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And the exec was partly right about players not knowing the takeout. The serious players of course do, but when i privately polled about 100 customers, all regulars that bet here at PM and bet on simulcasts, 2 of them knew what our takeout was.
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Logically beside the point for 2 reasons:
A.) What might matter is whether people who ARE NOT playing know that the takeout in racing is worse than any other "gambling" endeavor. A more proper test might be to go into a poker room and ask the players which has a higher rake, poker or horse racing.
B.) Players don't need to know the takeout to have it effect their play. I think we'd all agree that lottery players are probably the least price sensitive people in the world. They are after all betting on getting hit by lightning, basically, against a huge rake. But even lottery players show a very strong response to lower takeout (without having any clue what it actually is):
http://cpr.ca.gov/CPR_Report/Issues_...nues/GG06.html
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A proven strategy for lotteries across the country to generate additional funding for their beneficiaries has been to increase prize payouts. Higher payouts generate more winning experiences for players. This makes the games more entertaining and increases sales dramatically. Every lottery in the U.S. that has increased prize payouts has increased sales. [3] The most successful lotteries in the country have one major thing in common, a prize payout of at least 60 percent. There are 39 state lotteries, 36 of which allocate 60 percent or more of ticket sales to prizes. Two of the poorest performing lotteries, California and Louisiana, have a limited prize payout of only 50 percent of ticket sales. [4]
The Massachusetts State Lottery is the most successful lottery in the nation. It also has the highest prize payouts in the nation ranging from 60 percent to 79 percent of ticket sales. With a population of only 6.4 million, compared to California's population of over 35 million, Massachusetts out-produced California in 2002 total revenues by approximately $1.3 billion. [5]
In New York, the payout for their instant games was increased to 65 percent in 1999. After the fourth year of the program, contributions to education increased by more than $500 million a year with higher payouts a major contributing factor. In 2002, Florida increased instant game payouts from 56 percent to 67 percent. Revenues from these products increased 62 percent in the first year, thereby increasing annual contributions to education by $49 million the first year. In Texas, sales sharply declined from $3.7 billion to $2.5 billion after prize payouts were capped in 1998 at 52 percent. Four years after the cap was restored to its prior level, revenues have steadily increased to $3.1 billion. [6]
Top lottery officials from Massachusetts, New York, Florida, Texas and Georgia have recently stated that higher payouts were instrumental in increasing revenues and generating additional funds for their beneficiaries. [7]
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Now that's not theory, that's practice. It's pretty pathetic that the friggin lottery has this figured out, yet people in this industry haven't.
