Advice: Embrace 'Whales,' Close Tracks

[trigger]

>>>>>>>>>>>>>"Michael Konik, a best-selling author, television commentator, and former member of sports-betting syndicates, discussed how computer-assisted wagering allows users to identify potentially profitable plays and make money.
He said the “smart money” has sought out other means to wager on racing because bookmakers “don’t want to service people that understand the line better than they do.”
Konik acknowledged rebates, which average about 7% in the industry, can spell trouble for the average 0n-track player who is at a disadvantage, but he doesn’t advocate eliminating rebates. He said the industry needs to experiment with lower percentages to see how far it can go without chasing away the whales.
“You will know when the rebate is set too low,” Konik said. “I don’t know what that right number is for your industry. I don’t believe smart bettors will be the end of the industry. In fact, they can be one of the forces that revitalize the industry.”
Konik said a major drawback of the pari-mutuel system is takeout rates, which average about 20% but run as high as 30% for some exotic wagers in Pennsylvania.
“I don’t think most people can win betting horses at a 20% takeout,” he said. “The vast majority of your customers cannot win long-term betting horse racing.”>>>>>>>>>"
http://news.bloodhorse.com//viewstory.asp?id=47321

[Indulto]

From the article:... He said the “smart money” has sought out other means to wager on racing because bookmakers “don’t want to service people that understand the line better than they do.”
Konik acknowledged rebates, which average about 7% in the industry, can spell trouble for the average 0n-track player who is at a disadvantage, but he doesn’t advocate eliminating rebates. He said the industry needs to experiment with lower percentages to see how far it can go without chasing away the whales.
“You will know when the rebate is set too low,” Konik said. “I don’t know what that right number is for your industry. I don’t believe smart bettors will be the end of the industry. In fact, they can be one of the forces that revitalize the industry.”
Konik said a major drawback of the pari-mutuel system is takeout rates, which average about 20% but run as high as 30% for some exotic wagers in Pennsylvania.
“I don’t think most people can win betting horses at a 20% takeout,” he said. “The vast majority of your customers cannot win long-term betting horse racing.Finally, someone comes right out and says that unrebated players are at a disavantage against rebated players.

[Imriledup]

From the article:Finally, someone comes right out and says that unrebated players are at a disavantage against rebated players.

How are they at a disadvantage? Whether or not you get a rebate, you still have to pick winners and bet properly.

[JustRalph]

How are they at a disadvantage? Whether or not you get a rebate, you still have to pick winners and bet properly.


Whale: picks same winner as you, gets 7% more back

that is a huge advantage over the long run


for every 100 dollars won, he gets 7 bucks more than you. that simple

[Pace Cap'n]

for every 100 dollars won, he gets 7 bucks more than you. that simple

Which enables him to bet even more, therefore driving down your odds even more.

[cj]

Which enables him to bet even more, therefore driving down your odds even more.

Of course, that also drives the odds up on others.

I don't think there is a clear answer if it provides a disadvantage to other players. Clearly, it helps those getting a rebate. However, as a bettor, I want as much money in the pools as possible. I don't want every track to be like Presque Isle Downs or Turf Paradise where a $50 bet kills any edge you may have had.

[alhattab]

Whale: picks same winner as you, gets 7% more back

that is a huge advantage over the long run


for every 100 dollars won, he gets 7 bucks more than you. that simple

I don't believe that's how it works. I thought rebate was on amount bet not amount won.

The advantage is pretty simple although I suggest not at the expense of other bettors. It is just more likely that the rebated bettor will be able to show a net profit.

[SMOO]

as a bettor, I want as much money in the pools as possible. I don't want every track to be like Presque Isle Downs or Turf Paradise where a $50 bet kills any edge you may have had.

This is a great point. Pool size is very important.

[lamboguy]

i am going to say this again. if the tracks were willing to close the betting windows 5 minutes before the bell rings, i would rebate the tracks 5% gladly instead of getting the stupid rebate.

if anyone knows of a situation where i can get the odds 5 minutes before post and lock them in i would gladly pay them.

[SMOO]

if anyone knows of a situation where i can get the odds 5 minutes before post and lock them in i would gladly pay them.

Yes, it's called sports betting. :D

[ryesteve]

I don't think there is a clear answer if it provides a disadvantage to other players.Of course there is. The only people who are reluctant to concede this are the ones who are getting the big rebates (hello?)

[classhandicapper]

i am going to say this again. if the tracks were willing to close the betting windows 5 minutes before the bell rings, i would rebate the tracks 5% gladly instead of getting the stupid rebate.

if anyone knows of a situation where i can get the odds 5 minutes before post and lock them in i would gladly pay them.

Exchange betting.

[Tampa Russ]

i am going to say this again. if the tracks were willing to close the betting windows 5 minutes before the bell rings, i would rebate the tracks 5% gladly instead of getting the stupid rebate.

if anyone knows of a situation where i can get the odds 5 minutes before post and lock them in i would gladly pay them.

A very simple solution to a very serious integrity problem. The windows lock 3-4-5 minutes before post. All monies must be tallied before horses load into the gate. Of course it will take some getting used to, but so be it. It will need to be federal law in order for the tracks to actually try this again, so I'm not hopeful.

[kenwoodallpromos]

Askingfor some tracks to go away, others to give up last minute bets and give more $$ back in rebates anmd takeout; asking other customers to put up with whales. I DO agree with much he is saying; IMO new ground is working on getiing young bettors, which is why even with some changes there is not enough new bettors to help OUR odds!!

[JustRalph]

I don't believe that's how it works. I thought rebate was on amount bet not amount won.

The advantage is pretty simple although I suggest not at the expense of other bettors. It is just more likely that the rebated bettor will be able to show a net profit.


you are right, but I thought the overseas groups paid on winnings too? But they limit odds payouts? Maybe I am wrong. either way they still have an advantage. You bet a hundred, they get the same bets for 93? Either way it works out............

I have never used an offshore house. But I am pretty sure when I first looked into it (6-7 years ago) that some paid rebates on winnings too? I am getting old.......maybe I am pulling a Bush and "mis-remembering" it happens :lol:

[DanG]

I’m a long way from the sharpest tool in the shed, but I never understood the argument that it is a disadvantage (during the actual betting process) for player A to be rewarded (at the conclusion) of the session and for player B not to receive one.

Player A at $1,000 per race puts $10,000 at risk over 10 races and contributes (let’s say 20%) or, $2,000 to the rake.

Player B bets $10 per race and puts $100 at risk and forks over $20 bucks to the take out.

As they are walking to their car…Player A is rewarded for his $2,000 contribution and for risking $10,000 by receiving a kick back of 5%, or $500 bucks. While the shots were being fired he had no advantage over player-B, he played into the same pool, take out etc…but because of his increased volume he is rewarded, because the track understands (I wish! :faint: ) the concept of the churn.

On this day it so happens; player A got killed; Lost 8 grand and pumped up the mutual's all over the board and player B had an incredible day zigging when Player A zagged. Player B is not obligated to reimburse the “whale” because he increased his payouts, but he should recognize the fact that player A is frankly more important to the bottom line of this business and must be encouraged to continually risk large capital..

BTW: I’m somewhere in between A & B, but I do recognize without player A we would not recognize our pools as we now know them. We are much more dependant on a relatively small number of individuals then we realize. Just as we need owners to make our game go, we need large players and I say the more the merrier and bless them all.

Ok…just making sure my flak jacket is secure. :D

[Imriledup]

I’m a long way from the sharpest tool in the shed, but I never understood the argument that it is a disadvantage (during the actual betting process) for player A to be rewarded (at the conclusion) of the session and for player B not to receive one.

Player A at $1,000 per race puts $10,000 at risk over 10 races and contributes (let’s say 20%) or, $2,000 to the rake.

Player B bets $10 per race and puts $100 at risk and forks over $20 bucks to the take out.

As they are walking to their car…Player A is rewarded for his $2,000 contribution and for risking $10,000 by receiving a kick back of 5%, or $500 bucks. While the shots were being fired he had no advantage over player-B, he played into the same pool, take out etc…but because of his increased volume he is rewarded, because the track understands (I wish! :faint: ) the concept of the churn.

On this day it so happens; player A got killed; Lost 8 grand and pumped up the mutual's all over the board and player B had an incredible day zigging when Player A zagged. Player B is not obligated to reimburse the “whale” because he increased his payouts, but he should recognize the fact that player A is frankly more important to the bottom line of this business and must be encouraged to continually risk large capital..

BTW: I’m somewhere in between A & B, but I do recognize without player A we would not recognize our pools as we now know them. We are much more dependant on a relatively small number of individuals then we realize. Just as we need owners to make our game go, we need large players and I say the more the merrier and bless them all.

Ok…just making sure my flak jacket is secure. :D

Great post.

Another factor is that the player who is betting 1,000 per race for ten races (for arguments sake, lets say he's making 10 thousand dollar win bets) is depressing his own mutuel price while the 10 dollar bettor is not.

Assuming this isnt' the Breeders Cup and we are talking about a Tuesday at Mountaineer, the 1,000 bettor bets his grand on a horse that without his bet will pay 6.60, but because of his bet, it pays 6.00

the 10 dollar bettor bets on his own 6.60 horse and gets 6.60.

How is it an advantage to get 6.00 instead of 6.60?

[ryesteve]

On this day it so happens; player A got killed; Lost 8 grand and pumped up the mutual's all over the board and player B had an incredible day But generally, that's not how it plays out. What happens over the long run is that the rebate player uses his leverage to spread all over the board and turn overlay opportunities into breakeven/slightly negative propositions. The horses outside their spread aren't horses most players would've wanted to touch anyway. Sure, they're not ominscient, but the number of 10/1 shots they turn into 5/1 shots hurt a lot more than the gain from the rare instances when you manage to correctly zig when they zag.

[Imriledup]

But generally, that's not how it plays out. What happens over the long run is that the rebate player uses his leverage to spread all over the board and turn overlay opportunities into breakeven/slightly negative propositions. The horses outside their spread aren't horses most players would've wanted to touch anyway. Sure, they're not ominscient, but the number of 10/1 shots they turn into 5/1 shots hurt a lot more than the gain from the rare instances when you manage to correctly zig when they zag.

But, if they are turning 10-1 shots into 5-1 shots, doesn't that mean there's another horse on the board that is overlayed that the non rebate player can take advantage of?

If Bill Gates did this with no rebate, what would you say? You would say that Gates is using his leverage.........but, he's got no rebate. So, its a money thing and not a rebate thing, right?

[Indulto]

But, if they are turning 10-1 shots into 5-1 shots, doesn't that mean there's another horse on the board that is overlayed that the non rebate player can take advantage of?

