Lower Takeout Feedback

[DeanT]

Hi Everyone,

I am heading to the Gaming Summit in Montreal at the end of the month. I am on a panel about wagering and takeouts. This summit will have people from all walks of racing from all over North America, including track execs. The Summit this year is focused on the player and why he has left racing for other games and what we can do to get them back playing.

One area of discussion is takeouts and what lower prices can do for everyone. I wrote a motion for players to lower takeouts in my country, which one would hope could snowball across racing in North America, if successful. I hate to sound like a downer, but I am not overly confident racing will change; but since the conference will be hearing from players, it is a chance to be heard.

Here is my motion.

http://pullthepocket.blogspot.com/2008/04/player-motion-give-tax-back-to-us.html

If you could reply here (on this thread) with any thoughts, and maybe your first name and residence (if possible), the head of the conference wants to print out all responses, as well as the motion.

Some like Ian, DanG and Jeff P have already responded and my sincere thanks. Some comments would be especially good, for example, if you have an angle that is clicking through at 0.95 ROI that is a red light bet where you bet zero dollars, what a 7% takeout cut could do for you. Or if you ahve played offshore and gotten a rebate, what that has done to your volume.

Anyway, thanks in advance, and to all who choose to respond let's hope we can do some good.

Best,

Dean

[1st time lasix]

Very best of luck to you and I applaud your efforts. I ONLY play venues with lower exotic takeouts. I refuse to play any track pool when the take approaches 21% or more. Last year i never had played Ellis park until they dropped the take on the late PicK Four to 4%. They got my attention and my dollars. I played the races individually as well so it attracted me to their product.

[DeanT]

I did the same thing 1sttime. I had never bet ELP ever before. I am not sure I have even seen a race there. Looking forward to see what they come up with this year as a special bet. Apparently they have something up their sleeve.

Thanks for the response and gl at the windows.

[SMOO]

You will get more repeat customers with a lowered takeout, it's a mathematical fact.

[dvlander]

Not to go off-topic but lower takeout certainly will result in higher track handle just as lower income tax rates means more tax revenue for the government (i.e., increased economic activity). Track management doesn't get it just like most government officials don't get it.

Dale

[Imriledup]

Hi Everyone,

I am heading to the Gaming Summit in Montreal at the end of the month. I am on a panel about wagering and takeouts. This summit will have people from all walks of racing from all over North America, including track execs. The Summit this year is focused on the player and why he has left racing for other games and what we can do to get them back playing.

One area of discussion is takeouts and what lower prices can do for everyone. I wrote a motion for players to lower takeouts in my country, which one would hope could snowball across racing in North America, if successful. I hate to sound like a downer, but I am not overly confident racing will change; but since the conference will be hearing from players, it is a chance to be heard.

Here is my motion.

http://pullthepocket.blogspot.com/2008/04/player-motion-give-tax-back-to-us.html

If you could reply here (on this thread) with any thoughts, and maybe your first name and residence (if possible), the head of the conference wants to print out all responses, as well as the motion.

Some like Ian, DanG and Jeff P have already responded and my sincere thanks. Some comments would be especially good, for example, if you have an angle that is clicking through at 0.95 ROI that is a red light bet where you bet zero dollars, what a 7% takeout cut could do for you. Or if you ahve played offshore and gotten a rebate, what that has done to your volume.

Anyway, thanks in advance, and to all who choose to respond let's hope we can do some good.

Best,

Dean

If you play offshore and get a rebate, you don't want takeout lowered at all, because your rebate gets lowered. The lower takeout only helps people who aren't getting a rebate.

[SeattleSlew@BP]

If you play offshore and get a rebate, you don't want takeout lowered at all, because your rebate gets lowered. The lower takeout only helps people who aren't getting a rebate.

That's a myth. I play thru parimutuel rebate shops AND offshore, and would much rather have an across the board lowering of takeout. I get the same or better rate while the betting market allows the bad players to stick around longer and wager.

