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netbet
05-06-2009, 11:24 AM
With thanks to The Financial Times...

"A US ban on online gambling, (http://www.ft.com/cms/s/0/9221ea00-398e-11de-b82d-00144feabdc0.html?nclick_check=1) which has sparked criminal investigations and plunging share prices at betting companies around the world, could be eased under new legislation presented on Wednesday by the head of the House financial services committee".

Netbet

Ray2000
05-06-2009, 11:52 AM
Ubet (13%) and Mntg (6%) up nicely but mostly on other factors



CHDN 32.43 -1.51
CPHC 6.50 -0.43
ISLE 12.35 -0.39
MNTG 2.24 +0.12
PENN 31.97 -2.65
UBET 2.78 +0.33

2009-05-06 11:46

Ray2000
05-06-2009, 04:15 PM
Just a quick link for anyone interested ...

"Youbet.com Hails Chairman Frank's Online Gambling Legislation"

http://finance.yahoo.com/news/Youbetcom-Hails-Chairman-prnews-15152826.html?.v=1

trigger
05-10-2009, 11:53 AM
With thanks to The Financial Times...

"A US ban on online gambling, (http://www.ft.com/cms/s/0/9221ea00-398e-11de-b82d-00144feabdc0.html?nclick_check=1) which has sparked criminal investigations and plunging share prices at betting companies around the world, could be eased under new legislation presented on Wednesday by the head of the House financial services committee".

Netbet

Since online betting on horseraces is currently legal in the USA, how is this legislation going to do any good for horseracing?
If this law is passed, the ADW's will all initiate, at the least, poker games although they will face formidable competition if the land-based Vegas casinos decide to get in on the online gambling action. Don't see how the impact on horseracing handle/interest will be anything but negative.

Jeff P
05-10-2009, 01:16 PM
In my opinion, UIGEA, which was passed in 2006, was unenforceable because it put the burden of enforcement squarely on the shoulders of banks and financial institutions. I'll make the argument that much of UIGEA's support came about not because online wagering is inherently bad or a danger to society - but rather because certain track operators saw an opportunity to force a monopoly upon the horse player. In my opinion UIGEA was a cheap attempt to force US based players who were playing offshore and getting rebated to play in the US where rebates and lower pricing were much harder to obtain.

The only tangible result that I have seen as a result of UIGEA being passed was that Pinnacle and Neteller were both forced to stop taking US residents as customers. But that didn't change anything. Other options are still available to price sensitive players. Since UIGEA's passage handle has continued to shrink.

The problem of shrinking handle stems from a flawed thought process and mentality still prevalent among many industry decision makers:

Instead of identifying customer needs and wants - instead of making it the industry's mission statement to satisfy customer needs and wants - instead of marketing in new fresh ways and competing for and earning the business of new customers - many in the industry would rather attempt to force limited choices and high prices upon the customer - making it effectively impossible for the industry to do the one thing it needs to do the most: GROW HANDLE.

It's time for the industry to WAKE UP! Shrinking handle is a symptom of an industry failing to satisfy customer needs and wants. Shrinking handle is NOT going to reverse itself because of laws like UIGEA that were designed to limit customer choices.

The ONLY way the industry will reverse the current trend and start GROWING handle is when it reverses course and makes satisfying customer needs and wants the industy's mission statement.

-jp

.

trying2win
05-10-2009, 05:28 PM
Jeff:

Great post! :ThmbUp: In my opinion, you're right on the money.


T2W

CBedo
05-10-2009, 10:07 PM
In my opinion, UIGEA, which was passed in 2006, was unenforceable because it put the burden of enforcement squarely on the shoulders of banks and financial institutions. I'll make the argument that much of UIGEA's support came about not because online wagering is inherently bad or a danger to society - but rather because certain track operators saw an opportunity to force a monopoly upon the horse player. In my opinion UIGEA was a cheap attempt to force US based players who were playing offshore and getting rebated to play in the US where rebates and lower pricing were much harder to obtain.

The only tangible result that I have seen as a result of UIGEA being passed was that Pinnacle and Neteller were both forced to stop taking US residents as customers. But that didn't change anything. Other options are still available to price sensitive players. Since UIGEA's passage handle has continued to shrink.

