How dysfunctional is the racing business?

[ceejay]

The entire ADW situation just stinks. Most businesses try to make it easier for customers to spend money. Tracknet/TVG-Youbet do the opposite, treating customers like they should be happy just to be able to use their services.

It sure has limited my overall action. Great work guys.

[beertapper]

is there any place on earth where the racing industry is healthy??? UK perhaps?

[Bruddah]

is, because they have found the Americans willing to buy their artificial turf. They measure their cash in pounds. LITERALLY! As they make their deposits in American dollars. What a bunch of Yankee Rubes, we are! :lol: :kiss:

[DeanT]

is there any place on earth where the racing industry is healthy??? UK perhaps?

The UK isnt too bad. They have about 6% overrounds there, so the takeout is around 250% lower than here. The government also taxes profits, not betting, so that increases payouts and people churn. (they made a change in the early 90's to do that in betting and it grew rapidly).

They have betfair licensed. This provides people with around 4% rakes on win betting.

The bookmakers are pretty free there to price. Track execs stay out of it for the most part. They put on the races and stay out of betting. This has provided bettors with a lot of choice because competition is fierce - internet betting with good features, many types of bets, free information, etc.

In general, the guys with MBA's who have never placed a bet, have nothing to do with betting there. Praise the lord.

People from the UK on the board can correct me, but that is what I have read, and is what I understand to the best to my knowledge.

[DeanT]

I hope the petition that is going is not taken the wrong way by these "execs". Knowing them they would take it as "see, we have to get together and offer all tracks to everyone....... then we can charge 24% on everything, and make a pile of money"

I dont want them to control it, I want people like Ian to, spurring innovation and proper pricing like the UK. Maybe this business can explode.

[SMOO]

They could start by not having all the races go off at the same time. I'd think that would increase handle, but I'm not a racing biz genius.

[DanG]

I hope the petition that is going is not taken the wrong way by these "execs". Knowing them they would take it as "see, we have to get together and offer all tracks to everyone....... then we can charge 24% on everything, and make a pile of money"

I dont want them to control it, I want people like Ian to, spurring innovation and proper pricing like the UK. Maybe this business can explode.
Good points Dean;

I’ve often thought the “czar” of racing where all tracks speak with the same voice had upside, but the more I look at who is behind the curtain it could just as easily be a nightmare.

Take between $170 and $310 clams from every $1,000 bet and then have the stones to tax “significant” winnings as if it only took $2 bucks to achieve the score. Keep saying that out loud a few hundred times until it sinks in. I can’t imagine why huge money is in day trading at the current rates per trade. :bang:


Wouldn’t we love the Hong Kong / Australia whales in our pools instead of taxing them away? Throw in a grandfathered internet gambling exemption that should be easily exploited and you have a pathetic excuse for an industry that should be flourishing with its modern advantages.

[betovernetcapper]

Track execs stay out of it for the most part. They put on the races and stay out of betting.
Great idea. I think every track executive should have the legend "stay out of the betting" tattooed on their hand so they can see it 24/7 and not forget.

[kenwoodallpromos]

I thjought the petition was to get racing to standardized the rate between the tracks and simulcasters, not the takeout.
Casinos understand that the reason their slots takeout is so low is that they make money on recycling the same money back into the machines seveal times before the bettor leaves for the day.
Of that $15 billion bet on racing per year, with a total takeout of $3 billion, how much of that $15 billion is fresh money and how much is winnings put back in? When you look at the total wagering for 1 track on 1 day, how much of that total is winnings re-bet?

[betovernetcapper]

Kenwood-your right the petition is about simulcast signal fees and accessibility but anytime is the right time to question takeout prices.

[DeanT]

I thjought the petition was to get racing to standardized the rate between the tracks and simulcasters, not the takeout.


For everything to work, the takeout will be addressed in that, imo. If tracks try to monopolize and collude, do you really think we will benefit? They could get together and say "ok, we'll charge a flat 20% takeout on everything, and charge all ADW's 18% for the signals. That will put them all out of business and we will be able to run everything ourselves"

When the people who have created this problem in the first place take it over, I dunno about all of you, but that scares the living hell out of me.

As for churning back into the pools, the evidence is there for us to see. We don't need wacky $500,000 commissioned reports to tell us that tho. Common sense tells us that. I went to the track with $100 and lost it in ten minutes. I put $100 in a poker stars account once and played for 2 years.

[kenwoodallpromos]

For W/P/S wagering, make the takeout equal to the distance of the race in furlong: 5 1/2f= 6%; 10f=10%.

[DeanT]

I posted it on another thread, but I think that they should do everything that they can to cater to both ends of the spectrum.

The guy out for a good time and to watch the horses go cares less that the rake is 20%. They are not price sensitive. The guy who opens a youbet account is sensitive to price.

