons, even before TrackNet's anti-competitive methods in recent months. But I do agree with the concept that tracks should have control of their games, including the takeout, and they should be paying a fixed percentage of an ADW's contributed handle as a commission. Then tracks would compete for business on the basis of their takeout rates and quality of racing, and ADW's would compete for business on the basis of their services and ease of use.

The business model is all screwed up, and the solution should be to fix the underlying problems, rather than attempt to put patches on top of it - like rebates - that introduce a new set of inequities.

[parlay]

Dave, it's not a question of what it should be.

My state has legalized parimutuel wagering. The enabling regulations in most all states use the same term, as does every track. It's been the way tracks operated for decades. In fact, if you go way back, it was the adoption of the parimutuel system that got horseracing "un-banned" back in the early days of the 20th century.

Rebates clearly break that model, yet none of the proponents will admit it. Instead, they shift the question to how it should be (as you did), or they make up some "track takeout" vs. "ADW takeout" nonsense that's immaterial.

I don't necessarily disagree that larger wagerers should get some consideration. The payout rates on dollar slots are often higher than on quarter machines. But that's written into the law, the information is freely available, and any person is free to choose which machines they play.

In contrast, tracks only show a single set of odds and payouts. On-track customers don't have access to rebates. The access to rebate shops, legally, varies from state to state. My state requires that all ADW's be licensed, and no rebate shops have been. I realize that enforcement is difficult, and I'm not above ignoring a stupid law. But if we all keep using the internet to circumvent the laws, sooner or later it's going to bite us in the ass. My state is on the verge of suing a well-known ADW now.

I despise CDI for a variety of reasons, even before TrackNet's anti-competitive methods in recent months. But I do agree with the concept that tracks should have control of their games, including the takeout, and they should be paying a fixed percentage of an ADW's contributed handle as a commission. Then tracks would compete for business on the basis of their takeout rates and quality of racing, and ADW's would compete for business on the basis of their services and ease of use.

The business model is all screwed up, and the solution should be to fix the underlying problems, rather than attempt to put patches on top of it - like rebates - that introduce a new set of inequities.

Well stated!!

[Kelso]

I don't know if a politician opposing internet wagering will be the trigger, or if it will be some kind of class action lawsuit based on a consumer protection angle...but something is getting ready to happen.


So long as ADWs offer the same rebates, on the same terms, to all comers ... I don't see any grounding for consumer protection claims.

I do expect, however, successful "equal protection" Class Actions against many states. The internet, almost by definition, crosses state lines. It isn't right that people in different states have different levels of access to internet wagering.

I also expect the tracks to get nailed, hard, for attempting to control the downstream price of their product; i.e., refusing to sell their signals to some ADWs simply because those buyers will discount the resale with rebates.

[betovernetcapper]

Whenever a bet is made a certain amount, typically between 17 and 30 percent, is set aside or taken out. This is called the take out. This take out percentage is the same for all bets from $2 to $2,000,000. This is not complicated, the take out is the same percentage for Bill Gates and a homeless person.
.
When a race has been declared official, what are called mutual prices are posted. The mutual price is the payment for a winning bet plus the stake amount, usually $2. So if a horse won at 2 to 1 it would have a mutual price of $6.00 (2*2)+2. If the homeless person bet $2 on this horse he would receive $6. If Bill Gates had bet $2000 he would receive $6000. All parties receive the same mutual price.
.
Which brings us to rebates . A rebate is a type of bonus or reward. It can take the form of free past performances-streaming videos-toasters-betting vouchers or cash. Rewards are offered on track and off. Every ADW offers some type of rebate or reward. It's up to each player to select the rewards they find most attractive. If someone plays $100@month then the best rebate might be BrisBets because of the free past performances. If someone plays a couple of hundred, he might find the YouBet rewards program effective particularly as a kind of Xmas account. If someone bets a little more then PTC's cash rewards might be the way to go. I don't know what whales should do because I've never been in that league and haven't spent a great deal of time worrying about where/how to bet $1,000,000+ a year.
.
The rewards don't just fall from the sky-they must be paid for. All rebates/rewards come from the amount I mentioned before-the take out , which everyone pays at the same rate. None of us has any choice in the takeout. All of us have choices regarding our rewards.
.
Choose wisely

[parlay]

Whenever a bet is made a certain amount, typically between 17 and 30 percent, is set aside or taken out. This is called the take out. This take out percentage is the same for all bets from $2 to $2,000,000. This is not complicated, the take out is the same percentage for Bill Gates and a homeless person.
.
When a race has been declared official, what are called mutual prices are posted. The mutual price is the payment for a winning bet plus the stake amount, usually $2. So if a horse won at 2 to 1 it would have a mutual price of $6.00 (2*2)+2. If the homeless person bet $2 on this horse he would receive $6. If Bill Gates had bet $2000 he would receive $6000. All parties receive the same mutual price.
.
Which brings us to rebates . A rebate is a type of bonus or reward. It can take the form of free past performances-streaming videos-toasters-betting vouchers or cash. Rewards are offered on track and off. Every ADW offers some type of rebate or reward. It's up to each player to select the rewards they find most attractive. If someone plays $100@month then the best rebate might be BrisBets because of the free past performances. If someone plays a couple of hundred, he might find the YouBet rewards program effective particularly as a kind of Xmas account. If someone bets a little more then PTC's cash rewards might be the way to go. I don't know what whales should do because I've never been in that league and haven't spent a great deal of time worrying about where/how to bet $1,000,000+ a year.
.
The rewards don't just fall from the sky-they must be paid for. All rebates/rewards come from the amount I mentioned before-the take out , which everyone pays at the same rate. None of us has any choice in the takeout. All of us have choices regarding our rewards.
.
Choose wisely

Very few of us, if any, i free to choose to whom we
give our business!

[DanG]

Whenever a bet is made a certain amount, typically between 17 and 30 percent, is set aside or taken out. This is called the take out. This take out percentage is the same for all bets from $2 to $2,000,000. This is not complicated, the take out is the same percentage for Bill Gates and a homeless person.
.
When a race has been declared official, what are called mutual prices are posted. The mutual price is the payment for a winning bet plus the stake amount, usually $2. So if a horse won at 2 to 1 it would have a mutual price of $6.00 (2*2)+2. If the homeless person bet $2 on this horse he would receive $6. If Bill Gates had bet $2000 he would receive $6000. All parties receive the same mutual price.
.
Which brings us to rebates . A rebate is a type of bonus or reward. It can take the form of free past performances-streaming videos-toasters-betting vouchers or cash. Rewards are offered on track and off. Every ADW offers some type of rebate or reward. It's up to each player to select the rewards they find most attractive. If someone plays $100@month then the best rebate might be BrisBets because of the free past performances. If someone plays a couple of hundred, he might find the YouBet rewards program effective particularly as a kind of Xmas account. If someone bets a little more then PTC's cash rewards might be the way to go. I don't know what whales should do because I've never been in that league and haven't spent a great deal of time worrying about where/how to bet $1,000,000+ a year.
.
The rewards don't just fall from the sky-they must be paid for. All rebates/rewards come from the amount I mentioned before-the take out , which everyone pays at the same rate. None of us has any choice in the takeout. All of us have choices regarding our rewards.
.Choose wisely
Another excellent post in an excellent thread IMO. :ThmbUp:

[Premier Turf Club]

On-track customers don't have access to rebates.

You make very intelligent points, but I must take exception to your statement about on-track patrons not having access to rebates.

Absolutely, unequivocally untrue. I know for a fact that many tracks quietly under the table rebate their best customers. You are correct in that a rebate won't be offered to everyone, but the rebates offered to these players can be as high as 10%. I personally know a few that get them (some are customers of ours), and a track executive or two have told us that they offer them to their best on-track customers to "level the playing field."

Now why this has to be done so hush-hush is beyond me.

[betovernetcapper]

It's true unless you live in the Isle of Man, your options aren't unlimited, but we all have some. :)

[DanG]

On-track customers don't have access to rebates.
While I don’t agree, you made several valid points in your post. This one however needed a little clarification.

For many years Kentucky has rolled out the red carpet to a couple whales and given them perks to play on track. Its common knowledge among those around the game.

I’m not criticizing it in the least BTW. In fact I applaud it, as NYRA should have sent a limousine to Ernie Daulman’s door for example and shined his shoes instead of losing him to Nevada.

Oops...i think I see where Ian [PTC] just posted the same thing...Oh well, as Gilda Radner would say..."Never mind". :D

[Bob G]

Turfway was one of the first to offer rebates. I can't remember the name of the man, but it was in the trade papers from at least 20 years ago.