The main thing DanT needs to emphasize is that it's not an overnight thing. Laurel tried it for a three week meet and were "disappointed", but it takes longer than that for the takeout reduction to make a significant difference to the average bettor's bankroll.

[DeanT]

That's a myth. I play thru parimutuel rebate shops AND offshore, and would much rather have an across the board lowering of takeout. I get the same or better rate while the betting market allows the bad players to stick around longer and wager.

The main thing DanT needs to emphasize is that it's not an overnight thing. Laurel tried it for a three week meet and were "disappointed", but it takes longer than that for the takeout reduction to make a significant difference to the average bettor's bankroll.

I agree. I would like to see something like this done for 2 years I think.

It took us about 50 years to screw up the business, it is not going to get fixed in a week, imo.

Thanks for the response. We are getting up there now with players making some great points. I think I have 25 or so responses so far, which is nice. It is appreciated.

[rrbauer]

Laurel tried it for TEN RACING DAYS.....BFD!

[facorsig]

Racing is wildly popular here across the country in the absence of both parimutuel wagering and the resultant takeout. A possible conclusion is that there is no link between takeout and the popularity of racing. Race tracks fail to provide an environment which is attractive to the general community, fail to cater to the interests of the wagering public and do a poor job to reward those few how push the most money through the windows.

The 7% tax which was rescinded should have resulted in removal of some service from the government which WO is now providing from these same funds. Likely, the government was not providing any service to the race tracks and the original tax was more of a problem. Restoring the tax would not provide any benefit to racing.

Personally, I do not consider take-out in my wagering decisions. I do consider rebates. Last year's move by WO to remove Premier Turf Club as a result of a single $1 wager by someone related to the track using the $1 provided by Premier was offensive and indicative of the attitude of WO management. There is an ethics element here which WO management will not understand and therefore I am not likely to wager on their track for the foreseeable future.

Fred

[Cangamble]

Racing is wildly popular here across the country in the absence of both parimutuel wagering and the resultant takeout. A possible conclusion is that there is no link between takeout and the popularity of racing. Race tracks fail to provide an environment which is attractive to the general community, fail to cater to the interests of the wagering public and do a poor job to reward those few how push the most money through the windows.

The 7% tax which was rescinded should have resulted in removal of some service from the government which WO is now providing from these same funds. Likely, the government was not providing any service to the race tracks and the original tax was more of a problem. Restoring the tax would not provide any benefit to racing.

Personally, I do not consider take-out in my wagering decisions. I do consider rebates. Last year's move by WO to remove Premier Turf Club as a result of a single $1 wager by someone related to the track using the $1 provided by Premier was offensive and indicative of the attitude of WO management. There is an ethics element here which WO management will not understand and therefore I am not likely to wager on their track for the foreseeable future.

Fred
Dubai racing is bet pretty heavily on Betfair for example. But the purses are big and it is more of an oddity in the middle east which explains the popularity there. And I'm sure many of the Sheiks there probably bet a few wives on their nags as well:)

Ever since parimutuel wagering began in Canada, the government got a good chunk of the money bet. They didn't perform very many services for the cut. When slots came along, it was negotiated to drop most of the taxes as the government was now to get 80% of slot profits. The only part of the 7% that came back to the horseplayer is perhaps HPI's rewards which most likely amount to 1% of the money bet at HPI. Many HPI account holders aren't eligible for rewards because they are out of their home market area (like me), so I'm guess at the 1%. The rest of that windfall went to the tracks, and if I'm not mistaken, track takeout has slightly increased since 1995 in Ontario.

WEG management's idea of competing for customers is to eliminate WEG's competition.

This is just another reason why they are worthy of zero respect.

[Kelso]

I'm sure many of the Sheiks there probably bet a few wives on their nags as well
:lol:

[Imriledup]

That's a myth. I play thru parimutuel rebate shops AND offshore, and would much rather have an across the board lowering of takeout. I get the same or better rate while the betting market allows the bad players to stick around longer and wager.

