Where Is the Profit in Rebates?

[peter e]

A person getting a rebate, say 10%, bets $1,000.
Of that bet the track takes out about $160. The bettor gets $100 back, leaving the track with only $60 to cover its expenses and profit. Where does it profit from giving the rebate?
I must be missing something. Someone please explain.

[BillW]

A person getting a rebate, say 10%, bets $1,000.
Of that bet the track takes out about $160. The bettor gets $100 back, leaving the track with only $60 to cover its expenses and profit. Where does it profit from giving the rebate?
I must be missing something. Someone please explain.

Tracks don't give rebates, only ADW's do. Tracks benefit without spending a penny when the person receiving the rebate bets more money, because he/she has more money to bet.

[InsideThePylons-MW]

Tracks don't give rebates, only ADW's do.

How could anybody that reads this board say this?

[BillW]

How could anybody that reads this board say this?

I misspoke. No track that publicly advertises rebates or will talk to me (the average bettor) offers rebates that I am aware of. How's that?

[Imriledup]

A person getting a rebate, say 10%, bets $1,000.
Of that bet the track takes out about $160. The bettor gets $100 back, leaving the track with only $60 to cover its expenses and profit. Where does it profit from giving the rebate?
I must be missing something. Someone please explain.

Tracks Can't (or don't) give rebates because every dollar they collect from takeout rates is divvied up between government, purses, etc.

ADWs can give rebates because they have very little overhead. Some tracks do give rebates, but they are disguised as player rewards programs where you can accumulate 'points' and cash them in for vouchers. Those rewards are very small. Some tracks give up to 4% to big bettors, that's the highest 'reward' that i know of.

[FenceBored]

Tracks Can't (or don't) give rebates because every dollar they collect from takeout rates is divvied up between government, purses, etc.

ADWs can give rebates because they have very little overhead. Some tracks do give rebates, but they are disguised as player rewards programs where you can accumulate 'points' and cash them in for vouchers. Those rewards are very small. Some tracks give up to 4% to big bettors, that's the highest 'reward' that i know of.

Looking at my current player reward total, just $1000 more in wagers and I'll have enough points for that Bob Baffert dashboard bobblehead I've always dreamed of. :lol:

[Imriledup]

Looking at my current player reward total, just $1000 more in wagers and I'll have enough points for that Bob Baffert dashboard bobblehead I've always dreamed of. :lol:

:lol: :ThmbUp:

[andymays]

I would like to see a experiment or trial run where TVG and HRTV along with HANA and two Racetracks like Saratoga and Del Mar went to a 10% take for all wagers on a Saturday this year or next. It needs to be heavily promoted for 30 days prior but I think it would bring back all the offshore players and I think the pools would be enormous for that day.

We would all know where the different theories stand after that!

If there was ever a time to give this a shot it's now!

[Imriledup]

I would like to see a experiment or trial run where TVG and HRTV along with HANA and two Racetracks like Saratoga and Del Mar went to a 10% take for all wagers on a Saturday this year or next. It needs to be heavily promoted for 30 days prior but I think it would bring back all the offshore players and I think the pools would be enormous for that day.

We would all know where the different theories stand after that!

If there was ever a time to give this a shot it's now!

The pools would be much bigger, but i'm not sure that would convince anyone to adopt a 10% across the board take.

[andymays]

The pools would be much bigger, but i'm not sure that would convince anyone to adopt a 10% across the board take.


If it worked and the networks profited from increases in viewership (advertising) and handle (ADW) then you never know. It's worth a shot!

[Dave Schwartz]

The first thing that would happen is that the whales would become extinct - as a sizeable cut in takeout would hurt them. This would mean an instant 15% or more reduction in handle.

So, I doubt that total handle to the tracks would go up.

[Dave Schwartz]

An afterthought - the PROFIT to the tracks might increase but not the handle.

[Imriledup]

The first thing that would happen is that the whales would become extinct - as a sizeable cut in takeout would hurt them. This would mean an instant 15% or more reduction in handle.

So, I doubt that total handle to the tracks would go up.

Exactly. Good points, with much lower takeouts, whales stay away as there's really no incentive for them to play into a pool where their rebate is close to 0%.

