BMeadow
03-24-2009, 05:01 PM
The California Horse Racing Board is soliciting public comments regarding a proposal to overturn the restriction against California players earning rebates. Here is the letter I wrote to the Board:
My wife loves to shop at Bed Bath and Beyond--but only if she has a coupon. When she gets a discount, she spends a lot of money. When she gets no discount, she spends no money. Bed Bath and Beyond is happy to offer her a discount, because the store makes money when she shops there.
I wrote a book, Money Secrets At The Racetrack. If I sell it at my office, I collect $24.95. If I sell it to Amazon (who can sell it for whatever they want), I collect only $11.23. So why do I let Amazon sell it? Because they will sell many, many more copies than I could myself. If they choose to sell it for $13, why is this my problem? None of these customers are driving to my office anyway!
Give me a rebate and I bet more, much more. No rebate, no action. A true story from several years ago:
I was contacted by a computer handicapper who said he had a program that was break even over thousands of races. I worked out a deal with a rebate shop to give me 10% back on everything I bet. For the next several months, I bet thousands of dollars per day on horses I knew nothing about across the county. As it turned out, the computer program was break even--but only after we got the 10% back, so after several months, we pulled the plug. Meantime, I had wagered nearly $1 million. Of this, approximately $100,000 was rebated to me (which covered the betting losses) and an additional $80,000 (we figured the combined takeout was somewhere around 18%) was left to the ADW, the tracks, the horsemen, and the various states. That's $80,000 in free money which NEVER would have been collected without the rebates.
Today, unfortunately, because the tracks have charged the rebate shops a lot more money for their signals, that 10% on win bets is only a memory. Still, some rebates are always better than no rebates. In just about every business, volume costumers get lower prices. Why shouldn't it be that way for horse racing? If the track sells a signal to an ADW for 6%, why should the track care what the ADW does after that? If it wants to keep expenses down and return most of its money to its customers, how is that bad? Does anybody seriously think that players using rebate shops would be driving to the racetrack instead?
In Las Vegas, a common deal for the biggest whales is to offer 10% back on losses (a man who loses $1 million will get $100,000 back). For lower-level players, comps are easily obtainable (right now in my pending file, I have offers from half a dozen casino-hotels offering me everything from free suites to free shows to free meals to free cash just for showing up, while the best I can do at racetracks is go to free Fridays with $1 hot dogs at Santa Anita). It's only smart business.
California's foolish restriction on rebates has cost it untold amounts of money. Rebates mean more money back to players, which increases churn. It also means that I might make a bet on a marginal horse instead of keeping the money in my pocket.
The rule has also turned some players into underground players--betting with offshore racebooks, using phony documents to pretend they're from another state, using cell phones with out-of-state numbers, etc. All of this would end immediately if California officially permitted rebates.
The time is way, way, way overdue to end this crazy restriction on the free market.
My wife loves to shop at Bed Bath and Beyond--but only if she has a coupon. When she gets a discount, she spends a lot of money. When she gets no discount, she spends no money. Bed Bath and Beyond is happy to offer her a discount, because the store makes money when she shops there.
I wrote a book, Money Secrets At The Racetrack. If I sell it at my office, I collect $24.95. If I sell it to Amazon (who can sell it for whatever they want), I collect only $11.23. So why do I let Amazon sell it? Because they will sell many, many more copies than I could myself. If they choose to sell it for $13, why is this my problem? None of these customers are driving to my office anyway!
Give me a rebate and I bet more, much more. No rebate, no action. A true story from several years ago:
I was contacted by a computer handicapper who said he had a program that was break even over thousands of races. I worked out a deal with a rebate shop to give me 10% back on everything I bet. For the next several months, I bet thousands of dollars per day on horses I knew nothing about across the county. As it turned out, the computer program was break even--but only after we got the 10% back, so after several months, we pulled the plug. Meantime, I had wagered nearly $1 million. Of this, approximately $100,000 was rebated to me (which covered the betting losses) and an additional $80,000 (we figured the combined takeout was somewhere around 18%) was left to the ADW, the tracks, the horsemen, and the various states. That's $80,000 in free money which NEVER would have been collected without the rebates.
Today, unfortunately, because the tracks have charged the rebate shops a lot more money for their signals, that 10% on win bets is only a memory. Still, some rebates are always better than no rebates. In just about every business, volume costumers get lower prices. Why shouldn't it be that way for horse racing? If the track sells a signal to an ADW for 6%, why should the track care what the ADW does after that? If it wants to keep expenses down and return most of its money to its customers, how is that bad? Does anybody seriously think that players using rebate shops would be driving to the racetrack instead?
In Las Vegas, a common deal for the biggest whales is to offer 10% back on losses (a man who loses $1 million will get $100,000 back). For lower-level players, comps are easily obtainable (right now in my pending file, I have offers from half a dozen casino-hotels offering me everything from free suites to free shows to free meals to free cash just for showing up, while the best I can do at racetracks is go to free Fridays with $1 hot dogs at Santa Anita). It's only smart business.
California's foolish restriction on rebates has cost it untold amounts of money. Rebates mean more money back to players, which increases churn. It also means that I might make a bet on a marginal horse instead of keeping the money in my pocket.
The rule has also turned some players into underground players--betting with offshore racebooks, using phony documents to pretend they're from another state, using cell phones with out-of-state numbers, etc. All of this would end immediately if California officially permitted rebates.
The time is way, way, way overdue to end this crazy restriction on the free market.