The problem, as parlay said, is that we don't all have the same choices of where to bet. I live in Nevada. My legal choices of betting at home are limited to phone accounts for three Vegas racebooks and Philadelphia Park (phone betting only). The racebooks don't offer rebates (they have some player rewards, but they aren't directly transferable to cash), and Philadelphia Park's "rebate" is $25 per $25,000 worth of action (one tenth of one percent). If I could legally play PTC, I'd be doing so, and if Pinnacle was still available to U.S. customers, I'd be using it. As it is, I can't legally bet NYRA, and I can't legally get rebates that amount to anything of value.

[Topcat]

On the issue of rebates and "fairness"-the emphasis is wrong here-don't fault the rebate players for taking advantage of rebates, put pressure on tracks to offer rebates for all or reducing take out. Saying it is unfair is as silly as saying that those who bought better stocks, real estate or mutual funds have an unfair advantage. In many ways they do. They have more money and maybe more smarts.

Let me offer another silly comparison, perhaps more down to earth. The person who buys most of his groceries at a 7-11 is at an unfair advantge to those who buy at a Supermarket or discount store. To rail against a person saving money by buying at a Supermarket would be seen by most as silly-perhaps because the food industry is a good example of lots of competition in an industry and almost everyone can choose to buy at a Supermarket or convenience store.

The horse racing industry by contrast does nto have free competition, and while not a strict monopoly, is pretty close to a oligopoly-limited entry due to govt regulation, limited competition and lots of price control and what woudl pass for price fixing in a competitive industry.

The best way to influence an oligopoly is to vote with your dollars or break them up (rebates in a way do this). Hence I am in favor of rebates whether I can take full advantage of them or not.

[Foolish Pleasure]

pretty close to an oligopoly?
it is a federally enforced regional monopoly. Nevada is the largest set aside program in human history.
it comes with all the super inefficient problems that all heavily influenced state business comes with.


guy bets .50cents in superfectas,
uses the same online technology,
or in the case of a live patron,
the same teller,
same resources as guy betting $10,000,


only difference, guy betting fifty cents just paid a dime,
while guy betting $10000 just paid two thousand dollars for the same exact service.

[DeanT]

Excellent post. Maybe people will think twice saying things are "unfair" when they realize that they paid 30 cents to make their $2 win bet, while a guy paid $30 to make the exact same bet for $200.

[PittsburghPhil]

Which brings us to rebates . A rebate is a type of bonus or reward. It can take the form of free past performances-streaming videos-toasters-betting vouchers or cash. Rewards are offered on track and off. Every ADW offers some type of rebate or reward. It's up to each player to select the rewards they find most attractive. If someone plays $100@month then the best rebate might be BrisBets because of the free past performances. If someone plays a couple of hundred, he might find the YouBet rewards program effective particularly as a kind of Xmas account. If someone bets a little more then PTC's cash rewards might be the way to go. I don't know what whales should do because I've never been in that league and haven't spent a great deal of time worrying about where/how to bet $1,000,000+ a year.
.
The rewards don't just fall from the sky-they must be paid for. All rebates/rewards come from the amount I mentioned before-the take out , which everyone pays at the same rate. None of us has any choice in the takeout. All of us have choices regarding our rewards.
.
Choose wisely

Be careful what you wish for!

If rebates are a bonus or a reward, then you can't use gambling losses to offset them the way you could if they were parimuteul payoffs. That means if you are getting a 10 percent rebate, you bet $1 million, and get back $100,000 in rebates, those rebates are TAXABLE INCOME. If you own an OTB and your "rebate" comes from the OTB's income, then that income should be taxed as well, before it shifts to the player, or it should be taxed as OTB income for the player, where losses cannot offset it either.

If rebates aren't taxable income, then they are a kickback, which is illegal unless everyone gets one, or price discrimination, where some customers are getting a better price than others, to the point that it has two players playing entirely different games. Comps are not the same, as a free room doesn't change the player's chances of winning the way a rebate does, but comps are also taxable income.

So take your pick: are your rebates an illegal kickback, price discrimination, or taxable income? Has to be one of the three.

[chickenhead]

I don't see why it doesn't make sense to look at the take as a transaction cost, like brokerage fees.

Broker A charges $8 per transaction, broker B charges $100 per transaction, Broker C charges some fixed percentage. The customer decides which services at which cost make the most sense for him. Certainly the difference in fees is not taxable income. As far as price discrimination, I haven't seen a bank yet that doesn't offer a different fee structure based on dollar amount in deposit.

A good measure of how f'ed up things are is that the discount brokers (PTC) actually offer better and richer product than the high cost broker, who can only keep customers by what amounts to strong arm tactics.

[betovernetcapper]

ditto Chickenhead's post

[alydar]

chickehead is correct, rebates are not taxable income. tracks awds etc are not required to file 1099's for them.

[DanG]

I don't see why it doesn't make sense to look at the take as a transaction cost, like brokerage fees.

Broker A charges $8 per transaction, broker B charges $100 per transaction, Broker C charges some fixed percentage. The customer decides which services at which cost make the most sense for him. Certainly the difference in fees is not taxable income. As far as price discrimination, I haven't seen a bank yet that doesn't offer a different fee structure based on dollar amount in deposit.

A good measure of how f'ed up things are is that the discount brokers (PTC) actually offer better and richer product than the high cost broker, who can only keep customers by what amounts to strong arm tactics.
Well said Chick!

http://i96.photobucket.com/albums/l185/compukatz/WooWoo.jpg

[PittsburghPhil]

I don't see why it doesn't make sense to look at the take as a transaction cost, like brokerage fees.

Broker A charges $8 per transaction, broker B charges $100 per transaction, Broker C charges some fixed percentage. The customer decides which services at which cost make the most sense for him. Certainly the difference in fees is not taxable income. As far as price discrimination, I haven't seen a bank yet that doesn't offer a different fee structure based on dollar amount in deposit.

A good measure of how f'ed up things are is that the discount brokers (PTC) actually offer better and richer product than the high cost broker, who can only keep customers by what amounts to strong arm tactics.

Some of the rebates are done on the down-low and are not generally available, while others require a certain level of action which in turn is made more possible by the rebate itself.

Whether or not it's taxable income isn't clear, especially if the gambler is the owner of the OTB as well. Fortunately, we don't have to guess, as one can write to the IRS for an opinion letter stating one way or the other which it is.

Has anyone done that yet?

[betovernetcapper]

Phil
It's fairly simple

1.) You place a bet
.
2.) Your bet wins or loses and your account reflects that transaction
.
3.) You receive a rebate for the amount bet (see 1.) and that transaction is reflected in your account

4.) At the end of the year you report your profits to the IRS

hope this helps :)

[Pace Cap'n]

Phil
It's fairly simple

1.) You place a bet
.
2.) Your bet wins or loses and your account reflects that transaction
.
3.) You receive a rebate for the amount bet (see 1.) and that transaction is reflected in your account

4.) At the end of the year you report your profits to the IRS

hope this helps :)

On the profit thing, not exactly. Assuming you are not a professional gambler, you will report ALL monies (tickets cashed and rebates) received from wagering activities as "other income", which will be included in your adjusted gross income. All losing wagers may be deducted on "Schedule A" of your 1040 as an itemized deduction, up to the amount realized as "tickets cashed". Rebates will remain as AGI with no offsets available.

Otherwise, imagine this scenario...

I make two wagers during the calendar year. Each wager is for $500K. Both horses go off at even money. One wins, while one loses. I get a 10% rebate from the ADW. Does that mean I just made $100K tax free? Not likely.

Didn't mean to pick your post apart, just hoping to clarify a bit.

[betovernetcapper]

:lol: Sorry you said what I meant to say

[Kelso]

I make two wagers during the calendar year. Each wager is for $500K. Both horses go off at even money. One wins, while one loses. I get a 10% rebate from the ADW. Does that mean I just made $100K tax free? Not likely.


You made $50K more on your winner and lost $50K less on your loser. Net $100K is certainly gambling profit, but I think that's what BONC's points #3 and #4 covered. End-of-year statement shows the $100k for your friends in IRS.

[Pace Cap'n]

You made $50K more on your winner and lost $50K less on your loser. Net $100K is certainly gambling profit, but I think that's what BONC's points #3 and #4 covered. End-of-year statement shows the $100k for your friends in IRS.

You might wish to check with a CPA before you file a return using the data as stated above.

[Pace Cap'n]

You made $50K more on your winner and lost $50K less on your loser. Net $100K is certainly gambling profit, but I think that's what BONC's points #3 and #4 covered. End-of-year statement shows the $100k for your friends in IRS.