[Dave Schwartz]

Yes, that would be good for us, but the point is that the tracks would not allow it.

[Jens]

Dave-
I'm completely baffled by your statement that a sizable cut in takeout would hurt the whales and cause them to become extinct??? It seems to me that as long as the whales takeout remains the same (or lower) that a reduced takeout would have the effect of doing just the opposite. Lower takeout for fish like me :) would allow us regular players bankrolls to last longer adding to the churn (handle), some solid players might even become profitable enough to approach or reach whale levels, new blood would be more likely to enter the game etc. All of this would mean larger pools which would allow the present whales to wager more without affecting their odds. What am I missing?? As long as the vig the whale pays remains the same (or lower) how could reducing the take to the minnows cause the whales to become extinct?

[cj]

The first thing that would happen is that the whales would become extinct - as a sizeable cut in takeout would hurt them. This would mean an instant 15% or more reduction in handle.

So, I doubt that total handle to the tracks would go up.

If the takeout cuts equaled their rebates, why would they have to leave? Why would it hurt them? In theory, the pools would be bigger and they could bet more with the same effective takeout.

[Imriledup]

Dave-
I'm completely baffled by your statement that a sizable cut in takeout would hurt the whales and cause them to become extinct??? It seems to me that as long as the whales takeout remains the same (or lower) that a reduced takeout would have the effect of doing just the opposite. Lower takeout for fish like me :) would allow us regular players bankrolls to last longer adding to the churn (handle), some solid players might even become profitable enough to approach or reach whale levels, new blood would be more likely to enter the game etc. All of this would mean larger pools which would allow the present whales to wager more without affecting their odds. What am I missing?? As long as the vig the whale pays remains the same (or lower) how could reducing the take to the minnows cause the whales to become extinct?

Because if you lower the take, the whale's rebate gets lower. With a lower rebate, there's less incentive to play big money.

[cj]

Because if you lower the take, the whale's rebate gets lower. With a lower rebate, there's less incentive to play big money.

Why? It doesn't make sense. If their effective takeout should theoretically be the same with the ability to bet into bigger pools.

[InsideThePylons-MW]

Dave-
I'm completely baffled by your statement that a sizable cut in takeout would hurt the whales and cause them to become extinct??? It seems to me that as long as the whales takeout remains the same (or lower) that a reduced takeout would have the effect of doing just the opposite. Lower takeout for fish like me :) would allow us regular players bankrolls to last longer adding to the churn (handle), some solid players might even become profitable enough to approach or reach whale levels, new blood would be more likely to enter the game etc. All of this would mean larger pools which would allow the present whales to wager more without affecting their odds. What am I missing?? As long as the vig the whale pays remains the same (or lower) how could reducing the take to the minnows cause the whales to become extinct?

Baffled is correct.

If they lower takeout to 10%, the whales won't leave.

Some tracks that now charge 3% for their signal will be a couple % points higher but the major tracks will be just about the same takeout as now with rebates. The rise in pools and the ability for the sharpest to bet more because of that will cause an all-around increase.

[InsideThePylons-MW]

Because if you lower the take, the whale's rebate gets lower. With a lower rebate, there's less incentive to play big money.

If the takeout is 20% with a 10% rebate or a 10% takeout with no rebate.....assuming the pools are bigger with the 10% takeout, I will end up betting more with the bigger pools and 10% takeout.

[Charlie D]

The high take means i do not play as much as i would if take was lower, this means there is less money in pools than there should be.

Lower take i play, so do others like me. money attracts money as you can see on Betfair everyday.

[Dave Schwartz]

The whales rebate is tied to the takeout. If the takeout goes down so does the rebate. When the takeout is higher - in pools like PEN's pick 3 - they get the highest imaginable rebate.

[Imriledup]

If the takeout is 20% with a 10% rebate or a 10% takeout with no rebate.....assuming the pools are bigger with the 10% takeout, I will end up betting more with the bigger pools and 10% takeout.

I think rebate players would all rather bet into an extremely high takeout with an extremely high rebate. This way, all the smartest non rebate players aren't in those pools, they are in pools with lower takeouts. Rebate players get a large rebate and don't have to deal with the sharpest non rebate players.