The problem of shrinking handle stems from a flawed thought process and mentality still prevalent among many industry decision makers:

Instead of identifying customer needs and wants - instead of making it the industry's mission statement to satisfy customer needs and wants - instead of marketing in new fresh ways and competing for and earning the business of new customers - many in the industry would rather attempt to force limited choices and high prices upon the customer - making it effectively impossible for the industry to do the one thing it needs to do the most: GROW HANDLE.

It's time for the industry to WAKE UP! Shrinking handle is a symptom of an industry failing to satisfy customer needs and wants. Shrinking handle is NOT going to reverse itself because of laws like UIGEA that were designed to limit customer choices.

The ONLY way the industry will reverse the current trend and start GROWING handle is when it reverses course and makes satisfying customer needs and wants the industy's mission statement.

-jp

.

Great post, but in my opinion, UIGEA had nothing (directly) to do with horse racing. It was all about online poker. Horse racing just got caught in the wake.

Frank Angst
05-11-2009, 10:28 AM
I did a story on this topic in the current Thoroughbred Times magazine, dated May 9.
Because horse racing ADW operations already have Internet operations in place and customer lists, they could have some advantage over large casino operators that surely would launch their own sites.
It will be interesting to follow.

trigger
05-11-2009, 10:44 AM
In my opinion, UIGEA, which was passed in 2006, was unenforceable because it put the burden of enforcement squarely on the shoulders of banks and financial institutions. I'll make the argument that much of UIGEA's support came about not because online wagering is inherently bad or a danger to society - but rather because certain track operators saw an opportunity to force a monopoly upon the horse player. In my opinion UIGEA was a cheap attempt to force US based players who were playing offshore and getting rebated to play in the US where rebates and lower pricing were much harder to obtain.

The only tangible result that I have seen as a result of UIGEA being passed was that Pinnacle and Neteller were both forced to stop taking US residents as customers. But that didn't change anything. Other options are still available to price sensitive players. Since UIGEA's passage handle has continued to shrink.

The problem of shrinking handle stems from a flawed thought process and mentality still prevalent among many industry decision makers:

Instead of identifying customer needs and wants - instead of making it the industry's mission statement to satisfy customer needs and wants - instead of marketing in new fresh ways and competing for and earning the business of new customers - many in the industry would rather attempt to force limited choices and high prices upon the customer - making it effectively impossible for the industry to do the one thing it needs to do the most: GROW HANDLE.

It's time for the industry to WAKE UP! Shrinking handle is a symptom of an industry failing to satisfy customer needs and wants. Shrinking handle is NOT going to reverse itself because of laws like UIGEA that were designed to limit customer choices.

The ONLY way the industry will reverse the current trend and start GROWING handle is when it reverses course and makes satisfying customer needs and wants the industy's mission statement.

-jp

.
While I wholeheartedly agree that the NA racing industry needs to pay much more attention to the customer in order to survive especially in making horse racing gambling much more competitive with alternatives by reducing takeout for all, I don't see how making online poker and casino games(and,sports betting will not be far behind) legal in the US will not have an adverse impact on horse racing handle.
Also, large scale poker games and bookmaking have been illegal in the US in most states for decades while, during this period, betting on horseraces at the track, or later, via OTBs or legal ADWs (since simulcasting was implemented) has been legal in most states . Accordingly, I agree with Cbedo that the UIGEA had very little to do directly with horseracing and lots to do with continuing existing laws banning bookmaking (which currently btw contributes nothing to horseracing) and other forms of gambling.
Anyway, to repeat my original point, the legalization of online poker and casino games will ,imho, have a substantial negative long term impact on horseracing handle.

DeanT
05-11-2009, 11:58 AM
Fair point trigger, and you may be right.

However, some pros (imo):

1 - The business is a mess. If you live in Alaska, eat hamburger meat and don't have a moose licence you can only bet Emerald Downs every second Monday. Or something like that. if a national system is passed racing must get into the mainstream, get rid of all the laws, or be dead.

2- Betting Exchanges. The largest now owns TVG. if they bring that platform and 2M + customers around the world to US racing with high trading volumes, it could crush soccer and other games.

3- Low takeouts happen on the net. The days of 22% takeouts would be over. We again, would finally be forced to compete.