So I would keep rakes at 20% across the board, then allow ADW's to pay a reasonable fee as to keep racing on sound footing (i.e.6%) and then let ADW's do whatever they want with their share. Oh, and of course make sure every track is offered to every state and province!

One place might offer free handicapping tools and data as an incentive with a small rebate, one might offer a preimier betting interface and less freebies. One might be bare bones but offer 10% rebates to all customers etc.

Let the free market run with horse racing for awhile. They have had their chance to run it for close to 100 years. And it has not worked!

[Pace Cap'n]

It is somewhat surprising that in none of the current related threads, no one has touched on the political aspect of track managment. In many, if not most states, the racing honchos are in their position as a result of political patronage. They have either been appointed or otherwise "chosen" to hold the job they have. And they sure know which side of the bread the butter is on.

If the track mgmt. actually wanted to reduce takeout, it would literally take an act of the local (state) congress. And if the Govenor and fellow pols were opposed, then they are certainly no longer fans of the managment. And the managers might then have to go look for a real job. Imagine that!

If a manager wants to add an ADW, and he just got his ass reamed last month over the takeout issue, he is not going to risk any more heat from the Govenor. C ya later, ADW.

Any meaningful reform in the racing community will necessitate both political and executive reformation.

[Pace Cap'n]

And, it's not just horseracing....

I used to think one of the things that made Las Vegas a great gambling city was the opportunity to match wits against the oddsmaker.

Lately, I'm not so sure. Lately, it looks as if sports betting is going the way of blackjack, where in order to play the game you have to either a) be a dope or b) do your best to pretend to be a dope until you're inevitably caught and tossed out for having the audacity to risk money at a card game.

If that's the way the business is going, with sports books forever relegated to the status of the evil stepchild of casino operations, with bettors viewed with contempt and suspicion rather than appreciated as customers, and required to check their brains at the entrance like they do at the 21 pit, then it's a real shame.

Forget about policing sports betting as the industry's "watchdog," or catching any game-fixing schemes.

No, if that's the direction the business is going, Las Vegas sports betting will end up policing itself right into irrelevancy.

www.lasvegassun.com/sunbin/stories/commentary/2007/aug/13/566655769.htm (http://www.lasvegassun.com/sunbin/stories/commentary/2007/aug/13/566655769.html)l

(http://www.majorwager.com/forums/newreply.php?do=newreply&p=1268269)

[Kelso]

Track execs stay out of it for the most part. They put on the races and stay out of betting.



Where do the tracks get their money for purses and operations/profit?

Thank you.

[DeanT]

From the percentage the bookmakers pay them to be allowed to bet (from their rakes).

For example, in Tasmania recently they licensed betfair. I think betfair is paying the track $12M or something like that in fees to be allowed to bet their product. And that has been growing as handle rises with the small rakes.

[Imriledup]

Good points Dean;

I’ve often thought the “czar” of racing where all tracks speak with the same voice had upside, but the more I look at who is behind the curtain it could just as easily be a nightmare.

Take between $170 and $310 clams from every $1,000 bet and then have the stones to tax “significant” winnings as if it only took $2 bucks to achieve the score. Keep saying that out loud a few hundred times until it sinks in. I can’t imagine why huge money is in day trading at the current rates per trade. :bang:


Wouldn’t we love the Hong Kong / Australia whales in our pools instead of taxing them away? Throw in a grandfathered internet gambling exemption that should be easily exploited and you have a pathetic excuse for an industry that should be flourishing with its modern advantages.

If a person puts in a 10,000 pick 6 ticket and hits the pick 6 and it pays 5,000, they get tax withheld of, what is it, 28%?. There's gotta be a way to know that the bet that won was a 10k ticket and that bet did NOT show a profit....therefore, no signer and no withholding. There is SO many thousands of dollars taken out of circulation from betting pools and 'held' its ridiculous.

Think of all the churn racetracks are missing when all those 5k payoffs results in withholding. Look at the Ky Derby for example. The superfecta pool, is almost guaranteed to have 28% of it withheld no matter who wins. A Derby super is going to pay 5k for 1 dollar most likely, it would take an act of god for a super in a 20 horse field to pay under 5k.

In this year's derby, Street Sense was the betting favorite and Curlin was the 2nd betting favorite and the top two betting faves ran 1-3 and the super STILL paid 29k. I'd have to guess the betting pool on the Derby super was 7 or 8 million, which means about a million dollars in 'tax' was shipped off to uncle sam. Every person who cashed on that super got withheld.

The tri only paid 440 so there was no signer or withholding on that one, terrible bad beat for the Govt. That tri pool is over 20 million, so when giacomo came in, about 5 or 6 million was taken out and shipped in a nice, neat little wrapper to U.S.

I'd love to know at the end of the year how many dollars were withheld in tracks across america, its gotta be well over 100 million, you'd think, right?

Just another thing that makes win betting more attractive.