If Bill Gates did this with no rebate, what would you say? You would say that Gates is using his leverage.........but, he's got no rebate. So, its a money thing and not a rebate thing, right?I too welcome Bill Gates' money in the pools. I would like to see him get rebated at a rate available to ALL players. Whales have been with us at least since "Bet-a-million" Gates who, as I understand it, did not get rebates.

I'm not against whales. I'm not against rebates. I'm against the practice of only whales getting rebates. It's no coincidence that the game has tanked since rebates were introduced. Your odds example has nothing to do with the argument that the practice of rebating puts unrebated players at a disadvantage. The notion that there is any distinction regrding the timing of the disadvantage strikes me as equally irrelevant.

But I can't blame you guys for trying to spin it. ;)

[ryesteve]

But, if they are turning 10-1 shots into 5-1 shots, doesn't that mean there's another horse on the board that is overlayed that the non rebate player can take advantage of?
I said, "The horses outside their spread aren't horses most players would've wanted to touch anyway."


If Bill Gates did this with no rebate, what would you say? You would say that Gates is using his leverage.........but, he's got no rebate. So, its a money thing and not a rebate thing, right?No, it's not. If Bill Gates isn't getting a rebate, he can't successfully employ betting strategies that yield a $1.85 $net and still show a profit. It's the rebate that gives you leverage, not bankroll.

[Imriledup]

I said, "The horses outside their spread aren't horses most players would've wanted to touch anyway."

No, it's not. If Bill Gates isn't getting a rebate, he can't successfully employ betting strategies that yield a $1.85 $net and still show a profit. It's the rebate that gives you leverage, not bankroll.

But i'm not talking about a profit. There's no rule that says Gates has to make a profit betting horses. He could just spread thousands of his own dollars onto combinations that some computer racing geek tells him to play. The rebate has nothing to do with leverage, its all about how big your bankroll is and what risk you are deciding to take on. Also, who's to say that anyone with a rebate is re-betting the rebate money into the pools? Horseplayers can take their rebate and put it directly into the stock market without ever rebetting one dollar.

[Indulto]

But i'm not talking about a profit. There's no rule that says Gates has to make a profit betting horses. He could just spread thousands of his own dollars onto combinations that some computer racing geek tells him to play. The rebate has nothing to do with leverage, its all about how big your bankroll is and what risk you are deciding to take on. Also, who's to say that anyone with a rebate is re-betting the rebate money into the pools? Horseplayers can take their rebate and put it directly into the stock market without ever rebetting one dollar.How often does that happen? A big score by a small player might not soon be up for grabs, and long-term winners will take profits out of the game, but most will put returned money back in the pools.

[trigger]

There's no question in my mind that a player with a large rebate(5%+) has a great advantage over the non-rebated player.
Just imagine a 10 player poker game with a 10% rake where one player gets a rebate of 10% on everything he bets which gets added to his bankroll after every deal. Now, assume all players possess equal poker playing ability. Who do you think has the best chance of winning ?

[Bruddah]

and I wish all of these so called Industry smarty pants would just shut up and think beyond their noses. Saying you want to cater to whales only is like a Chef saying his cake is made of all icing. There is no foudation and after a couple of mouthfuls you have eaten all you can stand. Eat any more and your sick. The truth in the end is, you never had cake in the first place.

The same applies to building business revenues and profits. It takes the right ingredients in proper proportions to build a cake and the icing comes later. These idiots want to build a business model with all icing and no foundation. It won't work and will make the Industry sicker in the end.

Simpletons and idiots all! :ThmbDown:

[Overlay]

Just as a cross-reference, there's another current thread on the Advance Deposit Wagering (ADW) discussion board about this same article:

http://www.paceadvantage.com/forum/showthread.php?t=51124

[DeanT]

50th time we've been thru this :)

Rebates are good. End of story.

With quotes from racetrack execs like this, it is the only way we can lower takeouts and improve handles.

This is a true story. I was talking to a general manager of a racetrack and said "how about that 25% takeout on exactas?" And he said "I know! The state won't let us take any more than that!" I think he missed the point slightly.

That is what we are up against folks. There are 30 or more states and THG's and TOC's and racetrack execs that think like that. We are never going to get them to decide to lower rake. They are in the 1930's.

The question is: How do we make rebates better and let everyone take advantage of them if they so choose? And how do we get ADW's to offer them to us to grow our game?

The first step in that, imo, is making sure that ADW's THG and tracks all get a slice of the pie, but players do too. Each of them give 2% of their take to be given as rebates. If ADW A wants to give the 6% to people who bet $50000 a month, fine. Then ADW might want to give 2%-6% to everyone on a sliding scale, fine. Then a third ADW might want to give 3.5% to everyone and points for things and such for the remainder.

Whatever, but it is lower prices and players can take advantage of it if they choose. We willl raise handles overnight, as well.

That is a workable plan, imo. But make no mistake, and I do not say this without cause (I have spoken to many people in this business about this): Rebates are the only way we will get a fair shake. Everything else is pure fantasy.

[ryesteve]

But i'm not talking about a profit. There's no rule that says Gates has to make a profit betting horses.If a whale's not making a profit, he's not going to be a whale very long, so I have no idea what this is supposed to mean.

[Niko]

I’m a long way from the sharpest tool in the shed, but I never understood the argument that it is a disadvantage (during the actual betting process) for player A to be rewarded (at the conclusion) of the session and for player B not to receive one.

Player A at $1,000 per race puts $10,000 at risk over 10 races and contributes (let’s say 20%) or, $2,000 to the rake.

Player B bets $10 per race and puts $100 at risk and forks over $20 bucks to the take out.

As they are walking to their car…Player A is rewarded for his $2,000 contribution and for risking $10,000 by receiving a kick back of 5%, or $500 bucks. While the shots were being fired he had no advantage over player-B, he played into the same pool, take out etc…but because of his increased volume he is rewarded, because the track understands (I wish! :faint: ) the concept of the churn.

On this day it so happens; player A got killed; Lost 8 grand and pumped up the mutual's all over the board and player B had an incredible day zigging when Player A zagged. Player B is not obligated to reimburse the “whale” because he increased his payouts, but he should recognize the fact that player A is frankly more important to the bottom line of this business and must be encouraged to continually risk large capital..

BTW: I’m somewhere in between A & B, but I do recognize without player A we would not recognize our pools as we now know them. We are much more dependant on a relatively small number of individuals then we realize. Just as we need owners to make our game go, we need large players and I say the more the merrier and bless them all.

Ok…just making sure my flak jacket is secure. :D

I'm in the same boat mentally so maybe 2 "great" minds can make sense of this. I'd like to first state that I agree that liquidity in the pools is essential for everyone involved. So anyway to get more money in the game is good.....as long as it doesn't lead to chasing away the foundation of the fan base. Here goes my simplistic explanation of what happens.

Two groups of people (A and B) are betting into the same pools (sitting at the same table playing against each other-however you want to picture it). We'll assume both groups are of equal handicapping and betting ability. Sometimes they're betting the same horses, and some races different horses-but overall their win percentage and ROI are the same. Let's say a 28% win rate and 5% profit.

Both can show a profit at average of odds of 3-1. Without rebates they both face the same problem. How much can they bet before decreasing their maximum profit. All's good and both can bet to maximize their profit.

Now the racetrack owner comes to Group A and says hey, you're good customers and spend a lot of money with me so I'm going to give you 4% to 10% back on your wagers depending on the track you play and how much you bet (even higher on exotics at tracks with large takeouts). It's good business-reward your best customers.

Now the game changes.

Group A is getting rebates and can bet their horses down to 5/2 and maintain their profit. They can also bet more money which is good for the betting pools and good for the tracks, who can argue that. And that means more profit for them so they can bet even more which is even better for the tracks.

Now let's look at Group B. Group A (all player A's) now has the ability to bet more money at lower odds while maintaining their profit. They're betting their 3-1 horses down to 5/2 but still collecting an overall profit of 5%. Group B's horses are getting bet below 3-1 on average but they can't make a profit below 3-1. What should group B do? Support Group A because they increase the handle? Or find another game because they've lost their edge?

Now let's take it a step further. Management comes to Group A and says...man you're spending an awful lot of money with us. Here's what we're going to do for you. You can hook up your batch betting computer programs into our pools to make sure you're maximizing your edge and percentages correctly. That way you can bet more money and we'll make more money. And by the way-the pools don't always close at the start of the race so you can always cancel a bet if your horse breaks slow (I couldn't resist this last part). Group A is estatic. They're making money, their churn is way up, their profits are up. They're really doing the tracks a favor with all the money they're spending. The track is estatic. Look at all this money the whales are pumping into our track. We couldn't survive without them. Our handle is flat or going down, but our best customers are betting more. We couldn't survive if it wasn't for them. It's fair, everyone gets the same odds on the tote board.

Now let's go back to Group B. Here's some of the things they're perceiving. It's seems like it's harder to get an edge, especially on the low priced horses. Horses that used to go off at 3-1 are now 5-2. At the small tracks you have no idea what's going to happen, but you assume the favorite that gets a clean break is going to get hammered. But it's still fair right...after all everyone gets the same odds on the odds at the end of the race.

Now if you're player B what should you do?

Now how about Group C.

The player that's not a good handicapper and goes a few times a year. They're facing a huge hurdle in Group A, another hurdle in group B and their take to start is 20% or higher (it's really higher than that because group A is making money and group B is making or losing a little).

Now the question is...except to have some fun, why would Group C play the game.

Maybe I'm not looking at this right, but this simplistic model is what I've come up with in the last couple minutes to give another viewpoint.

I'd love to see Poker give a different rake to players-everyone gets to play the same cards so the odds are the same..and why not let the best customers sit at the last seat each hand so they can see how everyone else bets first. It's only fair, they're the best customer....

[DeanT]

Poker gives rakebacks and have done so for years.

All you have to do is seek it out.

[trigger]

Poker gives rakebacks and have done so for years.

All you have to do is seek it out.

Yea, but the poker rakebacks are no where near 10-12% as for whales in horse racing(to start with ,casino poker rakes(takeout) are less than 5%).
The rebates in horse racing are way to high and create a substantial disadvantage for the non-rebated players.

[DeanT]

Yea, but the poker rakebacks are no where near 10-12%
Poker rebates are nowhere near 10% because their total take is 4%.

They know charging 22% rakes would be insane. That would make them racing and no one would play poker.

30% rakebacks are the norm in poker. Equalizing that for racing that would mean we would get around a 7% rebate, putting us on par with Australian bettors. It would be a good start. Handle might fight its way out of the porcelain hotel that the 19th century types have landed us in.

[InsideThePylons-MW]

Yea, but the poker rakebacks are no where near 10-12% as for whales in horse racing(to start with ,casino poker rakes(takeout) are less than 5%).
The rebates in horse racing are way to high and create a substantial disadvantage for the non-rebated players.

