My Master's Degree Thesis Blog

[ALostTexan]

As some on Pace Advantage know, I am currently finishing my Master's Degree at the University of Arizona Race Track Industry Program in Tucson, AZ. I have decided to write and edit my final project through a blog that I have established, and I invite that is interested everyone to check it out.

Essentially, I have had enough with the constant bitching that takeout is too high or too low. We have an argument between horseplayers and racetracks that has no basis for rational discussion.

Now, that may rub people the wrong way, but it is true. There is no rational basis for the discussion.

The problem is that all of the studies on churn that have been done that do show that decreasing the takeout will lead to higher revenues to everyone were done about 30 years ago. I am not saying that the topic has not been addressed by many people since then, but what I am saying is that there has been little true research on the topic in 30 years.

There have been isolated studies on the topic. For instance, you can look at what happened in New York when they dropped their takeout rates, but those studies did little to see the overall effect of dropping the rates on the industry.

So I am staking my academic career in Tucson to a study that uses economic principles and techniques to estimate the effects of altering takeout. I am in the middle of designing a Monte Carlo simulation to see what happens to the industry as a whole when the takeout rates are altered and see if we can produce results that are statistically accurate and significant, and hopefully begin a rational discussion on the topic.

I am also not doing this alone. I am working 3 statisticians from the University of Arizona, for instance, to verify my work, and I have had numerous discussions with industry experts on the topic. Among them are Maury Wolff, one of the smartest people to ever place a $2 bet, whom I have conversed with at length about this project.

All I am trying to do is show an economic model that we can all agree on, and if it does show that decreasing takeout is a smart move then we can move on to actually making it happen.

I will be posing a series of past studies on the blog over the next few days which will show the literature review that I have done on the topic. There are many studies done in the past on these topics, and these are important because they are academic studies - not studies commissioned by horsemen's groups or racetracks which can easily be biased.

The blog can be found at http://thesis.ushorseman.com (http://thesis.ushorseman.com/), although right now there is only a similar entry like this that explains my reasoning for conducting this study. I hope that everyone will take a moment from time-to-time and see what progress I am having, and hopefully provide feedback on the study as I work to complete it.

[Horseplayersbet.com]

This should be interesting. I wonder though how you can mathematically incorporate the consequences of lowering or raising takeouts when it comes to the attraction of new horseplayers.

If it is just about churn and only churn, there is no difference to the industry if a 20% takeout yields a track 100 million in betting versus a 10% takeout yielding 200 million in handle.

There are three things that happen when takeout is lowered that enhances growth (in theory, though the first two have been proven by slots industry):

1. The horseplayer will last longer and devote more time and effort towards horse racing, betting, watching, handicapping, etc. They will feel they are closer to beating the game (and some may be now beating the game). Because of this they will cut back or eliminate other forms of gambling in their lives and devote more of their disposable income towards horse racing than they did before.

2. Because the existing horseplayer devotes more time and effort to the game, it means that there is an enhanced possibility that other people the horseplayer knows will get exposed to horse racing, some will get intrigued enough to try it, and of those, some will eventually become horseplayers themselves. In a family setting, when the father or mother is spending time betting on horses, the children will most likely become familiar with the game and eventually some will become horseplayers too.

3. The lower the takeout the more likely visible long term winners will emerge. This is a huge drawing card for new potential horseplayers, and was probably the biggest driving factor in the exploding online poker market.

Raise takeout, and the opposite effect will occur.

[DeanT]

Among them are Maury Wolff, one of the smartest people to ever place a $2 bet, whom I have conversed with at length about this project.


Smart choice! If he verifies and helps out with your work, it will be taken very seriously by everyone, imo.

[rwwupl]

excerpt: Horseplayersbet.com

3. The lower the takeout the more likely visible long term winners will emerge. This is a huge drawing card for new potential horseplayers, and was probably the biggest driving factor in the exploding online poker market.

Raise takeout, and the opposite effect will occur.


Gambling is timeless... Do not dismiss a study because it is older than you are. There were smart people around 30 years ago too.

The attraction of gambling is a chance to have your opinion validated,and win with a reward. There is no way to measure the impact on a gambler because each is different.

There is an optimum price for everything... and it is clear that horse racing has not identified and adopted the optimum take or the circumstances would be quite different for the industry.

There is no better draw for any game than to see winners, and horse racing does not send winners home because of the excessive take(IMO), if you can not see a reasonable chance to win, why try?

Study well,be flexible because you are learning... do not try to prove your opinion going in, but adjust as the truth comes through to you...we all are depending on you.

[Dave Schwartz]

All I am trying to do is show an economic model that we can all agree on, and if it does show that decreasing takeout is a smart move then we can move on to actually making it happen.

While I encourage your work, my experience is that only one of the two sides will agree with your study.

My experience also tells me that rarely does someone begin a mathematical study without already having a horse in the race. Which horse are YOU backing?


Regards,
Dave Schwartz

[GameTheory]

This should be interesting. I wonder though how you can mathematically incorporate the consequences of lowering or raising takeouts when it comes to the attraction of new horseplayers.

If it is just about churn and only churn, there is no difference to the industry if a 20% takeout yields a track 100 million in betting versus a 10% takeout yielding 200 million in handle.

There are three things that happen when takeout is lowered that enhances growth (in theory, though the first two have been proven by slots industry):

1. The horseplayer will last longer and devote more time and effort towards horse racing, betting, watching, handicapping, etc. They will feel they are closer to beating the game (and some may be now beating the game). Because of this they will cut back or eliminate other forms of gambling in their lives and devote more of their disposable income towards horse racing than they did before.

2. Because the existing horseplayer devotes more time and effort to the game, it means that there is an enhanced possibility that other people the horseplayer knows will get exposed to horse racing, some will get intrigued enough to try it, and of those, some will eventually become horseplayers themselves. In a family setting, when the father or mother is spending time betting on horses, the children will most likely become familiar with the game and eventually some will become horseplayers too.

3. The lower the takeout the more likely visible long term winners will emerge. This is a huge drawing card for new potential horseplayers, and was probably the biggest driving factor in the exploding online poker market.

Raise takeout, and the opposite effect will occur.Yes, I'm wondering how you might account for these effects in a academic study when you can't actually do real-world experiments? If it only has to do with the theoretical effects of churn while holding the current number of players constant, such a study could well end up being used by the industry to justify NOT lowering takeout, or even raising it. Although it could be argued that the longer a player churns, the more likely he will be to add more additional money to his play over time (the churn keeps him alive until his next paycheck), I don't think that is enough of a benefit to the racetrack to care (especially since they'll be taking in less at the lower rate).

Now, for EXISTING players, isolating only this effect of lowering takeout is a major event in and of itself without regard for any other effect it causes, because it is good for his bottom-line and will turn some losers into winners.

But from the industry standpoint it doesn't matter much and may very well show that they will be reducing their profit. It is the above quoted long-term effects that will cascade from this initial effect that really matter for the overall health of the sport and the industry's bottom-line. And I'm not sure how you can study those in a concrete way without some real-world case studies, and there aren't any. You'd have to make comparisons to other countries, other forms of gambling, and other types of markets. (Or simply show the effect of too much taxation on any economy, which is basically what we're talking about -- being over-taxed.). None of which will convince anybody in power in horse racing, or they would be pushing to lower takeout already as it is all too obvious.

[andymays]

If there were two tracks in the world and they were 1 mile apart and everything was equal. Same class levels, same field sizes, same purses, same bets available and on and on.

They both run at exactly the same time.

The only difference is that Track A has takeout of 15% and 20%

and

Track B has takeout of 10% on all bets.

It doesn't take a genius to figure out who gets the most action.

Keep it simple.

When I walk outside to go for a walk and I don't see a cloud in the sky I don't have to look behind me to see the sun to know it's out. :eek:

[DeanT]

There is quite a bit of common sense and keeping it simple in the argument Andy, so I think you make a great point.

One thing that I believe racing has a hard time with is behavior and odds lines. There was a race yesterday, might have been at Hawthorne, where the odds board was something like this at one minute to post:

9-1
6-5
25-1
2-1
2-1
12-1

That was at about 17% take.

I you cut the take in half, the 6-5 moves up, the 2-1 might be 4-1 and the other 2-1 might be 5-2. Immediately the red light race moves into green light territory for a horseplayer (in fact the final odds that I was watching at Betfair at about a 4% overrround had the 6-5 at 6-5, and the two 2-1's at just shy of 7-2).

You can not grade this type of race on any curve. There are players who will bet zero dollars on that odds board at 17% take, but might bet $400 at 5% or 8%. It can be a zero sum game, and it is not a smooth curve.

This is common sense to anyone who ever seriously has played the horses. But in a lot of racing when you mention fair odds lines and rational horseplayer behavior you are met with blank stares. There is a massive chasm between the people who slug away in the pools and the people who count our money.

[andymays]

By the way I'm not saying it's a waste of time to do the study to get through the program.

When you come out of the program use common sense. That's all.

[johnhannibalsmith]

I look forward to reading the conclusions. Good luck!

[Charli125]

By the way I'm not saying it's a waste of time to do the study to get through the program.

When you come out of the program use common sense. That's all.

It's definitely not a waste of time. Go for it Texan! I look forward to seeing your results, and I think you've picked the right person to use as a mentor/sounding block.

[Deepsix]

Maybe you can also take a look at rebates, and their impact, as it relates to the takeout subject.

[OTM Al]

Since you are at UA, have you talked to any of the experimental economics guys there? That was a major site in that branch of the discipline when I was in grad school (had a Nobel winner there for quite a while) and still looks like they have a good sized group. Its the type of question that they might well be very interested in.

[Show Me the Wire]

Isn't all economics experimental, just kidding, I couldn't resist.

[Robert Goren]

Isn't all economics experimental, just kidding, I couldn't resist. No, but it is all voodoo.;)

[twindouble]

No, but it is all voodoo.;)

The only way a reduction of takeout will be effective is to educate players as to how important it is to their wallet and their play. Savvy quasi professional players are keen to takeout but the majority of players that come in many colors have no clue about takeout. Do all the studies you want but if you don't reach the players with your results, it's all for nothing. That's like putting the best motor in a car and hiding that fact from the public. Tracks have been operating right along knowing that when takeout is under the radar it's of no consequence to them. I've done a small study on takeout and 7 out of 10 didn't know what the takeout was on the tracks they played and the majority played more than one track, some 3 to 4 tracks. Think about it, a friend can say, "twindouble, Tony's restaurant has the best pizza in the world". How many players come up to you and said, this track or that track has the lowest takeout in the country. Never happens.

[GameTheory]

The only way a reduction of takeout will be effective is to educate players as to how important it is to their wallet and their play. Savvy quasi professional players are keen to takeout but the majority of players that come in many colors have no clue about takeout. Do all the studies you want but if you don't reach the players with your results, it's all for nothing. That's like putting the best motor in a car and hiding that fact from the public. Tracks have been operating right along knowing that when takeout is under the radar it's of no consequence to them. I've done a small study on takeout and 7 out of 10 didn't know what the takeout was on the tracks they played and the majority played more than one track, some 3 to 4 tracks. Think about it, a friend can say, "twindouble, Tony's restaurant has the best pizza in the world". How many players come up to you and said, this track or that track has the lowest takeout in the country. Never happens.Not true -- the beneficial effects of takeout happen automatically just as the negative effects do. Like Dean pointed out above, a lot of bets will get made that wouldn't just because the visible odds on the board will be better. The player doesn't have to know about the takeout rate to know he'd rather get 2-1 than 6-5. And the extra money in his wallet at the end of the day will still be there whether or not he realizes why it is there. And he'll tell his friends he's been doing better lately whether or not he knows why.