Also, its a bit psychological, if you have a horrible day, you can look back and know that you are getting a chunk of money back. If you have a horrible day with no rebate into 10 pct pools, its not as good, you aren't getting a penny back.

[Dick Schmidt]

Jens,

Whales are different than you and me. They bet a lot more money. The truth is that most so called Whales lose money at the track. However, they arrange such generous rebates that they can do OK. Say they lose 5% of every dollar wagered, but get a 7% rebate. Now, for the average player, that is nothing, but if you bet, say, 300 million dollars a year (that's why they are called whales) then you are looking at a fair bit of cash.

Now if the tracks cut the take, they can't pay such big rebates, so the whales suddenly stop being profitable and stop betting. Poof goes almost a billion dollars a year in action that the tracks have come to depend on. I doubt us little guys are going to be able to make that up, so it ain't gonna happen.

Thus endith today's lesson: it's all about the money.

[Indulto]

Jens,

Whales are different than you and me. They bet a lot more money. The truth is that most so called Whales lose money at the track. However, they arrange such generous rebates that they can do OK. Say they lose 5% of every dollar wagered, but get a 7% rebate. Now, for the average player, that is nothing, but if you bet, say, 300 million dollars a year (that's why they are called whales) then you are looking at a fair bit of cash.

Now if the tracks cut the take, they can't pay such big rebates, so the whales suddenly stop being profitable and stop betting. Poof goes almost a billion dollars a year in action that the tracks have come to depend on. I doubt us little guys are going to be able to make that up, so it ain't gonna happen.

Thus endith today's lesson: it's all about the money.But what % of that $1 billion bet by whales do the tracks actually realize compared to that of the remaining $13 Billion bet by non-whales? Even if you're right that ALL whales would suddenly disappear, the resulting increase in handle by non-whales would not have to total $1 Billion to generate the same revenue.

Something has to be done to replace the current aging bettors, or it will all collapse anyway. Racing should also be lobbying for an end to the prohibition by some states on their residents betting on horseraces over the internet rather than eliminating withholding which mainly benefits whales. Consolidation of handle to fewer tracks has already started with the closing of Bay Meadows and the expected closing of Hollywood Park.

How long would whales stay out of pools enlarged by greater non-whale participation and winnowing of racing venues?

[Sid]

The thread now appears pretty much to represent the same point of view I was offering but which finally led me to give up on being viewed as an idiot in last week's thread titled "1991- TBred handle begins downward, casino handle begins upward spiral."

Yes, unless a new generation of horseplayers is found none of it matters. But understanding what one is standing on is a good preliminary to rebuilding a foundation.

[startngate]

Jens,

Whales are different than you and me. They bet a lot more money. The truth is that most so called Whales lose money at the track. However, they arrange such generous rebates that they can do OK. Say they lose 5% of every dollar wagered, but get a 7% rebate. Now, for the average player, that is nothing, but if you bet, say, 300 million dollars a year (that's why they are called whales) then you are looking at a fair bit of cash.

Now if the tracks cut the take, they can't pay such big rebates, so the whales suddenly stop being profitable and stop betting. Poof goes almost a billion dollars a year in action that the tracks have come to depend on. I doubt us little guys are going to be able to make that up, so it ain't gonna happen.

Thus endith today's lesson: it's all about the money.Actually, you seem to forget that with a lower takeout the whale's P/L will go up because they will collect more on their winning bets.

Every whale I have talked to on the subject has told me they would rather have lower takeouts and would likely bet even more than they do currently.

Also, the places that rebate now will continue to rebate, just at a lower level. They all work in reverse. They decide on what percentage of handle they need to retain after paying core expenses (host fees, taxes, etc) and return whatever is left as rebates. Yes, the rebate will be less, but it won't go away ... especially for the whales.

[Cangamble]

Pools would be bigger. Whales would still be getting the same rates they get today (as they would negotiate a couple of extra points in order to do that).
So there would be no reason for them to bet less. In fact, I would argue they would be more because the pools would be bigger, and they could bet more without affecting the odds they want to achieve.
Also, more new money would be attracted as all players would spend more time betting and handicapping thus drawing in friends and families into the horse racing universe, plus the game could actually be beaten consistently by the layman with luck and skill, and this dangling carrot will bring in other gamblers who have avoided horse racing....the younger poker crowd for example.