Poker rakeback is almost the same as a 10% rebate in racing.

Almost every site has numerous people/pros that get 100% rakeback.

[Indulto]

http://www.thoroughbredtimes.com/national-news/2008/September/29/Customer-service-key-topic-at-simulcast-conference.aspx (http://www.thoroughbredtimes.com/national-news/2008/September/29/Customer-service-key-topic-at-simulcast-conference.aspx)
Customer service key topic at simulcast conference
by Ed DeRosaSeptember 29, 2008... There are subsets of the betting group as well. What is good for the big bettors is not necessarily good for those with smaller bankrolls, and while tracks certainly like the handle “whales” generate, most would be reluctant to lose the weekend warrior player.

... “This is a business that prefers to milk the cow rather than to slaughter it,” Konik said. “A rebate is an advantage to a professional that does not need it.”
...The article also includes an interesting photo for those interested in "Da Facts."

[DeanT]

I guess Konik did not read the report that his group paid for.

This type of stuff is nothing more than a smoke screen to get players off focus. It is a good way to get people off the simple fact that the tracks charge everyone too much. The easiest way to get bettors off that focus is to pit them against each other.

It has worked for quite awhile. Luckily people are starting to see thru it.

[Imriledup]

I'm in the same boat mentally so maybe 2 "great" minds can make sense of this. I'd like to first state that I agree that liquidity in the pools is essential for everyone involved. So anyway to get more money in the game is good.....as long as it doesn't lead to chasing away the foundation of the fan base. Here goes my simplistic explanation of what happens.

Two groups of people (A and B) are betting into the same pools (sitting at the same table playing against each other-however you want to picture it). We'll assume both groups are of equal handicapping and betting ability. Sometimes they're betting the same horses, and some races different horses-but overall their win percentage and ROI are the same. Let's say a 28% win rate and 5% profit.

Both can show a profit at average of odds of 3-1. Without rebates they both face the same problem. How much can they bet before decreasing their maximum profit. All's good and both can bet to maximize their profit.

Now the racetrack owner comes to Group A and says hey, you're good customers and spend a lot of money with me so I'm going to give you 4% to 10% back on your wagers depending on the track you play and how much you bet (even higher on exotics at tracks with large takeouts). It's good business-reward your best customers.

Now the game changes.

Group A is getting rebates and can bet their horses down to 5/2 and maintain their profit. They can also bet more money which is good for the betting pools and good for the tracks, who can argue that. And that means more profit for them so they can bet even more which is even better for the tracks.

Now let's look at Group B. Group A (all player A's) now has the ability to bet more money at lower odds while maintaining their profit. They're betting their 3-1 horses down to 5/2 but still collecting an overall profit of 5%. Group B's horses are getting bet below 3-1 on average but they can't make a profit below 3-1. What should group B do? Support Group A because they increase the handle? Or find another game because they've lost their edge?

Now let's take it a step further. Management comes to Group A and says...man you're spending an awful lot of money with us. Here's what we're going to do for you. You can hook up your batch betting computer programs into our pools to make sure you're maximizing your edge and percentages correctly. That way you can bet more money and we'll make more money. And by the way-the pools don't always close at the start of the race so you can always cancel a bet if your horse breaks slow (I couldn't resist this last part). Group A is estatic. They're making money, their churn is way up, their profits are up. They're really doing the tracks a favor with all the money they're spending. The track is estatic. Look at all this money the whales are pumping into our track. We couldn't survive without them. Our handle is flat or going down, but our best customers are betting more. We couldn't survive if it wasn't for them. It's fair, everyone gets the same odds on the tote board.

Now let's go back to Group B. Here's some of the things they're perceiving. It's seems like it's harder to get an edge, especially on the low priced horses. Horses that used to go off at 3-1 are now 5-2. At the small tracks you have no idea what's going to happen, but you assume the favorite that gets a clean break is going to get hammered. But it's still fair right...after all everyone gets the same odds on the odds at the end of the race.

Now if you're player B what should you do?

Now how about Group C.

The player that's not a good handicapper and goes a few times a year. They're facing a huge hurdle in Group A, another hurdle in group B and their take to start is 20% or higher (it's really higher than that because group A is making money and group B is making or losing a little).

Now the question is...except to have some fun, why would Group C play the game.

Maybe I'm not looking at this right, but this simplistic model is what I've come up with in the last couple minutes to give another viewpoint.

I'd love to see Poker give a different rake to players-everyone gets to play the same cards so the odds are the same..and why not let the best customers sit at the last seat each hand so they can see how everyone else bets first. It's only fair, they're the best customer....

Niko, great post. I'd like to toss in my 2 cents on what you wrote.

1) the Group B answer is to bet a different horse. If their 3-1 shot (on their own personal line) is down to 5-2, they need to bet someone else who is providing value. Also, there isn't just one whale betting, there are more than one and i have to imagine that whales all don't bet on the same horse and when they do, they don't always win. If Whale A bets a 3-1 down to 5-2, than Whale B might see value in a horse who is 6-1 and not 5-1 and bet on that one.

2) Its completely unfair to say that all rebate players have robotic access, that's just not true. Also, the ability to cancel wagers is not a rebate-shop specific thing either.

3) One more thing about the non rebate players having to take 5-2 on the whale's 3-1 shot. If the little fish knows (which he doesnt) that the money coming into his selection (the 3-1 shot) is whale money, won't he adjust his own personal morning line to fact that whale's never lose and the 5-2 shot that has been endorsed by the whale becomes a better bet (or at least as good) than the 3-1 shot that's NOT endorsed by the whale?

4) Much of the argument against rebate players is that its unfair to the little fish and why shouldn't they get a rebate too? Well, they can get a rebate, all they have to do is bet a million dollars a month (or whatever the rebate shops require)? I'd love to play center for the LA Lakers, but at 5 foot 8 i'm not tall enough. The NBA isnt' going to change the rules so that i can fulfill my dream of NBA stardom, so i have to figure out another way to make it out there. Same thing for the small bettors.....you want a rebate? Become a big bettor, everyone has the same opportunity to be a big bettor. The system is fair, it doesn't discriminate, you want the rebate, bet more. You want to be a hollywood actor making 25 million a film, learn how to act. Same thing.

[Indulto]

... Much of the argument against rebate players is that its unfair to the little fish and why shouldn't they get a rebate too? Well, they can get a rebate, all they have to do is bet a million dollars a month (or whatever the rebate shops require)?

...you want a rebate? Become a big bettor, everyone has the same opportunity to be a big bettor. The system is fair, it doesn't discriminate, you want the rebate, bet more. ..."Let them eat cake."

[barn32]

Poker rebates are nowhere near 10% because their total take is 4%.

Poker players can get 25% of the rake that they pay refunded to them on Full Tilt. One of the biggest sites. The 100% rakeback figures are rare and given to "props." Some sites with low volume also offer large rake back incentives. WSEX offered 100% rake back for a long time, but the site never really caught on. I think they've since lowered it to about 75%. (Not sure.)

On one of the other big sites (Poker Stars), which does not have rake back, there are people making $100,000 a year playing break even poker. Poker Stars rewards high volume players generously, and I mean HIGH volume. These are guys playing anywhere from 4 to 24 games at a time. If you earn 1 million points in a year you become "Super Nova Elite" status entitling you to approximately $100,000 worth of cash bonuses and tournaments. There are other perks as well.

Super Nova Elite (http://www.pokerstars.com/vip/supernova/elite/)

[ryesteve]

The poker analogy doesn't work, because the poker player getting a rakeback doesn't affect how much money I win when I win the pot.

On the other hand, unless the whale is betting indiscriminantly or foolishly, he DOES lower the payouts far more times than not on the horses I win with.

[jonnielu]

Of course there is. The only people who are reluctant to concede this are the ones who are getting the big rebates (hello?)

Hey Steve,

How is it a dis-advantage to those that are playing the less populated side of the street, and betting the 30% of winners that are outside the ML top 4?

jdl

[Cangamble]

The poker analogy doesn't work, because the poker player getting a rakeback doesn't affect how much money I win when I win the pot.

On the other hand, unless the whale is betting indiscriminantly or foolishly, he DOES lower the payouts far more times than not on the horses I win with.
I think the poker analogy works more than you think. Players online who received rakebacks tend to play more, and therefore are in more pots. This is assuming that not all tables are playing at full capacity of course.
Plus those who get rakebacks may bet more aggressively when they get their rakeback, thus inflating your pot.

As for whales, you are right on. Without whales, everyone elses ROI's would increase.

I'm not sure I buy into the pool size argument that many pro-Whales bring up here. The pool size would be be a little less without whales, but it would increase because everyone else would have more churn money because their returns would increase. And I don't think there are many non whales who would avoid a track if their exactor pools were 30,000 instead of 50,000, etc.

[Cangamble]

Hey Steve,

How is it a dis-advantage to those that are playing the less populated side of the street, and betting the 30% of winners that are outside the ML top 4?

jdl
Whales don't just bet ML top 4's. They bet perceived underlays. Batch betting programs are set up to take advantage of any underlay, whether they are even money or 40-1, or whether an exactor is paying $10 or $400.

[ryesteve]

Hey Steve,

How is it a dis-advantage to those that are playing the less populated side of the street, and betting the 30% of winners that are outside the ML top 4?
Because what I'm talking about applies to those horses as well.

[Imriledup]

I just want to point something out that seems to be misleading with a lot of the posts in this thread and that is that whales don't always win. Its like the word bounce. Bounce doesn't equal loss just like whale doesn't equal win.

The parimutuel system is set up so that if one horse is too low in odds and isn't representative of his true chances of winning, some other horse will provide a long run winning gamble for someone who is astute enough to take it. If there is a horse that is 3-1 on the board and some whale thinks that 3-1 is too high, he might bet a few grand to win making that horse 2-1. There could be another whale who says "dammit, that's my pick, i wanted 3-1 but i love it so much i'm going to still bet it....maybe it will drift up in price or win anyway" and the whale proceeds to make that 2-1 shot, who is already a bad bet, become an 8-5 shot.

The higher the pools, the more meat on the bone for everyone. Take a look at the results from every track every day. You see tons of longshots win, huge tri's supers, pick 6s etc that pay thousands or tens of thousands....whales bet those races too, why did that horse pay 50 bucks to win? Why did the tri pay 3,000 for a buck? Did all the whales collectively just happen to skip those races? No, they bet them and lost.

[Niko]

I don't have all the answers and I'm not a well heeled insider so I'm just thinking it through and getting others opinions. I'm not sure any ADW would share the information with the public-one did a few years back and said overall the big bettors lost-but with a rebate, well that's another story. And a few of them won some large chunks of change. And I still don't totally trust the tote system no matter what anyone tells me-pig headed maybe.