[W2G]

So I am staking my academic career in Tucson to a study that uses economic principles and techniques to estimate the effects of altering takeout.

Maybe just a touch dramatic? It's just your Master's thesis, albeit an ambitious one. And one that many here will have keen interest. Based on the formidable scope of work ahead I'm sure you're already ahead of your peers. And it's good that you are approaching the research with such a serious-minded attitude.

What are your hypotheses?

[Robert Goren]

The only way a reduction of takeout will be effective is to educate players as to how important it is to their wallet and their play. Savvy quasi professional players are keen to takeout but the majority of players that come in many colors have no clue about takeout. Do all the studies you want but if you don't reach the players with your results, it's all for nothing. That's like putting the best motor in a car and hiding that fact from the public. Tracks have been operating right along knowing that when takeout is under the radar it's of no consequence to them. I've done a small study on takeout and 7 out of 10 didn't know what the takeout was on the tracks they played and the majority played more than one track, some 3 to 4 tracks. Think about it, a friend can say, "twindouble, Tony's restaurant has the best pizza in the world". How many players come up to you and said, this track or that track has the lowest takeout in the country. Never happens. I agree with you about the take out. I just think the "science" of economics is at the same stage as the science of astronomy was when they thought every revolve around the Earth. JMO

[twindouble]

Not true -- the beneficial effects of takeout happen automatically just as the negative effects do. Like Dean pointed out above, a lot of bets will get made that wouldn't just because the visible odds on the board will be better. The player doesn't have to know about the takeout rate to know he'd rather get 2-1 than 6-5. And the extra money in his wallet at the end of the day will still be there whether or not he realizes why it is there. And he'll tell his friends he's been doing better lately whether or not he knows why.

What do you mean "not true"? All I said was many players don't pay any attention to takeout and when takeout is lowered it should be used as a promotional tool. That small study I did proved to me that many players ignore takeout. Why do an indepth study and not promote the findings if they are postive.

[GameTheory]

What do you mean "not true"? All I said was many players don't pay any attention to takeout and when takeout is lowered it should be used as a promotional tool. That small study I did proved to me that many players ignore takeout. Why do an indepth study and not promote the findings if they are postive.Let me clarify. You said: "Do all the studies you want but if you don't reach the players with your results, it's all for nothing." That's the part that isn't true. It isn't "all for nothing" if you don't reach the players. You have to reach management and lawmakers. If if players don't care or don't know, good things will still happen with lower takeout. They will happen automatically, like gravity.

[DeanT]

I would agree with that GT, of course. It is just like the Massachusetts state lottery. No one, not one person in the entire state knew that takeout for the lottery was 70% at one time, then brought down to 30%. They just hit fewer winners when it was 70% then they did at 30%.

Revenue to the state did not rise overnight as well. But over time it did. Since they have not changed the takeout in a year or so, I imagine that the state of Mass has settled that the optimal takeout for scratch ticket and lottery games is 30%.

As far as I can tell there was no study done in Mass, it was all trial and error and looking at empirical results. I would assume racing will find an optimal price point the same way.

It is painfully ironic to me that lottery players (perhaps the least price sensitive people on earth) have had their takeout cut by 65%, while horseplayers, who are price sensitive, struggle with higher and higher takeouts. I dont think even the most militant track executive or horsemen's rep could say that a lottery should have a lower takeout than the supers at Philly Park. I would hope everyone could at least agree with that.

[twindouble]

Let me clarify. You said: "Do all the studies you want but if you don't reach the players with your results, it's all for nothing." That's the part that isn't true. It isn't "all for nothing" if you don't reach the players. You have to reach management and lawmakers. If if players don't care or don't know, good things will still happen with lower takeout. They will happen automatically, like gravity.

Are you saying if a takeout reduction is kept under the radar eventually players will become aware it was reduced? That's like saying lets put a product on the market and advertise it five years later. Tracks have to compete for business, I'm saying use lower takeout as a promotional tool. That was the theme of my post but I can't delete "all for nothing". I wouldn't lower takeout and keep it under the rug and hope for the best. Maybe some will eventually catch on to what your saying but I want all to know when the product hits the market. Minor misunderstanding.

[Horseplayersbet.com]

Are you saying if a takeout reduction is kept under the radar eventually players will become aware it was reduced? That's like saying lets put a product on the market and advertise it five years later. Tracks have to compete for business, I'm saying use lower takeout as a promotional tool. That was the theme of my post but I can't delete "all for nothing". I wouldn't lower takeout and keep it under the rug and hope for the best. Maybe some will eventually catch on to what your saying but I want all to know when the product hits the market. Minor misunderstanding.
Players will start betting more and lasting longer because the takeout is reduced. Whether they know about it or not.

You could increase slots takeout tomorrow to 16%, and not tell anyone, and in 6 months the total made by the casino will be less than half.

[GameTheory]

Are you saying if a takeout reduction is kept under the radar eventually players will become aware it was reduced? That's like saying lets put a product on the market and advertise it five years later. Tracks have to compete for business, I'm saying use lower takeout as a promotional tool. That was the theme of my post but I can't delete "all for nothing". I wouldn't lower takeout and keep it under the rug and hope for the best. Maybe some will eventually catch on to what your saying but I want all to know when the product hits the market. Minor misunderstanding.I'm not saying it is BAD to promote it -- they should promote the hell out of it. But even if the response to the promotion was a big "who cares?" from the players the benefits of lowered takeout (i.e. more profit for the tracks, more profit for the players, and more players playing) will still happen. These things are inevitable under lower takeout (all else being equal) without players being consciously aware of it.

[OTM Al]

I agree with you about the take out. I just think the "science" of economics is at the same stage as the science of astronomy was when they thought every revolve around the Earth. JMO

If ignorance is bliss, you are quite blissful on the subject.

[twindouble]

Players will start betting more and lasting longer because the takeout is reduced. Whether they know about it or not.

You could increase slots takeout tomorrow to 16%, and not tell anyone, and in 6 months the total made by the casino will be less than half.

You can't compare slot players to horse players, that's night and day. Keep in mind what I said, "players come in many colors" the majority won't even be aware of the change and there's plenty of players that are at the tracks for many different reasons.

[Bruddah]

If ignorance is bliss, you are quite blissful on the subject.


Hey, I have the patent and copyright on ignorance around here. :lol: :rolleyes:

[GameTheory]

You can't compare slot players to horse players, that's night and day. Keep in mind what I said, "players come in many colors" the majority won't even be aware of the change and there's plenty of players that are at the tracks for many different reasons.I (and I think "we") are agreeing with you that most players won't even be aware of the change. We are saying it doesn't matter, and it is not important that they be aware of the change.

[OTM Al]

You know I was just thinking about it and I was a bit rude in my reply. Mr Goren should educate himself a bit better though like his namesake if he is going to make such bold statements though.

Now, why don't we help this guy out with real thoughts rather than another tangential hijacking of a thread? 95% of the other threads out there are hijacked so have some fun with them. This guy is trying to work on something, which IMO, is really well beyond a Master's Thesis (I work in a major grad school in NYC....) but I wish him luck and any assistance I can give on his project.

[twindouble]

I (and I think "we") are agreeing with you that most players won't even be aware of the change. We are saying it doesn't matter, and it is not important that they be aware of the change.

I'm saying hammer it home and get quick results but the truth is lower takeout won't happen "at this point".

[GameTheory]

I'm saying hammer it home and get quick results but the truth is lower takeout won't happen "at this point".Unfortunately I think that for the same reason most aren't aware of it, promotion of it will probably fall flat because most don't care or understand why they should care. Luckily, as we have been saying, it really doesn't matter whether they care or not -- they'll no doubt be happier with the extra dough they are making and the larger quantity of advantageous bets they can find. (Which will lead to growth.)

[ALostTexan]

This should be interesting. I wonder though how you can mathematically incorporate the consequences of lowering or raising takeouts when it comes to the attraction of new horseplayers.

If it is just about churn and only churn, there is no difference to the industry if a 20% takeout yields a track 100 million in betting versus a 10% takeout yielding 200 million in handle.

There are three things that happen when takeout is lowered that enhances growth (in theory, though the first two have been proven by slots industry):

1. The horseplayer will last longer and devote more time and effort towards horse racing, betting, watching, handicapping, etc. They will feel they are closer to beating the game (and some may be now beating the game). Because of this they will cut back or eliminate other forms of gambling in their lives and devote more of their disposable income towards horse racing than they did before.

2. Because the existing horseplayer devotes more time and effort to the game, it means that there is an enhanced possibility that other people the horseplayer knows will get exposed to horse racing, some will get intrigued enough to try it, and of those, some will eventually become horseplayers themselves. In a family setting, when the father or mother is spending time betting on horses, the children will most likely become familiar with the game and eventually some will become horseplayers too.

3. The lower the takeout the more likely visible long term winners will emerge. This is a huge drawing card for new potential horseplayers, and was probably the biggest driving factor in the exploding online poker market.

Raise takeout, and the opposite effect will occur.

Actually, some of the literature on the slot machine industry does not show that raising or lowering takeout in a small amount has a significant impact on play, but this will be visited soon on the blog, where I will have an opportunity to point out the literature that has been done on the subject.

[ALostTexan]

excerpt: Horseplayersbet.com

Gambling is timeless... Do not dismiss a study because it is older than you are. There were smart people around 30 years ago too.

So you obviously didn't bother to read anything I said. I am not questioning the studies that have been done, except for the fact that they were done without wagering via simulcasting. Since it is estimated that approximately 90% of the wagering on races is done off-track, the older studies are no longer applicable.

[twindouble]

Unfortunately I think that for the same reason most aren't aware of it, promotion of it will probably fall flat because most don't care or understand why they should care. Luckily, as we have been saying, it really doesn't matter whether they care or not -- they'll no doubt be happier with the extra dough they are making and the larger quantity of advantageous bets they can find. (Which will lead to growth.)


I said that some players will be aware and that's good thing for sure but all those that fall into that category of grays are at the track for many different reasons than the savvy players. Most are clueless about takeout and would not know the difference, what the horse paid is all they think about or not even think they had noticeable extra money. Sure over time some would be able to hang in longer than they did before and come back so your right on that score

[ALostTexan]

Maybe just a touch dramatic? It's just your Master's thesis, albeit an ambitious one. And one that many here will have keen interest. Based on the formidable scope of work ahead I'm sure you're already ahead of your peers. And it's good that you are approaching the research with such a serious-minded attitude.

What are your hypotheses?

No, I don't feel like I am being dramatic on this at all. I must graduate in May, because after that I will no longer have funding to continue. I am putting everything I have into this, and I am having a great deal of trouble even getting the data that I need.

I have a big portion of the simulation model built already for this project, but I have not been able to get anyone in the industry to work with me for an academic research project. The tote companies, numerous racetracks, and Equibase have all shut the door on me so far.

I am getting very frustrated in this after months of work, and I can tell from the response on here so far that all of this is probably a waste of time anyway.

Nobody wants to open their eyes on this topic. Horseplayers make all of these claims that reducing the takeout will not hurt the revenues to the tracks, many of which have small margins as it is. But those claims are based on old reasoning that doesn't take into account simulcasting. Racetracks want to ignore the old data because it doesn't take into account off track wagering but don't want to have new studies that do take into account simulcasting.

I don't have the time and energy to explain this fully here, but for those that haven't completely blown off my project idea I invite you to check back to the blog over the next week to see updates. I would have more updates on there already but I have spent the week with the operators of numerous tracks in Palm Springs at the annual HTA/TRA Joint Meeting, which has taken up a bit of my time.

I probably shouldn't have posted anything on here last night because I should have known that I would not have the time to answer all of the questions and before I had a chance to even look back at it there were 20-something comments.

Sit back, relax, and I will show all of my findings on here, and then you can disregard them if you want, but at least let me show some of my reasoning before blowing it off.