Please ignore previous post. The intended point was that there is NO gambling profit in my example. One winner, one loser, a wash. However, both items (wagers and cashout) must be reported on a 1040, along with the rebate.

[K9Pup]

Be careful what you wish for!

If rebates are a bonus or a reward, then you can't use gambling losses to offset them the way you could if they were parimuteul payoffs. That means if you are getting a 10 percent rebate, you bet $1 million, and get back $100,000 in rebates, those rebates are TAXABLE INCOME. If you own an OTB and your "rebate" comes from the OTB's income, then that income should be taxed as well, before it shifts to the player, or it should be taxed as OTB income for the player, where losses cannot offset it either.

If rebates aren't taxable income, then they are a kickback, which is illegal unless everyone gets one, or price discrimination, where some customers are getting a better price than others, to the point that it has two players playing entirely different games. Comps are not the same, as a free room doesn't change the player's chances of winning the way a rebate does, but comps are also taxable income.

So take your pick: are your rebates an illegal kickback, price discrimination, or taxable income? Has to be one of the three.

The rebates are MY money originally, not "new" money. So I don't see how they can be taxable. But I DO see the the need to possibly adjust your losing "tickets" total minus the rebate amount.

[betovernetcapper]

OMG! I honestly hadn't thought of it that way. I almost hope I don't show a profit this year so I don't have to deal with this. :)

[Pace Cap'n]

The rebates are MY money originally, not "new" money. So I don't see how they can be taxable. But I DO see the the need to possibly adjust your losing "tickets" total minus the rebate amount.

The rebates were never your money, originally. Initially, your money went towards the purchase of a ticket, both times. Again, good luck trying to sell your position to the IRS.

[Pace Cap'n]

BTW, tax accounting was my profession for a number of years. I'm not blowing smoke here.

[K9Pup]

The rebates were never your money, originally. Initially, your money went towards the purchase of a ticket, both times. Again, good luck trying to sell your position to the IRS.



Both times? Not sure what you mean.

How will the IRS become aware of any rebates? Most sites seem to keep the rebates pretty secretive.


BTW, tax accounting was my profession for a number of years. I'm not blowing smoke here.

BTW I won't be hiring you to do my taxes!! :-)

[PittsburghPhil]

Both times?
How will the IRS become aware of any rebates? Most sites seem to keep the rebates pretty secretive.

It's not just the IRS, but city and state tax agencies as well. We're talking about a LOT of money here that's going unreported, and as we know, tax evasion happens to be a felony.

How will they know? I don't know, maybe they read internet message boards where people brag about how much they're getting in rebates and decide that's probable cause to start unmasking people? Who knows. Maybe a horseplayer got sick of the rebaters having an unfair advantage and was lured by the REWARD MONEY they pay to people who snitch out tax cheats. I mean who knows?

Maybe NYRA is looking for this type of ruling and baited a rebate shop into suing it in bankruptcy court, so it could argue that the money stiffed was a rebate rather than actual winnings? Keep in mind that it would be possible for a losing player to owe a lot in taxes on the rebates (which are "just like a [taxable] comp or reward" right?), so winning isn't even necessary. I don't work for NYRA and don't know what they're doing but it's odd they'd press the issue as they have.

Perhaps the players hee should have taken their cue from the tracks and also kept the thing on the down-low. No matter what, I'm sure the IRS will eventually visit this issue. That reward money will be too much for some not to take a shot at if they turn out to be right, that's for sure.

[PittsburghPhil]

On the profit thing, not exactly. Assuming you are not a professional gambler, you will report ALL monies (tickets cashed and rebates) received from wagering activities as "other income", which will be included in your adjusted gross income. All losing wagers may be deducted on "Schedule A" of your 1040 as an itemized deduction, up to the amount realized as "tickets cashed". Rebates will remain as AGI with no offsets available.

Otherwise, imagine this scenario...

I make two wagers during the calendar year. Each wager is for $500K. Both horses go off at even money. One wins, while one loses. I get a 10% rebate from the ADW. Does that mean I just made $100K tax free? Not likely.

Didn't mean to pick your post apart, just hoping to clarify a bit.


I doubt anything other than a full IRS audit would break their denial. They remind me of the teens who post videos of themselves committing crimes to Youtube and wonder why they got caught.

[PittsburghPhil]

The rebates are MY money originally, not "new" money.

When we were talking about unffair competition and price discrimination, the rebates were supposedly NOT the bettor's money, but "like a bonus or reward." That's because if it's a KICKBACK it's illegal. Only when I pointed out that not calling it a KICKBACK would mean it was TAXABLE INCOME did the argument flip again.

I ask one more time: are rebates taxable income or an antitrust violation in the form of price discrimination? If the rebate alters the price of the bet and is not taxable, it's a kickback, and if it's not a kickback, it's taxable.

It MUST be one or the other. Which?

[K9Pup]

When we were talking about unffair competition and price discrimination, the rebates were supposedly NOT the bettor's money, but "like a bonus or reward." That's because if it's a KICKBACK it's illegal. Only when I pointed out that not calling it a KICKBACK would mean it was TAXABLE INCOME did the argument flip again.

I ask one more time: are rebates taxable income or an antitrust violation in the form of price discrimination? If the rebate alters the price of the bet and is not taxable, it's a kickback, and if it's not a kickback, it's taxable.

It MUST be one or the other. Which?

Hmmm. I vote niether. Why can't the AWDs give their good customers discounts?

[chickenhead]

When we were talking about unffair competition and price discrimination, the rebates were supposedly NOT the bettor's money, but "like a bonus or reward." That's because if it's a KICKBACK it's illegal. Only when I pointed out that not calling it a KICKBACK would mean it was TAXABLE INCOME did the argument flip again.

I ask one more time: are rebates taxable income or an antitrust violation in the form of price discrimination? If the rebate alters the price of the bet and is not taxable, it's a kickback, and if it's not a kickback, it's taxable.

It MUST be one or the other. Which?

Rebates in other realms are not taxable income.

Real Estate:

The IRS has stated in available Publications, such as “Taxable and Non-Taxable Income” and “Basis of Assets”, that cash rebates are not taxable income to a buyer, but reduce the buyer’s basis in the property purchased. These publications are publicly available via the IRS Web site.

Credit Card Rewards:

Usually a prize or an award is taxable income. If you win the lottery, you'll be sharing your luck with Uncle Sam. But if you redeem frequent flier miles, you don't have to pay income taxes. What's the difference? The difference is that the miles are viewed as a purchase price adjustment, similar to a coupon or manufacturer's rebate.

I'm only arguing what is logical, not what I know to be fact, but I think the burden is on you to tell me what makes this sort of rebate different than that sort of rebate. They are both purchase price adjustments. If "kickbacks" are illegal, then how are they done every day in nearly every industry in the form of non-taxable rebates? I don't see your "either-or" holding up at all here.

[classhandicapper]

Now why this has to be done so hush-hush is beyond me.

Because they don't want to give the rebates, they have to in order to keep those customers. If it wasn't hush hush, more people would be knocking on their door trying to get them.

[PittsburghPhil]

Rebates in other realms are not taxable income.

Real Estate:



Credit Card Rewards:



I'm only arguing what is logical, not what I know to be fact, but I think the burden is on you to tell me what makes this sort of rebate different than that sort of rebate. They are both purchase price adjustments. If "kickbacks" are illegal, then how are they done every day in nearly every industry in the form of non-taxable rebates?

Those rebates are available to everyone on an equal basis, and don't alter the fundamental nature of the product the way they do in a gambling pool.

Pinnacle's rebate setup, a flat rate for everyone, was an example of nondiscriminatory discounting. A rebate that requires a certain level of action, or which is given to certain customers only, would be discriminatory. It's also not a slam-dunk that the IRS would apply the same rule to rebates especially if the person receiving them were say the owner of the OTB givng them.

Those who give out rebares should do so universally if they want to dodge this issue. They don't.

[chickenhead]

Those rebates are available to everyone on an equal basis, and don't alter the fundamental nature of the product the way they do in a gambling pool.

Pinnacle's rebate setup, a flat rate for everyone, was an example of nondiscriminatory discounting. A rebate that requires a certain level of action, or which is given to certain customers only, would be discriminatory.

I don't think that is necessarily true. Credit Cards aren't given to just anyone, and the very best rates and rewards on Credit Cards aren't given to just anyone. There is a discriminatory process (in the best use of the term) to decide who gets what level of "rewards".


Those who give out rebares should do so universally if they want to dodge this issue. They don't.