Racing should not sell itself short, imo. It is a great game if priced right and if it is dragged into this century. In Australia last year the jurisdictions where Betfair were offered (where people could bet rugby, soccer and everything) had handle growth of 20-30%. When the game is priced right and offered to everyone in different ways, it is an excellent betting proposition, imo.

hencicleva
05-11-2009, 01:40 PM
What are the main legal obsticles to Betfair or anyone else operating a Betting Exchange in this country?

DeanT
05-11-2009, 06:03 PM
I believe it is up mostly to the states to decide.

savant
05-12-2009, 05:58 AM
A New Chance for Online Gambling in the U.S.

By ERIC PFANNER
April 26, 2009

PARIS — Is online gambling coming in from the cold?

When the U.S. Congress cracked down on Internet betting in 2006, the big, publicly traded European companies that had dominated the business closed up shop in the United States. Growth in the booming industry shifted away from these companies, once the darlings of the stock market, to private operators in offshore locations like Antigua and the Isle of Man.

But now, executives of some of the European companies whisper excitedly that they may soon get a second chance in the United States. Meanwhile, a number of European countries that have long maintained barriers are moving, under pressure from regulators, to legalize, and tax, online gambling.

Read the rest:

http://www.nytimes.com/2009/04/27/technology/internet/27iht-gamble.html?_r=2

Bruddah
05-12-2009, 11:28 AM
Instead of identifying customer needs and wants - instead of making it the industry's mission statement to satisfy customer needs and wants - instead of marketing in new fresh ways and competing for and earning the business of new customers - many in the industry would rather attempt to force limited choices and high prices upon the customer - making it effectively impossible for the industry to do the one thing it needs to do the most: GROW HANDLE.

It's time for the industry to WAKE UP! Shrinking handle is a symptom of an industry failing to satisfy customer needs and wants. Shrinking handle is NOT going to reverse itself because of laws like UIGEA that were designed to limit customer choices.

The ONLY way the industry will reverse the current trend and start GROWING handle is when it reverses course and makes satisfying customer needs and wants the industy's mission statement.

I have been a very satisfied customer of Jeff for years. After speaking with him many many times, I knew this young man was brilliant and a true Gem.

His post above and especially those I have high lighted above are my beliefs, as well. I have voiced the exact same things many times on this site. However, Jeff says them much more eloquently than I. Jeff you have it right. I only wished that the Powers to be in the Racing Industry would read them. Not only read them but ADOPT THEM INTO THEIR BUSINESS MODELS for the future. If they don't, there will be no future for Horse Racing.

DeadHeat
05-12-2009, 03:32 PM
Yes. It is up to the states to decide. Here in Nevada, gambling capitol of the world, it is a misdemeanor to bet online. I have to go to a casino 60+ miles away or have someone else do the betting for me.

This means I do not wager nearly as often as I would like.

DH

trigger
05-12-2009, 06:29 PM
................................Racing should not sell itself short, imo. It is a great game if priced right and if it is dragged into this century. In Australia last year the jurisdictions where Betfair were offered (where people could bet rugby, soccer and everything) had handle growth of 20-30%. When the game is priced right and offered to everyone in different ways, it is an excellent betting proposition, imo.

Agree, priced right is one of the keys but it should be priced right for all bettors.

DeanT
05-12-2009, 06:55 PM
Agree, priced right is one of the keys but it should be priced right for all bettors.
That's the way the growing places do it, like Betfair.

trigger
05-12-2009, 11:31 PM
That's the way the growing places do it, like Betfair.

How much is Betfair's commission/takeout on each bet and how much of it goes to the tracks/horsemen?

startngate
05-12-2009, 11:49 PM
How much is Betfair's commission/takeout on each bet and how much of it goes to the tracks/horsemen?I have seen some public statements on their deals in Australia that would indicate they pay between 15% and 20% of their revenue on horse racing to the associations.

With their commission/takeout being a sliding scale of up to 5% depending on a player's volume on all matched bets it means BetFair are paying the industry in Australia the equivalent of a host fee of less than 1% of 'handle'.

DeanT
05-13-2009, 12:48 AM
How much is Betfair's commission/takeout on each bet and how much of it goes to the tracks/horsemen?
5% takeout ......... 15% gross profits tax, just like the bookmakers pay.