[ALostTexan]

The only way a reduction of takeout will be effective is to educate players as to how important it is to their wallet and their play. Savvy quasi professional players are keen to takeout but the majority of players that come in many colors have no clue about takeout. Do all the studies you want but if you don't reach the players with your results, it's all for nothing. That's like putting the best motor in a car and hiding that fact from the public. Tracks have been operating right along knowing that when takeout is under the radar it's of no consequence to them. I've done a small study on takeout and 7 out of 10 didn't know what the takeout was on the tracks they played and the majority played more than one track, some 3 to 4 tracks. Think about it, a friend can say, "twindouble, Tony's restaurant has the best pizza in the world". How many players come up to you and said, this track or that track has the lowest takeout in the country. Never happens.

In other words, continue to "educate" players with research that is 30 years old that was done in a world without simulcast wagering since that adequately reflects the current environment of racing.

[twindouble]

In other words, continue to "educate" players with research that is 30 years old that was done in a world without simulcast wagering since that adequately reflects the current environment of racing.

No I'm not saying don't do the research current information just reflects higher takeout that like I said goes under the radar for many non savvy players. Historically racing only survives on churning money and you can't do a study and exclude the rebates that the high rollers get, they pay a much lower takeout than the average players.

[ALostTexan]

Since I really do not sleep that much I have posted the first of many explanations on takeout reduction for the thesis. It is titled "Churn - How does it work? First a very simple look..." (http://thesis.ushorseman.com) and I hope that everyone will take a look at it.

I know that this is a gross oversimplification of the topic, but my task is to fully explain the topic, so you have to start somewhere. This is essentially the very basis of my paper, and everything will build off of this basic premise on how churn works.

Please take a look at the post and let me know what you think.

http://thesis.ushorseman.com

[proximity]

I said that some players will be aware and that's good thing for sure but all those that fall into that category of grays are at the track for many different reasons than the savvy players. Most are clueless about takeout and would not know the difference, what the horse paid is all they think about or not even think they had noticeable extra money. Sure over time some would be able to hang in longer than they did before and come back so your right on that score

read post #8 by dean t on this thread..... and then read it again.

way too many races with third choices in the 2-1 to 3-1 range. EVERY regular horseplayer notices this and it is simply demoralizing when your top pick is the public's third choice and you can't even get a double digit payoff on it.:mad:

[ALostTexan]

OK, the simple fact is I do not sleep much, so I have updated the blog again with the next step in the study. It is entitled "A Simple Look at Effects of Churn on Wagering - Let It Ride, Baby..." (http://thesis.ushorseman.com) and starts to build on the basic premise by introducing pari-mutuel wagering and the effects of churn.

I hope to get more updated to this over the weekend, so hopefully there will be more food for thought for everyone soon.

http://thesis.ushorseman.com

[InsideThePylons-MW]

You can not grade this type of race on any curve. There are players who will bet zero dollars on that odds board at 17% take, but might bet $400 at 5% or 8%. It can be a zero sum game, and it is not a smooth curve.

Or easily $4000.....maybe even $40000 if the pools could ever stand a bet that big.

[InsideThePylons-MW]

OK, the simple fact is I do not sleep much, so I have updated the blog again with the next step in the study. It is entitled "A Simple Look at Effects of Churn on Wagering - Let It Ride, Baby..." (http://thesis.ushorseman.com) and starts to build on the basic premise by introducing pari-mutuel wagering and the effects of churn.

Your first chart where you lower the takeout from 24% to 22% is misleading.

On the examples where there is no change in return, that is not always true. A horse can be an added $1 in the pool away from being bumped up 20 cents in payout. Any reduction in takeout will cause that bump. A reduction from 24% to 22% will cause many of those horses to pay $3.80 instead of $3.60 which your chart does not reflect.

[Horseplayersbet.com]

I don't think the Cummings Report is based on 30 year old data:
http://www.nationalhbpa.com/resources/Cummings_report7-17-04.PDF

[DeanT]

Texan,

Don't get discouraged from posting here at all. I think people have been open minded (hey, at least it is better than the HANA sucks topics :)). Your simple churn post is a good start; we did something similar on the blog recently. Keep firing away. I believe you are correct that simulcast and the proliferation of slots for on track bettors has made a difference. I dont know if you can do much with the pool siphoning without empirically looking at something that is pretty much real-world unmodelable, but you certainly can give it a good shot.

I look forward to following along.

[DeanT]

I have a big portion of the simulation model built already for this project, but I have not been able to get anyone in the industry to work with me for an academic research project. The tote companies, numerous racetracks, and Equibase have all shut the door on me so far.

Welcome to being a horseplayer. As someone posted on a blog I read recently - if their daughter wants to do a grade 6 school project on Secretariat, the kid would have to get a credit card and purchase his running lines.

[OTM Al]

Welcome to being a horseplayer. As someone posted on a blog I read recently - if their daughter wants to do a grade 6 school project on Secretariat, the kid would have to get a credit card and purchase his running lines.

Fortunately our kids are much more savy as 15 second search on Google gets you this

http://www.secretariat.com/past_performance.htm

Texan, You need to be careful with what appears to be one of your assumptions, ie that the final odds will be uniformly increased by the % drop in takeout. I argue this should not be the case. Bettors will place bets on a given horse until the expected (utility of) return drops below the price of the bet. So the lower priced horse, those of course considered more likely to win, should have their price affected far less that the higher price ones. Because of the lowered takeout, more money should pump into the pool though as, if we just consider the favorite, it will take more money to push down the price of that favorite to the overall minimum acceptable level, which is unchanged by takeout level. Likewise, the longshots should be even longer with lower takeout. This would of course be a ripe topic for an experimental investigation and not to hard to replicate in the lab.

[beertapper]

what about comparing betfair payouts and UK tote payouts, handle, etc ?

[ALostTexan]

Your first chart where you lower the takeout from 24% to 22% is misleading.

On the examples where there is no change in return, that is not always true. A horse can be an added $1 in the pool away from being bumped up 20 cents in payout. Any reduction in takeout will cause that bump. A reduction from 24% to 22% will cause many of those horses to pay $3.80 instead of $3.60 which your chart does not reflect.

That really isn't true. In all of those examples I calculated the Win payout based breakage to the dime. So in all of the examples I calculated and recalculated with the original and altered takeout rates.

I will post my methodology in calculating the Win payouts, which is done in accordance to the ARCI Model Rules and is how the tote companies do calculate the payouts.

I guess if I did the breakage to a nickel there would have been more fluctuation in payouts, but my charts should be a little more realistic. I also know that in the parlay series that I showed that the increased money that was bet in the later races would decrease the odds down to 1-9 if everything else was held constant, but that wasn't the point of the discussion, only how the bets would have increased with the lowered takeout rates.

[rwwupl]

So you obviously didn't bother to read anything I said. I am not questioning the studies that have been done, except for the fact that they were done without wagering via simulcasting. Since it is estimated that approximately 90% of the wagering on races is done off-track, the older studies are no longer applicable.


Wrong! When you are learning it is best not to jump to conclusions, as if you already know the answers to everything, and select only evidence that supports your preconceived ideas.

A Lost Texan...
Essentially, I have had enough with the constant bitching that takeout is too high or too low. We have an argument between horseplayers and racetracks that has no basis for rational discussion.

If you really believe that you are well named...A Lost Texan.

The "take " has to do with how much money is returned to the bettor. It influences the chances and number of winners from each pool of participants. Where and how the bet is placed is not relevant, but the number of winners you send home is relevant, because each bettor must perceive he has a chance of winning, or he will not bet... winners encourage others to participate.

Listening is a virtue

Best of luck in the future.

[twindouble]

read post #8 by dean t on this thread..... and then read it again.

way too many races with third choices in the 2-1 to 3-1 range. EVERY regular horseplayer notices this and it is simply demoralizing when your top pick is the public's third choice and you can't even get a double digit payoff on it.:mad:

I don't need to read it again. When I first came back here the threads I read here prior to signing in on this subject, the majority of posters were saying "players were clueless about takeout". Now in this thread and others every player is keenly aware of takeout. I did that small study and I proved the majority was clueless and didn't care about takeout. They were there to bet the horses and watch the races betting their favorite tracks. Granted that study was small like an exit pole but I was shocked that those "regular players" didn't care and didn't know what the takeout was on the tracks they played. I get the impression some posters here just go with the flow and agree with their favorite poster or they are just intimidated by them.

I'm sure if I continued the study there would be some that would ask "what's takeout". Some players from my experiences are clueless about many things when it comes to handicapping but they are there every day or whenever they can afford to go. Some are walking around with just the track program. Like I said "players come in many different shades and colors". Savvy players make their money off those people and that's been said here I don't know how many times.

[ALostTexan]

I don't think the Cummings Report is based on 30 year old data:
http://www.nationalhbpa.com/resources/Cummings_report7-17-04.PDF

I am not trying to be a name-dropper, but I know Mr. Cummings fairly well and I have been at a conference this week in California that he is also attending. I spoke with him at length both before this conference as well as this week and he will be the first to say that while his report for the California horsemen did tough on the fact that lower takeout would benefit the industry my methodology of quantifying it is a new and different way of showing that.

When I mentioned Mr. Wolff "and others" I could have gone in-depth to describe everyone that I have been in contact with regarding this project but that isn't the important part of this. The important thing is that I have done the literature review and taken into account all of the previous studies on the topic.

I will probably begin to discuss the literature on this topic soon.

[Horseplayersbet.com]

I am not trying to be a name-dropper, but I know Mr. Cummings fairly well and I have been at a conference this week in California that he is also attending. I spoke with him at length both before this conference as well as this week and he will be the first to say that while his report for the California horsemen did tough on the fact that lower takeout would benefit the industry my methodology of quantifying it is a new and different way of showing that.

When I mentioned Mr. Wolff "and others" I could have gone in-depth to describe everyone that I have been in contact with regarding this project but that isn't the important part of this. The important thing is that I have done the literature review and taken into account all of the previous studies on the topic.

I will probably begin to discuss the literature on this topic soon.

It really sounds like you've gone to the right sources. I wish you well with this.

Do you play yourself? Are you a member of HANA yet?

[rwwupl]

I am not trying to be a name-dropper, but I know Mr. Cummings fairly well and I have been at a conference this week in California that he is also attending. I spoke with him at length both before this conference as well as this week and he will be the first to say that while his report for the California horsemen did tough on the fact that lower takeout would benefit the industry my methodology of quantifying it is a new and different way of showing that.

When I mentioned Mr. Wolff "and others" I could have gone in-depth to describe everyone that I have been in contact with regarding this project but that isn't the important part of this. The important thing is that I have done the literature review and taken into account all of the previous studies on the topic.
I will probably begin to discuss the literature on this topic soon.



Are you trying to sell what you have concluded or trying to get the views of others?

[proximity]

They were there to bet the horses and watch the races betting their favorite tracks. Granted that study was small like an exit pole but I was shocked that those "regular players" didn't care and didn't know what the takeout was on the tracks they played..

they may not "know" or say they care, but when they're seeing third choices on the board at 5-2, players tend to gravitate away from those situations.

maybe we should just raise the takeout to 80% and have a bunch of 1-9 shots in every race? since nobody knows or says they care what the takeout is, they'd still play horses enthusiastically right?

[twindouble]

they may not "know" or say they care, but when they're seeing third choices on the board at 5-2, players tend to gravitate away from those situations.

maybe we should just raise the takeout to 80% and have a bunch of 1-9 shots in every race? since nobody knows or says they care what the takeout is, they'd still play horses enthusiastically right?

Explain to me how to cut out those quotes so I can cherry pick like everyone else does. I really would to know, has nothing to do with your responce because I don't know where your coming from.

