California Rebates, etc.

[rrbauer]

So, Drew Couto is gone; and, the CHRB has blessed rebates.

Begs the question: How many California players are getting rebates, on which tracks and for how much?

Do I hear: None, none and none?

Did you know that the Calif industry did an end-run and got the sunset clause on the extra 1/2 point of exotic takeout extended until Jan 1, 2014 (from 2009). They did that last year with zero fanfare and zero publicity and, of course, zero complaints from horseplayers. That takeout increase was to be used for workers comp relief. (This in spite of the state-provided relief from the general fund.) The relief amounts to paying each horse an appearance fee if it doesn't earn any purse money. I mention this because it softens the financial sting to know that it's being used for a "good" cause.

[Jens]

I only know what I'm getting = zippo. Recently dropped my wagers by over 90% from 6k per month to 600 per month. Very close to dropping out entirely as the customer clearly is of no concern to any industry entity be it tracks, horsemen, or adw's.

[DanG]

Did you know that the Calif industry did an end-run and got the sunset clause on the extra 1/2 point of exotic takeout extended until Jan 1, 2014 (from 2009). They did that last year with zero fanfare and zero publicity and, of course, zero complaints from horseplayers.
Make that a whole “4” I’m aware of…a lot of good it did us. :rolleyes:

[Jeff P]

My understanding is that rebates aren't yet an official reality in CA.

After the 6/5/2009 CHRB meeting I had the following email exchange with CHRB public information officer Mike Marten:

Me:
Mike,

First, thanks for the update.

With regard to the following bullet point item:

The Board repealed a rule that had placed restrictions on the state’s racetracks and simulcast associations from doing business with off-track betting facilities offering rebates to persons wagering on horse races. Given that rebate restrictions might discourage wagering on California races, the Board eliminated the prohibition, freeing all locations to offer rebates to customers.

Question:

Does this mean that ADWs such as YouBet, TVG, ExpressBet, Premier Turf Club, RGS, Bet America, LinkToBet, TwinSpires, etc. are now able to offer - should they desire to do so:

1. Rebates to out of state residents wagering on California track signals?

2. Rebates to CALIFORNIA RESIDENTS wagering on California track signals?

3. Rebates to CALIFORNIA RESIDENTS wagering on non California track signals?

Can you answer each of the above three items separately?

Sincerely,

Jeff Platt
President, HANA

Mike:
Jeff:

I verified with our policy and regulations department that the answer to all of three questions is yes. Here is what they said:

The answer is yes to all of his questions. The repeal of the rebate rule essentially allows the industry to offer rebates. The prohibition in California regarding rebates is no more. Reminder, the proposal will need to be submitted to the OAL for determination before the repeal becomes effective. The OAL has 30 days upon receipt of the rulemaking file to make a determination. The repeal becomes effective 30 days after filing with the Secretary of State.

Mike

At this point in time the one thing I'm unsure of is:

When rebates do become available in CA, how badly will source market fees impact the ability of ADWs to rebate their CA customers?


-jp

.

[Jeff P]

Did you know that the Calif industry did an end-run and got the sunset clause on the extra 1/2 point of exotic takeout extended until Jan 1, 2014 (from 2009). They did that last year with zero fanfare and zero publicity and, of course, zero complaints from horseplayers.
Yes. They did that last year... pre HANA.

If something similar were a CHRB agenda item up for consideration this year, would they be able to do the same thing with zero comment from horseplayers?

Something tells me the answer to that question is no.

-jp

.

[startngate]

At this point in time the one thing I'm unsure of is:

When rebates do become available in CA, how badly will source market fees impact the ability of ADWs to rebate their CA customers?

-jp
The CA ADW's are likely not going to be able to rebate customers much, if at all.

Remember, the CA ADW law is set up to allow the ADW's to only keep a small % of handle (max of 6.5%, but the TOC had that down to 5.5% I believe) and then return the rest to the State, Host Track and Horsemen. With TrackNet and TVG taking up some of that for 'market access fees' on some of the tracks, that leaves precious little profit for the ADW's ... much less the ability to rebate anything its CA customers.

It's a different story for non-CA customers, who can 'officially' be rebated on CA tracks now. Of course they already were at some rebate shops despite the CA ban, but at least now it's 'legal'.

Of course, since all the CA tracks charge a high host fee thanks to the TOC, the amount of rebate is going to be less than it would be on tracks with lower host fees. Source market fees will also affect the rebate for some customers, assuming the ADW is paying them.

[Imriledup]

The CA ADW's are likely not going to be able to rebate customers much, if at all.

Remember, the CA ADW law is set up to allow the ADW's to only keep a small % of handle (max of 6.5%, but the TOC had that down to 5.5% I believe) and then return the rest to the State, Host Track and Horsemen. With TrackNet and TVG taking up some of that for 'market access fees' on some of the tracks, that leaves precious little profit for the ADW's ... much less the ability to rebate anything its CA customers.

It's a different story for non-CA customers, who can 'officially' be rebated on CA tracks now. Of course they already were at some rebate shops despite the CA ban, but at least now it's 'legal'.

Of course, since all the CA tracks charge a high host fee thanks to the TOC, the amount of rebate is going to be less than it would be on tracks with lower host fees. Source market fees will also affect the rebate for some customers, assuming the ADW is paying them.

I wonder if there is going to be collusion between the ADWs to keep rebates low? Its the same with gas stations. If you'll ever notice competing gas stations across the highway from each other, are the exact same price. You would think that one station would be 1 penny cheaper, but no, in bed is in bed, exact same price. Maybe the ADWs will all get together and come up with some type of plan to keep rebates from getting out of hand.

[Jeff P]

The CA ADW's are likely not going to be able to rebate customers much, if at all.