Poker; Rake-bad example for horse racing. If the larger players receive a rebate on the rake it doesn't change the percentages at the tables. You still have 52 cards and the odds of you winning or losing a hand don't change. But maybe you can be a little more aggressive which gives you an advantage.
End result; you win more or lose less but don't impact the odds of the cards being played each hand. It is a good example of what happens if you reward top players though.

As for my example, it was simplistic by design. Not all whales win and they bet across all odds. But if they're able to bet more overall while maintaining an edge, they change the odds of the cards (horses) during the playing of the game. They decrease the odds overall of the most likely winners. And yes they can kill their own edge.

It's suggested just not to bet the horses they are...I think that's a little harder to do than you think. If they're good they make it harder to find value. But when they're wrong-the rewards can be greater.

I don't know how many people do batch betting but it wouldn't take many. The programs are expensive and sophisticated. I would assume the players are sophisticated also, well connected and have to be well funded to build the program and get access to the pools and technology. It wouldn't take many (a group or two) to take away a lot of edges. Little advantages compounded over time turn into huge numbers.

There are plenty of players here that can get around some of this..and yes --if you want a rebate, all you have to do is bet more-or go to PTC and play the smaller tracks. The player that gets killed is the weekend fan who plays few times a year. How many are coming back?

If a goup of players is betting say 30% of the pool to throw out a number and only losing 10% of a 20% take, that means the other 70% (casual weekend fan) is losing 30%. How long do you think it takes them to figure it out.

I don't have an easy answer, I just think horse racing is heading down a very slippery slope and has been for a while. In the end I could be wrong though-I don't have the inside data to support or negate what I'm saying. I have no idea who's winning or how much. I can only use the data that's public.

[Cangamble]

Imriledup, 20% of all dollars bet are lost by bettors collectively.
Even if a whale that gets a 12% rebate loses 5% after rebate, he is causing the other players to have lower ROIs than they would if he had vanished from the betting scene.

Niko, when gamblers cash, they tend to go Wild West. This happens in online Poker. And it happens with those who just got their rebate money. Lets not forget, those getting rebates in poker aren't getting them because they have to win, it is just that they play enough hands to qualify for the rebate. So they aren't necessarily smarter than other players. Yes, the hands probability does change if you have these people thinking they have found money and they are building up the pots on a wing and a prayer.

[DeanT]

Never lose site of the prize. The discussion should go like this:

A:Rebates are good because they lower prices in a crippling, fading high cost game.

B:Rebates are even better if everyone who wants them can get them.

How do we get to "B"?

Never ever ask for them to be outlawed, because they will never come back and we can never get to "B". Does anyone actually think that the THG will give us rebate money if they get a bigger ADW slice?

That is the only thing we have to concern ourselves with. Everything else is noise, detracts from the goal, and gives tracks a green light to do what they want: raise prices higher and higher, resulting in more and more people leaving this game and having us play into $100 win pools.

[Niko]

Dean; I hope I'm not giving the wrong impression. I don't want rebates to go away. I want B too.

Cangamble; You're right-should've clarified-if they're putting more money in, it does change the players odds from an ROI aspect

[ryesteve]

Did all the whales collectively just happen to skip those races? No, they bet them and lost.That does no one any good (except stabbers) if there's not a rational means of landing on those winning horses. This is similar to the polytrack arguments; side A says, "The higher mutuels benefit the player" and side B says, "High mutuels don't help when they're merely the residue of chaos"

[Indulto]

Never lose site of the prize. The discussion should go like this:

A:Rebates are good because they lower prices in a crippling, fading high cost game.

B:Rebates are even better if everyone who wants them can get them.

How do we get to "B"?

Never ever ask for them to be outlawed, because they will never come back and we can never get to "B". Does anyone actually think that the THG will give us rebate money if they get a bigger ADW slice?

That is the only thing we have to concern ourselves with. Everything else is noise, detracts from the goal, and gives tracks a green light to do what they want: raise prices higher and higher, resulting in more and more people leaving this game and having us play into $100 win pools.Dean,
I respect you as arguably the most able articulator of the value of rebates for all. You have convinced me that churn is the key to handle growth, and that increased churn from smaller bankroll players will stimulate churn from those with bigger bankrolls. However, it is because I don’t lose sight of the prize that I disagree with the bolded statement above.

The prize in my eyes is a level playing field for players on which to bet races at all venues from any ADW vendor with full fields of sound, competitive contestants supplied by horsemen who are also competing on a level playing field. Your description of horsemen who advocated small fields in races with slots-fed purses was a revelation; and yet another symptom of how the game is broken.

Let racing put up that prize by creating a centralized authority to establish and enforce uniform policies for medication, race-riding, and pool integrity as well as to ensure cooperative race date/time scheduling, ADW availability, and field size-building purse distribution among tracks; and I would support the suspension of rebating for one year with the agreement that rebates for all would be implemented for at least the following year.

They tell lawyers never to ask a question they don’t already know the answer to. Perhaps opinion writers should not postulate positions they don’t want challenged. ;)

[DeanT]

Dean,
I respect you as arguably the most able articulator of the value of rebates for all. You have convinced me that churn is the key to handle growth, and that increased churn from smaller bankroll players will stimulate churn from those with bigger bankrolls. However, it is because I don’t lose sight of the prize that I disagree with the bolded statement above.

The prize in my eyes is a level playing field for players on which to bet races at all venues from any ADW vendor with full fields of sound, competitive contestants supplied by horsemen who are also competing on a level playing field. Your description of horsemen who advocated small fields in races with slots-fed purses was a revelation; and yet another symptom of how the game is broken.

Let racing put up that prize by creating a centralized authority to establish and enforce uniform policies for medication, race-riding, and pool integrity as well as to ensure cooperative race date/time scheduling, ADW availability, and field size-building purse distribution among tracks; and I would support the suspension of rebating for one year with the agreement that rebates for all would be implemented for at least the following year.

They tell lawyers never to ask a question they don’t already know the answer to. Perhaps opinion writers should not postulate positions they don’t want challenged. ;)

All noble goals. But unfortunately this will never happen in our lifetimes.

That is what I am trying to get through in most of these posts. Sit on some player panels for awhile. Trust me, when you present these ideals they are met with unbridled laughter.

We have a chance (albeit a small one) to get lower prices through rebates for everyone. There is one rope that is currently being thrown to players and the rebate one is it. If we choose to not grab it and continue to flail around in the water, we'll drown. That's my opinion, and I welcome people who disagree, but I did not come to this conclusion without some real world experience.

[Cangamble]

Dean, don't get me wrong. I'm not anti rebate at all. I'm way more pro lower takeout though, but that doesn't look like a reality in the very near future.
I'm not against whales either, because anyone can be one. It is a free market.
But I will state a fact, whales do not help non whales one bit, in fact they hurt non whales by decreasing the ROI of every other bettor on the planet.
I don't believe they make non whales bet more because of pool size either.
In fact, the only people they help are ADW owners.
But for a non whale to say whales are good is like a mom and pop shop saying that Wal Mart is good.

[DeanT]

Dean, don't get me wrong. I'm not anti rebate at all. I'm way more pro lower takeout though, but that doesn't look like a reality in the very near future.
I'm not against whales either, because anyone can be one. It is a free market.
But I will state a fact, whales do not help non whales one bit, in fact they hurt non whales by decreasing the ROI of every other bettor on the planet.
I don't believe they make non whales bet more because of pool size either.
In fact, the only people they help are ADW owners.
But for a non whale to say whales are good is like a mom and pop shop saying that Wal Mart is good.

I am not getting into an argument about ROI's and all that. The eye on the prize is this : Whales are good for one simple reason: Racetracks and horseman groups know that when prices are lowered people bet more. That is something that bettors have been trumpeting for 30 years, but only in the last ten years have the tracks embraced it. It is now part of a business plan.

Why do you think half these groups, some of which who have shut off domestic ADW's during the THG fight, keep the offshores going? Because they bet lotsa money.

Our goal should be this: "Look THG and tracks, you see what whales play when you give them a break. Give the minnows a break by giving a hunk of ADW thru rebates and they will bet more too."

When we speak with one simple message and get rid of all the noise with Joe getting a bump with 2% higher rebates and Pete gets a bump because he can afford Jcapper and I cant etc, we might be able to get things done to lower prices and better ROI's for everyone.

[Pace Cap'n]

The poker analogy doesn't work because if a player is getting rakeback and you are not, and therefore increasing his bankroll, he does not get more agressive and increase your pots. He moves up to a higher level, and is no longer involved in your pots.

Regarding the boxcar exotic payoffs on horses that "don't figure"--it is my belief that the whales are taking down most of those, especially those that do use batch betting. If they have already bet thousands on the "logical" winner(s) and exactas, what's a few more hundred on some "flyers"?

Are rebates good or bad? Definitely good for those who receive them. And bad for those who don't get them when you both land on the same winner, assuming that the rebate recipients have increased their wager proportionate to the amount of that "found" money on your choice.

I would think it would be sheer folly to attempt to play full-time without being a participant in some form of rebate program.

[DeanT]

I would think it would be sheer folly to attempt to play full-time without being a participant in some form of rebate program.
Here is an example from the HANA blog from a player who got rebates. This is what we might achieve if we get behind the concept. Sure he lost all his bankroll, but he got to play awhile and it made racing fun. We need more of this, and we need all hands on deck to make it happen, imo.

http://blog.horseplayersassociation.org/2008/07/churn.html
Churn (http://blog.horseplayersassociation.org/2008/07/churn.html)

I received an interesting email awhile ago I thought I would share. It is from a small harness player.

I registered for a XXXX account and I must say I am impressed. All they need now is free video and programs. I like the smaller tracks like Monticello and Northville... I even tried a place ticket on a 3-1 greyhound...... best yet.... I started with 100........ betting frivilously and stupid, I blew it all... but next day I had 23 dollars in my account.... and then last night.... I got the 23 all the way back up to 100 and then blew it all again ... but anyway I managed to bet about $700.... So now they throw $35 back in my account....... Thanks for playing!!......... Back to the slow grind.

If this player took his $100 to the track, he is broke after the first day. Instead, by getting a boost through an overnight rebate he bet well over 7 times that amount. Instead of contributing $21 to racing through takeouts, he contributed over $150. There is a genuine excitement in his email, and I found that infectious. That is exactly what we need in this business.

This is a small player; and that folks is churn. Lower takeouts should not be just for whales. Whales started as minnows once too.

[Indulto]

All noble goals. But unfortunately this will never happen in our lifetimes.

That is what I am trying to get through in most of these posts. Sit on some player panels for awhile. Trust me, when you present these ideals they are met with unbridled laughter.