[jballscalls]

Pools would be bigger. Whales would still be getting the same rates they get today (as they would negotiate a couple of extra points in order to do that).
So there would be no reason for them to bet less. In fact, I would argue they would be more because the pools would be bigger, and they could bet more without affecting the odds they want to achieve.
Also, more new money would be attracted as all players would spend more time betting and handicapping thus drawing in friends and families into the horse racing universe, plus the game could actually be beaten consistently by the layman with luck and skill, and this dangling carrot will bring in other gamblers who have avoided horse racing....the younger poker crowd for example.

just curious, but is there any proof that this has happened or will happen?? has it been proven before or is there any empirical evidence??

the only reason i ask is because i know lots of poker players, lots of young people and tons of horse players, and 90 percent of them have no idea what takeout even is. I ask people in our otb about takeout because i'd also like to see it lowered, and most have no idea what takeout is at various facilities.

[Sid]

I ask people in our otb about takeout because i'd also like to see it lowered, and most have no idea what takeout is at various facilities.
That's true. And the same people think a racetrack is a license to print money, and the states are making money hand over fist raking the parimutuel tax, and they lost the last race because of a bad ride.

[arno]

I think rebate players would all rather bet into an extremely high takeout with an extremely high rebate. This way, all the smartest non rebate players aren't in those pools, they are in pools with lower takeouts. Rebate players get a large rebate and don't have to deal with the sharpest non rebate players.

Also, its a bit psychological, if you have a horrible day, you can look back and know that you are getting a chunk of money back. If you have a horrible day with no rebate into 10 pct pools, its not as good, you aren't getting a penny back.

I have to agree the whales would disappear.

I am no whale but lucky enough to live within 5 miles of Monmouth Park and only work 6 furlongs away.
Pick 4's only have a 15% takeout and I bet them on track.
However, Pick 3's with a 25% takeout I bet with my ADW and make up a higher % of my handle.

Why?

Because my ADW gives me 3 times the rebate on the pick 3's as they do on pick 4's at Monmouth Park.

The whales want the higher rebates and will continue to get them.

[InsideThePylons-MW]

Some of the posts in this thread are just scary stupid.

[Cangamble]

just curious, but is there any proof that this has happened or will happen?? has it been proven before or is there any empirical evidence??

the only reason i ask is because i know lots of poker players, lots of young people and tons of horse players, and 90 percent of them have no idea what takeout even is. I ask people in our otb about takeout because i'd also like to see it lowered, and most have no idea what takeout is at various facilities.
Betfair. Most people are not cognizant of takeout, but they realize how long they last playing certain gambling games.
And lowering to 10% will create winners, which will create buzz. Betfair attracts players because there are known winners out there...striving to be lucky and trying out winning systems will occur within the fringes.

[ddog]

Some of the posts in this thread are just scary stupid.



and I say God BLESS em!

:lol:

[trigger]

Every time rebates come up ,we go around and around. With all the math wizards on this board, can't someone construct a model with fair assumptions that will give us some real facts on this question?
.
Not a math/statistics major but how about this as a start?
10 bettors in the win pool
The takeout is 20%
1 bettor(bettor A) gets a 10% rebate
1 bettor(bettor B-non rebatee) bets the same horses as the rebated player A.
Each player has a $1000 bankroll
Each of the 10 bettors bets 10% of their remaining bankroll in each of 20 races
Player A adds his rebate to his bankroll after each race.
Bettors A and B win each of the 20 races and the other 8 never win (i.e Players A and B split up the pool(after takeout) proportional to their bets for each race=parimutuel pool).
Run this model. Then,
Reduce the takeout to 10% and eliminate Player A's 10% rebate and rerun the model again.
Compare how players A and B make out in each model.