[ALostTexan]

[/B]



Are you trying to sell what you have concluded or trying to get the views of others?

You seem to have disregarded everything I am doing already so I don't know why I am even responding. I will briefly explain this one additional time then I doubt I will respond to any more of your comments because it seems to be an exercise in futility.

There are many, many people that claim that takeout should be reduced because the previous studies showed that reducing takeout will result in increased revenues to both the track and the savy horseplayer. This is based on churn. Those studies, though, took into account "attendance costs," meaning that the more money you put into the horseplayer's hand the longer they will stay at the racetrack and will bet more money by the end of the race day.

I am trying to take into account the fact that approximately 90% of the money is bet off-track. This is not something that I really like, because I still think that attending the races is an important part of the racing experience. I have worked at and for racetracks but I started as a horseplayer, but the fact is 90% of the money is not bet at the racetrack so the "attendance costs" are really not that relevant.

So I am attempting to model a new study that takes into account the old studies but changes them to reflect the current market. This is, you know, sort of how academic research is done. You take the knowledge of the past, you identify how those studies need to be changed to reflect the current environment and you begin to look at the studies in a different way. You go down this route regardless of what you think the results will show, because even bad news is important to know.

At this point, I believe that the industry would benefit from reduced takeout rates while not decreasing the revenues that the industry would collect as a whole. But I am not sure on that. Regardless, the question needs to be answered.

We can all yell and scream and give every reason to reduce takeout, but until it can be shown by an independent study there is no reason for the racetracks to reduce the takeout. It is really that simple. If this study shows that through all of the interactions the revenues to the tracks might not be harmed through reduced takeout then the rational discussion can begin on reduced takeout. That is all that I am trying to do - update some of the major studies and reasons that horseplayers believe that takeout should be reduced.

If this study does show that the revenues will be harmed to the tracks that is at least good information to know because then other studies can begin to look elsewhere for reasons to reduce takeout.

Also, if the study shows that the revenues under the current system are X and after an increase or decrease in takeout the revenues remain at X then that is valuable information to know as well, because if they stay the same as a whole with the decreased takeout rate then there is less reason to not decrease the takeout rates and if they stay the same after a simulated takeout rate increase then there is absolutely no reason to increase the rates.

The fact is an extensive simulation model is not something that has been published in the academic journals, at least as far as I can tell, that take into account off-track wagering, and again 90% of the money is bet off-track. It is not as much of importance as to where the bet is placed but it is important that the next bet can be placed on a different track.

Stick with me on this and I will hopefully be able to explain some of this through the blog and ultimately through the paper that I want to publish on the topic.

http://thesis.ushorseman.com

[GameTheory]

There are many, many people that claim that takeout should be reduced because the previous studies showed that reducing takeout will result in increased revenues to both the track and the savy horseplayer. This is based on churn. Those studies, though, took into account "attendance costs," meaning that the more money you put into the horseplayer's hand the longer they will stay at the racetrack and will bet more money by the end of the race day.I claim that takeout should be reduced, but not because of any studies, but because it is common sense. And if the entire question is going to be reduced to churn, then we should all give up right now because churn doesn't address the biggest benefits of lowering takeout -- bringing in entirely new players, which is where the major growth will occur. I think it entirely possibly that even with the increased churn, lowered takeout will reduce racetrack profits ASSUMING WE HOLD THE NUMBER OF PLAYERS THE SAME. In other words, your study could well show what looks like "bad news" when in fact lowering takeout would still be the right thing to do.

This is not to disparage your study, which needs to be done. I just hope you make it clear it is not the entire answer to the takeout question. It is the answer to the question -- "what is the short-term effect of lowering takeout" but in the grand scheme of things it only addresses one effect of many (and not even the biggest and most important of those effects) that will be caused by lowered takeout. The problem, of course, is that the other important effects lend themselves even less easily to mathematical modeling, so we left to argue for them simply on the basis of logic and good sense, things that so far have not been persuasive. However, repetition helps.

[ALostTexan]

I claim that takeout should be reduced, but not because of any studies, but because it is common sense. And if the entire question is going to be reduced to churn, then we should all give up right now because churn doesn't address the biggest benefits of lowering takeout -- bringing in entirely new players, which is where the major growth will occur. I think it entirely possibly that even with the increased churn, lowered takeout will reduce racetrack profits ASSUMING WE HOLD THE NUMBER OF PLAYERS THE SAME. In other words, your study could well show what looks like "bad news" when in fact lowering takeout would still be the right thing to do.

This is not to disparage your study, which needs to be done. I just hope you make it clear it is not the entire answer to the takeout question. It is the answer to the question -- "what is the short-term effect of lowering takeout" but in the grand scheme of things it only addresses one effect of many (and not even the biggest and most important of those effects) that will be caused by lowered takeout. The problem, of course, is that the other important effects lend themselves even less easily to mathematical modeling, so we left to argue for them simply on the basis of logic and good sense, things that so far have not been persuasive. However, repetition helps.

Take a look a the blog when you get a chance. In the first long post on the blog, I did explain this:

I am not trying to say that my project is going to solve all of racing’s problems or answer every question on the topic, but my hope is to begin a rational conversation on the topic.

Again, there needs to be a rational basis for the discussion, and I think that this study is just a small step in the right direction. It would be stupid to think that this study and this study alone would answer every question to the takeout discussion, but I am just trying to do my part to begin that discussion.

All I want is to begin the rational discussion with an actual academic and mathematical approach, because the "common sense" approach is getting us nowhere, and in the case of California, for example, the "common sense" approach is getting everyone further away from any reduced takeout, which the horseplayers want and what could help the industry.

[Show Me the Wire]

ALostTexan:

"The problem, though, is that racing is in a very open market, as approximately 90% of the money wagered on racing is done off-track, which previous studies do not take into consideration. So if Track A were to drop their takeout, producing higher payouts to the players, there is nothing that says the player has to take those increased payouts and rebet into the next race at that track. In fact, most of the money will probably not bet rebet into the next race at that track.
So, if a track decreases their revenues in early races by dropping their takeout in the hope that the increased churn will produce higher revenues in later races, only to have the player turn around and bet those higher payouts into other tracks that have higher takeouts, the track that has done the right thing by the player has only hurt themselves." [bolding added for emphasis]

Your common sense assumption is right on the money. There is no gaurantee a player will invest his winnings at the same track. The only way this assumption is incorrect is if all races were fungible. Each race is a boutique event. this can be easily seen by looking at the wagering pools for individual races. the pools vary throughout the day, depending on the desirability factor of the product.

Your assumption explains the casino that revokes a players comps, because the player wagers at an unrelated property.

Keep up the good work, the studies have to be updated to include the ability to wager savings from one propeerty at another property.

[Greyfox]

Lost Texan your study is fascinating and I suspect that you know your stuff.
As the Scots say though "The proof will be in the eating of the pudding."
In effect, the ultimate test will be when some track somewhere tests your theoretical conclusions in "real life" to see if they hold.

Alternately, the thought occurred to me that perhaps some type of "en vivo"
facts might be gleaned from current tracks.
Hear me out on this. I'm assuming that different States with different tracks and different countries have different take out rates.

Is there any way of comparing their actual revenues with their takeouts?
I recognize that the flaw in this is that we wouldn't know the impact of decreased take outs on a specific track, however, it strikes me that some type of correlation should be apparent however slight. Yes? No?

[DeanT]

This is important stuff, imo, and you are on the right track.

Takeout is reduced, handle goes up. We know that. Whether it is 1910 or 2010.

But as Texan states, in 1970 you had eight races to bet and nothing else to bet - no lottery ticket on the way home, no slots parlor, no late night races from Los Al and cal Expo, no casino beside your house.

It is kind of clear to me anyway, that things have changed.

I believe this is why ADW wagering, and lowering prices there, is where the most churn happens. We can ask Dick Powell about this.

One of the reasons Pinnacle sports drew so much handle was that they were giving 7% takeout reductions across the board to anyone who played there, it stayed in his/her account and they could bet every track at essentially the same rate. When racing shut them all down (or changed laws so playing there was illegal) some execs (and I spoke to many of them) thought this handle, dollar for dollar would roar back into racing. Any serious player told them they were nuts, because a racetrack, at 20% takeout, with all the churn busters available around the player is not even close to a tight account at Pinny at 13% takeouts.

For more evidence of that we can look at the Singapore Turf Club - drops take to 10%, handle explodes; there is nothing else to bet on there, and shutting out all other wagering makes a difference.

And of course betfair - a tight account, good prices everywhere, even on poker, and max churn for anyone who plays there. Boom, 20,000 customers to 2.5 million in eight years.

Anyway, rambling on, but continued good work Texan.

[twindouble]

AlostTexan;

Some here support the double digit rebate issue that the whales get that's a form of lower "takeout". I hope you don't in your study. Any study that doesn't include that will be faulty because in my opinion the whales have positioned themselves to skim the pari-mutual system.

[ALostTexan]

Lost Texan your study is fascinating and I suspect that you know your stuff.
As the Scots say though "The proof will be in the eating of the pudding."
In effect, the ultimate test will be when some track somewhere tests your theoretical conclusions in "real life" to see if they hold.

Alternately, the thought occurred to me that perhaps some type of "en vivo"
facts might be gleaned from current tracks.
Hear me out on this. I'm assuming that different States with different tracks and different countries have different take out rates.

Is there any way of comparing their actual revenues with their takeouts?
I recognize that the flaw in this is that we wouldn't know the impact of decreased take outs on a specific track, however, it strikes me that some type of correlation should be apparent however slight. Yes? No?

Without spending a ton of time on this, the answer is yes. The model works by using a random number to give a date and a time that the player plays a race. That goes into a weighted system depending on total win pool at that time, which would take a ton of time to explain right now but essentially it says that the player is more likely to play a NYRA track over Beulah Park. There is a chance that he or she would play Beulah, but there is a higher likelihood that they would play NYRA.

The model then works by using a VLookup to show what the takeout rate is for that particular race that is bet and then shows what the track would have earned from from that wager.

After 10,000 or so wagers, all of the monies that the tracks would have made over the course of the simulation are put into a pivot table, which crunches the numbers easily.

Then, the exact same races are analyzed based on a lower takeout rate. The initial races will have a lower revenue amount to the track, but the revenues should be increased or decreased on later races. This is the churn effect that horseplayers always quote and that economics almost always conclude.

This entire process is repeated thousands of times and the results can be plotted to analyze their statistical value.

I promise this will all be explained in excruciating detail very soon, but that is essentially how the model will work.

[Horseplayersbet.com]

AlostTexan;

Some here support the double digit rebate issue that the whales get that's a form of lower "takeout". I hope you don't in your study. Any study that doesn't include that will be faulty because in my opinion the whales have positioned themselves to skim the pari-mutual system.
What about single digit rebates that many people across America can get?
Not all rebate players make money btw, but they all get to play more than they would without them.
They need to be part of this study, in fact, they need to be studied because their betting patterns is evidence of what happens when reducing takeout.

Twin Double, do you get rebates, if not, why not?

[ALostTexan]

AlostTexan;

Some here support the double digit rebate issue that the whales get that's a form of lower "takeout". I hope you don't in your study. Any study that doesn't include that will be faulty because in my opinion the whales have positioned themselves to skim the pari-mutual system.

Initially this is not part of the study, but the fact is this should probably be analyzed in future studies. The goal is to build a working model that can be used to look at many different scenarios, such as some tracks changing their takeout and some not, as well as going to a single takeout rate verses dropping X% from where they are now.

I am actually having fun doing this project, even if I seem very frustrated on here. Don't get me wrong, I am having alot of frustration doing it, but all-in-all it is alot of fun.