We have a chance (albeit a small one) to get lower prices through rebates for everyone. There is one rope that is currently being thrown to players and the rebate one is it. If we choose to not grab it and continue to flail around in the water, we'll drown. That's my opinion, and I welcome people who disagree, but I did not come to this conclusion without some real world experience.That laughter only confirms my belief that confrontation must precede negotiation; especially if something is to happen in our lifetimes.

The only rope I see being thrown to players is by Premier Turf Club and they seem to be stymied by the same forces players in general are.... The eye on the prize is this : Whales are good for one simple reason: Racetracks and horseman groups know that when prices are lowered people bet more. That is something that bettors have been trumpeting for 30 years, but only in the last ten years have the tracks embraced it. It is now part of a business plan.

Why do you think half these groups, some of which who have shut off domestic ADW's during the THG fight, keep the offshores going? Because they bet lotsa money.

Our goal should be this: "Look THG and tracks, you see what whales play when you give them a break. Give the minnows a break by giving a hunk of ADW thru rebates and they will bet more too." ...Who do you think is actually listening to that argument?

[Imriledup]

Here is an example from the HANA blog from a player who got rebates. This is what we might achieve if we get behind the concept. Sure he lost all his bankroll, but he got to play awhile and it made racing fun. We need more of this, and we need all hands on deck to make it happen, imo.

http://blog.horseplayersassociation.org/2008/07/churn.html
Churn (http://blog.horseplayersassociation.org/2008/07/churn.html)

I received an interesting email awhile ago I thought I would share. It is from a small harness player.

I registered for a XXXX account and I must say I am impressed. All they need now is free video and programs. I like the smaller tracks like Monticello and Northville... I even tried a place ticket on a 3-1 greyhound...... best yet.... I started with 100........ betting frivilously and stupid, I blew it all... but next day I had 23 dollars in my account.... and then last night.... I got the 23 all the way back up to 100 and then blew it all again ... but anyway I managed to bet about $700.... So now they throw $35 back in my account....... Thanks for playing!!......... Back to the slow grind.

If this player took his $100 to the track, he is broke after the first day. Instead, by getting a boost through an overnight rebate he bet well over 7 times that amount. Instead of contributing $21 to racing through takeouts, he contributed over $150. There is a genuine excitement in his email, and I found that infectious. That is exactly what we need in this business.

This is a small player; and that folks is churn. Lower takeouts should not be just for whales. Whales started as minnows once too.

The key to growth in this game is to give minnows some incentive to become whales. Give the rebate to everyone on equal footing and you take away a large incentive for a minnow to grow.

If beautiful women dated and married garbage men, we would have many less Doctors in the world. Attractive women provide great incentive for men to reach greater heights in their personal lives because they know they can attract a great looking mate by becoming 'somebody'. Same thing with minnows, they need the carrrot to dangle.

Also, is it really fair to reward the 5 dollar bettor with the same rate as the million dollar bettor? If you owned a doughnut shop and sold doughnuts for 99 cents and i came in and bought one doughnut, it would be 99 cents. If a guy came in and said he wants 1,000 doughunts, there's zero chance you'd charge him 990 dollars, you'd give him a bulk discount for being a great customer.

Now, if the guy who bought one doughnut was saying he wanted his doughnut for 40 cents, you'd politely tell him that if he bought x amount of doughnuts that he too could get the better price.

Life works that way, i don't know why it would be any different in horse racing.

[ryesteve]

Life works that way, i don't know why it would be any different in horse racing.Because buying a donut isn't a parimutuel activity. The guy who buys a thousand donuts isn't making mine more expensive; if anything, he's gonna make mine cheaper, since the donut shop owner can expand his business and produce them more efficiently.

On the other hand, the whale is certainly costing me money.

This is even worse than the poker analogy.
I'm not anti rebate at all. I'm way more pro lower takeout though, but that doesn't look like a reality in the very near future.
I'm not against whales either, because anyone can be one. It is a free market.
But I will state a fact, whales do not help non whales one bit, in fact they hurt non whales by decreasing the ROI of every other bettor on the planet.
I don't believe they make non whales bet more because of pool size either.
In fact, the only people they help are ADW owners.
But for a non whale to say whales are good is like a mom and pop shop saying that Wal Mart is good.That's it in a nutshell. I don't see how anyone could state it any better or clearer.

[DeanT]

Who do you think is actually listening to that argument?

Tracks that have joined PTC.

PTC themselves (wagering up 400% last year and everyone in the business noticed that on shore churn with smaller players is relevant)

Woodbine has upped rebates for their players, and they were staunchly anti-rebate. Their VIP program might be the best in North America.

Mountaineer and Presque Isle have been very vocal about open access and pro-rebate.

Hawthorne just did open access and have rebaters as their clients.

Hastings lowered takeouts on show betting to 12%

A few more years of this maybe we can make some headway. But it is much better than it used to be, imo. The message is getting through I think.

[Imriledup]

Steve,

I still don't understand how rebate players cost you money. You look up at the board and peruse the prices, if you don't like anything you see, you pass. If you like something you see, you play. Same with a whale, he peruses the board and bets what he likes as do you.

This crying and complaining from non rebate players that they should get a rebate has to stop. The system is fair. Every human who wants to bet has the same exact chance as the whale to procure a rebate. They aren't telling you that you can't have a rebate because of your color or your race. The system the way its set up does not discriminate, its fair. You want a rebate, bet more money. The whale got to where he is by blood, sweat and tears and lots of sacrifices and you can do that too with a little hard work. Or, a lot of hard work.

[InsideThePylons-MW]

Regarding the boxcar exotic payoffs on horses that "don't figure"--it is my belief that the whales are taking down most of those, especially those that do use batch betting. If they have already bet thousands on the "logical" winner(s) and exactas, what's a few more hundred on some "flyers"?

So now whales bet all logical combinations and all illogical combinations. So basically they bet every combination in every race. Is that what you are saying?

C'mon!

[InsideThePylons-MW]

Some hilarious stuff in this thread.

You guys act as if there is only one whale out there.

Whales slaughter whales too.

If I'm looking at an exacta I like that is paying $40 and I think $30 is fair, well I'm going to make a huge bet on it to where it will bring the payoff down to around $30. If 3 other whales do the exact same thing, now the exacta is paying $22 and my bet is now slaughtered.

[Pace Cap'n]

So now whales bet all logical combinations and all illogical combinations. So basically they bet every combination in every race. Is that what you are saying?

C'mon!

Not every combo, but for sure they can afford a lot more of them than can I. Do you think those huge payouts are being won by people betting their phone number?

[DeanT]

Not every combo, but for sure they can afford a lot more of them than can I.

Of course they can afford more combos, they are paying with a huge bankroll. Surely you are not saying we should stop people from playing with a big bankroll are you?

[cj]

I would think that whales, at least winning ones, better have a pretty high winning percentage. I don't think they are betting a bunch of 20 to 1 shots. If they are betting a lot of money, they are never going to have an edge playing big priced horses.

[Cangamble]

Steve,

I still don't understand how rebate players cost you money. You look up at the board and peruse the prices, if you don't like anything you see, you pass. If you like something you see, you play. Same with a whale, he peruses the board and bets what he likes as do you.

This crying and complaining from non rebate players that they should get a rebate has to stop. The system is fair. Every human who wants to bet has the same exact chance as the whale to procure a rebate. They aren't telling you that you can't have a rebate because of your color or your race. The system the way its set up does not discriminate, its fair. You want a rebate, bet more money. The whale got to where he is by blood, sweat and tears and lots of sacrifices and you can do that too with a little hard work. Or, a lot of hard work.
You just don't get it.

[Cangamble]

A few assumptions. Track sells signal for 5%. Whales buys signal. Track does 40% from their live betting, and 60% from signal buyers. Track weekly bet total is 10 million.
Whales make up for half the signal buyers (30% the total weekly handle).
Whale wouldn't play if they didn't get their rebates, and regular players wouldn't churn back if they cashed more (which is not real world but it really makes my point more solid). Track takeout on track is 20%. Whales break even after rebate.

With whales. 10 million bet. Track makes 20% of 4 million and 5% of 6 million. Total 1.1 million. This means they return 8.9 million. 3 million to whales, and 5.9 million to non whales (of which 450,000 (15% of 3 million) goes to signal buying tracks and ADWs). Non whales bet 7 million, so their ROI is .779 for average player.

Without whales. 7 million bet. Track makes 20% of 4 million and 5% of 3 million. Total 950,000. So they are giving back 6,050,000 to non whales (of which 450,000 goes to signal buying tracks and ADWs). Total bet is 7 million, total returned to non whale players is 560,000. ROI is .80 for average player.

[DeanT]

Great, so we all go broke on Tuesday without whales and Monday with them. We get a one day reprieve!

Yippee!

There is so much more a bigger picture here. It is about getting more people to win. They are not going to win with a .78 ROI with whales or a 0.80 ROI without them. We need to make sure we get people to win and promote winners. If we don't we are competing with slot machine players and we will lose that battle every time.

If we think big and stop with the 1% or 2% crap and fighting with this nonsense we might actually be able to turn this game around.

[Cangamble]

Dean, I was being conservative in my example. The extra money won by bettors would be churned back most definitely. And whales collectively probably have ROIs after rebates of around 1.02 or so.
So we might be talking 4%.

But I was addressing the fact that some were doubting that whales cost the average player money.

Also, a player who may be alive for Tuesday instead of going broke on Monday, may devote more time and money to the game.

My point is that whales are another hurdle that the average Joe has to overcome in an attempt to beat the game.

And sure, we need tracks to cut down to 10% takeouts for all, or 10% rebates for all, in order for the game to grow even an inch.

[alhattab]

A few assumptions. Track sells signal for 5%. Whales buys signal. Track does 40% from their live betting, and 60% from signal buyers. Track weekly bet total is 10 million.
Whales make up for half the signal buyers (30% the total weekly handle).
Whale wouldn't play if they didn't get their rebates, and regular players wouldn't churn back if they cashed more (which is not real world but it really makes my point more solid). Track takeout on track is 20%. Whales break even after rebate.

With whales. 10 million bet. Track makes 20% of 4 million and 5% of 6 million. Total 1.1 million. This means they return 8.9 million. 3 million to whales, and 5.9 million to non whales (of which 450,000 (15% of 3 million) goes to signal buying tracks and ADWs). Non whales bet 7 million, so their ROI is .779 for average player.

Without whales. 7 million bet. Track makes 20% of 4 million and 5% of 3 million. Total 950,000. So they are giving back 6,050,000 to non whales (of which 450,000 goes to signal buying tracks and ADWs). Total bet is 7 million, total returned to non whale players is 560,000. ROI is .80 for average player.