Remember, the CA ADW law is set up to allow the ADW's to only keep a small % of handle (max of 6.5%, but the TOC had that down to 5.5% I believe) and then return the rest to the State, Host Track and Horsemen. With TrackNet and TVG taking up some of that for 'market access fees' on some of the tracks, that leaves precious little profit for the ADW's ... much less the ability to rebate anything its CA customers.

It's a different story for non-CA customers, who can 'officially' be rebated on CA tracks now. Of course they already were at some rebate shops despite the CA ban, but at least now it's 'legal'.

Of course, since all the CA tracks charge a high host fee thanks to the TOC, the amount of rebate is going to be less than it would be on tracks with lower host fees. Source market fees will also affect the rebate for some customers, assuming the ADW is paying them. I still see the CHRB reversing its long standing position against rebates as one form of lowered takeout and as a player victory - if only a moral victory so far.

I find it really sad how the TOC (which gets a big chunk of its funding from player handle btw) has made it nearly impossible for a struggling industry to take steps that might actually GROW handle.

There is much work that needs to be done. And that's a huge understatement.


-jp

.

[Imriledup]

I still see the CHRB reversing its long standing position against rebates as one form of lowered takeout and as a player victory - if only a moral victory so far.

I find it really sad how the TOC (which gets a big chunk of its funding from player handle btw) has made it nearly impossible for a struggling industry to take steps that might actually GROW handle.

There is much work that needs to be done. And that's a huge understatement.


-jp

.


Couto is gone, things can only get better.

[highnote]

I find it really sad how the TOC (which gets a big chunk of its funding from player handle btw) has made it nearly impossible for a struggling industry to take steps that might actually GROW handle.

It makes sense to me that if TOC gets funding from handle then players need a say in how TOC is run.

[Track Collector]

I wonder if there is going to be collusion between the ADWs to keep rebates low? Its the same with gas stations. If you'll ever notice competing gas stations across the highway from each other, are the exact same price. You would think that one station would be 1 penny cheaper, but no, in bed is in bed, exact same price. Maybe the ADWs will all get together and come up with some type of plan to keep rebates from getting out of hand.

IMO, no. There are plenty of ADW's (both well known as some below the radar screen). Those with lesser business may find that the only way to attract customers is to offer more competitive rates. Free enterprise at work.:)

[Imriledup]

IMO, no. There are plenty of ADW's (both well known as some below the radar screen). Those with lesser business may find that the only way to attract customers is to offer more competitive rates. Free enterprise at work.:)

If you owned Youbet and i owned TVG and i called you and said "only rebate 1 percent and i promise to do the same" what would you say?

[highnote]

If you owned Youbet and i owned TVG and i called you and said "only rebate 1 percent and i promise to do the same" what would you say?


I would say to you that price fixing is illegal.

[rrbauer]

If you owned Youbet and i owned TVG and i called you and said "only rebate 1 percent and i promise to do the same" what would you say?

I would say, "Give them nothing. They won't know the difference."

[Jeff P]

Received this update from CHRB Information Officer Mike Marten earlier today:
The proposal to amend Rule 1950.1, Rebates on Wagers, was adopted by the Board at the June 5, 2009 regulatory hearing and was submitted to the Office of Administrative Law for (OAL) for review on June 16, 2009.

Therefore, based on what I sent to you before, OAL has 30 working days to review the rule, or no later than July 27. If approved by OAL, it would go to the Secretary of State and become effective 30 days after that, or by August 26.

OAL is an entirely separate state agency. We do not know if they will require the full 30 working days to complete their review.

Please understand that the CHRB/State of California permitting rebates is not necessarily the same as rebates becoming immediately available. It will be up to the wagering companies/providers to each determine its own policy on whether or not to offer rebates.

Mike



-jp

.

[jballscalls]

on golden gates website they have a button for a rebate button, i want to say its 1% if you bet over 10 or 20k a month

[andicap]

I remember interviewing Bill Nader a few years ago when NYRA wanted to institute rebates. They were mainly for the whale-type players and geared toward exotics since the higher takeouts give tracks/ADWs more leeway.

Nader said the idea was to keep the biggest bettors from going offshore. I have a feeling many of the legal rebate plans that will be enacted in the U.S. will follow a similar pattern

[castaway01]

I remember interviewing Bill Nader a few years ago when NYRA wanted to institute rebates. They were mainly for the whale-type players and geared toward exotics since the higher takeouts give tracks/ADWs more leeway.

Nader said the idea was to keep the biggest bettors from going offshore. I have a feeling many of the legal rebate plans that will be enacted in the U.S. will follow a similar pattern

At least it would be a start

[rrbauer]

This has turned out to be another sick joke on horseplayers. How much longer can they drag their feet, delay, create bureaucratic hoops, etc? The fact is that they could've just up and reversed their stand, got an opinion from the state AG and done it. Somebody is scared stiff about this happening.

[Imriledup]

This has turned out to be another sick joke on horseplayers. How much longer can they drag their feet, delay, create bureaucratic hoops, etc? The fact is that they could've just up and reversed their stand, got an opinion from the state AG and done it. Somebody is scared stiff about this happening.


They're California, anything is possible. State of zero leadership in horseracing (and government for that matter)

[Track Collector]

If you owned Youbet and i owned TVG and i called you and said "only rebate 1 percent and i promise to do the same" what would you say?

I would decline your offer. If I am YouBet or any other major ADW, I would hopefully recognize that there are only a limited number of "high volume" customers out there, and I would also know that they are price sensitive when it comes to rebates, as well as knowledgable about where rebates are available. Free enterprise will always lead to someone offering better rates in order to attract and/or win over customers. The key again is that (sizable) rebates are available from a number of lesser known ADW's, who wish to remain below the radar screen.