[twindouble]

Initially this is not part of the study, but the fact is this should probably be analyzed in future studies. The goal is to build a working model that can be used to look at many different scenarios, such as some tracks changing their takeout and some not, as well as going to a single takeout rate verses dropping X% from where they are now.

I am actually having fun doing this project, even if I seem very frustrated on here. Don't get me wrong, I am having alot of frustration doing it, but all-in-all it is alot of fun.

These whales "churn" millions of dollars. Excluding that from you study is like designing a table without legs.

[Horseplayersbet.com]

These whales "churn" millions of dollars. Excluding that from you study is like designing a table without legs.
Twin Double, do you get rebates, if not, why not?

You seem to duck and dodge this question. It was asked a while ago by someone else, and you never replied.

Quack quack.

[DeanT]

maybe we should just raise the takeout to 80% and have a bunch of 1-9 shots in every race? since nobody knows or says they care what the takeout is, they'd still play horses enthusiastically right?

For a lark I flipped it to South Africa racing and checked the odds board versus BF. I think several years ago the take in South Africa was like 40% but no one was playing so they lowered it. From the tote calculation below, it looks like win takeout is now 22%.

Here is the final odds board for the last race that just went off (4 horse field) at their current rake.

9-5
3-5
3-1
13-1

At BF:

5-2
Even
9-2
24-1

For another lark here is what the board might look like at 40% takeouts:

Even
2-5
9-5
7-1

[twindouble]

What about single digit rebates that many people across America can get?
Not all rebate players make money btw, but they all get to play more than they would without them.
They need to be part of this study, in fact, they need to be studied because their betting patterns is evidence of what happens when reducing takeout.

Twin Double, do you get rebates, if not, why not?

Whatever I get is no ones business. That don't mean I would support an unfair rebating system. What's right for all players in my position. That opinion goes back to when rebates first showed up so I've been very consistent on the issue.

[rwwupl]

Initially this is not part of the study, but the fact is this should probably be analyzed in future studies. The goal is to build a working model that can be used to look at many different scenarios, such as some tracks changing their takeout and some not, as well as going to a single takeout rate verses dropping X% from where they are now.

I am actually having fun doing this project, even if I seem very frustrated on here. Don't get me wrong, I am having alot of frustration doing it, but all-in-all it is alot of fun.


Don't get frustrated here. We all want the best for the future of our game.

Your work is very interesting and we want success for you if you can fill in gaps that need to be filled in.

I do have a serious question for you----

Horse racing has funded studies in the past which have showed that the optimum take would benefit racing...and nothing was done, so what are the prospects of any race track or ADW taking what you conclude to heart and adopting the study, before time passes and the next study says yours is out of date?

This does not mean that I do not support what you are doing, I do, but have we not been here before? How can you avoid your study collecting dust on the shelf, as others before you have done?

[johnhannibalsmith]

The guy's trying to get a good grade, get out of school, and provide the industry with a useful tool to potentially shape policy.

I'm not sure that ensuring that his project is actually implemented is one of the stated goals. There's no reason why he needs to have a plan to keep it from collecting dust, that's not his stake in the process. Of course, doing a good job will lessen that possibility, but preventing it is hardly something he has control over.

[Horseplayersbet.com]

Whatever I get is no ones business. That don't mean I would support an unfair rebating system. What's right for all players in my position. That opinion goes back to when rebates first showed up so I've been very consistent on the issue.
What's right for all players? In Arizona, one can't even bet on the internet. My point is that every jurisdiction is different, and there are many examples where horseplayers are not on an equal level.

As for it being none of anyone's business. Fine.

But I have to look at you now as possibly having a hidden agenda, IN MY OPINION (your favorite 3 words).

The reason I ask is that if you do get rebates, you would be the first person I know of who got rebates and complained about how unfair they are. :lol:

If you aren't getting them, and you can, you are shooting yourself in the foot and I can't take you seriously at all, IN MY OPINION.

Or the last option is that you don't bet much or at all, which means you are spending way too much time on a message board discussing the fairness of the system, IN MY OPINION.

[Igeteven]

I am going to be honest with and truthful,

There is a academic world and the real world, what you learn in school, doesn't come to the reality of life

To all gamblers, the take out is most important.

That's it, what they teach you in school is theory, nothing more.

When you gamble, it's a VERY serious business when you play the horses everyday. ie, weekend warriors, trying to make a extra buck.


Example on the take out. One is sitting at a poker table, if the house took, 20 percent out of each pot, within one hour or less, nobody would have any money let to play.


Good Luck

[twindouble]

What's right for all players? In Arizona, one can't even bet on the internet. My point is that every jurisdiction is different, and there are many examples where horseplayers are not on an equal level.

As for it being none of anyone's business. Fine.

But I have to look at you now as possibly having a hidden agenda, IN MY OPINION (your favorite 3 words).

The reason I ask is that if you do get rebates, you would be the first person I know of who got rebates and complained about how unfair they are. :lol:

If you aren't getting them, and you can, you are shooting yourself in the foot and I can't take you seriously at all, IN MY OPINION.

Or the last option is that you don't bet much or at all, which means you are spending way too much time on a message board discussing the fairness of the system, IN MY OPINION.

Me with an hidden agenda, that was a laugh. What do you want, my bank balance? How many members here post how much they wager or how often? Even if they did, most wouldn't believe what they say anyway. I played 6 races last night and still posted here, not only that check out my history, I come and go all the time because I play the horses and put a lot time into it. Crossed my mind also that many here don't play near as much as I do, so your not alone on that score. I don't know and I wouldn't ask. This is forum for discussion, not a place to delve into anyone's personal life. What personal information they put forth here is up to them, and I have no desire to squeeze any out. You summery of me is way off base and unclalled for.

[InsideThePylons-MW]

That really isn't true. In all of those examples I calculated the Win payout based breakage to the dime. So in all of the examples I calculated and recalculated with the original and altered takeout rates.

I will post my methodology in calculating the Win payouts, which is done in accordance to the ARCI Model Rules and is how the tote companies do calculate the payouts.

10000 win pool...fav has 3900 to win....24% takeout.....7600 returned.....fav pays 3.80

10000 win pool....fav has 3900 to win...22% takeout....7800 returned....fav pays 4.00

I don't know what methodology you are using or the ARCI rules but that is how the pari-mutuel system and reduced takeout work at every track I bet on.

[Horseplayersbet.com]

Me with an hidden agenda, that was a laugh. What do you want, my bank balance? How many members here post how much they wager or how often? Even if they did, most wouldn't believe what they say anyway. I played 6 races last night and still posted here, not only that check out my history, I come and go all the time because I play the horses and put a lot time into it. Crossed my mind also that many here don't play near as much as I do, so your not alone on that score. I don't know and I wouldn't ask. This is forum for discussion, not a place to delve into anyone's personal life. What personal information they put forth here is up to them, and I have no desire to squeeze any out. You summery of me is way off base and unclalled for.
I wasn't asking what your bank account looks like. It is a simple question, if you are so dead set against rebates, have you ever had them? Yes, you can even lie about it if you want. But choosing not to answer is pretty defensive IN MY OPINION.

If you don't get rebates, you really have no idea what motivates rebate players, IN MY OPINION.

You offer up your age, and a whole lot of things like where you play, where you've been etc. For someone who goes on and on about rebates, it would be kind of good to see what perspective you are coming from. If not, I might as well put you on ignore, because of what I mentioned earlier in this post.

If you still choose not to answer this simple question, I will promise you I will stop addressing you, because I will not see anymore of your posts :)

I'd also like to add, that nothing in horse racing is fair for everyone. Is it fair that some states have slots and subsidize horsemen with them? Is it fair that some states make it almost impossible for customers to get rebates? I can go on.

[twindouble]

I wasn't asking what your bank account looks like. It is a simple question, if you are so dead set against rebates, have you ever had them? Yes, you can even lie about it if you want. But choosing not to answer is pretty defensive IN MY OPINION.

If you don't get rebates, you really have no idea what motivates rebate players, IN MY OPINION.

You offer up your age, and a whole lot of things like where you play, where you've been etc. For someone who goes on and on about rebates, it would be kind of good to see what perspective you are coming from. If not, I might as well put you on ignore, because of what I mentioned earlier in this post.

If you still choose not to answer this simple question, I will promise you I will stop addressing you, because I will not see anymore of your posts :)

I'd also like to add, that nothing in horse racing is fair for everyone. Is it fair that some states have slots and subsidize horsemen with them? Is it fair that some states make it almost impossible for customers to get rebates? I can go on.

So, just because I said "it's no ones business" your going to ignore me and discard anything I've said of any value. That says a lot to me so do as you please, I won't feel any loss or lose any sleep over it.

[Horseplayersbet.com]

So, just because I said "it's no ones business" your going to ignore me and discard anything I've said of any value. That says a lot to me so do as you please, I won't feel any loss or lose any sleep over it.
It says a lot to me that you won't answer that simple question.
Ciao.

[twindouble]

It says a lot to me that you won't answer that simple question.
Ciao.

So be it!

[OTM Al]

10000 win pool...fav has 3900 to win....24% takeout.....7600 returned.....fav pays 3.80

10000 win pool....fav has 3900 to win...22% takeout....7800 returned....fav pays 4.00

I don't know what methodology you are using or the ARCI rules but that is how the pari-mutuel system and reduced takeout work at every track I bet on.

This is what I keep talking about in terms of not fully thinking through this problem. If this is really what happens, then lowering takeout will lose tracks money as your example shows no change in behavior and simply a shift of money from the track to the bettor. If the general opinion was that the fave should be around 3.80 to win, then it's probably still going to get pounded down to that. The pool size should be bigger though and the price on the longest horse in the field should be 35-1 instead of 30-1 for example. Bigger overall pool, bigger portion of the pool toward the faves, but approximately the same price on the most favored horses and much bigger difference on the long shots.

[twindouble]

The biggest problem race tracks have is what I said years ago "the dumb asses gave away their signals" Simple as that. It took Ray Paulick a few years to catch up with my thoughts, I like and respect him. In 2008 he had a great piece on his blog by Fred Pope how to fix the problem. If that can't be fixed there's no hope for the tracks.

[Indulto]

What's right for all players? In Arizona, one can't even bet on the internet. My point is that every jurisdiction is different, and there are many examples where horseplayers are not on an equal level.

As for it being none of anyone's business. Fine.

But I have to look at you now as possibly having a hidden agenda, IN MY OPINION (your favorite 3 words).

The reason I ask is that if you do get rebates, you would be the first person I know of who got rebates and complained about how unfair they are.

If you aren't getting them, and you can, you are shooting yourself in the foot and I can't take you seriously at all, IN MY OPINION.

Or the last option is that you don't bet much or at all, which means you are spending way too much time on a message board discussing the fairness of the system, IN MY OPINION.I wasn't asking what your bank account looks like. It is a simple question, if you are so dead set against rebates, have you ever had them? Yes, you can even lie about it if you want. But choosing not to answer is pretty defensive IN MY OPINION.

If you don't get rebates, you really have no idea what motivates rebate players, IN MY OPINION.

You offer up your age, and a whole lot of things like where you play, where you've been etc. For someone who goes on and on about rebates, it would be kind of good to see what perspective you are coming from. If not, I might as well put you on ignore, because of what I mentioned earlier in this post.

If you still choose not to answer this simple question, I will promise you I will stop addressing you, because I will not see anymore of your posts

I'd also like to add, that nothing in horse racing is fair for everyone. Is it fair that some states have slots and subsidize horsemen with them? Is it fair that some states make it almost impossible for customers to get rebates? I can go on.HPB/CG/ME,
Can I take some of your IGNORE action as well? Every time I ask a question of you in public that you don’t like, I get a nasty PM from you rather than a public response. ;)

I noticed you had a similar debate with SMTW in another thread, but you didn’t ask him if he got a rebate, or even if he was interested in lowering direct takout.