In AUS the first year of it in the first state that passed it, old revenues (the tote system with 16% takes) were $10M to purses. Betfair's first year resulted in $12M to purses due to increased handles and betting turnover.

Cangamble
05-13-2009, 10:01 AM
Apparently the Frank's bill throws sports betting under the bus:
http://majorwager.com/index.cfm?page=27&show_column=746

rrbauer
05-13-2009, 02:35 PM
I think that UIGEA will be repealed totally or not at all. The banks and financial institutions will not back the repeal unless the whole thing goes.

trigger
05-14-2009, 10:00 AM
5% takeout ......... 15% gross profits tax, just like the bookmakers pay.

In AUS the first year of it in the first state that passed it, old revenues (the tote system with 16% takes) were $10M to purses. Betfair's first year resulted in $12M to purses due to increased handles and betting turnover.

Check my math/ logic, but if I get this right , at the rate of 15% of 5% (assuming gross profit=the gross takeout) that means the NA tracks/ horsemen would get about 3/4 of one percent of Betfair's commission to split among themselves. At an average current 20% takeout in NA, this would mean Betfair's NA handle would have to increase 26 times to keep the tracks/horsemen even with what they get now.
I like the idea of a 5% takeout but is this kind of handle increase feasible? What am I missing?

hencicleva
05-14-2009, 10:06 AM
Check my math/ logic, but if I get this right , at the rate of 15% of 5% (assuming gross profit=the gross takeout) that means the NA tracks/ horsemen would get about 3/4 of one percent of Betfair's commission to split among themselves. At an average current 20% takeout in NA, this would mean Betfair's NA handle would have to increase 26 times to keep the tracks/horsemen even with what they get now.
I like the idea of a 5% takeout but is this kind of handle increase feasible? What am I missing?

That ADW's hand over all the takeout is your error. Like Betfair they keep nearly all of it. Others on this board I'm sure know exactly how much.

DeanT
05-14-2009, 11:03 AM
What am I missing?

Churn, synergies with the tote (people who bet betfair bet into the tote too when they can not get prices; which is why in 2008 tote handles were up 30% in betfair jurisdictions in AUS), funding purses in a 1885 way versus today, engagement with customers.

I guess it is like asking this question "how will the stock market have anyone wanting to work in it when people can pay $6 a trade like they can now versus $350 for the same trade 10 years ago; trades would have to increase 55 times?" Clearly that was not the case. $6 trades and the internet brought the stock market to new markets and volumes surged. Betfair (and other low margin net companies) work on exactly the same principal.

Getting the fiefdoms to get their head around that in racing? Very difficult.

DeanT
05-14-2009, 11:16 AM
PS: Trigger a quick example from the real world. A friend is a professional player, in 2004 he played no racing at all, he concentrated on other games. Then he started doing some work on racing again, solely with BF because of the opportunities. Because he was again interested in playing he created a pari mutuel account as well, for bets he could not get matched and so on. He played win money, a place system and a show system, plus a few exotics, trying to grind out profits into the pools. At the end of the year he had bet close to $2M. I asked him how much he would have bet without betfair being there, and he said "nothing, I would not play racing". He still plays racing to this day.

I think that is a fair point to understand. When we bring in new gambling markets they are energized to play racing. At 22% takes, they choose something else. We will never as a business thrive charging at track rates over the net. No business can, and we must start to get that through our heads (imo) and move on to growing the game.

Valuist
05-16-2009, 09:28 PM
In my opinion, UIGEA, which was passed in 2006, was unenforceable because it put the burden of enforcement squarely on the shoulders of banks and financial institutions. I'll make the argument that much of UIGEA's support came about not because online wagering is inherently bad or a danger to society - but rather because certain track operators saw an opportunity to force a monopoly upon the horse player. In my opinion UIGEA was a cheap attempt to force US based players who were playing offshore and getting rebated to play in the US where rebates and lower pricing were much harder to obtain.

The only tangible result that I have seen as a result of UIGEA being passed was that Pinnacle and Neteller were both forced to stop taking US residents as customers. But that didn't change anything. Other options are still available to price sensitive players. Since UIGEA's passage handle has continued to shrink.

