Quote:
Originally Posted by toddbowker
Not ignoring it at all. By virtue of you stating slots having a lot of churn and are a special case, you've just proved my point. They are the closest casino game to compare parimutuel wagering with because a slot machine operates off a straight takeout model also.
My point was all customers care, even if they don't consciously know it. But if we are to assume your premise that not all customers care and therefore should be treated differently, then ponder this.
If it's necessary to lower the effective takeout rate for "customers who care" why is it not the right thing to do for everyone? If the "customers who care" will bet more because of their lower effective takeout, wouldn't everyone bet more if the takeout were lower? After all, if the "customers who care" aren't going to bet more, then why bother charging them less?
The data I presented on our panel in Tucson showed that our customers churn rate was over 42% (a factor of 3x) higher when factoring rebates (which is how the industry currently lowers effective takeout).
Many people seem to forget we are in the churn business. Putting more money in the customer's hands will always increase churn rates. Optimizing that number to maximize revenue is the challenge, and it's not an easy solve, especially when everyone isn't doing it at the same time. That's why Bill was suggesting that tracks band together to do it.
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Slots are not close to horse racing.
A slot bettor has over 100 wagering cycles an hour. A casual horseplayer has 2. So if variance were equal, it would take 50 times as long for a casual horseplayer to outrun variance. (In actuality, variance is higher in horse racing.)
And even in slot machines, there is a trend towards higher takeout machines that use bonus rounds to increase time on device. The players don't care as long as they get to stay longer.
Your churn statistics are a mixture of casual and serious players. What you need to do is back out the rebate players and the large handle players. Then take the remainder of players and calculate how much they are affected by churn. The answer is going to be "almost no effect". A bettor who plays 6 races a week would have to play for decades before the main determinant of her results isn't luck. That bettor is not takeout sensitive.
We are all governed by the laws of math.