How’s this combative attitude of yours toward potential customers of your ADW working out for you, anyway? I haven’t seen nearly the level of interest in, and endorsements of, your operation that appeared on this board for another ADW owner who previously also frequently interacted with posters here.

As the owner of a rebate shop, your agenda may not be hidden, but like all such operations, you enable some players to gain a competitive edge over others. Without relief from high takeout, the latter are being forced out of the game; further contributing to its downward spiral. So when you attempt to trivialize the fairness issue, and discredit your opponents who recognize that rebates are a perversion of the pari-mutuel process, some of us wonder if your agenda isn’t simply to attain short-term profits before the ship goes down.

IN MY OPINION, it’s you who’s spending too much time on message boards, arrogantly arguing with people who won’t buy your brand of Kool-Aid. You’re too dangerous for me to ever put you on IGNORE. :lol:

[Horseplayersbet.com]

Indulto/Miss Ms. Mr. Whatever/Anonymous Stalker, I have been quite open on the boards.

Why are you butting your nose into this? This has nothing to do with you. I would have asked you long ago if you get rebates, but I've heard that it is probable you live in California, so I feel your pain.

I've put you on iggy off an on btw. You aren't on right now, for entertainment purposes only.

I should add that the PMs are a result of your false accusations of me, not questions, and you know it.

[Show Me the Wire]

To be fair, I was asked by Horseplayersbet.com. Look at post 214 in the thread in question.

BTW with all this comparison talk of poker and horses, I just hit a nice hunch bet with Gambling Pokerface. It really wasn't a hunch, more of a coinciedence.

[DeanT]

This is what I keep talking about in terms of not fully thinking through this problem. If this is really what happens, then lowering takeout will lose tracks money as your example shows no change in behavior and simply a shift of money from the track to the bettor. If the general opinion was that the fave should be around 3.80 to win, then it's probably still going to get pounded down to that.
Hi Al,

I have read this from many folks before, but with respect it does not happen like that. Read a few of the posts about comparing odds boards for what happens empirically. Better yet, if you are watching AQ tomorrow, throw the tote up at 16% and Betfair up at 5% and look at the odds differences for the entire field. You will see opportunities on each horse with lower takeout.

D

[Indulto]

To be fair, I was asked by Horseplayersbet.com. Look at post 214 in the thread in question. ...Yes, nice evasive action. ;)

What about direct takeout, should it be reduced?

[Indulto]

Indulto/Miss Ms. Mr. Whatever/Anonymous Stalker, I have been quite open on the boards.

Why are you butting your nose into this? This has nothing to do with you. I would have asked you long ago if you get rebates, but I've heard that it is probable you live in California, so I feel your pain.

I've put you on iggy off an on btw. You aren't on right now, for entertainment purposes only.

I should add that the PMs are a result of your false accusations of me, not questions, and you know it.Open One,
I guess my nose is sensitive to the negative effects of selective rebating on the game. Why do you object if you think your demeanor is beyond reproach? ;)

I stand corrected on the SMTW exchange. You did ask him if he got a rebate, but you didn't subsequently pursue him when you didn't get any answer like you did with TD.

Since you're being entertaining as well as being entertained, feel free to explain how my questions morphed into false accusations. I'm willing to go there if you are. Of course you can always pretend you have me on IGNORE.:lol:

[twindouble]

Open One,
I guess my nose is sensitive to the negative effects of selective rebating on the game. Why do you object if you think your demeanor is beyond reproach? ;)

I stand corrected on the SMTW exchange. You did ask him if he got a rebate, but you didn't subsequently pursue him when you didn't get any answer like you did with TD.

Since you're being entertaining as well as being entertained, feel free to explain how my questions morphed into false accusations. I'm willing to go there if you are. Of course you can always pretend you have me on IGNORE.:lol:

It's rare for someone defended me on any forum, I appreciate it indulto but I can handle it like I always have. Look, when someone has a low opinion of anyone, it's isn't worth the time or effort being on the defense, it's like losing race and carrying it over to the next day, it's nothing but baggage to be discarded.

[Indulto]

It's rare for someone defended me on any forum, I appreciate it indulto but I can handle it like I always have. Look, when someone has a low opinion of anyone, it's isn't worth the time or effort being on the defense, it's like losing race and carrying it over to the next day, it's nothing but baggage to be discarded.Sorry if it appeared I was suggesting otherwise, TD. Actually, i was playing on offense -- not defense -- when I posted that. ;)

[twindouble]

Sorry if it appeared I was suggesting otherwise, TD. Actually, i was playing on offense -- not defense -- when I posted that. ;)

I was talking about me not you. I know you were on the offense. I don't waste my time with people like that. I'm satified with my life and the respect I get from others, that's all that counts.

[Show Me the Wire]

Yes, nice evasive action. ;)

What about direct takeout, should it be reduced?


Would I like to see an overall reduction in any fee or cost I pay? Of course. Is it going to happen, in this economy? I don't think so.

[ALostTexan]

10000 win pool...fav has 3900 to win....24% takeout.....7600 returned.....fav pays 3.80

10000 win pool....fav has 3900 to win...22% takeout....7800 returned....fav pays 4.00

I don't know what methodology you are using or the ARCI rules but that is how the pari-mutuel system and reduced takeout work at every track I bet on.

I have begun to address this with tonight's blog entry, but it takes alot of time to fully go through my problems with calculating the win payout and it is going to take 2-3 entries to fully explain it. I am not doubting that your numbers are correct although you are doubting mine. The fact is it is not quite that simple, and I will be explaining it very soon.

For now, though, I will say that I do not have access to the actual Win Pools and the Amount Bet on the Winning Horse (ABW). I actually have to calculate the amount in the win pool, which is described on the blog now, and I have to calculate the amount of the Win pool that was bet on the winning horse based on the pari-mutuel payout. That isn't necessarily easy, either, because it turns out to be a sliding scale of ranges due to breakage being removed from the calculation. For instance, at 20% takeout and breaking to a dime a $2.20 payout means that the ABW is actually somewhere between 66.67% and 72.72% of the Win pool while a $2.40 winner was 61.54% and 66.66% of the Win pool while a $5.00 payout was between 30.77% and 31.99% of the Win pool and so on and so on and so on. I have built tables that show all of these different ranges.

But, what I am saying is that if the pools are large and the winning horse has additional money bet on it it may still stay within those ranges and a different takeout rate can also keep with with a set of ranges. That was the case with my numbers but not yours, but using a different set of numbers on your end would probably show results very similar to mine.

As you can see there are many, many, many factors that go into all of this, and I am trying to explain every step of the process in the study.

[ALostTexan]

I am going to be honest with and truthful,

There is a academic world and the real world, what you learn in school, doesn't come to the reality of life

To all gamblers, the take out is most important.

That's it, what they teach you in school is theory, nothing more.

When you gamble, it's a VERY serious business when you play the horses everyday. ie, weekend warriors, trying to make a extra buck.


Example on the take out. One is sitting at a poker table, if the house took, 20 percent out of each pot, within one hour or less, nobody would have any money let to play.


Good Luck

I can give you 2,699,649 examples of why you are wrong in your reasoning. That is every dollar that was wagered at Philadelphia Park on March 9.

Philadelphia Park, as I am sure you know, has some of the most ridiculous takeout rates in racing world. According to your reasoning, gamblers would never go near Philadelphia Park. Yet nearly $2.7 million dollars was wagered there on Tuesday.

Could that have been $5 million if their takeout rates were lower? I am sure they could have been, but the fact is even with high takeout rates a large number of wagering dollars were pointed there on Tuesday.

If that is not enough, open your morning paper to see how much was wagered in your state lottery.

How much more real-world can you get?

[Dave Schwartz]

For now, though, I will say that I do not have access to the actual Win Pools and the Amount Bet on the Winning Horse (ABW).

Why not? Everyone else does.


I actually have to calculate the amount in the win pool, which is described on the blog now, and I have to calculate the amount of the Win pool that was bet on the winning horse based on the pari-mutuel payout.

I would suggest, sir, that this is highly amateurish considering the proliferation of pool total availability.


Regards,
Dave Schwartz

[Charlie D]

I can give you 2,699,649 examples of why you are wrong in your reasoning. That is every dollar that was wagered at Philadelphia Park on March 9.




And this is probably why Take Out reduction is hardly mentioned by VP's of Racing etc.



Wonder how much of that money came from Whales recieving very nice rebates and how much came from those receiving a toaster as a rebate.

[ALostTexan]

Why not? Everyone else does.




I would suggest, sir, that this is highly amateurish considering the proliferation of pool total availability.


Regards,
Dave Schwartz

Did you bother to read the blog entry before insulting me? Take a look at that and you might see the issues I have had to confront in obtaining the data legally and ethically.

[ALostTexan]

The guy's trying to get a good grade, get out of school, and provide the industry with a useful tool to potentially shape policy.

I'm not sure that ensuring that his project is actually implemented is one of the stated goals. There's no reason why he needs to have a plan to keep it from collecting dust, that's not his stake in the process. Of course, doing a good job will lessen that possibility, but preventing it is hardly something he has control over.

For what it is worth, I am 31 years old, I am a licensed racing official in Arizona, and I have been intimately involved in the racing industry while I have been in Arizona. Ask Boomer and Jeff Platt about some of my involvement in the push to legalize ADW's in the state if you don't feel like I have any creditability.

I also really don't care about the actual "grade" on this project. In reality this is technically 1 credit hour out of tons of credit hours, so getting a 70 on the project doesn't really hurt me. I was also named the Distinguished Student at the RTIP at the 2009 Symposium on Racing and Gaming so I think I have proven my worth to the program. Additionally, I am currently employed by Stan Bergstein, a legend in the world of racing, who has taught me a great deal in the past 6 months.

I am not trying to brag, but I am not a 22 year old that is worried about getting a good grade to make Mom and Dad proud. What I really want to do is begin a rational conversation on this topic of altering takeout. I want to produce a study that could potentially begin a trend. I left a $60,000/year job to pursue this degree because I have a passion for the Sport of Kings, and I don't want to tell my grandkids about racing in the past-tense.

My first goal is to make this study work and hopefully everyone from horseplayers to track owners can using this as a building block to turn this sport around. Altering takeout is only a part of that, and I don't claim to be the Messiah for Racing. I don't feel that there has been enough done to show the benefits or harms of altering takeout, so I am just trying to do my part.

Yet far before it is complete my study is getting shit on by many, many people, and I know that there are many on here that have already disregarded the study because I am trying to use theoretical economic models to state the case of altering takeout rather than the "common sense" approach that has gotten the topic of takeout really far. It seems to have worked extremely well in California.

[Greyfox]

Yet far before it is complete my study is getting shit on by many, many people, and I know that there are many on here that have already disregarded the study because I am trying to use theoretical economic models to state the case of altering takeout rather than the "common sense" approach that has gotten the topic of takeout really far. It seems to have worked extremely well in California.

I haven't read many posts here that way. I, including others, have supported your quest.
You're coming across in a manner that I hear the world's smallest violin playing. Boo hoo.
The above post is a "turn off." :ThmbDown:

[Deepsix]

Hang in there alostTexan, your brief bio is helpful, your frustrations are appreciated, and we can handle the straight talk. I'm following along on your blog, and here, with interest and whatever the outcome(s) its refreshing to read a fresh perspective on this takeout topic. You will probably teach us a few things and maybe you'll cause some to rethink what they thought they knew.

Good stuff.

[Horseplayersbet.com]

A Lost Texan, you should put your blog site link in your signature, so when you refer to your new posts, if someone is interested they know where to go.

[GameTheory]

Why not? Everyone else does.




