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And I suspect some of them are sadistic assholes who don't want people with shallower pockets to make any scratch. On a conspiratorial reach: maybe they are sometimes paid to hammer down the odds and decrease pay outs.
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Nobody is being sadistic or assholish. It is simply business. They're making profit.
Would you say that Walmart is run by a bunch of assholes who are just taking advantage of people by making profit off the consumer?
(Note that I am not a big fan of Walmart and how they pay their employees, but I still shop there because it provides me with the best pricing I can get.)
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Originally Posted by jasperson
Why do the Whales bet win,place and knock down the odds? Is it because the exotics don't offer winning propositions? I think that with their expertise the exotics would offer better value.
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They also play exotics. In fact, they play ALL the pools.
And you are correct, the exotics DO offer more value, but probably not for the reason you think.
The reason they offer more value is because the takeout is higher.
WHAT?
I said that the value is higher for them because the takeout is higher and, therefore, they get a higher rebate because the rebate deal is also usually tied to the takeout.
The typical whale deal with an ADW is that their rebate is tied directly to whatever the ADW is making as their commission on a bet.
It works like this:
Assume 18% takeout. Let's follow that 18%.
(Note that these numbers are not likely accurate in 2018. I admit to being a bit out of the loop these days.)
1. Of that the track keeps 2%, leaving 16%.
2. Perhaps the horsemen take 1%, leaving 15%.
3. The signal fees and tote is another 3.5%, leaving 11.5%.
4. That 11.5% is passed on to the ADW as commission.
Here's where things get interesting. This is where the ADW net is split between the ADW and the bettor. (Note that their could be an agent who also gets a small commission for bringing the customer to the ADW.)
Let's say that you are a $1,000 per month player.
(Note that I am making these numbers up. I've got no idea what your ADW deal might be.)
5. The ADW is going to keep the 1st 8%. That means you get to keep whatever the ADW commission - 8% is. At this track that means 3.5%.
If the net to the ADW was only 10%, you'd be getting a 2% rebate.
If the ADW commission rate was 7% then you'd get 0% for a rebate.
Now, let's change the scenario to a whale betting $10m per month.
That 11.5% that goes to the ADW is split way differently.
5. The ADW keeps 0.5% and gives you the rest. Thus, at an 11.5% track, you are going to get an 11% rebate. At an 8% track, you are going to get a 7.5% rebate.
These are the BASIC mechanics of how it works.
BTW, do not expect the "retail stores," such as Twin Spires or Express Bet to work quite this way.
Finally, the extremely high volume players may be offered an even better deal. A flat sum is paid to the ADW for the year and the player gets ALL of the ADW commission.
Hope this helps with your understanding.