The problem of shrinking handle stems from a flawed thought process and mentality still prevalent among many industry decision makers:

Instead of identifying customer needs and wants - instead of making it the industry's mission statement to satisfy customer needs and wants - instead of marketing in new fresh ways and competing for and earning the business of new customers - many in the industry would rather attempt to force limited choices and high prices upon the customer - making it effectively impossible for the industry to do the one thing it needs to do the most: GROW HANDLE.

It's time for the industry to WAKE UP! Shrinking handle is a symptom of an industry failing to satisfy customer needs and wants. Shrinking handle is NOT going to reverse itself because of laws like UIGEA that were designed to limit customer choices.

The ONLY way the industry will reverse the current trend and start GROWING handle is when it reverses course and makes satisfying customer needs and wants the industy's mission statement.

-jp

.

Great post. The only thing I'd add is that for the industry to grow handle, they MUST start cutting takeout.

BigJake
05-17-2009, 09:13 AM
I've only been betting horses since 2001. I don't know alot about the history of things like takeout. What would be a reasonable expectation for takeouts (I know zero would most likely answer, but I said reasonable)? Think Kee is at 16% or 17% for WPS. Is this what most people want or should it be even lower than that? What was the average takeout 25 years ago? The answer, I guess, could be the ridiculous takeout on exotics. Is that what needs to be lowered? I am all for my horses paying more (lower takeouts), but I really don't know what the average player wants the takeouts to be.

startngate
05-17-2009, 10:13 AM
Check my math/ logic, but if I get this right , at the rate of 15% of 5% (assuming gross profit=the gross takeout) that means the NA tracks/ horsemen would get about 3/4 of one percent of Betfair's commission to split among themselves. At an average current 20% takeout in NA, this would mean Betfair's NA handle would have to increase 26 times to keep the tracks/horsemen even with what they get now.
I like the idea of a 5% takeout but is this kind of handle increase feasible? What am I missing?You have to compare the fee BetFair would pay to the fee the track currently gets for its signal. To round things off, if you assume that BetFair would be paying the rough equivalent of a 1% host fee, then a track getting a 3% host fee would need to see a 3x increase in handle to get the same revenue from BetFair as another outlet. This becomes a much greater increase if comparing to another ADW that is paying a much higher host fee, and also paying source market fees.

BetFair could offset this somewhat by offering pool betting too, and paying a higher host fee there. Either way, it would take a large handle increase for the tracks to not be hurt by the BetFair model from a revenue standpoint. As DeanT mentions it seems to be working on some level in Australia, arguably in a market with much more sophisticated gamblers.

I've only been betting horses since 2001. I don't know alot about the history of things like takeout. What would be a reasonable expectation for takeouts (I know zero would most likely answer, but I said reasonable)? Think Kee is at 16% or 17% for WPS. Is this what most people want or should it be even lower than that? What was the average takeout 25 years ago? The answer, I guess, could be the ridiculous takeout on exotics. Is that what needs to be lowered? I am all for my horses paying more (lower takeouts), but I really don't know what the average player wants the takeouts to be.Well, the 'average' player doesn't know what the takeout is, nor do they care. If they did, the track with the lowest takeout would get the majority of the handle, and no one would be playing pools like the 30%+ takeout pools you find at Philly Park and Penn National.

Don't get me wrong, despite the average player not knowing or caring what the takeout is, they are affected by it and will churn less because of a higher takeout. Still, they will not make their decisions about which track to play based on takeout. The average player plays the local track and tracks they have heard of.

Lower the takeout to 5% on a track like Beulah Park, Portland Meadows or Sun Ray and you are not going to see a big migration of handle to those places from the 'average' player. You'll also see a very limited migration from the sophisticated players IMO because the pools are small and the sophisticaed players will know they are just betting against themselves which lowers their perceived 'edge'.

Cangamble
05-17-2009, 10:52 AM
Lower the takeout to 5% on a track like Beulah Park, Portland Meadows or Sun Ray and you are not going to see a big migration of handle to those places from the 'average' player. You'll also see a very limited migration from the sophisticated players IMO because the pools are small and the sophisticaed players will know they are just betting against themselves which lowers their perceived 'edge'.
I agree with most of your post. Players generally play locally or tracks they like. Most players are not cognizant of track takeout, but they are affected by it at least subconsciously (as they realize that they just don't last very long playing horses versus other games of chance).
But as far as this part of your post is concerned. It might be less true now that HANA has formed. We don't know for sure yet, but lets hope.