If it was shown to be a legal necessity they would, but it hasn't. Again banks don't pay a flat rate of interest for all deposit amounts...volume discounts abound...the burden is on you to prove there is something illegal about volume based "reward" in this particular parimutuel setting that somehow doesn't apply to all the other realms where it is done.

[chickenhead]

the threat of real illegal actions come from the innefficiencies created by the skewed rules of licencing. Lets look at PTC for instance.

A. They offer very nice rebates.
B. These are not available to CA residents.
C. CA (and other) residents would like to bet through PTC.

This is the sort of innefficiency that is just begging for a "shadow" consolidator to begin opening accounts with CA (and other forlorn) residents, giving them access to a wagering interface, consolidating those bets, and pumping them through a legal PTC account. Shave a point or two from the (maxed out) PTC rebate for administrative fees, and you've got an irresistably easy setup.

*disclaimer* the above is not intended as a suggestion, just an example of the market always seeking to address inequities. It is probably being done informally all over the place. It also has no specific relation to PTC, it is potentially true for all ADWs.

[betovernetcapper]

Whenever the subject of rebates is discussed someone mentions whales and how it's unfair they get bla bla bla.
There are some people with their own rebate shops who bet $5,000,000 a week, but these aren't the people I'm talking about when I use the term rebate. When I think of rebates, I think of guys like me, who bet $50-$200 on an average day. My getting a couple of dollars at the end of the day effects others players how?
I'd like to suggest that at least in some conversations about rebates the introduction of the term whale is a red herring.

[K9Pup]

I don't think that is necessarily true. Credit Cards aren't given to just anyone, and the very best rates and rewards on Credit Cards aren't given to just anyone. There is a discriminatory process (in the best use of the term) to decide who gets what level of "rewards".



Yep. And frequent flyer programs always require you to fly X number of miles within a given time period.

[betovernetcapper]

Today's Bloodhorse has an interesting article
http://news.bloodhorse.com/viewstory.asp?id=40242

[Indulto]

Whenever the subject of rebates is discussed someone mentions whales and how it's unfair they get bla bla bla.
There are some people with their own rebate shops who bet $5,000,000 a week, but these aren't the people I'm talking about when I use the term rebate. When I think of rebates, I think of guys like me, who bet $50-$200 on an average day. My getting a couple of dollars at the end of the day effects others players how?
I'd like to suggest that at least in some conversations about rebates the introduction of the term whale is a red herring.:lol: Whale = Herring :lol:

BONC,
It isn't clear to me that "effective takeout lowerers" who own their own ADW are rebating themselves directly. It could be that they are "Effective Rebate Shops" that "pay track odds," but wind up with greater income from their wagers through operating profits on them.;)

While I believe cash rebates to some bettors and not others IS unfair, I would certainly try to protect myself with a rebate if I could until such time as the playing field were leveled.

You and I are roughly at the same level of play except that you probably bet more days during a qualifying period than I would. Here's how I think you have a competitive advantage over me:

Say you and I happend to have identified the same contenders in a pick four and structure the same initial 50 combinations. I pay $50 for that wager. With a 10% rebate, you pay only $45 ... OR ... you can get 5 additional combinations for the same price including either additional combinations or multiples of existing ones. In any of those scenarios, you are in a position to achieve a better result.

How does that NOT affect me?

[betovernetcapper]

Indulto,
Let me give this a shot. We decide to go hunting and we get to the hunting lodge pro shop and I pick out a rifle and you pick out a bow and arrow. If you feel using a bow and arrow places you at a disatvantage-go back to the pro shop and exchange your bow for a rifle. You see where I'm going with this..........
.
You want to exchange your bow and arrow for a rifle, call PTC and I'll bet Ian will do anything possible to get you an account. What do you have to lose? come on-give it a shot :)

[Indulto]

Indulto,
Let me give this a shot. We decide to go hunting and we get to the hunting lodge pro shop and I pick out a rifle and you pick out a bow and arrow. If you feel using a bow and arrow places you at a disatvantage-go back to the pro shop and exchange your bow for a rifle. You see where I'm going with this..........
.
You want to exchange your bow and arrow for a rifle, call PTC and I'll bet Ian will do anything possible to get you an account. What do you have to lose? come on-give it a shot :)BONC, or should I say, Kemo Sabe? ;)
I would love nothing better than to open a PTC account, but the Lone Deranger from the TOC seems to think I shouldn't be able to from the progressive state of California.

Maybe he thinks PTC will start signing up residents of Mexico. :lol:

[betovernetcapper]

Well at least you have nice weather. In December when I'm trudging through the frozen tundra to spend my rebates, your going to be on the beach. It's all good. :)

[K9Pup]

:lol: Whale = Herring :lol:


How does that NOT affect me?

Ok, so it does affect you. But doesn't it also affect you when he might have an expensive computer program to do his handicapping? Or if is just a better handicapper than you?

Are you upset that some people get rebates? Or upset because you can't ?

[Indulto]

Ok, so it does affect you. But doesn't it also affect you when he might have an expensive computer program to do his handicapping? Or if is just a better handicapper than you?

Are you upset that some people get rebates? Or upset because you can't ?It makes no difference to me how he arrives at his selections, or whether or not he's a better handicapper than I am by whatever criteria you have in mind. The issue is whether or not I'm being handicapped as a bettor. ;)

I don't think upset is the right word. It offends my sense of fairness and tradition that some people are getting an edge over others in a game where players once had an equal chance to come out ahead whether they bet at the $2 window or the $50 one.

It's unlikely I'll even qualify for a rebate when I finally can bet at PTC much less reach the level where RichRosa's software and the data are comped. But maybe by that time both will have enough volume that even non-rebated players can be rewarded with free custom automated selections on days they do wager.

[Kelso]

Say you and I happend to have identified the same contenders in a pick four and structure the same initial 50 combinations. I pay $50 for that wager. With a 10% rebate, you pay only $45 ... OR ... you can get 5 additional combinations for the same price including either additional combinations or multiples of existing ones. In any of those scenarios, you are in a position to achieve a better result.

How does that NOT affect me?


I suggest it's in the same manner that someone betting online from the comfort of his home ... and within easy reach of his refrigerator ... does not affect the guy who doesn't own a computer and has to buy gas to drive to a track or OTB, pay for tolls and parking, spring for admission (particularly for a comfortable teletheater) and blow really big bucks on beer and lunch.

(But both guys continue, of course, to get the same odds on every bet they make in common.)

[K9Pup]

It's unlikely I'll even qualify for a rebate when I finally can bet at PTC much less reach the level where RichRosa's software and the data are comped. But maybe by that time both will have enough volume that even non-rebated players can be rewarded with free custom automated selections on days they do wager.

I'm not sure you answered my question. If you qualified for rebates and COULD receive them, would we be having this discussion?

[Imriledup]

It makes no difference to me how he arrives at his selections, or whether or not he's a better handicapper than I am by whatever criteria you have in mind. The issue is whether or not I'm being handicapped as a bettor. ;)

I don't think upset is the right word. It offends my sense of fairness and tradition that some people are getting an edge over others in a game where players once had an equal chance to come out ahead whether they bet at the $2 window or the $50 one.

It's unlikely I'll even qualify for a rebate when I finally can bet at PTC much less reach the level where RichRosa's software and the data are comped. But maybe by that time both will have enough volume that even non-rebated players can be rewarded with free custom automated selections on days they do wager.

Smaller bettors have a MUCH better chance to come out ahead because a 2 dollar wager on a horse does not alter the price while a 2000 wager does. That rebate goes to give the 2000 bettor an incentive to bet 2000. Two dollars to win on a 3-1 shot at a track of your choice pays 8 dollars. Two THOUSAND dollars on a 3-1 shot at a track of your choice might pay 7 dollars, so the bigger bettor only gets a 7 dollar price, which means without a rebate, he's actually paying a 1000 commission to wager that 2000.

[Indulto]

Smaller bettors have a MUCH better chance to come out ahead because a 2 dollar wager on a horse does not alter the price while a 2000 wager does. That rebate goes to give the 2000 bettor an incentive to bet 2000. Two dollars to win on a 3-1 shot at a track of your choice pays 8 dollars. Two THOUSAND dollars on a 3-1 shot at a track of your choice might pay 7 dollars, so the bigger bettor only gets a 7 dollar price, which means without a rebate, he's actually paying a 1000 commission to wager that 2000.Please detail the logic for how the smaller bettor comes out ahead when the rebated $2000 bettor lowers the price on their common selection.;)

I would think that someone who views that situation as paying a commission should be using a betting exchange.