The main thing DanT needs to emphasize is that it's not an overnight thing. Laurel tried it for a three week meet and were "disappointed", but it takes longer than that for the takeout reduction to make a significant difference to the average bettor's bankroll.

So you are saying that if your favorite track slashed their takeout, your rebate would stay the same? I don't think that's right.

[SeattleSlew@BP]

So you are saying that if your favorite track slashed their takeout, your rebate would stay the same? I don't think that's right.

No, I'm saying the takeout reduction would make up for the drop in rebate. I can either be getting rebated in sharper pools vs. syndicates and other serious players who get rebates, or betting at the same rate (via lower takeout) into "dumber" pools. It's obviously not as simple as flipping a switch, it would take time to build, I'm simply stating why there is a long term advantage for reduced takeout for everybody, even rebate players.

[Cangamble]

No, I'm saying the takeout reduction would make up for the drop in rebate. I can either be getting rebated in sharper pools vs. syndicates and other serious players who get rebates, or betting at the same rate (via lower takeout) into "dumber" pools. It's obviously not as simple as flipping a switch, it would take time to build, I'm simply stating why there is a long term advantage for reduced takeout for everybody, even rebate players.
I definitely would rather have reduced takeouts for everyone that are at least the size of my average rebate.
Dumb money is lacking in the pools as it is. I'd rather see more of it than less.

[DeanT]

Thanks to everyone who replied. I got some via email as well. Anyhow, several good comments. I have to get to work adding more. If you want to add your 2 cents please continue to do so.

I wrote my thanks out in a post below.

>>>>>>>>>>>>>>>

First off, let me thank everyone who commented, and ask if you have not and want to, please do below.

The response has been much more than I anticipated and several things have struck me:

- The Harnessedge, Standardbred Canada and Harnesslink.com all placed the story up on their websites. There are obviously people there frustrated that the status-quo has taken over our game. I guess if they see a group of people concerned that the game has fallen so far, and not grown as it should, and offering somewhat of a proposal, it gives them reason to promote that. I thank them all for running it. We have had traffic and responses from their links.

- The fans who commented, who might not bet an arm and a leg, but who want to see the game get better. The horsemen who commented, who we all know are busy people.

- The bigger bettors. They commented too. I would be shocked if in aggregate, we had less than $30M in yearly handle represented in the comments so far. Ian Meyers who runs Premier Turf Club also commented. If a takeout reduction happened across the board it would actually hurt his business. His model is built on returning some rake to the player through legal rebating. Still, there he is saying "great idea". We need more people in this business thinking of its growth tomorrow, rather than their own pocketbook of today. Ian's platform is awesome and so is his customer service. He will find a way to win as a businessman in whatever racing throws at him.

The common theme that I find with players is that we are unlike anyone out there in racing. When the horsemen groups and tracks discuss their deals, as we see going on down south with groups wanting to shut wagering off at Lone Star, and yesterday's news about the Kentucky Derby, there is always a fight for a slice. With the players, without fail when speaking of takeout reductions (and this is a common theme of the comments below) it is always about growing the game.

It amazes me like no other business. We don't see customers at Walmart comment on a blog about the price of lawn chairs because they want to see Wal Mart grow. We don't see people comment about wanting the prices of televisions changed so Best Buy can make 11 cents a share instead of 9 cents a share. But in racing, fans and gamblers comment constantly about helping the game get better, and bigger and stronger.

Our fans and bettors are a strange breed, we all know that. But their passion for this game is like none other. They all deserve a seat at the table. When I see the fights down south with groups butting heads for signals and slices and signal fights, that is never more apparent. This game is nothing without our customers - absolutely nothing. They need to be heard.

Once again, I thank everyone who commented and ask that you continue to. It's important.

Good racing today and this weekend everyone.