DeanT
05-17-2009, 11:52 AM
Well, the 'average' player doesn't know what the takeout is, nor do they care. If they did, the track with the lowest takeout would get the majority of the handle, and no one would be playing pools like the 30%+ takeout pools you find at Philly Park and Penn National.



All true, however that line of thought from those in racing is what has really hurt us. We are looking and arguing inside the box of customers with this rather than outside. You are only talking about people who are playing racing, rather than looking at those who have left racing, or play other games. To them, takeout matters, and it matters a lot.

I liken it to a flea market. People that go to a flea market to haggle, touch items, out for a day out and are part of that landscape could care less about doing the same thing online. BUT, there are millions who would partake in a flea market or garage sale experience in another way. If we listened only to those touch customers, Ebay would never have been a success.

Betfair and rebaters (as well as poker companies and 5 cent money line bookmakers) have gone after the unsatisfied price sensitive market, while we in racing have said over and over again "the 'average' player doesn't know what the takeout is, nor do they care". They might not care, but there are millions of people out there who do. If racing does keep losing market share year after year, in twenty years in MBA textbooks, I believe that this will be the single most cited item on why racing died off as a gambling game - lack of vision, and lack of a plan to cater to gamblers, by clinging to what once was.

trigger
05-17-2009, 12:58 PM
You have to compare the fee BetFair would pay to the fee the track currently gets for its signal. To round things off, if you assume that BetFair would be paying the rough equivalent of a 1% host fee, then a track getting a 3% host fee would need to see a 3x increase in handle to get the same revenue from BetFair as another outlet. This becomes a much greater increase if comparing to another ADW that is paying a much higher host fee, and also paying source market fees.

BetFair could offset this somewhat by offering pool betting too, and paying a higher host fee there. Either way, it would take a large handle increase for the tracks to not be hurt by the BetFair model from a revenue standpoint. As DeanT mentions it seems to be working on some level in Australia, arguably in a market with much more sophisticated gamblers.

Well, the 'average' player doesn't know what the takeout is, nor do they care. If they did, the track with the lowest takeout would get the majority of the handle, and no one would be playing pools like the 30%+ takeout pools you find at Philly Park and Penn National.

Don't get me wrong, despite the average player not knowing or caring what the takeout is, they are affected by it and will churn less because of a higher takeout. Still, they will not make their decisions about which track to play based on takeout. The average player plays the local track and tracks they have heard of.

Lower the takeout to 5% on a track like Beulah Park, Portland Meadows or Sun Ray and you are not going to see a big migration of handle to those places from the 'average' player. You'll also see a very limited migration from the sophisticated players IMO because the pools are small and the sophisticaed players will know they are just betting against themselves which lowers their perceived 'edge'.

On the Betfair handle issue, you're right I was comparing the differences to on-track takeout(20%). On the other hand, I don't think there are many ADW's paying only 3% on their handle to the tracks/horsemen on "premium"/large pool tracks any more. For instance, it's my understanding that ADW's get to only keep around 5% on California action.

On the awareness of the takeout by the "average" players, the high takeout grinds these player's bankrolls down fairly quickly (even some with fair handicapping skills) and , after losses mount over time, many quit or curtail their horseracing betting. Also, I think the potential horse players in the younger generation are much more aware of the mathematics of various gambling games and chose their gambling "poison" accordingly.
I don't think many slot players know what the takeout is on the one armed bandits they play, but the takeout (4-10%?) must be low enough so they make a score often enough to keep coming back. Not so easy to do in horseracing.

DeanT
05-17-2009, 01:08 PM
For instance, it's my understanding that ADW's get to only keep around 5% on California action.

That's correct. I wonder how that business policy has been working for California racing.

trigger
05-17-2009, 01:16 PM
I've only been betting horses since 2001. I don't know alot about the history of things like takeout. What would be a reasonable expectation for takeouts (I know zero would most likely answer, but I said reasonable)? Think Kee is at 16% or 17% for WPS. Is this what most people want or should it be even lower than that? What was the average takeout 25 years ago? The answer, I guess, could be the ridiculous takeout on exotics. Is that what needs to be lowered? I am all for my horses paying more (lower takeouts), but I really don't know what the average player wants the takeouts to be.