[betovernetcapper]

Indulto-we all should be using a betting exchange. :)

BTW, if anyone has any thoughts about the current signal wars-rebates-the petition or the Bloodhorse article, you might want to drop these guys a line

http://www.jockeyclub.com/contactUs.asp

[betchatoo]

Please detail the logic for how the smaller bettor comes out ahead when the rebated $2000 bettor lowers the price on their common selection.;)

I would think that someone who views that situation as paying a commission should be using a betting exchange.
Obviously you don't come out ahead when the big player shares your pick, but you do when he (or she) bets on someone else. The fallacy many people seem to have is that big players are always betting winners. I know more than a few players who bet a lot of money who are flat out losers. This is a big advantage to the better handicappers, even if they aren't being rebated, because it drives up the prices on their horses. Even if the big player's right 35% of the time, it leaves 65% of the races where you can make more money. The more money in the pool the better for everyone.

[Indulto]

Obviously you don't come out ahead when the big player shares your pick, but you do when he (or she) bets on someone else. The fallacy many people seem to have is that big players are always betting winners. I know more than a few players who bet a lot of money who are flat out losers. This is a big advantage to the better handicappers, even if they aren't being rebated, because it drives up the prices on their horses. Even if the big player's right 35% of the time, it leaves 65% of the races where you can make more money. The more money in the pool the better for everyone.B2,
Certainly there are big bettors who are also big losers and when chaos reigns, the small player has an equal opportunity to get lucky in situations where his bankroll permits.

Also the recent record P6 at HOL showed their were some genuinely good handicappers among small players that really socked it to the big boys. It happens every once in a Blue Moon.

The reality, however, is that whales collectively get much better results as evidenced by the negative settlements tracks consistently make with ADWs that either give rebates directly or are owned by players.

Of course there are small players out there with the talent and character to succeed despite playing at a competitive disadvantage. Think how well they would do on a level playing field.

Permit me to paraphrase you: The more money in the pool the better for racetrack operators, horsemen, and some of the bettors some of the time.

[betchatoo]

Indulto:

We're going have to agree to disagree on this one. I want the whales in the pool. I don't care if they're getting more money back on rebates then I am (it doesn't come out of what I would win.) I think I'm better than they are. Bring it on

[DeanT]

I would highly doubt the difference in percentage of degenerate gamblers in the rebate world are much different than anywhere else.

[Indulto]

Indulto:

We're going have to agree to disagree on this one. I want the whales in the pool. I don't care if they're getting more money back on rebates then I am (it doesn't come out of what I would win.) I think I'm better than they are. Bring it onB2,
Go for it! I think your position is the right one for you since you get a rebate (whale or no(r)whale ;) ).

If takeout were cut and nobody got rebates, then both whales and minnows would get more back on their wagers when they won. Would there be fewer winners under those circumstances? Would they churn less after winning more? Maybe not.

But if rebates make the pools larger, why shouldn't everybody get rebated equally? :confused:

[betchatoo]

B2,
Go for it! I think your position is the right one for you since you get a rebate (whale or no(r)whale ;) ).

If takeout were cut and nobody got rebates, then both whales and minnows would get more back on their wagers when they won. Would there be fewer winners under those circumstances? Would they churn less after winning more? Maybe not.

But if rebates make the pools larger, why shouldn't everybody get rebated equally? :confused:
Let me make this clear. I want takeout cut. I think it would encourage more people to play. I would much rather have a reduction in takeout than a rebate. But even if they were cut, tracks and services would find a way to give extra back to the big player, to encourage them to continue to play with them. Why do you think Vegas gives away free rooms and meals? Why do businesses of all sorts give discounts on big orders? Because it makes good business sense to reward the people who spend the most money with you.

[Indulto]

Let me make this clear. I want takeout cut. I think it would encourage more people to play. I would much rather have a reduction in takeout than a rebate. But even if they were cut, tracks and services would find a way to give extra back to the big player, to encourage them to continue to play with them. Why do you think Vegas gives away free rooms and meals? Why do businesses of all sorts give discounts on big orders? Because it makes good business sense to reward the people who spend the most money with you.First of all, congrats on the P4 and nice to see you on the preferred end of a DQ. ;)

I've always believed that's why tracks won't lower takeout. Why should they when the "price-sensitive" players will just turn around and demand that their competitive edge be reinstated.

I see nothing wrong with preferred treatment of one's best customers, but not at the expense of the rest of them.

[loopeepop]

What are the best online companies for rebates and the maxinum number of track a player can bet ?

[trying2win]

What are the best online companies for rebates and the maxinum number of track a player can bet ?

In my opinion....PREMIER TURF CLUB. They may not have all the tracks you want to play, but the ones they do carry offer very good cash rebates overall. I prefer to get a minimum of a 5 % cash rebate back for my straight bets, when I make a wager online. I get that and more overall at PTC. Those cash rebates really add up over time.

I like the betting reports too they have at their site, so you can review your progress at your favorite tracks.

Oh yes...and the customer service is superb!

T2W

[trigger]

Let me make this clear. I want takeout cut. I think it would encourage more people to play. I would much rather have a reduction in takeout than a rebate. But even if they were cut, tracks and services would find a way to give extra back to the big player, to encourage them to continue to play with them. Why do you think Vegas gives away free rooms and meals? Why do businesses of all sorts give discounts on big orders? Because it makes good business sense to reward the people who spend the most money with you.

Several years ago, Nevada, home of Las Vegas, the gambling capital of the world, saw fit to ban cash rebates on horse racing wagers at its casinos.

[DanG]

[/i][/u][/b]

Several years ago, Nevada, home of Las Vegas, the gambling capital of the world, saw fit to ban cash rebates on horse racing wagers at its casinos.
In all fairness Nevada did roll out the red carpet to entice Ernie Daulman to gamble there. Something the NYRA should have done as he was single handily X% of their handle.

I gambled for many years at the Palms, and comps were anything but democratic there. (BTW: A policy I agree with. Someone willing to take great risks deserves great rewards IMHO.)

[trigger]

Most of the rationales for rebates in this thread, revolve around justifying volume discounts for big( or bigger) bettors.
The fact remains that pari mutuel betting was originally set up to distribute the pool to the winners in proportion to their winning bets.
There is no doubt in my mind that rebates screw up the "equilibrium" of pari mutuel pools and tilt the playing field in favor of the rebatees at the expense of the non rebatees. The fact that one winning bettor gets more than another winning bettor who are both betting the same amount on the same horse proves this; or ,if both bettors lose, one bettor gets some extra money out of the pool to bet against the other bettor in the next race.
To me, cash rebates just don't work fairly in a pari mutuel setting .I don't have any problem with comps, rebates , or volumes discounts in any other arena like business transactions or other casino gambling games like blackjack or craps.

[DeanT]

Most of the rationales for rebates in this thread, revolve around justifying volume discounts for big( or bigger) bettors.


That may be true for the thread, but that is not my thought. Eventho it is a cornerstone of every business in the capitalistic world.

Rebates are good because they allow people to have a chance to win, whom would otherwise go broke and play poker or sports bet. 0.90 players slowly go broke - that is a given (and a 0.90 guy is s super handicapper!). 0.97 or 0.98 players bet more money and maybe 50 out of 100 sessions win. It gives them a chance, just like poker does. Poker understands this.

I had a chat with a track "guy" recently. He relayed to me that with their internet players it is "amazing to watch how much money is bet when they are winning. Their handle explodes!". I said "well why don't you rebate more and give more people a chance to win?" Not much of a response, because the execs do not want to hurt their gross margin percentages on the "spreadsheet", even tho it can mean more cash in the long run.

I can't blame them much, actually. After all, this is the way things are done since that french guy invented racetrack betting. It is hard to break through and understand what needs to be done in the 21st century. I am sure stagecoach owners biatched and screamed when cars were invented too, but the smart ones changed their biz model to make chasis. I am waiting to see what track wants to build a chasis. Our petition is a start, imo. They have to change, we don't.

[DanG]

There is no doubt in my mind that rebates screw up the "equilibrium" of pari mutuel pools and tilt the playing field in favor of the rebatees at the expense of the non rebatees. The fact that one winning bettor gets more than another winning bettor who are both betting the same amount on the same horse proves this; or ,if both bettors lose, one bettor gets some extra money out of the pool to bet against the other bettor in the next race.

Dean and many others are so much better at explaining this, but let me try one last crack here…




5 Players are betting the races into an ADW and their total wagering equals a $10,000 pool…


4 of the players are wagering $1,000 per race.


1 player is wagering $6,000 per race.


There is a 20% rake and $8,000 clams are redistributed after the event.
They do this over a 10 race card and the first group wagers $10,000 and the lone plunger wagers $60,000.