[cnollfan]

There was a race at Gulfstream this year that due to track conditions was scratched down to two horses. One of the horses was 50 cents to $1 and the other was 80 cents to $1. Sports betting wouldn't last 20 minutes if the bettors had to deal with odds like that. Imagine betting 200 on the Patriots minus the points to win 100, or if you like the other side, taking the points and betting 125 to win 100. It was more dramatic with the scratches, but that's what horseplayers are asked to do in every race.

[yak merchant]

There was a race at Gulfstream this year that due to track conditions was scratched down to two horses. One of the horses was 50 cents to $1 and the other was 80 cents to $1. Sports betting wouldn't last 20 minutes if the bettors had to deal with odds like that. Imagine betting 200 on the Patriots minus the points to win 100, or if you like the other side, taking the points and betting 125 to win 100. It was more dramatic with the scratches, but that's what horseplayers are asked to do in every race.


Pretty much, that's the problem, the math against making money at horseracing is all but stupid, but what I call the "dream" has been all but been removed from the betting end horseracing. Maybe there never was such a thing. But the dream of being a professional handicapper is pretty much not attainable in todays environment (yes there are exceptions few and far between, but their visibility is zero). I can turn on ESPN just about 24 hours a day, and find some example of the "poker dream". College dropouts, put in their time, some hard work and a few hard lessons, and now they sleep till noon, play poker on TV and make a million a year. While it may be no easier to play poker at a high level than it is to pick a winning horse, the rake in poker is 5% at a maximum. Same with sports betting. A professional bettor that picks 55% winners at 11/10 odds is paying 5% in vigorish. The biggest example is the day trading "dream" Etrade/Ameritrade/Schwab made BILLIONS taking commisions that I'm sure averaged well below 1%.

I have no doubt that if they cut the takouts to 5% across the board, eventually the pools would be atleast 5 times bigger (probably 25 times bigger). Obviously this can't happen all at once or the tracks would go out of business (still think about half of them need to at this point). So in my fairy tale world, all the stakeholders would wake up one day and realize this, propose to drop the takeout 1% each year for the next 10 years. Then take a page from the Hong Kong book of racing, where information is given away not charged for, and most importantly where cheating is policed and punished to the utmost extreme. Then take advantage of the fact we live in a global world where internet video gets better everyday , and market said low takeout racing to all parts of the world. And finally develop a robust and secure betting platform that can be accessed in a myriad of ways and most importantly bets can be batch submitted via computer. (ie encourage syndicates which is not out of the hong kong playbook)

I've never bet horses "Seriously", but if I knew that I could count on there being a 5% takeout in the future where my chances of getting cheated were very low, I can guarantee whatever circuit proposed this plan, I would start studying tomorrow. While I'm sure it will never happen and even if it did it would start off slow and probably be repealed a year into it. But if done properly sooner or later, a tipping point would be hit, where the large pools, accompanied with the tales of success would bring media attention, which in turn would bring the new horseracing "daytrader". Oh what a pipe dream.

[Imriledup]

No, I'm saying the takeout reduction would make up for the drop in rebate. I can either be getting rebated in sharper pools vs. syndicates and other serious players who get rebates, or betting at the same rate (via lower takeout) into "dumber" pools. It's obviously not as simple as flipping a switch, it would take time to build, I'm simply stating why there is a long term advantage for reduced takeout for everybody, even rebate players.

But, wouldn't the serious players who get rebates do just as well with no rebate and a lowered takeout? In other words, why would the pools get 'dumber' with lower takeout? Are you saying that rebate players would leave the game?

If a rebate player gets an avg rebate of 10 pct into 20 pct takeout pools, wouldn't he do as equally well with zero rebate and a 10 pct takeout?