[Cangamble]

Every time rebates come up ,we go around and around. With all the math wizards on this board, can't someone construct a model with fair assumptions that will give us some real facts on this question?
.
Not a math/statistics major but how about this as a start?
10 bettors in the win pool
The takeout is 20%
1 bettor(bettor A) gets a 10% rebate
1 bettor(bettor B-non rebatee) bets the same horses as the rebated player A.
Each player has a $1000 bankroll
Each of the 10 bettors bets 10% of their remaining bankroll in each of 20 races
Player A adds his rebate to his bankroll after each race.
Bettors A and B win each of the 20 races and the other 8 never win (i.e Players A and B split up the pool(after takeout) proportional to their bets for each race=parimutuel pool).
Run this model. Then,
Reduce the takeout to 10% and eliminate Player A's 10% rebate and rerun the model again.
Compare how players A and B make out in each model.
Here is another example:
Player A and B have a .85 ROI. Player A gets a rebate of 10%, player B gets no rebate.
Using a $1000 bankroll, theoretically Player B loses the $1000 after betting $6666.00, Player A loses the $1000 after betting $20000 on average.

[startngate]

Every time rebates come up ,we go around and around. With all the math wizards on this board, can't someone construct a model with fair assumptions that will give us some real facts on this question?
.
Not a math/statistics major but how about this as a start?
10 bettors in the win pool
The takeout is 20%
1 bettor(bettor A) gets a 10% rebate
1 bettor(bettor B-non rebatee) bets the same horses as the rebated player A.
Each player has a $1000 bankroll
Each of the 10 bettors bets 10% of their remaining bankroll in each of 20 races
Player A adds his rebate to his bankroll after each race.
Bettors A and B win each of the 20 races and the other 8 never win (i.e Players A and B split up the pool(after takeout) proportional to their bets for each race=parimutuel pool).
Run this model. Then,
Reduce the takeout to 10% and eliminate Player A's 10% rebate and rerun the model again.
Compare how players A and B make out in each model.Here ya go ...

This assumes one can bet exactly 10% (to the penny), no breakage, and that there is no minium payoff.

20% Takeout; 10% Rebate to Player A

Player A
Bets - $5,233.54
Wins - $7,076.32
Rebate - $523.35
P/L - $2,366.13

Player B
Bets - $4,737.59
Wins - $6,522.49
Rebate - $0.00
P/L - $1,784.91

Total Bet by all 10 players - $16,998.51

One interesting note, in Race #17 the payoff becomes less than the amount wagered.

10% Takeout; No rebates

Players A & B
Bets - $5,590.96
Wins - $8,194.19
P/L - $2,603.23

Total Bet by all 10 players - $18,209.31

In this example, there is a per bet profit all the way through the 20 races.

[startngate]

With wager amounts rounded down to the nearest dollar and nickel breakage:

20% Takeout; 10% Rebate to Player A

Player A
Bets - $5,163.00
Wins - $7,065.50
Rebate - $516.30
P/L - $2,418.80

Player B
Bets - $4,672.00
Wins - $6,501.25
Rebate - $0.00
P/L - $1,829.25

Total Bet by all 10 players - $16,827.00

In Race #16 the break goes negative at $1.02 (vs $1.05). In race #17 is goes below $1.00.

10% Takeout; No rebates

Players A & B
Bets - $5,505.00
Wins - $8,026.80
P/L - $2,521.80

Total Bet by all 10 players - $18,002.00

In race #20 the break goes negative at $1.03 (vs $1.05).



Either way, the rebated player bets more with lower takeout and no rebate. He also wins more. The non-rebated player sees a huge advantage in P/L with the lower takeout and (naturally) also wagers more.

[Indulto]

Some of the posts in this thread are just scary stupid.Particularly those where the poster declines to identify the object(s) of his disaffection.

[andymays]

With wager amounts rounded down to the nearest dollar and nickel breakage:

20% Takeout; 10% Rebate to Player A

Player A
Bets - $5,163.00
Wins - $7,065.50
Rebate - $516.30
P/L - $2,418.80

Player B
Bets - $4,672.00
Wins - $6,501.25
Rebate - $0.00
P/L - $1,829.25

Total Bet by all 10 players - $16,827.00

In Race #16 the break goes negative at $1.02 (vs $1.05). In race #17 is goes below $1.00.

10% Takeout; No rebates

Players A & B
Bets - $5,505.00
Wins - $8,026.80
P/L - $2,521.80

Total Bet by all 10 players - $18,002.00

In race #20 the break goes negative at $1.03 (vs $1.05).