Now; while the racing is in real time the four $1,000 players had a completely level playing field to take the cash from the man betting $6k. The “rebate” the $6,000 bettor is receiving “after the proceedings” had zero impact on the four players during the actual gambling.

Next; they are all at dinner and the man who wagered $60,000 is eligible for a 5% cash rebate as a reward for the moneys he was willing to risk. The other 4 gentleman recivive a 2% cash reward for their level of exposure.

I fail to see how when the money was changing hands that this “after the fact incentive” had any impact on the other 4 gentleman. In fact, by encouraging this man to bet significantly it gave them a pool increase of 60% thanks to the ADW enticing this man to bet into it rather than seeking other gambles.

[DeanT]

I like that one Dan.

I am a gambling buff. I have gotten into it and compared all types of wagering and all types of games. I am not an expert, but I seek the advice of them to learn. I am a racetracker first. I love the game.

I go to a gambling board and people think we are nuts to play racing with the rakes. I want a game where they come play with us. We will all be better off.

The empirical data is there, we just have to listen. When betfair and exchange betting started they were a blip on the radar. People balked when they allowed market makers to play for zero cost (i.e. a FULL rebate). It "can't work", so we heard. We all know what happened. In five short years they had 500,000 customers and won a Queen's Enterprise award in Britain for innovation. They are soon to be capitalized for billions.

They understood one simple thing, that a 10 year old with a lemonade stand learns quickly: A perfectly competitive market must adhere to marginal cost pricing. You can not grow when you are in a perfectly competitive market and you work on a curve where average cost= price. You are trying to put a square peg into a round hole. Everyone knows that, but racing tries to do that. They are dead and destined to medicority before they even started in the present gambling environment, imo.

As Andy Beyer said in a recent column: "Only in horse racing would it be a novel concept that the price of the product has something to do with a business' success or failure."

So true! Rebating places downard pressure on prices. Lower prices help the player. Racetracks seem to hate that. They can not even get their distibution right. We should not be surprised they are in the dark ages on pricing too, should we?

[bigmack]

There is no doubt in my mind that rebates screw up the "equilibrium" of pari mutuel pools and tilt the playing field in favor of the rebatees at the expense of the non rebatees.
You've been bangin' on that same drum for a spell. Can I axe a question? Do you realize that the folks who take the bets make a % of the wager as profit? If so, can you also grasp the fact that some prefer to give a % away as an incentive to build volume? If so, that's the end of this story. It's pretty simple. The money is comin' out irrespective of who gets it. Get it?

Your anti-pari-mutuel argument doesn't hold a drop of water.

[Indulto]

... I had a chat with a track "guy" recently. He relayed to me that with their internet players it is "amazing to watch how much money is bet when they are winning. Their handle explodes!". I said "well why don't you rebate more and give more people a chance to win?" Not much of a response, because the execs do not want to hurt their gross margin percentages on the "spreadsheet", even tho it can mean more cash in the long run.Thanks for sharing, and for at least contemplating the other view of the picture. :ThmbUp:

[trying2win]

In my opinion, Trigger is out in left field on the issues of rebates. Time to add him on my IGNORE list.

[betovernetcapper]

DanG and DeanT-I don't think I've used the term eloquent once in my entire life and now I I'm using it twice in one afternoon. Eloquent.
.
.
AP and FP each have a 17% take out and this weekend each will feature a couple of Illinois bred MSW races. In some cases the horses running in AP races and the horses running in the FP races were born on the same farm, maybe had the same sire. Trainers and owners may run horses at each track. My point is there is a certain commonality in these races.
.
The AP race has a take out of 17% and no onshore rebate.
.
The FP race has a take out of 17% and a healthy rebate.
.
Which to bet...which to bet.......DUH

[Indulto]

... It's pretty simple. The money is comin' out irrespective of who gets it. Get it?BgM,
The problem is that when some get it and others don't, it provides an advantage to those who do -- if not in the same race like more exotic combinations for the same price or total returned for the same wagered amount, then on a continuing ROI basis.

Why won't rebated players concede that fact and stop spouting irritating and insulting business analogy rhetoric to justify utilizing their competitive advantage. Do they subconsciously feel guilty about it?

The term "parimutuel" may indeed have little bearing here other than to help remind us of what contributed to racing's golden years.

Selective rebating is to players what milkshaking is to trainers, what exclusivity is to ADWs, and what OTB signal pricing is to racetracks -- an unfair competitive advantage. Not illegal, immoral, or fattenting -- just unfair and shortsighted because unrebated players have to eventually fade away.

Hopefully it will be because they become rebated players.;)

[bigmack]

The problem is that when some get it and others don't, it provides an advantage to those who do -- if not in the same race like more exotic combinations for the same price or total returned for the same wagered amount, then on a continuing ROI basis.
Dulto - I occasionally sail in regatta's with a cat that is constantly preoccupied with the advantages or disadvantages of one vessel over another. In the end, you simply have to go out and sail.

So too with rebates. Why are non-rebated players so preoccupied with who's getting what rebate. The payout to a non-rebated player is the same regardless of rebates so the the whole issue is moot.

[DeanT]

Thanks for sharing, and for at least contemplating the other view of the picture. :ThmbUp:

You're welcome! But it has never been to me the "other view of the picture"; it is the picture (imo).

As Mr. Cummings said in his report (that I think the industry threw in the garbage after it said things they didnt like): Rebaters help broaden the racing business and it makes it stronger as a whole.

I hope one day everyone can experience what lower prices through either rebates or lower rakes can do for all of us. It would be a great day for racing.

[trying2win]

Indulto:

I must respectfully disagree with you that rebates to horseplayers are unfair. It reminds me of the same arguments of executives at certain racetracks and horsemen associations when they've commented on this issue.

Next thing you know, certain horseplayers, racetrack executives and horsemen executives will be complaining about some horseplayers who have an 'unfair advantage' because are trying to get a edge via things like:

1. Studying the works of knowledgeable handicapping authors.

2. Doing al lot of extensive research on winning patterns at different racetracks.

3. Using top-of-line handicapping software etc.


T2W

[Indulto]

Dulto - I occasionally sail in regatta's with a cat that is constantly preoccupied with the advantages or disadvantages of one vessel over another. In the end, you simply have to go out and sail.

So too with rebates. Why are non-rebated players so preoccupied with who's getting what rebate. The payout to a non-rebated player is the same regardless of rebates so the the whole issue is moot.BgM,
In sailing, the idea is to get more wind in one's sails. In competitive sailing, one's sails needs to be the same size as everyone elses. :cool:

I guess both sailors and horseplayers sometimes blow a little harder to advance their positions. ;)

[cj]

Getting a rebate is much like everything else in racing. You aren't going to be handed anything on a silver platter. Those that work the hardest to get one, and I don't necessarily mean how much you bet, can get good deals. Those that don't bother trying won't get a rebate.

[trigger]

In my opinion, Trigger is out in left field on the issues of rebates. Time to add him on my IGNORE list.

Puleeze do it, I would consider that the ultimate complement.

[trigger]

Getting a rebate is much like everything else in racing. You aren't going to be handed anything on a silver platter. Those that work the hardest to get one, and I don't necessarily mean how much you bet, can get good deals. Those that don't bother trying won't get a rebate.

So, your argument , as I understand it, is that anybody that does not get rebates (or argues against them) doesn't work hard enough and is looking for something to be handed to them on a silver platter ?
C'mon , cj, I would have expected more from you than this Bigmack type of condescending comment..

[bigmack]

There is no doubt in my mind that rebates screw up the "equilibrium" of pari mutuel pools and tilt the playing field in favor of the rebatees at the expense of the non rebatees.
Do you believe this statement that bonc made?: The rewards don't just fall from the sky-they must be paid for. All rebates/rewards come from the amount I mentioned before-the take out , which everyone pays at the same rate. None of us has any choice in the takeout. All of us have choices regarding our rewards.

If you don't then you have a point with your above quote. If you do, and you should because it's fact, your point is invalid.

Any further reference of imbalance to the parimutuel nature of things as caused by rebates is catagorically grounds for further condescension or in the very least makes you honorary mascot for this icon. :bang:

[DeanT]

I agree BigMack. The argument is specious.

What price you get at point "a" is what it is, what happens after is irrelvant.

[Indulto]

Dean and many others are so much better at explaining this, but let me try one last crack here…

5 Players are betting the races into an ADW and their total wagering equals a $10,000 pool…


4 of the players are wagering $1,000 per race.


1 player is wagering $6,000 per race.


There is a 20% rake and $8,000 clams are redistributed after the event.
They do this over a 10 race card and the first group wagers $10,000 and the lone plunger wagers $60,000.

Now; while the racing is in real time the four $1,000 players had a completely level playing field to take the cash from the man betting $6k. The “rebate” the $6,000 bettor is receiving “after the proceedings” had zero impact on the four players during the actual gambling.

Next; they are all at dinner and the man who wagered $60,000 is eligible for a 5% cash rebate as a reward for the moneys he was willing to risk. The other 4 gentleman recivive a 2% cash reward for their level of exposure.

I fail to see how when the money was changing hands that this “after the fact incentive” had any impact on the other 4 gentleman. In fact, by encouraging this man to bet significantly it gave them a pool increase of 60% thanks to the ADW enticing this man to bet into it rather than seeking other gambles.DG,
The exchange of money "after the fact" doesn't mean it didn't affect the bettor's strategy BEFORE the fact. You seem to be assuming the bettor would bet exactly the same way with or without a rebate. Is that true in your experience?

Also, how likely is it that someone who has devoted himself to this game for years would "seek other gambles" if everyone received equal rebates or takeout were lowered for all, i.e., the competitve edge aspect went away?

DT,
Feel free to weigh in. ;)

[DeanT]

DG,
if everyone received equal rebates or takeout were lowered for all

That's the goal. Add internet wagering in all states and provinces for all tracks and unleash a place like PTC to upsell and do what they do best to grow their business. Hell let's throw Australia and the UK in while we're at it. We can teach them to play exotics.

I think it will happen, but I think it will be in no less than a decade. 10 years in racing is tantamount to ten minutes to Jeff Bezos. We've completely missed the boat on the economies of scale and mass distribution that the internet has afforded other businesses the last ten years. I hope we don't waste the next decade.

[chickenhead]

DG,
The exchange of money "after the fact" doesn't mean it didn't affect the bettor's strategy BEFORE the fact. You seem to be assuming the bettor would bet exactly the same way with or without a rebate. Is that true in your experience?

If your prerebate ROI is higher than their prerebate ROI, your ROI should actually go up the more money they bet (regardless of what their rebate is). They are adding money to the pool, and you are taking a disproportionately larger share of the pool per dollar bet than they are.

For your theory to hold true (absolutely), they must both increase their bets due to the rebate, and be a higher ROI player than you without a rebate, at that same increased bet level.

I believe that is correct (I could also be wrong :) ).

[trigger]

Do you believe this statement that bonc made?: The rewards don't just fall from the sky-they must be paid for. All rebates/rewards come from the amount I mentioned before-the take out , which everyone pays at the same rate. None of us has any choice in the takeout. All of us have choices regarding our rewards.

If you don't then you have a point with your above quote. If you do, and you should because it's fact, your point is invalid.

Any further reference of imbalance to the parimutuel nature of things as caused by rebates is catagorically grounds for further condescension or in the very least makes you honorary mascot for this icon. :bang:

Do you believe that bfi said this?
I guess he thinks that a casino taking a rake on a Texas Hold'm poker game should be able to give a part of that rake back to a player that bet the most in the current hand before the next deal so he can use it to bet against the other players.
Yea, that puts him an honorary imbalanced category of :rolleyes: .

[bigmack]

As Roy Rogers once said to Trigger: "Get off your high horse whine about rebates affecting pari-mutuels. It's pure unadulterated poppycock"

[Indulto]

Indulto:

I must respectfully disagree with you that rebates to horseplayers are unfair. It reminds me of the same arguments of executives at certain racetracks and horsemen associations when they've commented on this issue.t2w,
I said SELECTIVE rebates to horseplayers were unfair, not rebates to all players.

One can't try too hard to be accurate out there in right field. ;)

[Kelso]

or ,if both bettors lose, one bettor gets some extra money out of the pool to bet against the other bettor in the next race.


More money being bet against one is a GOOD thing ... no?

[vegasone]

Aren't we forgetting what happens if the 4 players bet 1000 each on the same horse as the whale who bets 6000. The 4 players who may have been expecting a 10% ROI all of a sudden get 0, zilch...(just an example, it may be any lower figure) depending of course on the pool. The whale gets the same however he makes it up on the rebates. Score 4 players 0, whale ..whatever the rebate is. Am I mistaken in this or what? I think this is the whole fallacy of most of the arguments for and against the whales etc. They must be lowering the return for the regular players as well as themselves but make it up with the rebates. If these whales didnt get the rebates, they would be betting a much lower amount if not 0. A lot of them would be out of the pools without the rebate.

[cj]

So, your argument , as I understand it, is that anybody that does not get rebates (or argues against them) doesn't work hard enough and is looking for something to be handed to them on a silver platter ?
C'mon , cj, I would have expected more from you than this Bigmack type of condescending comment..

I didn't mean it to come across that way. All I am saying is that if getting a rebate is important to a bettor, he can get one. So all this it is unfair stuff doesn't really seem right to me.

[betchatoo]

Aren't we forgetting what happens if the 4 players bet 1000 each on the same horse as the whale who bets 6000. The 4 players who may have been expecting a 10% ROI all of a sudden get 0, zilch...(just an example, it may be any lower figure) depending of course on the pool. The whale gets the same however he makes it up on the rebates. Score 4 players 0, whale ..whatever the rebate is. Am I mistaken in this or what? I think this is the whole fallacy of most of the arguments for and against the whales etc. They must be lowering the return for the regular players as well as themselves but make it up with the rebates. If these whales didnt get the rebates, they would be betting a much lower amount if not 0. A lot of them would be out of the pools without the rebate.
Anytime you play on the horse where all the money goes, you are going to get less of a payoff. However when you bet on a horse against the whale your rewards can more than make up for it. As an example let's take your 4 players betting $1,000 each. They bet into a small pool of $6,000. If the horse wins they can expect a profit of $200 each ($6,000 - 20% takeout leaves $4800 to be returned to the players.) Now the whale gets in and bets $6000 on another horse. When the 4 player horse wins they now receive a profit of $1,400. That's a hell of a lot of difference. If you're a good handicapper you always want the maximum amount of money in the pool.

[Imriledup]

BgM,
The problem is that when some get it and others don't, it provides an advantage to those who do -- if not in the same race like more exotic combinations for the same price or total returned for the same wagered amount, then on a continuing ROI basis.

Why won't rebated players concede that fact and stop spouting irritating and insulting business analogy rhetoric to justify utilizing their competitive advantage. Do they subconsciously feel guilty about it?

The term "parimutuel" may indeed have little bearing here other than to help remind us of what contributed to racing's golden years.

Selective rebating is to players what milkshaking is to trainers, what exclusivity is to ADWs, and what OTB signal pricing is to racetracks -- an unfair competitive advantage. Not illegal, immoral, or fattenting -- just unfair and shortsighted because unrebated players have to eventually fade away.

Hopefully it will be because they become rebated players.;)

I believe i posted a response in this thread that maybe you didn't read. I'll repeat it.

If a non rebated player wagers 2 dollars to win on a winning 3-1 shot, he gets an 8 dollar win price. If a rebated player bets 2,000 to win on that same 3-1 shot (assuming its not Saratoga on a Saturday) he'll get a 7 dollar win price (hypothetically) because his 2k bet will knock down that 8 dollar price to 7 dollars. Why should the large bettor only get a 7 dollar price when the 2 dollar bettor gets an 8 dollar price?

The rebate goes to 'cushion' that fall from 8 dollars to 7 dollars. Without a rebate, the 2k bettor is winning 1k of his 'own money'.

One more thing. Anyone who complains about NOT having a rebate needs to bet thousands a day. Thats the criteria, what's so hard to grasp?

If you want to be a jockey, you have to weigh under 120 lbs. If you want to be an olympic sprinter, you have to be able to run fast. If you want a rebate, you have to bet thousands a day, every day.

Its not rocket science.

[Imriledup]

[QUOTE=Indulto]DG,
The exchange of money "after the fact" doesn't mean it didn't affect the bettor's strategy BEFORE the fact. You seem to be assuming the bettor would bet exactly the same way with or without a rebate. Is that true in your experience?

Also, how likely is it that someone who has devoted himself to this game for years would "seek other gambles" if everyone received equal rebates or takeout were lowered for all, i.e., the competitve edge aspect went away?

It actually DOES affect the bettors strategy before the fact. With the rebate, he bets more reckless and makes more dumb decisions because he has that cushion. Having large whales in the pool helps the smart player.

[Imriledup]

Please detail the logic for how the smaller bettor comes out ahead when the rebated $2000 bettor lowers the price on their common selection.;)

I would think that someone who views that situation as paying a commission should be using a betting exchange.

What's there NOT to understand? the 2 dollar bettor gets the full 8 dollar price, where the 2k bettor gets 7. It has nothing to do with a 'common' selection. If the 2 dollar bettor bets on a horse who's 3-1 odds and then 2 seconds later, the 2k plunger hammers the same horse there IS a difference. The difference is this. the 2 dollar bettor got a 7 dollar price because he bet on a 5-2 shot. the 2k bettor got a 7 dollar price on a horse who was 'supposed to' pay 8 dollars.

[vegasone]

betchatoo:

Anytime you play on the horse where all the money goes, you are going to get less of a payoff. However when you bet on a horse against the whale your rewards can more than make up for it. As an example let's take your 4 players betting $1,000 each. They bet into a small pool of $6,000. If the horse wins they can expect a profit of $200 each ($6,000 - 20% takeout leaves $4800 to be returned to the players.) Now the whale gets in and bets $6000 on another horse. When the 4 player horse wins they now receive a profit of $1,400. That's a hell of a lot of difference. If you're a good handicapper you always want the maximum amount of money in the pool.



The key point is "if" they bet a different horse. A good majority of these big bettors are good handicappers and they are going to be betting the same horses other good handicappers are betting. Basically the smart money is going on the higher percentage winners, and the amount of money bet is higher than it would usually be. That is what is going to hurt the smaller "good" handicappers. It is going to lower their expected ROI, maybe drastically, maybe not.

Yes they increase the pools from the other horses they bet that don't win, but how much do they hurt the ones that win?

It may not hurt the regular customer as much, because they may get a higher payoff actually on horses horses that don't figure, but a lot lower payoff on horses that do. More study needs to be done.

[vegasone]

Another point is that if the regular customer continually gets a lower return than would normally be expected because of the lower odds, it is effectively the same as raising the takeout on him and could cause them to lose even more interest in the game and we will be left with fewer players.

[DanG]

Another point is that if the regular customer continually gets a lower return than would normally be expected because of the lower odds, it is effectively the same as raising the takeout on him and could cause them to lose even more interest in the game and we will be left with fewer players.
If you are correct, in that the “whales” are all hammering similar horses, than that is the opportunity the small player should dream of. I love that fact that the sheet players influence so much money in NY. It “creates” more opportunities than it eliminates if you don’t approach the gambles from their perspective.

I submit, if you disagree with Ernie Daulman’s opinion in NY when he has stepped out and body slammed a cold exacta for 10 large, you should get on your knees and thank him when your price is 30% higher than “your” probabilities said it should be.

There is no one absolute right horse. If you learn to trust your opinions and zig when the whales zag you will be light years ahead of the majority of the players in your price range.

[betchatoo]

Good post DanG. It is a good summary of what I was going to answer him. If you believes that the big players have all the answers and usually pick winners, get out of betting races cause there's no way to win. I just know too many bad players with money to believe it.

[DeanT]

I would agree with that. For every race at Del Mar I would hazard a bet that in a field of 8 horses, there is whale money on each horse.

Good bettors and bad bettors are everywhere. Degenerates are everywhere. I think whale betting has a good mix of all three.

The biggest bettor I know, who gets huge rebates, does not even keep track of whether he is up or down, let alone anything else. He doesn't even handicap. He uses one of the sheets.

[Indulto]

IRU, I seem to have attracted your IRE.

I did want to debate with players having an edge so I guess I'll have to engage edgy players.Actually, its the other way around. If a 2 dollar bettor bets on a 3-1 shot, he gets an 8 dollar mutuel. If a whale (without a rebate) bets 5,000 to win, he knocks down that 8 dollar mutuel to, depending on the track and the size of the win pool, to, lets say for arguments sake, 7.00.

So, the 2 dollar bettor gets an 8 dollar win price, but the whale gets a 7 dollar win price. he 'wins' 1 dollar on every 2 dollars wagered of 'his own money'. The rebate just gives him back that money he 'should' have won and gives him incentive TO wager that 5,000 to win.Smaller bettors have a MUCH better chance to come out ahead because a 2 dollar wager on a horse does not alter the price while a 2000 wager does. That rebate goes to give the 2000 bettor an incentive to bet 2000. Two dollars to win on a 3-1 shot at a track of your choice pays 8 dollars. Two THOUSAND dollars on a 3-1 shot at a track of your choice might pay 7 dollars, so the bigger bettor only gets a 7 dollar price, which means without a rebate, he's actually paying a 1000 commission to wager that 2000.In my original response to the latter post, I inadvertently left out that the smaller bettor doesn’t get the price that could give him a chance to come out ahead when it is altered by the bigger bettor who you admit -- when rebated -- is compensated for the loss in price he created. Could you have illustrated my point any better?

I appreciated your three successive responses to my posts. I haven’t received so much attention since I tried to get a refund from the IRS.:lol: DG,
The exchange of money "after the fact" doesn't mean it didn't affect the bettor's strategy BEFORE the fact. You seem to be assuming the bettor would bet exactly the same way with or without a rebate. Is that true in your experience? …It actually DOES affect the bettors strategy before the fact. With the rebate, he bets more reckless and makes more dumb decisions because he has that cushion. Having large whales in the pool helps the smart player.Are you suggesting that large rebated whales aren’t smart players?I believe i posted a response in this thread that maybe you didn't read. I'll repeat it.

If a non rebated player wagers 2 dollars to win on a winning 3-1 shot, he gets an 8 dollar win price. If a rebated player bets 2,000 to win on that same 3-1 shot (assuming its not Saratoga on a Saturday) he'll get a 7 dollar win price (hypothetically) because his 2k bet will knock down that 8 dollar price to 7 dollars. Why should the large bettor only get a 7 dollar price when the 2 dollar bettor gets an 8 dollar price?

The rebate goes to 'cushion' that fall from 8 dollars to 7 dollars. Without a rebate, the 2k bettor is winning 1k of his 'own money'.

One more thing. Anyone who complains about NOT having a rebate needs to bet thousands a day. Thats the criteria, what's so hard to grasp?That’s why I support PTC. Hopefully as a Calif. Resident, that isn’t just grasping at straws.If you want to be a jockey, you have to weigh under 120 lbs. If you want to be an olympic sprinter, you have to be able to run fast. If you want a rebate, you have to bet thousands a day, every day.

Its not rocket science.It doesn’t take a rocket scientist to confirm that you’d have to bet $4K a day over 250 racing days to qualify for DragNet’s cushiony deal. You could be a poster child for the anti-gambling forces. I can see it now:
-------------------------
Uncle Frank wants YOU

See your local ADW recruiter and enlist for a rebate NOW.

Let losers linger longer.
While winning wagerers wince at withholding,
Rebaters realize resurging returns on reduced signals.

The renewed vigor for re-wagering supported by player account reinvigoration with their own money refreshingly generates vigorish to government as well. Who says bookies aren't still smarter than most players.
-------------------------
(The above text was intended for the entertainment of its readers and does not necessarily reflect the poster's opinion.)
What's there NOT to understand? the 2 dollar bettor gets the full 8 dollar price, where the 2k bettor gets 7. It has nothing to do with a 'common' selection. If the 2 dollar bettor bets on a horse who's 3-1 odds and then 2 seconds later, the 2k plunger hammers the same horse there IS a difference. The difference is this. the 2 dollar bettor got a 7 dollar price because he bet on a 5-2 shot. the 2k bettor got a 7 dollar price on a horse who was 'supposed to' pay 8 dollars.To paraphrase an adage that used to continually appear on two competitive racing message boards, “Just saying it doesn’t make it so, no matter how many times it’s said.”

I did, however, think your post from the “Boycott Strategy” thread contained more meaningful statements:I guess the benefit of a rebate vs a lowered takeout is that if the whale bets into the lower takeout pool, his competition might be greater just because smarter people bet races and tracks with lower takeout and smarter people in general are better handicappers. When Hialeah raised their takeout to astronomical rates before they went out of business my first thought was of anger and boycott. Than, i thought to myself, "could there possible be ONE smart person who's betting Hialeah?" So, the low takeout might be the opposite of Hialeah's high rake in that the bettors are SMARTER, therefore, the whale might be better off betting into the normal takeout and getting the rebate.

Also, another factor is that i'd have to imagine a whale who gets used to a rebate of a certain amount would see a 'hit' in his rebate if he bet the Ellis pick 4. Sure, that lower rebate would be made up by higher prices, but when you are used to a certain amount being given back as a rebate, you dont' want that number to go down.I appreciate your confirming my position that rebated players enjoy a competitive advantage -- BEYOND any handicapping ability --over non-rebated players with smaller bankrolls. Was that so hard to understand? ;)