[Imriledup]

Pretty much, that's the problem, the math against making money at horseracing is all but stupid, but what I call the "dream" has been all but been removed from the betting end horseracing. Maybe there never was such a thing. But the dream of being a professional handicapper is pretty much not attainable in todays environment (yes there are exceptions few and far between, but their visibility is zero). I can turn on ESPN just about 24 hours a day, and find some example of the "poker dream". College dropouts, put in their time, some hard work and a few hard lessons, and now they sleep till noon, play poker on TV and make a million a year. While it may be no easier to play poker at a high level than it is to pick a winning horse, the rake in poker is 5% at a maximum. Same with sports betting. A professional bettor that picks 55% winners at 11/10 odds is paying 5% in vigorish. The biggest example is the day trading "dream" Etrade/Ameritrade/Schwab made BILLIONS taking commisions that I'm sure averaged well below 1%.

I have no doubt that if they cut the takouts to 5% across the board, eventually the pools would be atleast 5 times bigger (probably 25 times bigger). Obviously this can't happen all at once or the tracks would go out of business (still think about half of them need to at this point). So in my fairy tale world, all the stakeholders would wake up one day and realize this, propose to drop the takeout 1% each year for the next 10 years. Then take a page from the Hong Kong book of racing, where information is given away not charged for, and most importantly where cheating is policed and punished to the utmost extreme. Then take advantage of the fact we live in a global world where internet video gets better everyday , and market said low takeout racing to all parts of the world. And finally develop a robust and secure betting platform that can be accessed in a myriad of ways and most importantly bets can be batch submitted via computer. (ie encourage syndicates which is not out of the hong kong playbook)

I've never bet horses "Seriously", but if I knew that I could count on there being a 5% takeout in the future where my chances of getting cheated were very low, I can guarantee whatever circuit proposed this plan, I would start studying tomorrow. While I'm sure it will never happen and even if it did it would start off slow and probably be repealed a year into it. But if done properly sooner or later, a tipping point would be hit, where the large pools, accompanied with the tales of success would bring media attention, which in turn would bring the new horseracing "daytrader". Oh what a pipe dream.

Great post.

I wonder why, if all you say is true, that some enterprising people like the J Paul Reddam's of the world, don't open a top of the line, state of the art racetrack with 5% takeouts across the board. Wouldn't all the biggest bettors in the world gravitate to this track? They could have massive purses and the biggest betting handle in the USA by far.

[SMOO]

I have no doubt that if they cut the takouts to 5% across the board, eventually the pools would be atleast 5 times bigger (probably 25 times bigger). Obviously this can't happen all at once or the tracks would go out of business (still think about half of them need to at this point). So in my fairy tale world, all the stakeholders would wake up one day and realize this, propose to drop the takeout 1% each year for the next 10 years. Then take a page from the Hong Kong book of racing, where information is given away not charged for, and most importantly where cheating is policed and punished to the utmost extreme. Then take advantage of the fact we live in a global world where internet video gets better everyday , and market said low takeout racing to all parts of the world. And finally develop a robust and secure betting platform that can be accessed in a myriad of ways and most importantly bets can be batch submitted via computer. (ie encourage syndicates which is not out of the hong kong playbook)

:ThmbUp:

[DeanT]

Interesting post Yak. Some really great points about what the game could be someday with some work and leadership.

[Cangamble]

The new inventors would probably be nervous about making track takeouts as high as slots (9-10%).....But we are stuck with the dinosaur mentality of 40's and 50's instead.

[Cangamble]

And Good luck at the conference.

http://www.standardbredcanada.ca/news/iss0408/horseplayersprofiled0425.html

Say hi to all the WEG execs from me:)

[magwell]

Great post.

I wonder why, if all you say is true, that some enterprising people like the J Paul Reddam's of the world, don't open a top of the line, state of the art racetrack with 5% takeouts across the board. Wouldn't all the biggest bettors in the world gravitate to this track? They could have massive purses and the biggest betting handle in the USA by far. ....... come on, thats makes way too much sense for this game, cant do that.... it might work :lol: