The Rebate King

[Seabiscuit@AR]

http://www.afr.com/p/national/the_gambler_GwoSmf5IXaVFjmpyYXNu9

The Rebate King has not been paying his taxes and now the Australian Tax Office reckons he owes them $900 million from the last 10 years

[Seabiscuit@AR]

I don't think that link works

But you can go to the Australian Financial Review home page from that link and type "Zeljko" into the search bar at the top. It should bring up an article entitled The Gambler from 11 Feb 2012 by Angus Grigg

[Dave Schwartz]

http://www.afr.com/p/national/the_gambler_GwoSmf5IXaVFjmpyYXNu9J

[Robert Goren]

Buried someplace in the middle of the article is this little tidbit
The betting system relies on computer models driven by complex algorithms that place thousands of bets, worth millions of dollars, in the final minutes before the horses jump.
Next time somebody complains about late odds drops, I am going to refer them to article for an explaination as the reason why.

[davew]

I read that article and didn't see anything about taking money out of the pool at post time - their models have to do some dutching on multiple horses which would 'normalize' odds rather than make them more pronounced.

[Robert Goren]

I read that article and didn't see anything about taking money out of the pool at post time - their models have to do some dutching on multiple horses which would 'normalize' odds rather than make them more pronounced.I did not see that either. I never have seen an article anywhere saying that any of the whales were dutching races and betting mutiple horses in the same race.

[davew]

did you read they are making money on their losing horses?

the only way I know how to do that is by betting the top 3-5 horses in eligible races - they know the entire bet is slight positive expectation and even more so with rebates on the losing horses they bet on in that race.

[jelly]

In the US, the syndicate received an average rebate of 13 per cent on all losing bets, according to court documents.

:faint:

[Robert Fischer]

did you read they are making money on their losing horses?

the only way I know how to do that is by betting the top 3-5 horses in eligible races - they know the entire bet is slight positive expectation and even more so with rebates on the losing horses they bet on in that race.

might be reading into it too much here.

[takeout]

In the US, the syndicate received an average rebate of 13 per cent on all losing bets, according to court documents.

:faint:[snip]
And just as the ATO is giving him a good looking over, so too are everyday punters and racing professionals, who are beginning to grasp the sheer scale of the incentives given to his betting syndicate by TABs across Australia.

These incentives, not available to ordinary punters, almost brought down Tote Tasmania last year and threaten to undermine how the racing industry is funded.
[snip]

Comment: Sounds like the Goldman Sachs of betting syndicates. :rolleyes:

As an ‘average Joe’ bettor I may as well go play in a poker game where they cut 10% of only my winning pots. Pretty much the same type thing only worse, isn’t it? And I don’t even remember getting kissed! Only racing would be willing to see its average customers screwed to this extent. And at most places, this after slot welfare yet!

[PaceAdvantage]

The average customers don't make up anywhere near the percentage of handle as theses whales do...shouldn't racing bend over backwards for their best customers? Not saying what is happening here it's 100% correct, but all businesses give their best customers significant perks.

[Seabiscuit@AR]

The problem here is the totes look to have gained nothing by giving Zeljko these massive perks. Zeljko entered the American horse betting market about 10 to 12 years ago. Obviously the deal would have been "you give me big rebates and in return I will increase betting turnover on your races". Now Zeljko got his big rebates and has made squillions out of the deal. So obviously this was a good deal for him. But if a deal is very good for one party it is probably very bad for another party. Has USA betting handle gone up since Zeljko entered the market? No the opposite has happened

This article gives us a good insight into why turnover might have dropped on USA racing since Zeljko entered the market with his big rebates. The article states the following:

"TT reported that $69.1 million had been booked in “settlements from other TABs”. Once again, it’s thought Ranogajec’s syndicate would have reaped a good proportion of this."

TT = Tote Tasmania. What this means is this. Tote Tasmania co-pool their bets with SuperTAB which is mainly the Victorian TAB (it might include Western Australian money too). So the Victorian and Tasmanian tote money gets pooled together. The $69 million settlement payment is a payment from Victorian tote punters to Tasmanian tote punters. This $69 million is over and above the normal tote takeout. So the Victorian customers lost the normal tote takeout + $69 million. If tote Tasmania had not been co-pooling with the Victorian tote then Victorian tote customers would have been better off by $69 million

This is how rebates tend to be bad for the other party not getting the rebates. The non rebated players lose their money faster than normal as they are paying a higher effective takeout. When players lose their money super fast they will quit the game for good and go do something else with their time. End result is less turnover not more

Totes around the world have been pretty stupid to fall for the rebates = bigger turnover argument. From what I see you get an initial spike upwards as the "new" rebated money enters the pools but after a few years the rebates work their magic the opposite way and other non rebated players get wiped out of the pools

[Seabiscuit@AR]

I will add one more thing about these $69 million "settlement payments" between the Victorian (and possibly WA) TABs and Tasmania. Recently TABCorp which runs the Victorian TAB decided not to renew their co-pooling agreement with Tote Tasmania and let Tatts take over the deal. The reason for this was simple. The Victorians had finally woken up to the fact the co-pooling arrangement with Tote Tasmania was a bad deal for the Victorian tote customers. So they ended it

Tatts who are the new co-pooling partners with Tote Tasmania have already said things have to change and this can only mean much smaller rebates in the future. No rebates at all would be even better but that is probably too much to hope for

[Track Collector]

did you read they are making money on their losing horses?


ALLl people who get rebates get a wagering discount back from losing horses. Long-term, most do not end up on the positive side of the ledger because their pre-rebate ROI plus the rebate is still less than 1.00.

Larger rebates certainly make it easier to come out ahead than do smaller rebates, however, a person's pre-rebate ROI must be very high to start off with, and THAT is something extremely hard to do.

[Dave Schwartz]

did you read they are making money on their losing horses?

That is misleading. It means that despite having a losing proposition on flat bets they are showing an overall profit after rebate. I assure you it doesn't mean that they win if they lose.

Rebates are paid on every bet, not just the winning ones.

[Robert Goren]

A business model for racing that has whales making up most of the pools will not last very long. They end up on the same horse(s) too often. There needs to be a fair amount of money in the pools that doesn't agree with their computer models in order for the pari mutuel system to work. Right now they are very close to killing the goose that lays the golden eggs. If very much more whale money enters the market, the whole pari mutuel system implode on itself.

[Seabiscuit@AR]

http://www.smh.com.au/sport/horseracing/with-angels-you-never-dare-to-punt-20120216-1tbf7.html

Here is another article from Australia today which also touches on the issues of Zeljko and rebates

[PaceAdvantage]

A business model for racing that has whales making up most of the pools will not last very long. They end up on the same horse(s) too often. There needs to be a fair amount of money in the pools that doesn't agree with their computer models in order for the pari mutuel system to work. Right now they are very close to killing the goose that lays the golden eggs. If very much more whale money enters the market, the whole pari mutuel system implode on itself.Maybe we should let those who actually have experience being a whale or with intimate knowledge of their ways make these sorts of dire predictions...no offense, but I doubt you're an expert witness on the subject.

[ronsmac]

Maybe we should let those who actually have experience being a whale or with intimate knowledge of their ways make these sorts of dire predictions...no offense, but I doubt you're an expert witness on the subject.
Good post.

[takeout]

Maybe we should let those who actually have experience being a whale or with intimate knowledge of their ways make these sorts of dire predictions...The article said the tote system was almost brought down last year.

[PaceAdvantage]

The article said the tote system was almost brought down last year.I read the article...I don't recall reading that kind of gloom. I remember reading that a certain, specific tote company almost bit the dust, but that's not quite the same as you are saying.

[PurplePower]

I read the article...I don't recall reading that kind of gloom. I remember reading that a certain, specific tote company almost bit the dust, but that's not quite the same as you are saying.
What I read was that the tote company that gave this whale the huge rebates (to keep his business) was "brought down" by this whale. In my opinion, in order for the whales to "bring down" the pari-mutuel system they would have to start betting ALL of their money on WINNERS. (Of course then they would only get 1-9 on their money, so little reward, big risk). The fact that they use an "algorithm" and "make money" on losing wagers suggests that they are spreading that huge amount of money among at least "several" horses and therefore virtually ensure the continuation of pari-mutuel.

It is the tote company that gives the whale "the combination to the safe" in order to keep that whale's business that is at the greater risk of "imploding".

[Robert Goren]

Whenever you read that somebody is somehow making money by betting losing horses in a pari mutuel pools, you should question whether or not the author has a clue about what is going on. I have yet to read anything that can says exactly how you can make by betting money on losing horses in a pari mutuel pool.
I would like to address one other issue, late money. If you wish to see it works keep track of amounts of money in the pools at 1MTP and then subtract those numbers from the final pools. If you do this for a hundred races or so, you will get eyes opened about what is going on in some races.

[David-LV]

Whenever you read that somebody is somehow making money by betting losing horses in a pari mutuel pools, you should question whether or not the author has a clue about what is going on. I have yet to read anything that can says exactly how you can make by betting money on losing horses in a pari mutuel pool.
I would like to address one other issue, late money. If you wish to see it works keep track of amounts of money in the pools at 1MTP and then subtract those numbers from the final pools. If you do this for a hundred races or so, you will get eyes opened about what is going on in some races.

What the hell are you talking about now.
Do you ever think before you post, or are you just trying to built up the amount of times that you post.
I don't think that we are having a contest, but you are now up to 8,310.

___________
David-LV

[alydar]

Whenever you read that somebody is somehow making money by betting losing horses in a pari mutuel pools, you should question whether or not the author has a clue about what is going on. I have yet to read anything that can says exactly how you can make by betting money on losing horses in a pari mutuel pool.
I would like to address one other issue, late money. If you wish to see it works keep track of amounts of money in the pools at 1MTP and then subtract those numbers from the final pools. If you do this for a hundred races or so, you will get eyes opened about what is going on in some races.

Seems like simple math would prove otherwise. Did you read the article?

[Dave Schwartz]

If you wish to see it works keep track of amounts of money in the pools at 1MTP and then subtract those numbers from the final pools. If you do this for a hundred races or so, you will get eyes opened about what is going on in some races.

First, do it at 0 minutes to post instead.

Second, I tracked this about 12 years ago, before there was such a thing as a "whale" or a rebate. At that time I determined that about 45-55% of the money showed up AFTER the first flash of zero minutes to post. (Very much track dependent.)

It is simply how the tote system currently functions.

Granted, people are wagering ever-later, and the whale money probably has a lot to do with it. However, make no mistake - the issue is built into the natural delay that will always be there - not just from the whales and not caused by rebates.


Regards,
Dave Schwartz

[Robert Goren]

Seems like simple math would prove otherwise. Did you read the article? I read it and the all the post in this thread. It was about a crook that cheated his partners. Something most of the posters here seemed to have skipped over. The love affair with whales that goes on here is sick. They make money by betting $0.90 and getting paid like they bet $1. It's a great gig if you can get it. But you still have to be very good at picking winners. There is no way you can make money by betting a $1, losing it and getting $0.10 in a rebate unless you are betting someone else's money and then keep the rebate for yourself. The races where it is profitable to dutch a race even with a high rebate are pretty scarce. That means that the public and the other whales have to be off their figures on two or more horses. I think it is hard enough to find a race where they are off on one horse let alone two. Remember all the whales have the same information. Do you really think that there is much difference in the way they process it?

[Robert Goren]

First, do it at 0 minutes to post instead.

Second, I tracked this about 12 years ago, before there was such a thing as a "whale" or a rebate. At that time I determined that about 45-55% of the money showed up AFTER the first flash of zero minutes to post. (Very much track dependent.)

It is simply how the tote system currently functions.

Granted, people are wagering ever-later, and the whale money probably has a lot to do with it. However, make no mistake - the issue is built into the natural delay that will always be there - not just from the whales and not caused by rebates.


Regards,
Dave SchwartzWe agree on that. The point I am making is that while not all of the money bet late is whale money, however I think all of the whale money is late money and it is easy to guess where it is going if you look for it.

[Dave Schwartz]

We agree on that. The point I am making is that while not all of the money bet late is whale money, however I think all of the whale money is late money and it is easy to guess where it is going if you look for it.


That is not true. They do not bet all the money at the last minute but I cannot discuss this any further.

Dave

[Robert Goren]

That is not true. They do not bet all the money at the last minute but I cannot discuss this any further.

DaveIf you say so, but for the life of me I can't understand why they wouldn't bet it all late.

[cj]

If you say so, but for the life of me I can't understand why they wouldn't bet it all late.

Betting early and driving the price down can actually discourage people from playing the horse. Isn't this exactly what happened at CharlesTown with the canceled bet? While not the same thing, the objective would be the same, to discourage others from betting the horse.

[Robert Goren]

Betting early and driving the price down can actually discourage people from playing the horse. Isn't this exactly what happened at CharlesTown with the canceled bet? While not the same thing, the objective would be the same, to discourage others from betting the horse.
That would be objective, but after watching people try this for nearly fifty years, I am not sure it works. I am not even sure the huge bet and later canceled at CharlesTown actually scared off that much money. If it works all that well why don't we see more canceled huge bets. It doesn't a genius to come up with that tactic.

[cj]

That would be objective, but after watching people try this for nearly fifty years, I am not sure it works. I am not even sure the huge bet and later canceled at CharlesTown actually scared off that much money. If it works all that well why don't we see more canceled huge bets. It doesn't a genius to come up with that tactic.

I know for a fact of one very, very big bettor that does this. He doesn't cancel the bets, but he definitely does it with that purpose in mind.

[Robert Goren]

I know for a fact of one very, very big bettor that does this. He doesn't cancel the bets, but he definitely does it with that purpose in mind. I see early big bets pop up from time to time to time. I have seen itseen I was a kid and I am sure it was happening long before then. I am just not sure it works. It may draw more money than it scares away. There are a lot of people who bet with this kind of wager.

[cj]

I see early big bets pop up from time to time to time. I have seen itseen I was a kid and I am sure it was happening long before then. I am just not sure it works. It may draw more money than it scares away. There are a lot of people who bet with this kind of wager.

It also keeps those using conditional wagering out of the pool for the most part.

[Robert Goren]

It also keeps those using conditional wagering out of the pool for the most part.It could do some of that and if you are a big bettor that would be a very good thing. That is something would be very tricky to pull off. It would take a strong understanding of how "value bettor" come up with their price points. If he can freeze them out, it would add a fair amount to the price. Keep the odds below the price point for "value bettor" in the flash before the gate opens and yet above his price point when the betting stops be very hard to on a consistent basis. If somebody can do that, they have my admiration.

[PaceAdvantage]

If you say so, but for the life of me I can't understand why they wouldn't bet it all late.There's a lot you can't/don't understand, but that doesn't stop you from posting as if you know...odd...

[Robert Goren]

I understand one thing, odds drop after 10 MTP attract some betters. I know several people who used that in their handicapping. I know 2 people that don't even buy a form, they just bet with action on the tote board. I know the "value bettor" here like to think that everybody bets like they do. Well, I have got news for you, it ain't so. There are many ways to handicap to a race and some of them don't involve looking for a horse that going off at 2/1 when you think it ought to be 6/5. Some them actually involved looking for a horse going off at 6/5 that should be going be 2/1.