Either way, the rebated player bets more with lower takeout and no rebate. He also wins more. The non-rebated player sees a huge advantage in P/L with the lower takeout and (naturally) also wagers more.


Good Job! Now we just have to get them to take a shot and try it.

[InsideThePylons-MW]

Particularly those where the poster declines to identify the object(s) of his disaffection.

Maybe somebody missed the posts in this thread where I DID identify the objects of my disaffection.

[Imriledup]

Maybe i'll start a thread to petition the NBA to lower the rims. I'd love to be an NBA player, but the rims are too high, maybe the NBA can change the rules so i can play too.

[proximity]

Maybe i'll start a thread to petition the NBA to lower the rims. I'd love to be an NBA player, but the rims are too high, maybe the NBA can change the rules so i can play too.

or maybe they should raise the baskets 50 feet to cut down on scoring!! :)

[proximity]

Also, its a bit psychological, if you have a horrible day, you can look back and know that you are getting a chunk of money back. If you have a horrible day with no rebate into 10 pct pools, its not as good, you aren't getting a penny back.

i'd say there is definitely something to this and think the tracks should give at least a 1% rebate to account holders. tenths of a percent and a cup of coffee for thousands of dollars of betting just do not get people excited and motivated to play more.

personally i'm for reduced win pool takeout combined with rebates. i feel that win odds drive alot of the betting and 3rd choices sitting at 5/2 on the tote board (bay meadows) just don't inspire people.

[startngate]

Good Job! Now we just have to get them to take a shot and try it.Good luck ... here's why:

Assuming all money bet on track, with 20% takeout and 10% rebate to one player:

Total Bet by all 10 players - $16,827.00
Takeout - $3,365.40
Rebated Amount - $516.30
Net revenue to the track - $2,849.10

Assuming all money bet on track, with 10% takeout, no rebates:

Total Bet by all 10 players - $18,002.00
Takeout - $1,800.20
Rebated Amount - $0.00
Net revenue to the track - $1,800.20

Assuming the model above where 30% of the total handle ended up being rebated handle, to break even on the revenue side, betting would have to increase to $28,491.00 (+40%) if you got rid of rebates and lowered takeout to 10%.

In the scenario posed by trigger, it obviously didn't come close to happening. Is that what would happen in real life? Don't know, but racetrack managers will all fall back on this argument as to why lowering takeout is a bad idea.

[Imriledup]

i'd say there is definitely something to this and think the tracks should give at least a 1% rebate to account holders. tenths of a percent and a cup of coffee for thousands of dollars of betting just do not get people excited and motivated to play more.

personally i'm for reduced win pool takeout combined with rebates. i feel that win odds drive alot of the betting and 3rd choices sitting at 5/2 on the tote board (bay meadows) just don't inspire people.

Some tracks DO give rebates. Its just a matter of how bad you want it.

[proximity]

Some tracks DO give rebates. Its just a matter of how bad you want it.

sure they do, but at what tracks can a new player walk in, get an account wagering card, and immediately start collecting a 1%+ rebate for all of their action?

you go out to the track, place your own bets, eat track food, play track slots and yet players can sit at home betting through an adw and get 10-20x your rebate?

[Track Collector]

This would mean an instant 15% or more reduction in handle.

Warning...Topic drift.

Dave, I'm just curious, is that 15% just a guess on your part, or is there some type of study or available data to indicate that Whales make up ~15% off all handle?

[Imriledup]

sure they do, but at what tracks can a new player walk in, get an account wagering card, and immediately start collecting a 1%+ rebate for all of their action?

you go out to the track, place your own bets, eat track food, play track slots and yet players can sit at home betting through an adw and get 10-20x your rebate?

Meadowlands in NJ has a player program that rewards up to 4% rebate for the biggest players. just walk into their, sign up and start getting rebates. Go on their website for more info. i would suspect that monmouth has the same program, although i don't know for sure.

[fmolf]

i believe the whales at least most of them would disappear and here is why i believe this.a whale bets $1000 on a 3/1 shot.The payoff is the same on this 3/1 shot no matter the takeout.Payoffs might be slightly higher in the exotic pools if they lowered takeouts,but even this may be offset by having to pay off more winners do to increased amount of play due to lowered takeouts.

[cj]

With lower takeouts, all payoffs would be higher. If a whale bets $1,000 on a 3 to 1 shot, he might be 2 to 1, or 8 to 5, as the gate opens, 7 to 5 mid stretch.

With lower takes and bigger pools, the 3 to 1 might actually stay 3 to 1!

[fmolf]

With lower takeouts, all payoffs would be higher. If a whale bets $1,000 on a 3 to 1 shot, he might be 2 to 1, or 8 to 5, as the gate opens, 7 to 5 mid stretch.

With lower takes and bigger pools, the 3 to 1 might actually stay 3 to 1!
the tracks would quickly raise takeouts again unless handle went up.If handle goes up and more people bet into the pools the horses remain the same odds.this is so because the extra 10% of handle would be spread among the horses in the same ratios.

[cj]

the tracks would quickly raise takeouts again unless handle went up.If handle goes up and more people bet into the pools the horses remain the same odds.this is so because the extra 10% of handle would be spread among the horses in the same ratios.

You seem a little confused, or maybe it is me. If takeout is 20% in a 10,000 pool, and then horses are bet in the same ratio and takeout is 10% in a 20,000 pool, the horses will most certainly not be the same odds. The odds will be higher, and the winners pay more. Tote odds are calculated with takeout already removed. What am I missing?

[fmolf]

You seem a little confused, or maybe it is me. If takeout is 20% in a 10,000 pool, and then horses are bet in the same ratio and takeout is 10% in a 20,000 pool, the horses will most certainly not be the same odds. The odds will be higher, and the winners pay more. Tote odds are calculated with takeout already removed. What am I missing?
you are assuming that tracks are just going to hand back their profit?Handle on each race would need to go up by x amount to make up for lost revenue.this increase in the handle would be spread amongst the horses in the same ratio as it is now?Are you so naive that you think the tracks would keep the lower takeout rates without an increase in handle?

[proximity]

Meadowlands in NJ has a player program that rewards up to 4% rebate for the biggest players. just walk into their, sign up and start getting rebates. Go on their website for more info. i would suspect that monmouth has the same program, although i don't know for sure.

thanks for the tip. that program looks MUCH better than pen's. 1%+ right off the bat, just like i was asking about!!

is the phone betting just for nj residents though?

[Imriledup]

thanks for the tip. that program looks MUCH better than pen's. 1%+ right off the bat, just like i was asking about!!

is the phone betting just for nj residents though?

I'm not sure about that. I think if you are a NJ resident you are 'forced at gunpoint' to bet with them and them only. I can't imagine they would turn down someone from another state who wanted to play with them.

[Cangamble]

you are assuming that tracks are just going to hand back their profit?Handle on each race would need to go up by x amount to make up for lost revenue.this increase in the handle would be spread amongst the horses in the same ratio as it is now?Are you so naive that you think the tracks would keep the lower takeout rates without an increase in handle?
Isn't the assumption that takeouts were reduced to 10%?
That means the tracks give back 90% of the money that was wagered.
And yes, that means that all winning prices will increase from where they are today.
So a whale who gets a 10% rebate on 20% takeout bet today would not need a rebate on that bet if the takeout was 10% to cash the same money in the long run.

[fmolf]

Isn't the assumption that takeouts were reduced to 10%?
That means the tracks give back 90% of the money that was wagered.
And yes, that means that all winning prices will increase from where they are today.
So a whale who gets a 10% rebate on 20% takeout bet today would not need a rebate on that bet if the takeout was 10% to cash the same money in the long run.Even if the pools were increased the money is still spread around in the same ratios..

[Cangamble]

Even if the pools were increased the money is still spread around in the same ratios..
No it isn't.
Lets say that a pool has a takeout of 20%, and it has 10,000 in it. It is a ten horse race and every horse has 1000 bet on it.
Every horse will have odds of 7-1. The winner will pay $16.00. A whale who has $200 on the horse will make a profit of $1400 plus his 10% rebate of $20. And if the horse loses the whale will receive $20 no matter who wins.

If the the track takeout is 10%, every horse in the above race will be 8-1. The winning horse will pay $18.00. The whale with $200 to win will get a $1600 profit and no rebate. Also, he will get no rebate no matter who wins.