The take is always 20% for the non-whales. For off-track the split is 15% to host, 5% to receiver. There is no change in the net return to non-whales. The non-whales always net $5.4 million. What am I missing? Maybe I misunderstood your assumptions.

[barn32]

The system the way its set up does not discriminate, its fair. You want a rebate, bet more money. The whale got to where he is by blood, sweat and tears and lots of sacrifices and you can do that too with a little hard work. Or, a lot of hard work.Someone up above also said that "anyone can be a whale." Well, not everyone can be a whale. Most if not all "whales" have a lot of money to begin with. I certainly can't be a whale--not sure I'd want to be either.

Whales are their own class of fish.

[ryesteve]

The system is fair.See Cangamble's subsequent response to you.

Just out of curiosity, which are you? A rebate player trying to convince yourself that your performance has been achieved on a level playing field, or a non-rebate player who's in denial?

[Cangamble]

The take is always 20% for the non-whales. For off-track the split is 15% to host, 5% to receiver. There is no change in the net return to non-whales. The non-whales always net $5.4 million. What am I missing? Maybe I misunderstood your assumptions.
The whales have taken some of the available cash that would have been won by non whales if whales didn't exist, causing non whales real takeout rates to go up.

[Imriledup]

The whales have taken some of the available cash that would have been won by non whales if whales didn't exist, causing non whales real takeout rates to go up.

:bang:

[Cangamble]

:bang:
Stop doing that, and you might get it. It isn't rocket science.

[Imriledup]

You just don't get it.

I'm willing to learn oh wise one, please teach me the error of my ways.

:jump:

[Cangamble]

I gave a mathematical response. What flaw do you see in it? Do you understand it, or is there something in particular you don't agree with?

[Imriledup]

Stop doing that, and you might get it. It isn't rocket science.

Ok. I'll stop. It hurts to bang my head like that anyway.

I just don't see how increased pool sizes hurt anyone. Rebate players rebates are just buffers for betting a lot of money. That is their incentive to bet 2k to win on a 5-2 shot that their money knocks down to 2-1 (example). The rebate bettor gets 6 bucks on their 2-1 shot and the minnow gets the full 7 dollars (thus, doesnt need a rebate). Why should the whale pay a 1,000 'tax' on that 2 grand wager? (2k cashes for 7k on 5-2 or 6k on 2-1)

I think you are saying that because the whale has more money at his disposal, he can hammer down that 5-2 shot to 2-1. My argument was that the minnow can bet on someone else, he can find value on another horse, the whale's money doesn't hurt the minnow and actually helps him by creating a bigger pool and by creating value on other runners.

[Cangamble]

Sure, you can bet something else, and maybe win a few times, but in the long run, you are going to have a takeout of 2-4% more because whales exist.

[cj]

I see your point. It is a murky situation. Don't you have to assume that those betting much, much bigger sums of money than the average punter are either:



Better than most players
Very stupid
Has a lot of money and doesn't mind losing it (repeat of above maybe?)
As I said, I think the big money bettors almost must be betting low priced horses. The pools most places just aren't big enough to allow them to bet big sums on longshots. I think the key would be to be really, really good at identifying false favorites and fire away.

[Imriledup]

Sure, you can bet something else, and maybe win a few times, but in the long run, you are going to have a takeout of 2-4% more because whales exist.

But, if you skip the races where you feel that the bet-down winner is the right horse, you won't lose that extra percentage. Its also hypothetical that the bet down winner is always money coming from a whale. Also whales don't always bet the same horses.

[InsideThePylons-MW]

Someone up above also said that "anyone can be a whale." Well, not everyone can be a whale. Most if not all "whales" have a lot of money to begin with.

Totally false.

[PaceAdvantage]

I'm against the practice of only whales getting rebates.What's stopping you from opening an account at someplace like Premier Turf Club? You don't have to be a whale to get a rebate....

[Indulto]

What's stopping you from opening an account at someplace like Premier Turf Club? You don't have to be a whale to get a rebate....It's my understanding that PTC still cannot accept California residents.

[PaceAdvantage]

It's my understanding that PTC still cannot accept California residents.Good point. However, I was thinking of "you" in more general terms.

[raybo]

There's no question in my mind that a player with a large rebate(5%+) has a great advantage over the non-rebated player.
Just imagine a 10 player poker game with a 10% rake where one player gets a rebate of 10% on everything he bets which gets added to his bankroll after every deal. Now, assume all players possess equal poker playing ability. Who do you think has the best chance of winning ?

The player who gets the best cards. Not a valid comparison.

[DanG]

When I was going to Calder every live day for years there was a man (hopefully still is) named Marvin.

Marvin received a rather large inheritance and it was distributed monthly through a trust fund. When friends would ask Marvin why he put so much of this cash at risk betting his reply always was; “Because unlike the guy sitting home watching TV…I feel alive.”. Bless the Marvin's of the world... :ThmbUp:

Marvin was NOT a winning horse player by any stretch. Here was a man who bet “double-double’s” as he called them (I.e.…1-1, 2-2, 3-3 etc…) Ok…we get the picture.

Marvin had access to a ‘rebate in a sense. He could reload his bankroll unlike 90% of the crowd. The only difference being it didn’t come from Calder’s or an ADW rake, it came from his trust fund.

Some players at Calder who started the season with 10k in their bankroll didn’t have Marvin’s 1st of the month check and when their bank was tapped…they watched TV.

Does anyone deny that the Marvin’s of the world were / are an asset to Calder AND we the players participating?

There are VERY convincing arguments by VERY smart people in this thread that rebates create an unlevel playing field. I can’t wrap my mind around the unfairness and when I read Dean’s, Imriledup posts (and others) they make perfect sense to me.

Having said that; I need to bet into pools vs. the best players in the country in So Cal and NY and maybe its my subconscious saying I’m on equal footing or the 14 hour capping days don’t allow me to analyze it thoroughly. Either way; it’s a complex subject where there is no absolute right and wrong imo…just our own belief system.

[Imriledup]

Totally false.

You're right, its false.

Most whales started out like everyone else, betting 2 dollars across the board on the favorite. Very few successful and big bettors were betting a grand to win and place on the first day they ever went to a racetrack. I feel that in order to cultivate yourself into a really big bettor and a successful one, you have to start from the absolute bottom. The reason you have to start at the bottom is because you need to know how the progression works from 2 dollar bettor to 2,000 dollar bettor. It takes many years to progress to that level and you have to learn to go up the ladder and then get knocked back down again.

Every big bettor lost sleep when he lost his first 20 dollar bet, lost sleep when he lost his first 100 dollar bet and so on. You have to 'progress' to a high level and that takes probably about 20 years. (if you can do it in 10, you're really really good)

[ryesteve]

Does anyone deny that the Marvin’s of the world were / are an asset to Calder AND we the players participating?Absolutely... unfortunately, most of the people we're talking about aren't betting indiscriminantly the way Marvin does.

Similarly, I posted a thread about a month or so ago about a couple of weird races at Louisiana Downs. In a couple of the mid-card races, someone pumped a huge amount of money into the exotic pools on combinations that made no sense (my theory at the time was that someone bet into the wrong track by mistake, and didn't notice in time). The end result was that a chalky pick3 ended up paying literally 10times the parlay. A lot of people benefitted tremendously.

Unfortunately, these instances of people with a very large bankroll betting very foolishly, are extremely rare. What they're actually doing is smoothing out the longshot bias, hence generally lowering the prices on the horses that can be bet rationally.

[alhattab]

The whales have taken some of the available cash that would have been won by non whales if whales didn't exist, causing non whales real takeout rates to go up.

I think that's only true if you assume that the rebates given to the whales would have been put back into the pools (i.e., the take would be reduced to whatever the blended rate would have been absent the rebate)

[DanG]

Absolutely... unfortunately, most of the people we're talking about aren't betting indiscriminantly the way Marvin does.

Similarly, I posted a thread about a month or so ago about a couple of weird races at Louisiana Downs. In a couple of the mid-card races, someone pumped a huge amount of money into the exotic pools on combinations that made no sense (my theory at the time was that someone bet into the wrong track by mistake, and didn't notice in time). The end result was that a chalky pick3 ended up paying literally 10times the parlay. A lot of people benefitted tremendously.

Unfortunately, these instances of people with a very large bankroll betting very foolishly, are extremely rare. What they're actually doing is smoothing out the longshot bias, hence generally lowering the prices on the horses that can be bet rationally.
Understood Steve;

The point I was (poorly) trying to make is…

IMHO:




We give large bettors (on a whole) too much credit.
We give ourselves (on a whole) too little credit.
We concern ourselves a little too much with what happens after the last race is run.
Some of us are under the assumption there is one all-knowing “wise-guy odds line” that can be only be exploited in direct proportion to ones capital.
You make solid points Steve and may very well be correct. As I said; I may be in denial out of necessity and I do admit to getting rebates, but certainly not at the levels being discussed here.

[Niko]

I'm beginning to understand why there aren't many changes in horse racing-or that they're so difficult to make.

Rebates or lowering takeout (means less rebates) is good for all. That would be hard to argue against. Larger pools and churn is good for horse racing-hard to argue against.

All whales are winning players--not true. Winning whales can hurt other whales. And the less minnows there are, the more the whale gets hungry.

I won't get into batch betting, past posting etc....

Sophisticated (winning players) with rebates vs. those that are without them, hurt the smaller player or those that bet without them (and thus makes it harder for the small player today to turn into a whale) I still don't get why some people don't buy this-but I'm open to someone showing me with facts as opposed to mere opinions that I'm wrong. Ave takeout is 20%. If 1/4 of the money bet loses 10% overall, what does the other 3/4 lose? (very loose numbers used here) Answer; it's more than the 20% track take. This is where the argument gets splintered on both sides and seems to get stalled. Some agree with this and some don't. I'd like those that don't agree to demonstrate it to me mathematically to show me I'm incorrect and then I'll admit I'm wrong. If they can't, perhaps they should question whether they're right or wrong instead of protecting their turf.

The big question; If new horse players are in actuality playing a game with a much higher track take than 20%, why would they play if they lose a lot of money each time? What do you think the new players or casual players have been experiencing the last couple of years?

If it's true that the handle of whales (winning ones) is increasing but overall handle is declining, where does that put racing in 5 more years? But maybe to some big bettors it doesn't matter. Get what you can while the gettings good.


If you don't think the foundation of horse racing is attracting new players or keeping very casual players in the game, none of this matters.

But then again, if none of the executives pay attention to what we say this is all probably just hot air anyways. It's happened to other industries and businesses that have brought to their knees.

It's the voting of money that counts. The game will work itself out I guess.

[barn32]

Someone up above also said that "anyone can be a whale." Well, not everyone [i]can be a whale. Most if not all "whales" have a lot of money to begin with.