My 2 cents are that takeout should be about a 10% average in order to make horse race gambling competitive with other forms of gambling. But, the only way I see a 10% takeout happening is with a substantial reduction in the number of tracks (currently too much overhead ), races, and horses while maintaining handle at about current levels.... Kind of like the Hong Kong model on a larger scale.
At one point, I thought the "economic invisible hand" would eventually accomplish this as part of our free enterprise system but slots-fueled purses seem to have changed/interrupted that process...who knows what will happen now.

BigJake
05-17-2009, 02:10 PM
What was the take 25 - 30 years ago. I always thought that the 1970s was the last of the "horse racing hayday" so I'd like to know what takeouts were in the "hayday". Maybe I am wrong about the 1970s, I wasn't born until 1977. Its just what I've heard

InsideThePylons-MW
05-17-2009, 02:24 PM
10% takeout on all bets

Charge 3% to other racetracks and 5% to ADW's for host fees

Open signal access to everyone

This is the model that will give racing a chance to survive

startngate
05-17-2009, 02:48 PM
What was the take 25 - 30 years ago. I always thought that the 1970s was the last of the "horse racing hayday" so I'd like to know what takeouts were in the "hayday". Maybe I am wrong about the 1970s, I wasn't born until 1977. Its just what I've heardThe takeout rates themselves have not dramatically increased since the 70's. Exotic wagering has, and therefore the blended takeout rates have gone up since then.

Which in a way supports the lower takeout business model. In the 'good ole days' of racing you had WPS in every race, an early DD, and exactas and/or quinellas. That was basically it. Essentially one and two horse pools ... the lowest of the takeout rates in most State's laws.

Racing leaders, and the legislatures that allowed pari-mutuel pools decided long ago that since the payoffs for exotic wagers with 3 or more horses were going to be substantially higher than WPS, a higher take wouldn't be noticed by the player and set the rates higher. Bad assumption, no doubt.

IMO, a bet is a bet is a bet, so I've never figured out why charging different rates based on the pool makes sense. Of course the tracks can charge more, so they do ... :confused:

Cangamble
05-17-2009, 02:56 PM
My 2 cents are that takeout should be about a 10% average in order to make horse race gambling competitive with other forms of gambling. But, the only way I see a 10% takeout happening is with a substantial reduction in the number of tracks (currently too much overhead ), races, and horses while maintaining handle at about current levels.... Kind of like the Hong Kong model on a larger scale.
At one point, I thought the "economic invisible hand" would eventually accomplish this as part of our free enterprise system but slots-fueled purses seem to have changed/interrupted that process...who knows what will happen now.
I disagree that tracks have to go is takeouts are reduced to 10%. The bottom lines will increase everywhere. The lower the takeout, the more bets one can make, which means the more tracks they can play.
When I'm playing Betfair, I handicap up to 8 cards a day. When I play into the parimutuel system, I limit myself to 1-4 tracks a day.

Cangamble
05-17-2009, 03:05 PM
The takeout rates themselves have not dramatically increased since the 70's. Exotic wagering has, and therefore the blended takeout rates have gone up since then.

Which in a way supports the lower takeout business model. In the 'good ole days' of racing you had WPS in every race, an early DD, and exactas and/or quinellas. That was basically it. Essentially one and two horse pools ... the lowest of the takeout rates in most State's laws.

Racing leaders, and the legislatures that allowed pari-mutuel pools decided long ago that since the payoffs for exotic wagers with 3 or more horses were going to be substantially higher than WPS, a higher take wouldn't be noticed by the player and set the rates higher. Bad assumption, no doubt.

IMO, a bet is a bet is a bet, so I've never figured out why charging different rates based on the pool makes sense. Of course the tracks can charge more, so they do ... :confused:
I do think that wps takeouts have gone up by around 1-3% since the early 70's.
As for the higher blended takeout rates, of course they are considerably higher. But at the time they first implemented these higher rates for exotics, bettors were still only playing one track, and had to be there for it.
They were leaving with money a lot more than today because triactors were only available on one or two races tops.
Those who hit big triactors especially, actually took money out circulation even with the higher takeouts. This of course, is a lot less true today.
When we were given the ability to bet on 50 races a day, takeout reductions should have occurred across the board, and exotic takeout rates should have come down closer to wps levels as well.