In the long run, if he is good handicapper, he is much better off getting no rebate because his 8-1 shot will win more often than the other 8-1 shots in the field.

[Cangamble]

Good luck ... here's why:

Assuming all money bet on track, with 20% takeout and 10% rebate to one player:

Total Bet by all 10 players - $16,827.00
Takeout - $3,365.40
Rebated Amount - $516.30
Net revenue to the track - $2,849.10

Assuming all money bet on track, with 10% takeout, no rebates:

Total Bet by all 10 players - $18,002.00
Takeout - $1,800.20
Rebated Amount - $0.00
Net revenue to the track - $1,800.20

Assuming the model above where 30% of the total handle ended up being rebated handle, to break even on the revenue side, betting would have to increase to $28,491.00 (+40%) if you got rid of rebates and lowered takeout to 10%.

In the scenario posed by trigger, it obviously didn't come close to happening. Is that what would happen in real life? Don't know, but racetrack managers will all fall back on this argument as to why lowering takeout is a bad idea.
I think 40% is easy to achieve. My betting increased by at least 100% when I started getting an average 6.6% rebate.

[fmolf]

No it isn't.
Lets say that a pool has a takeout of 20%, and it has 10,000 in it. It is a ten horse race and every horse has 1000 bet on it.
Every horse will have odds of 7-1. The winner will pay $16.00. A whale who has $200 on the horse will make a profit of $1400 plus his 10% rebate of $20. And if the horse loses the whale will receive $20 no matter who wins.

If the the track takeout is 10%, every horse in the above race will be 8-1. The winning horse will pay $18.00. The whale with $200 to win will get a $1600 profit and no rebate. Also, he will get no rebate no matter who wins.

In the long run, if he is good handicapper, he is much better off getting no rebate because his 8-1 shot will win more often than the other 8-1 shots in the field.i get it now

[Imriledup]

No it isn't.
Lets say that a pool has a takeout of 20%, and it has 10,000 in it. It is a ten horse race and every horse has 1000 bet on it.
Every horse will have odds of 7-1. The winner will pay $16.00. A whale who has $200 on the horse will make a profit of $1400 plus his 10% rebate of $20. And if the horse loses the whale will receive $20 no matter who wins.

If the the track takeout is 10%, every horse in the above race will be 8-1. The winning horse will pay $18.00. The whale with $200 to win will get a $1600 profit and no rebate. Also, he will get no rebate no matter who wins.

In the long run, if he is good handicapper, he is much better off getting no rebate because his 8-1 shot will win more often than the other 8-1 shots in the field.

I think a rebate is better than the takeout being lowered because the rebate player gets 10% on every bet........with a lower takeout, he only can reap a reward if his bet wins.

[trigger]

Good luck ... here's why:

Assuming all money bet on track, with 20% takeout and 10% rebate to one player:

Total Bet by all 10 players - $16,827.00
Takeout - $3,365.40
Rebated Amount - $516.30
Net revenue to the track - $2,849.10

Assuming all money bet on track, with 10% takeout, no rebates:

Total Bet by all 10 players - $18,002.00
Takeout - $1,800.20
Rebated Amount - $0.00
Net revenue to the track - $1,800.20

Assuming the model above where 30% of the total handle ended up being rebated handle, to break even on the revenue side, betting would have to increase to $28,491.00 (+40%) if you got rid of rebates and lowered takeout to 10%.

In the scenario posed by trigger, it obviously didn't come close to happening. Is that what would happen in real life? Don't know, but racetrack managers will all fall back on this argument as to why lowering takeout is a bad idea.

Yea, that's what the model shows (thanks, startingate). So assuming there is no fatal flaw in the model's assumptions, the only way i see a 10% takeout down the road is with a major reduction in overhead expense. And, the only way to reduce overhead is to eliminate a substantial number of tracks so the existing handle is concentrated on a much fewer number of tracks therefore making a 10% takeout viable (with maybe a much more reasonable 2 or 3% rebate to the whales). Long term, this scenario might even attract a larger number of new horseplayers with a corresponding increase in handle. IMHO, there is no way a "global" 10% takeout ( or any substantial permanent reduction in takeout) is going to happen with the current number of tracks. Again, IMHO, the survival of the racing game will depend on consolidation.