[Someone said] Totally false.

[Someone else said] You're right, its false.

Most whales started out like everyone else, betting 2 dollars across the board on the favorite.


[i] Wow. I had no idea I was a whale. Thanks for waking me up. Tomorrow I'll start betting $2000 a race. I can get the money from Nancy Pelosi--I'm sure she'll earmark a couple hundred K for me to start being a whale.

I am so dumb I had no clue.

[rrbauer]

IAs I said, I think the big money bettors almost must be betting low priced horses. The pools most places just aren't big enough to allow them to bet big sums on longshots. I think the key would be to be really, really good at identifying false favorites and fire away.

The handful of players that I know who could be described as "big players" are constantly concerned with pool size and consequently are limited to the number of venues that they can play. And, you would be most likely on a race-by-race basis to find them fishing in the exacta and trifecta pools; not in the win pools. Taking $30 or $40K out of a race is their idea of a good score.

[oddsmaven]

I'm in accord with Cangamble, Ryesteve and Niko.

When Imriledup suggests that the other bettors can merely pass their original preference when the whales drive the odds down, and bet a different horse, I don't think that strategy is sensible in hardly any cases. With the take what it is, there are "not" tons of true overlays sitting there to snap up. If you play one track, IMO there are few good betting opportunities. And a number of those few get wiped out by the whale sized bets. So when a 1.05 ROI gets knocked down to 0.99, you have a choice of other horses estimated at 0.94, 0.91, 0.86., 0.82 etc. - none of which yield a profit merely because the whales have bumped them up a bit.

I'm assuming that the whales are pretty good and that they are mostly making good choices, so with the deck stacked against, not just with the takeout, but with the whale's hurting many of those few available edges, it is even tougher that if there were no rebates. And it is damn difficult to turn yourself slowly but surely into someone who can bet like a whale by betting into the teeth of all of this.

[Cangamble]

I think that's only true if you assume that the rebates given to the whales would have been put back into the pools (i.e., the take would be reduced to whatever the blended rate would have been absent the rebate)
You are missing the point. Lets say there is no rebates for anyone, and a few people are good enough to break even and lets say they are responsible for 25% of all betting.
The average everyone loses at the track is 20% collectively. This means that 75% the money bet is losing at more than 20%, if 25% of the pools is produced by those who break even.
Take those break even bettors out of the game, and then you have all players averaging losing 20% again. In other words, the races these break even bettors cash, would pay more with them not playing anymore.

[Cangamble]

But, if you skip the races where you feel that the bet-down winner is the right horse, you won't lose that extra percentage. Its also hypothetical that the bet down winner is always money coming from a whale. Also whales don't always bet the same horses.
Whales are most likely betting most of the horses you bet whether you think that or not. They all have different opinions, but overall, they have very good opinions, because a whale isn't someone with a printing press, it is someone who has a ROI of around .9 or higher, where the rebate pushes them close to break even, but in most cases over break even.
The probability that you can find an overlay taking into account track takeout is hard enough, but then finding the odd one that whales can't find, is near impossible and happens infrequently.
And nobody sits around and waits for that to happen.
Also, a horse who might have a 33% chance of winning that goes off at 4-1 most likely has a good chunk of whale money on it as well. Without whales, that horse may have gone off at 9-2 to 5-1. So even when you think you are getting an overlay, whales are most likely costing you something.

[trigger]

Quote:
Originally Posted by trigger
There's no question in my mind that a player with a large rebate(5%+) has a great advantage over the non-rebated player.
Just imagine a 10 player poker game with a 10% rake where one player gets a rebate of 10% on everything he bets which gets added to his bankroll after every deal. Now, assume all players possess equal poker playing ability. Who do you think has the best chance of winning ?

The player who gets the best cards. Not a valid comparison.
First, the poker player getting the best cards doesn't always win....just try playing against Johnny Chan or the like to see what I mean.
Anyway, the point I'm trying to make with the poker analogy is that the poker player getting the rebate of 10% has the best chance of winning (just like the rebated horse player). For just one example, assuming two poker players, with the same bankroll who get similar cards, hit a real long streak of bad luck ,the rebated poker player would be around to play more hands after the non rebated player (with equal ability) would have gone broke .
The rebates in horse racing are too big (and create too big an unfair advantage) because the takeout is too big ....I would have no problem if rebated whales were getting a rebate of 2-3% and takeout was 10%.

[DeanT]

That's a great post Niko.

We have to look at helping the game the most we can with some sort of achievable goal, and not worry about bumps in the road.

We should look at everything in a big picture way. If we have more whales we have more people playing into pools and more liquidity, we have more buzz. Stock traders and such who are risk averse are a market; betfair knows this and exploit that. I know it is fixed odds betting but it is a market for us. Churning money and getting more people to play the game is a good thing - and making sure we have winners in our game is of utmost importance.

We are speaking of a negative externality here. As cangamble and others pointed out there is a negative to smaller players, but is that negative worth ten pages of posts? I do not think so. If you look at the overall message "with lower prices people can win, and that can grow our game", there is more to it than a smaller player losing a point or two of ROI.

Here is a note from a report about whale betting. The big picture is not lost here.

Third, shutting off the rebater, or charging him a price sufficiently high to offset the supposed costs of his customers’ “winning,” would not eliminate those winners from the parimutuel pools. It would reduce their betting, but some would move on to another account wagering service, or continue to bet, though at a reduced rate, getting a lower rebate from their
IWSP. The humble customers would regain only a fraction of their current “excess” losses.

Finally, where do we draw the line? How high is up? What is winning “too much”? What is an acceptable rate of return? +1%? -8%? -12%? -18%? How do we make thatdetermination? And what do we tell our fans? I believe that is a slippery slope down which we should fear to tread.

Handicapping is a game that attracts customers because it can be beaten. To draw another parallel with the casino industry, they know full well that if they want to keep the business coming in, some customers have to win. Not “win for a while, then lose it back,” but win, period -- and this is their money they’re giving up, not the other players’. The example of a few winners stimulates many more to try their luck. All the more important, I believe, for Thoroughbred racing to position itself as a game at which some people win.

Sure, we’d all like more dumb money. The more dumb money in the game, the easier it is for smart players to win. We must, however, always keep the competition in mind: dumb money doesn’t go to the track. Dumb money plays the slots.

We can’t beat the competition at its game, so we have to emphasize
the strengths of our own. Penalizing some winners would send the wrong message to all our sophisticated customers.

We are speaking of a couple percent of ROI, tops here. And the proceeds of the whale betting at least goes into a serious players pocket and generates churn, growing the business. Don't get me wrong, as I have noted before, I believe the BEST possible rebate system is one where if people want one they can get one. I am just commenting on the current thread.

Lastly, earlier this year Calder raised takeouts. This was a 3% increase on some exotics, 1% elsewhere. NYRA raised takeouts 1%. That's ROI right out of our pocket, and much worse than any "whale ROI loss" yet we do not have ten pages here.

We have to direct our outrage, but let us focus on who to direct it to. We can only have one target at a time. Rebates are here because this business is systemically broken and it is priced too damn high - and tracks continue to price it too high with increases in rake. Fix the game by fixing the problem. This is a top down problem, not a bottom up one. We are never going to get thousands of beauracrats and dozens of state houses and hundreds of horseman groups and commissions to lower rake across the board, so the obvious thing to do is get rebating mandated for everyone to stop this monopoly priced mess.

[Imriledup]

Whales are most likely betting most of the horses you bet whether you think that or not. They all have different opinions, but overall, they have very good opinions, because a whale isn't someone with a printing press, it is someone who has a ROI of around .9 or higher, where the rebate pushes them close to break even, but in most cases over break even.
The probability that you can find an overlay taking into account track takeout is hard enough, but then finding the odd one that whales can't find, is near impossible and happens infrequently.
And nobody sits around and waits for that to happen.
Also, a horse who might have a 33% chance of winning that goes off at 4-1 most likely has a good chunk of whale money on it as well. Without whales, that horse may have gone off at 9-2 to 5-1. So even when you think you are getting an overlay, whales are most likely costing you something.

You say overall that whales have very good opinions. So, than isn't it an intelligence thing and not a money thing?

The very best players are going to find ways to put the right amount of money on the right horses and they do this because they know the right horses and not because they happen to be rich.

The sticking point i can't get past is smaller bettors complaining because bigger bettors have too much money. What's the difference if Joe Whale gets 100 grand in rebate to rebet or 100 grand from an inheritance from his long lost grandma?

[InsideThePylons-MW]

I am so dumb I had no clue.

100% True

[Indulto]

... We are speaking of a negative externality [???] here. As cangamble and others pointed out there is a negative to smaller players, but is that negative worth ten pages of posts? I do not think so. If you look at the overall message "with lower prices people can win, and that can grow our game", there is more to it than a smaller player losing a point or two of ROI.

... We are speaking of a couple percent of ROI, tops here.
And the proceeds of the whale betting at least goes into a serious players pocket and generates churn, growing the business. Don't get me wrong, as I have noted before, I believe the BEST possible rebate system is one where if people want one they can get one. I am just commenting on the current thread.

Lastly, earlier this year Calder raised takeouts. This was a 3% increase on some exotics, 1% elsewhere. NYRA raised takeouts 1%. That's ROI right out of our pocket, and much worse than any "whale ROI loss" yet we do not have ten pages here.

We have to direct our outrage, but let us focus on who to direct it to. We can only have one target at a time. Rebates are here because this business is systemically broken and it is priced too damn high - and tracks continue to price it too high with increases in rake. Fix the game by fixing the problem. This is a top down problem, not a bottom up one. We are never going to get thousands of beauracrats and dozens of state houses and hundreds of horseman groups and commissions to lower rake across the board, so the obvious thing to do is get rebating mandated for everyone to stop this monopoly priced mess.Dean,
You have contributed 12 of the first 98 posts in this thread, while complaining this is the "50th" thread on the topic. ;) What makes this one different is that for the first time, SEVERAL people are willing to acknowledge the negative impact selective rebating has on the great unrebated. :D So it's worth however many posts it takes to finally instill that message and "harness" that dissatisfaction.

I agree that we have to "direct our outrage." Indeed the problem is "top-down," but the solution is bottom-up:" Keep our wallets close to our bottoms -- no ifs, ands, or whethers, just but(t)s."

So what exactly is it that you are protesting? Do you believe threads such as these are interfering with acceptance of the PTC model by additional tracks?

... What's the difference if Joe Whale gets 100 grand in rebate to rebet or 100 grand from an inheritance from his long lost grandma?IRU = Clueless :lol:

[alhattab]

You are missing the point. Lets say there is no rebates for anyone, and a few people are good enough to break even and lets say they are responsible for 25% of all betting.
The average everyone loses at the track is 20% collectively. This means that 75% the money bet is losing at more than 20%, if 25% of the pools is produced by those who break even.
Take those break even bettors out of the game, and then you have all players averaging losing 20% again. In other words, the races these break even bettors cash, would pay more with them not playing anymore.