I would suggest, sir, that this is highly amateurish considering the proliferation of pool total availability.

Where is there a source for individual WPS pool data after the fact? (i.e. win pool only, place pool only, show pool only). The charts only list total WPS. The only way I'm aware of to get that is to record if off the tote board at race time, but for historical research what do you do?

[johnhannibalsmith]

For what it is worth, I am 31 years old, I am a licensed racing official in Arizona, and I have been intimately involved in the racing industry while I have been in Arizona. Ask Boomer and Jeff Platt about some of my involvement in the push to legalize ADW's in the state if you don't feel like I have any creditability.

I also really don't care about the actual "grade" on this project. In reality this is technically 1 credit hour out of tons of credit hours, so getting a 70 on the project doesn't really hurt me. I was also named the Distinguished Student at the RTIP at the 2009 Symposium on Racing and Gaming so I think I have proven my worth to the program. Additionally, I am currently employed by Stan Bergstein, a legend in the world of racing, who has taught me a great deal in the past 6 months.

I am not trying to brag, but I am not a 22 year old that is worried about getting a good grade to make Mom and Dad proud. What I really want to do is begin a rational conversation on this topic of altering takeout. I want to produce a study that could potentially begin a trend. I left a $60,000/year job to pursue this degree because I have a passion for the Sport of Kings, and I don't want to tell my grandkids about racing in the past-tense.

My first goal is to make this study work and hopefully everyone from horseplayers to track owners can using this as a building block to turn this sport around. Altering takeout is only a part of that, and I don't claim to be the Messiah for Racing. I don't feel that there has been enough done to show the benefits or harms of altering takeout, so I am just trying to do my part.

Yet far before it is complete my study is getting shit on by many, many people, and I know that there are many on here that have already disregarded the study because I am trying to use theoretical economic models to state the case of altering takeout rather than the "common sense" approach that has gotten the topic of takeout really far. It seems to have worked extremely well in California.

I am sorry that your experience here has led you to be defensive. I was trying to rebut Rwwupl's post that you were wasting your time because your conclusions would not be implemented. I was defending your project as a noble cause with primary goals not designed specifically to turn the racing industry on its head.

For someone routinely chastising others for "not bothering to read" and drawing irrational conclusions, I would offer that you have done precisely the same thing with this response.

[Igeteven]

I can give you 2,699,649 examples of why you are wrong in your reasoning. That is every dollar that was wagered at Philadelphia Park on March 9.

Philadelphia Park, as I am sure you know, has some of the most ridiculous takeout rates in racing world. According to your reasoning, gamblers would never go near Philadelphia Park. Yet nearly $2.7 million dollars was wagered there on Tuesday.

Could that have been $5 million if their takeout rates were lower? I am sure they could have been, but the fact is even with high takeout rates a large number of wagering dollars were pointed there on Tuesday.

If that is not enough, open your morning paper to see how much was wagered in your state lottery.

How much more real-world can you get?

Horse players are smart, lotto players are dumb, People are real stupid when it comes to the lottery, It's all luck, nothing more. When it comes to horse players, you are talking about people who think.

So don't give me that crap, get into the real world in if you are going to get involved in horse racing and if you can't separate the two, go play bingo or the lotto.

[iwearpurple]

Where is there a source for individual WPS pool data after the fact? (i.e. win pool only, place pool only, show pool only). The charts only list total WPS. The only way I'm aware of to get that is to record if off the tote board at race time, but for historical research what do you do?

You can get WPS amounts bet until the end of the day on Youbet.

[Greyfox]

For someone routinely chastising others for "not bothering to read" and drawing irrational conclusions, I would offer that you have done precisely the same thing with this response.

:ThmbUp: Spot on. Sounds like Tex will fit right in with a lot of other Race Track administrators when he graduates.

[budman]

I'm not as smart as you guys and gals but wouldn't this be like Reganomics?

Lower taxes & improve the economy --- lower the takeout & increase the handle.

Maybe the above is too simple but I'm just a K.I.S.S. sort of guy.

By the way LostTexan, good luck on that thesis (been there done that & don't want anymore of it) and getting back to Texas. I hope that you can make a difference with the dumb*** :eek: politicans in Austin when you get here.
re: Texas racing industry.

Good luck,

Budman

[Dave Schwartz]

Did you bother to read the blog entry before insulting me? Take a look at that and you might see the issues I have had to confront in obtaining the data legally and ethically.

I am not trying to insult you. Sorry if it came out that way.

No, I have not read your blog.


I am suggesting that for the quality of work that you need for a paper such as this, the breakage ruins your accuracy. You could prepare - there is software available that will capture the tote - ATR comes to mind.

Did I miss your answer to THIS question?
http://www.paceadvantage.com/forum/showpost.php?p=851235&postcount=5

I think this is a valid question.

Again, my intention was not to insult you. I would just like to know what you are trying to prove?


Dave

[GameTheory]

You can get WPS amounts bet until the end of the day on Youbet.Yeah, sure, but there is no way I find out the win pool of a race from 6 months ago or 2 years ago, is there?

[Igeteven]

How this thread is going and what he is learning in school, he will fit right in with track management

People, what you are seeing is a brand new bean counter to racing.

Good Luck

[Deepsix]

Sure is interesting how some people apparently feel threatened by this study.... even before they read the final conclusions in a couple months.

(btw, as I read alostTexan's posts and his blog, I detect that he is in favor of, or leans toward reduced takeout so its puzzeling why some here get so defensive and start the anti-management, bean counter charges.)

[ALostTexan]

Horse players are smart, lotto players are dumb, People are real stupid when it comes to the lottery, It's all luck, nothing more. When it comes to horse players, you are talking about people who think.

So don't give me that crap, get into the real world in if you are going to get involved in horse racing and if you can't separate the two, go play bingo or the lotto.

So explain the money in the pools at Philadelphia, the main point of my post. Your claim was that takeout was the most important thing to GAMBLERS, yet you ignored the $2.7 million bet at Philadelphia.

It amuses me that horse racing blames, among other things, the fact that lotteries have been implemented all over the country and that is part of our current problems. With that reasoning one is saying that people have moved from betting horses to betting the lottery. But then those same people have this "lottery players are idiots" attitude.

I am not saying that the case with you, but it is always an amusing observation that I have had.

[ALostTexan]

I'm not as smart as you guys and gals but wouldn't this be like Reganomics?

Lower taxes & improve the economy --- lower the takeout & increase the handle.

Maybe the above is too simple but I'm just a K.I.S.S. sort of guy.

By the way LostTexan, good luck on that thesis (been there done that & don't want anymore of it) and getting back to Texas. I hope that you can make a difference with the dumb*** :eek: politicans in Austin when you get here.
re: Texas racing industry.

Good luck,

Budman

Actually, Budman, the economic principle that I am trying to observe is whether or not the takeout rate can be shown to fit on with the economic theory of the Laffer curve (http://www.heritage.org/Research/Reports/2004/06/The-Laffer-Curve-Past-Present-and-Future). That is essentially what Reaganomics was based off of, and I am trying to observe through Monte Carlo simulation whether or not this is true.

[ALostTexan]

I am not trying to insult you. Sorry if it came out that way.

No, I have not read your blog.


I am suggesting that for the quality of work that you need for a paper such as this, the breakage ruins your accuracy. You could prepare - there is software available that will capture the tote - ATR comes to mind.

I could pretty much tell that you had not read the blog because if you had you would probably understand that I am having a great deal of trouble finding the exact numbers from a large time period, such as 2009. If I wanted to begin to collect data to make this even more precise I could do that now and then wait to graduate for another year, but that is not a possibility.

In the end, it is not a deal-killer anyway, and I will be explaining that as time goes on. If I have something that is close to the Win pool and the ABW, I can use that to calculate the Win payout, and as long as I am using the same numbers with a different takeout rate and showing the percent difference to the racetracks through the takeout it remains accurate. The main reason that I want to use very close data is to keep the relative pool size close and not just use random numbers. That way you actually see the approximate affects on Beulah Park verses Belmont Park and on both tracks between a Tuesday and a Saturday.

Did I miss your answer to THIS question?
http://www.paceadvantage.com/forum/showpost.php?p=851235&postcount=5

I think this is a valid question.

Again, my intention was not to insult you. I would just like to know what you are trying to prove?


Dave

I really don't have a "side" on this. If takeout can be altered without making a major change to the effects of revenues to the tracks then there is no reason to no alter the takeout. I am just trying to show this.

I am trying to use economic modeling to see if the takeout rate fits on the Laffer Curve (http://www.heritage.org/Research/Reports/2004/06/The-Laffer-Curve-Past-Present-and-Future). It was easy when there was only wagering allowed at 1 racetrack on the live product there. The problem now is that simulcasting offers wagering opportunities on numerous racetracks, each with a different takeout rate. When you ask the tracks for a takeout reduction and they want proof that it will not hurt them and your only proof is "It is common sense, dummy" then you will never get anywhere. I am trying to build a model that begins to look at the current environment that takes into account these multiple wagering opportunities.

At the same time, although my hunch is that the old studies on one racetrack are still somewhat valid in the current environment, I am also fully prepared to find that that isn't the case. I think that horseplayers need to know that as well, and then they can begin to state their case on other grounds.

I am not wearing the team colors for either side, though, I am just trying, as I have stated many times, to have a rational conversation on the topic. Without some sort of evidence in the effects of altering takeout, albeit a theoretical model with some on here have already tossed out the window, you will never be able to truly sit down with industry leaders to have that discussion.

I have admitted all along that this model will have its limitations, but my goal is to build an early model that can be built upon by smarter people than myself.

[Dave Schwartz]

I am trying to use economic modeling to see if the takeout rate fits on the Laffer Curve. It was easy when there was only wagering allowed at 1 racetrack on the live product there. The problem now is that simulcasting offers wagering opportunities on numerous racetracks, each with a different takeout rate. When you ask the tracks for a takeout reduction and they want proof that it will not hurt them and your only proof is "It is common sense, dummy" then you will never get anywhere. I am trying to build a model that begins to look at the current environment that takes into account these multiple wagering opportunities.

I totally agree with your belief structure.

I did get an answer to my question, although not directly from your words. It appears to me that you are (logically) representing the race tracks in this "reduce takeout" quagmire.

I see that as a good thing because tracks will not listen to someone who is not perceived to be "on their side." Coming from an industry-sided education program, what else could we expect? (To my knowledge there are no player-side education programs.)


I will take a look at your blog.

Regards,
Dave Schwartz

[ALostTexan]

Where is there a source for individual WPS pool data after the fact? (i.e. win pool only, place pool only, show pool only). The charts only list total WPS. The only way I'm aware of to get that is to record if off the tote board at race time, but for historical research what do you do?

This is exactly the problem. I would love to find a public database from 2009 that has this data but that is impossible to find. Well, not impossible, but that brings out the "public" part of it. I could get access to the data but it is generally protected by "Terms of Use" provisions. I am going through old data that I have collected to try to make something happen as we speak.

But, if anyone else knows of a public database of this information I would love to use it and it would save me tons of time. For now, though, I am having to work under the restrictions and constraints I have in front of me.

[GameTheory]

This is exactly the problem. I would love to find a public database from 2009 that has this data but that is impossible to find. Well, not impossible, but that brings out the "public" part of it. I could get access to the data but it is generally protected by "Terms of Use" provisions. I am going through old data that I have collected to try to make something happen as we speak.

But, if anyone else knows of a public database of this information I would love to use it and it would save me tons of time. For now, though, I am having to work under the restrictions and constraints I have in front of me.Myself and some others I know have collected a fair bit of tote board data that would have complete pools (which you can then cross-check against the official listed total), but the coverage is a bit random. I'm sure there are others as well that save it. With a team effort I think we could come up with a "big chunk" anyway...