Got it!

[Cangamble]

You say overall that whales have very good opinions. So, than isn't it an intelligence thing and not a money thing?

The very best players are going to find ways to put the right amount of money on the right horses and they do this because they know the right horses and not because they happen to be rich.

The sticking point i can't get past is smaller bettors complaining because bigger bettors have too much money. What's the difference if Joe Whale gets 100 grand in rebate to rebet or 100 grand from an inheritance from his long lost grandma?
There are people out there that have a ROI of .95 or .90 and remain small bettors, but if they had a bit of nerve, they could become whales.
In order to be a whale, outside of having an unlimited bankroll, which I don't think most whales go into the big rebate side with...they go in with a large bankroll and they also know their ROI makes them a break even player at worse on paper...but on the upside they have evidence that with rebates they will become winners. So they have to be above average players to begin with in most cases.

[InsideThePylons-MW]

There are people out there that have a ROI of .95 or .90 and remain small bettors, but if they had a bit of nerve, they could become whales.

So what is better.......Have that bettor give up, find something else and never return or have that bettor get a rebate, win, and increase his handle x 20?

[Niko]

That's a great post Niko.

We have to look at helping the game the most we can with some sort of achievable goal, and not worry about bumps in the road.

We should look at everything in a big picture way. If we have more whales we have more people playing into pools and more liquidity, we have more buzz. Stock traders and such who are risk averse are a market; betfair knows this and exploit that. If you look at the overall message "with lower prices people can win, and that can grow our game", there is more to it than a smaller player losing a point or two of ROI.

Here is a note from a report about whale betting. The big picture is not lost here.
Third, shutting off the rebater, or charging him a price sufficiently high to offset the supposed costs of his customers’ “winning,” would not eliminate those winners from the parimutuel pools. It would reduce their betting,
Finally, where do we draw the line? How high is up? What is winning “too much”? What is an acceptable rate of return? +1%? -8%? -12%? -18%? How do we make thatdetermination? And what do we tell our fans? I believe that is a slippery slope down which we should fear to tread.

Handicapping is a game that attracts customers because it can be beaten. To draw another parallel with the casino industry, they know full well that if they want to keep the business coming in, some customers have to win. Not “win for a while, then lose it back,” but win, period -- and this is their money they’re giving up, not the other players’. The example of a few winners stimulates many more to try their luck. All the more important, I believe, for Thoroughbred racing to position itself as a game at which some people win.

Sure, we’d all like more dumb money. The more dumb money in the game, the easier it is for smart players to win. We must, however, always keep the competition in mind: dumb money doesn’t go to the track. Dumb money plays the slots.

We can’t beat the competition at its game, so we have to emphasize
the strengths of our own. Penalizing some winners would send the wrong message to all our sophisticated customers.


We are speaking of a couple percent of ROI, tops here. And the proceeds of the whale betting at least goes into a serious players pocket and generates churn, growing the business. Don't get me wrong, as I have noted before, I believe the BEST possible rebate system is one where if people want one they can get one. I am just commenting on the current thread.

Lastly, earlier this year Calder raised takeouts. This was a 3% increase on some exotics, 1% elsewhere. NYRA raised takeouts 1%. That's ROI right out of our pocket, and much worse than any "whale ROI loss" yet we do not have ten pages here.

We have to direct our outrage, but let us focus on who to direct it to. We can only have one target at a time. Rebates are here because this business is systemically broken and it is priced too damn high - and tracks continue to price it too high with increases in rake. Fix the game by fixing the problem. This is a top down problem, not a bottom up one. We are never going to get thousands of beauracrats and dozens of state houses and hundreds of horseman groups and commissions to lower rake across the board, so the obvious thing to do is get rebating mandated for everyone to stop this monopoly priced mess.

There's 10 pages because there seem to be a lot of secrecy in racing and I think a lot of people are concerned about this--it affects your play if you don't get a rebate and you don't play small tracks which PTC takes care of.

The game does need winners IF people think they're getting a fair shake. If not, it will make people think-rightly or wrongly-that they're getting screwed.

I don't know why they're not promoting the big winners. Walk into the Canterbury card club and they have pictures of the players and the big jackpots they won won posted on the wall---i.e "look at how much money you can win". Hardly ever advertised in horse racing. Why?

I stopped betting Calder, that's why I don't complain about it. Whales don't have too if the handle stays high enough because they'd get a higher rebate due to the higher take out (depending on the fees the ADW would pay)-doesn't hurt them. Small players look at how it hurts them, big players at how it helps them and medium players.

The whale and yourself make some very valid and strong points from one side of the game. But there's the other side too.-and we all agree on that solution. I'd like to see what the real numbers are. How much do the whales really take out or change the game (effectively increase the handle on all the other players) Is it a small percentage, a large percentage? The whales say a couple percentage points-how big is that? And can the game continue to exist in its present direction if the smaller players are chased away?

I'm not a big player, the most I've bet is 2-3 grand a day (pinnacle days-there you go) because I started with a very, very small bankroll, I can't start over with a new bankroll because I'm not a rich person, have a family to support and it's a game to me. I enjoy it that way-I've got my job for day money. I only play on Saturdays and some Sundays now because of family commitments or maybe I could get to rebate levels but--I've learned my sweet spot which is limiting play to a couple plays a day to keep it profitable for me overall-most but not every year. So I'm not the super handicapper, well heeled insider or even a big bettor, just the guy caught in the middle wanting the game to reverse direction so I can continue to enjoy it with others, and to find a way to bring new players in.

Advertising winners is one thing, but if you come in the door as a newbie without rebates---HOW LONG are you going to stick around with the edge you're fighting against?? I don't know Most casual players expect to lose overall, but if they never win or lose a lot each time...they'll find other venues.

I've already got one foot out the door but certain tracks like Keeneland and even the West Coast tracks continue to keep me hopeful that the game can change for the bettor......

If we ever get much lower takeouts or access to rebates for all players, this thread wouldn't exist-until then....

Thanks for your well thought out input and viewpoints (and those others that contributed), this has been good.

[DeanT]

Advertising winners is one thing, but if you come in the door as a newbie without rebates---HOW LONG are you going to stick around with the edge you're fighting against??

They don't and that sucks.

Good post again Niko.

[Imriledup]

There's 10 pages because there seem to be a lot of secrecy in racing and I think a lot of people are concerned about this--it affects your play if you don't get a rebate and you don't play small tracks which PTC takes care of.

The game does need winners IF people think they're getting a fair shake. If not, it will make people think-rightly or wrongly-that they're getting screwed.

I don't know why they're not promoting the big winners. Walk into the Canterbury card club and they have pictures of the players and the big jackpots they won won posted on the wall---i.e "look at how much money you can win". Hardly ever advertised in horse racing. Why?

I stopped betting Calder, that's why I don't complain about it. Whales don't have too if the handle stays high enough because they'd get a higher rebate due to the higher take out (depending on the fees the ADW would pay)-doesn't hurt them. Small players look at how it hurts them, big players at how it helps them and medium players.

The whale and yourself make some very valid and strong points from one side of the game. But there's the other side too.-and we all agree on that solution. I'd like to see what the real numbers are. How much do the whales really take out or change the game (effectively increase the handle on all the other players) Is it a small percentage, a large percentage? The whales say a couple percentage points-how big is that? And can the game continue to exist in its present direction if the smaller players are chased away?

I'm not a big player, the most I've bet is 2-3 grand a day (pinnacle days-there you go) because I started with a very, very small bankroll, I can't start over with a new bankroll because I'm not a rich person, have a family to support and it's a game to me. I enjoy it that way-I've got my job for day money. I only play on Saturdays and some Sundays now because of family commitments or maybe I could get to rebate levels but--I've learned my sweet spot which is limiting play to a couple plays a day to keep it profitable for me overall-most but not every year. So I'm not the super handicapper, well heeled insider or even a big bettor, just the guy caught in the middle wanting the game to reverse direction so I can continue to enjoy it with others, and to find a way to bring new players in.

Advertising winners is one thing, but if you come in the door as a newbie without rebates---HOW LONG are you going to stick around with the edge you're fighting against?? I don't know Most casual players expect to lose overall, but if they never win or lose a lot each time...they'll find other venues.

I've already got one foot out the door but certain tracks like Keeneland and even the West Coast tracks continue to keep me hopeful that the game can change for the bettor......

If we ever get much lower takeouts or access to rebates for all players, this thread wouldn't exist-until then....

Thanks for your well thought out input and viewpoints (and those others that contributed), this has been good.

I'd love to hear your ideaor ideas of what racing needs to do to change for the bettor (or better).

[Niko]

That's been discussed in other threads and a couple points touched on here. Others have had some great suggestions in those threads. Don't want to take the time and energy to go through everythng right now-sorry.

A couple have been touched on here with the biggest kept into focus by Dean. Most everything else is secondary (except tote security-past posting, etc. in my opinion).

[Imriledup]

One thing i want to mention, or ask is this. Don't some tracks say no to rebate shops? Not all tracks accept wagers from rebate houses, right?

[rrbauer]

One thing i want to mention, or ask is this. Don't some tracks say no to rebate shops? Not all tracks accept wagers from rebate houses, right?

Define a "rebate house".

Do you consider Youbet a "rebate house"? If you don't live in Calif, it is on all of the non-TVG tracks. Do you consider TS a "rebate house"? It is. My point being that it's very hard to categorize an ADW as to its status as a rebater. It all depends on the track's takeout, their deal with the ADW outfit and the player's level of play.

[SaratogaSteve]

Sure, you can bet something else, and maybe win a few times, but in the long run, you are going to have a takeout of 2-4% more because whales exist.

I didn't fully get the outrage until your calculations. Thank you.

However, if the non-rebate crowd is thinking the miniscule advantage stated above is killing the game, members of that crowd are in the wrong game.

[Imriledup]

Define a "rebate house".

Do you consider Youbet a "rebate house"? If you don't live in Calif, it is on all of the non-TVG tracks. Do you consider TS a "rebate house"? It is. My point being that it's very hard to categorize an ADW as to its status as a rebater. It all depends on the track's takeout, their deal with the ADW outfit and the player's level of play.

Places where you can get rebates of 7-15 percent on certain wagers.

[ryesteve]

I didn't fully get the outrage until your calculations. Thank you.

However, if the non-rebate crowd is thinking the miniscule advantage stated above is killing the game, members of that crowd are in the wrong game.I'm not sure why you think a 2-4% difference in "miniscule". Compound that over a thousand bets, and see what the difference in your bankroll ends up being.