[rwwupl]

Actually, Budman, the economic principle that I am trying to observe is whether or not the takeout rate can be shown to fit on with the economic theory of the Laffer curve (http://www.heritage.org/Research/Reports/2004/06/The-Laffer-Curve-Past-Present-and-Future). That is essentially what Reaganomics was based off of, and I am trying to observe through Monte Carlo simulation whether or not this is true.


I think a better question to be answered is should a bet cost everyone the same or like racings present course to have tiered take out levels with rebates to some players?

We all know who Ronald Reagan was and Art Laffer is a great economist, but I view the question as more basic.

"Rebates" and "Take out" combined equal the cost of the bet to the customer, and some customers get a better deal than others.The present system favors the deep pocket players over the average player. The average players are leaving, could this be a contributing factor...what happens when the deep pocket players only have themselves to compete with?

If you live in California, and deal with a U.S. based company, you get no rebates,no matter how much you play. If you bet a lot, you can go outside of the jurisdiction and get rebates. Each jurisdiction has its own rules on this. This creates confusion and jealousy among the public.... and that is not good. It creates a question of basic fairness.

Why should a bet cost one man more than another man to complete? Yeah, yeah, I know, It costs less per item if you buy ten of something rather than one. But does that logic fit horse racing in this day of computers when a hundred dollar bet cost s exactly the same to process as a two dollar bet?

In the name of consistency and fair play would it not be better to have one flat rate for each bet without any rebates for certain customers?

It seems to me that this could be done if we could establish the optimum take out level and gain agreement among the parties to be consistent... but that would probably require a central office to be created.

Oh..well, sorry, I did not mean to hijack your thread, those are just thoughts that popped into my mind, that I wanted to share with you.

I do support the work of A Lost Texan and all efforts to improve a broken system, you never know when it is completed what fruit it will bear... and I am always flexible to change my mind when it comes to horse racing,
Do not be frustrated if others have questions.

I am not sure if the public would understand if they were informed that the cost to them to make a bet would be based on a Laffer curve and you are on the wrong end.

Things are not going so well now, so best to you and carry on.

[Deepsix]

WOW.... abiggoahead, alostTexan!!! lol You're gaining support.

Too funny.

[Dave Schwartz]

I, too, am behind his effort.

Even though he is educated to be a "track man," consider the fact that we are more likely to get the tracks to listen to "one of their own."


Just my opinion.

Regards,
Dave Schwartz

[proximity]

Philadelphia Park, as I am sure you know, has some of the most ridiculous takeout rates in racing world.

i wish you nothing but the best of luck on your project, but the above is incorrect.

31% takeout minus 18% rebate equals 13% takeout on exotics.... amongst the best in the racing world!!

[Indulto]

I think a better question to be answered is should a bet cost everyone the same or like racings present course to have tiered take out levels with rebates to some players?

We all know who Ronald Reagan was and Art Laffer is a great economist, but I view the question as more basic.

"Rebates" and "Take out" combined equal the cost of the bet to the customer, and some customers get a better deal than others.The present system favors the deep pocket players over the average player. The average players are leaving, could this be a contributing factor...what happens when the deep pocket players only have themselves to compete with?

If you live in California, and deal with a U.S. based company, you get no rebates,no matter how much you play. If you bet a lot, you can go outside of the jurisdiction and get rebates. Each jurisdiction has its own rules on this. This creates confusion and jealousy among the public.... and that is not good. It creates a question of basic fairness.

Why should a bet cost one man more than another man to complete? Yeah, yeah, I know, It costs less per item if you buy ten of something rather than one. But does that logic fit horse racing in this day of computers when a hundred dollar bet cost s exactly the same to process as a two dollar bet?

In the name of consistency and fair play would it not be better to have one flat rate for each bet without any rebates for certain customers?

It seems to me that this could be done if we could establish the optimum take out level and gain agreement among the parties to be consistent... but that would probably require a central office to be created.

Oh..well, sorry, I did not mean to hijack your thread, those are just thoughts that popped into my mind, that I wanted to share with you.

I do support the work of A Lost Texan and all efforts to improve a broken system, you never know when it is completed what fruit it will bear... and I am always flexible to change my mind when it comes to horse racing,
Do not be frustrated if others have questions.

I am not sure if the public would understand if they were informed that the cost to them to make a bet would be based on a Laffer curve and you are on the wrong end.

Things are not going so well now, so best to you and carry on.Well said, rw. Please post more often. :ThmbUp:

[Deepsix]

Hey Prox, how about breaking that down for us: ie, who/how many are getting the 18% rebate? What percentage of the total handel is getting rebates at that level?

[Dave Schwartz]

31% takeout minus 18% rebate equals 13% takeout on exotics.... amongst the best in the racing world!!

At Phillly Park?

I am not aware of anyone getting a significant rebate at Philly.

[proximity]

Hey Prox, how about breaking that down for us: ie, who/how many are getting the 18% rebate? What percentage of the total handel is getting rebates at that level?

handel?

is that some kind of secret racing industry pun?? like hal's your handel??:)

seriously though, i don't know the exact scope, but serious rebates (beyond cups of coffee for $10,000 of betting) are a fly in the ointment here that didn't exist 30 years ago....

[Deepsix]

Heh! My typo measured against your silly post..... yeah its a toss up.

[proximity]

At Phillly Park?

I am not aware of anyone getting a significant rebate at Philly.

:confused:

[ALostTexan]

Tonight I updated the blog to explain the next step in how to calculate a Win payout. I know that many on here know exactly how to calculate a Win payout, but that is not the main focus of the blog post. Instead, I showed how I have to calculate the Win payout based on the somewhat limited data I have available since I do not have what is one of the four most important numbers required for calculating the payout: the amount of money wagered on the winning horse.

I have essentially shown that you can take the win payout and use a random number within the range of percentages that would produce that Win payout and multiply that by the Win pool to get the ABW. As long as my project is consistently using the same Win pool and same ABW this should be an accurate method to determine the effects of altering the takeout rate.

[ALostTexan]

Unfortunately I have been extremely busy over the past few days and have not been able to update the blog until tonight.

I have posted the tracks that will be used for the study on the blog tonight, though,and I would love to hear comments on this, so fire away...

[Stillriledup]

i wish you nothing but the best of luck on your project, but the above is incorrect.

31% takeout minus 18% rebate equals 13% takeout on exotics.... amongst the best in the racing world!!

Which rebate shop is giving 18% rebates on Philly?

[Stillriledup]

I think a better question to be answered is should a bet cost everyone the same or like racings present course to have tiered take out levels with rebates to some players?

We all know who Ronald Reagan was and Art Laffer is a great economist, but I view the question as more basic.

"Rebates" and "Take out" combined equal the cost of the bet to the customer, and some customers get a better deal than others.The present system favors the deep pocket players over the average player. The average players are leaving, could this be a contributing factor...what happens when the deep pocket players only have themselves to compete with?

If you live in California, and deal with a U.S. based company, you get no rebates,no matter how much you play. If you bet a lot, you can go outside of the jurisdiction and get rebates. Each jurisdiction has its own rules on this. This creates confusion and jealousy among the public.... and that is not good. It creates a question of basic fairness.

Why should a bet cost one man more than another man to complete? Yeah, yeah, I know, It costs less per item if you buy ten of something rather than one. But does that logic fit horse racing in this day of computers when a hundred dollar bet cost s exactly the same to process as a two dollar bet?

In the name of consistency and fair play would it not be better to have one flat rate for each bet without any rebates for certain customers?

It seems to me that this could be done if we could establish the optimum take out level and gain agreement among the parties to be consistent... but that would probably require a central office to be created.

Oh..well, sorry, I did not mean to hijack your thread, those are just thoughts that popped into my mind, that I wanted to share with you.

I do support the work of A Lost Texan and all efforts to improve a broken system, you never know when it is completed what fruit it will bear... and I am always flexible to change my mind when it comes to horse racing,
Do not be frustrated if others have questions.

I am not sure if the public would understand if they were informed that the cost to them to make a bet would be based on a Laffer curve and you are on the wrong end.

Things are not going so well now, so best to you and carry on.


A one hundred dollar bet and a two dollar bet cost the exact same amount of money to process. Unfortunately for the 2 dollar player, the 100 dollar player is making the bet taking company 50 times the amount.......which means that the bet taking company has 50 times the incentive to keep that 100 dollar player happy.

[rwwupl]

A one hundred dollar bet and a two dollar bet cost the exact same amount of money to process. Unfortunately for the 2 dollar player, the 100 dollar player is making the bet taking company 50 times the amount.......which means that the bet taking company has 50 times the incentive to keep that 100 dollar player happy.


So,...Following that logic, the bet taking company should put up a sign that says"we accept $100 bets and up,only"

The bet taking company has little incentive to take less than $100 bets. :)

[proximity]

Which rebate shop is giving 18% rebates on Philly?

d.s. should be getting AT LEAST 16-18% on tris and supers at pha...

[senortout]

four little words....

THE LIFE CHANGING SCORE

This is the real reason for high takeout rates today.

If someone takes a significant amount from the game($100,000 plus, say) theres a damn good chance it won't all find its way back into the pools.

So there you have it, we have high takeouts, because the powers that be are aware of this.

Take away the gimmick wager and lower the take-out...sure no problem then because you would have to bet lots and lots to make lots and lots and the handle would be okay.....but don't take my word for it....when was racing's golden era and how were they doing then?

senortout

[GameTheory]

four little words....

THE LIFE CHANGING SCORE

This is the real reason for high takeout rates today.

If someone takes a significant amount from the game($100,000 plus, say) theres a damn good chance it won't all find its way back into the pools.

So there you have it, we have high takeouts, because the powers that be are aware of this.

Take away the gimmick wager and lower the take-out...sure no problem then because you would have to bet lots and lots to make lots and lots and the handle would be okay.....but don't take my word for it....when was racing's golden era and how were they doing then?

senortoutSo takeouts are high because the people in charge are smart and they've figured this out? Are people hitting life-changing scores on win-place-show bets? Exactas & quinellas? Why are those rates high? Why isn't the takeout for show bets 2%?

[Jeff P]

So,...Following that logic, the bet taking company should put up a sign that says"we accept $100 bets and up,only"Sadly, that is exactly what Tracknet has forced ADWs into doing by insisting on a $1 million / year min handle rebate policy.

If Tracknet lowered that threshhold (or eliminated it) they would in effect be leveling the playing field (making things more fair) for the everyday player.


-jp

.

[LottaKash]

x

"The thinking which created today's problems is insufficient to solve them" - Albert Einstein

best,

[ALostTexan]

Track Takeout List – A Call for Crowdsourcing Help (http://thesis.ushorseman.com/?p=33)


I updated the blog tonight with a call for help from horseplayers. I have, what I hope, is the final list of track takeouts that I plan on using for the remainder of the study. The problem,though, is that when I look at 3 different sources for the WPS takeout rate I generally get 3 different answers to what the takeout rate is.

So far I have primarily used the HANA Track Rankings list to determine the WPS Takeout Rates for this project. I trust these numbers more than any other source, but I do know that small errors can occur. There are a few tracks that are not in the Track Rankings list that I have deduced in one way or another as well.

Ultimately I want to make sure that all of the takeout rates are correct, so I am asking the crowd to look over the list and see if there are any glaring errors and to share that with everyone. I am not doubting that the HANA numbers are correct, but if there are errors I hope that people will point them out. I am sure that everyone at HANA would want to know if the numbers are incorrect as well.

Quite frankly I find it sad that I have so much trouble getting overall takeout rates from industry sources, and I find it even more sad that many of the DRF Track Information pages are wrong. For one of the main sources of information for horseplayers and the industry in general they do not seem to have a major interest in updating their fact sheets.

I appreciate any help in advance.