Crist and Beyer lay into NYRA and Stronach for having financial interests in CAW's

[lamboguy]

with these legal sports gambling operations i have made deals with them where i am laying $105 and $107, but if i am a Robo player which is very similar to the CAW, they throw you out.

its not the rebates, its the supreme technology from the CAW that is creating the huge edges over the players that don't have that access to make their bets, rebate or no rebate.

[lamboguy]

to offset the Robo guys in sports and try to throw them for a loop, the sportsbooks operate with games that are un numbered and in different sequential order from one book to the other. years ago you could walk up to any sports book on the strip and call your game by the schedule number and they were all the same. not today with the Robo's running around.

[Andy Asaro]

There is no reason in the world that at least one major track can't go to 12%. Optimal pricing is a standard business practice everywhere but Horse Racing. You start at 12%. In 6 months you might be able to lower it to 10.5% if the data determines that 10.5 is optimal. Or, you may find that 13% is optimal. Whatever it is you have to pick a starting point. And if Industry people in this thread go to the people they work for and ask about this you'll know in the first 10 seconds if the people you're talking to about it are full of shit or not. If they start dancing you'll know they aren't serious people serious about growing the game/sport.

This is an easy message and easy to do. You just have to get all the human anchors out of the way

[lamboguy]

Originally Posted by Andy Asaro

There is no reason in the world that at least one major track can't go to 12%. Optimal pricing is a standard business practice everywhere but Horse Racing. You start at 12%. In 6 months you might be able to lower it to 10.5% if the data determines that 10.5 is optimal. Or, you may find that 13% is optimal. Whatever it is you have to pick a starting point. And if Industry people in this thread go to the people they work for and ask about this you'll know in the first 10 seconds if the people you're talking to about it are full of shit or not. If they start dancing you'll know they aren't serious people serious about growing the game/sport.

This is an easy message and easy to do. You just have to get all the human anchors out of the way

there is only one problem that we have to eliminating rebates and lowering takeout. the problem is whether the bettor is ontrack or online, it cost the same amount of money to service small bettors and big bettors. if the person is going to the track, the track has to pay to maintain the facility and pay its management and tellers. in today's world, a person who bets only $100 in a 4-hour day is a stone-cold loser for the race track. the guy who is betting $10,000 for the day with a rebate is subsidizing the smaller player. its the same thing online, the adw's have expenses as well. they have full-time programmers and customer service, they have to pay other help and they pay equibase and many other expenses.

[classhandicapper]

IMO, any potential positive impact from a cut in the take will take awhile to reach the bottom line of the tracks (if at all). Initially, it's probably going to cost the track money. This industry seems incapable of thinking long term.

[classhandicapper]

Originally Posted by lamboguy

there is only one problem that we have to eliminating rebates and lowering takeout. the problem is whether the bettor is ontrack or online, it cost the same amount of money to service small bettors and big bettors. if the person is going to the track, the track has to pay to maintain the facility and pay its management and tellers.

That's probably why at many tracks it appears they are making no real effort to bring fans out. It's cheaper for them if I bet from home.

If you extend this, you understand why consolidation always comes up.

If there are 80 tracks in the industry, that's 80 tracks you have to maintain.

If there are 10-15 tracks, the industry costs are dramatically lower. You wouldn't even have to keep all the handle to generate the free cash to theoretically do things like cutting the take, raising purses, and getting away from the casino money. But there are huge painful downsides to it.

[lamboguy]

Originally Posted by classhandicapper

That's probably why at many tracks it appears they are making no real effort to bring fans out. It's cheaper for them if I bet from home.

If you extend this, you understand why consolidation always comes up.

If there are 80 tracks in the industry, that's 80 tracks you have to maintain.

If there are 10-15 tracks, the industry costs are dramatically lower. You wouldn't even have to keep all the handle to generate the free cash to theoretically do things like cutting the take, raising purses, and getting away from the casino money. But there are huge painful downsides to it.

the best thing that could happen would be a reduction in takeout and breakage. maybe there is a way to do it and get people to go to the track... the casino's certainly have found the way to get idiots into their buildings to sit in front of machines and feed them with their paychecks, welfare and social security money.

[Saratoga]

Originally Posted by lamboguy

the best thing that could happen would be a reduction in takeout and breakage. maybe there is a way to do it and get people to go to the track... the casino's certainly have found the way to get idiots into their buildings to sit in front of machines and feed them with their paychecks, welfare and social security money.

Exactly!!

Casino's largest take is on Roulette....5%

Slots are about 10%

They maintain more property and pay more people....


Why can't Race Tracks????

[Andy Asaro]

Originally Posted by lamboguy

there is only one problem that we have to eliminating rebates and lowering takeout. the problem is whether the bettor is ontrack or online, it cost the same amount of money to service small bettors and big bettors. if the person is going to the track, the track has to pay to maintain the facility and pay its management and tellers. in today's world, a person who bets only $100 in a 4-hour day is a stone-cold loser for the race track. the guy who is betting $10,000 for the day with a rebate is subsidizing the smaller player. its the same thing online, the adw's have expenses as well. they have full-time programmers and customer service, they have to pay other help and they pay equibase and many other expenses.

I'm confident they can figure it out if they want to

[GMB@BP]

Originally Posted by Andy Asaro

High volume players get on track rebates. If you're betting 100K or more a day some tracks will rebate you. Some tracks probably less

100k a day, lolz. is that normal for the everyday player? Maybe I am just in a different universe.

[Andy Asaro]

Originally Posted by GMB@BP

100k a day, lolz. is that normal for the everyday player? Maybe I am just in a different universe.

A guy like Zayat used to do 200K a day at Del Mar when he was really rolling from what I was told. A few others did that as well.

[lamboguy]

last i heard a few years ago, there were a couple of guys that were not CAW that bet about $80 million a year. 20 years ago Beaver used to bet $1 million a day, Zayat was tangled up with him somehow.

[dilanesp]

So, on takeout cuts:

1. The most economically efficient model is VARIABLE takeout. Takeout on races less attractive to bet (early on the card, weekday, short fields, off tracks) should be lower, perhaps even much lower. Takeout on the most attractive races (certainly the Kentucky Derby and maybe the Breeders' Cup, also races with large fields) should be higher.

There's various reasons the tracks don't do this.

2. The rebates are basically a form of volume discount. Just like if you buy 48 rolls of toilet paper at Costco you pay less, well, you pay less if you run a lot of money through the system.

And because of that, takeout reductions that have the effect of making the rebates less valuable may not have the effect on handle people here think. If rebate play is decreased, it may offset the gains from non-rebate players in the lowered takeout pools. And this is probably a big reason you don't see more tracks lowering takeout, other than on certain bets that are less popular (see point 1).

3. The Gordian Knot here is that the rebates produce so much handle that they override the normal rules of supply and demand. In a normal market, cutting the price raises demand and raising it lowers demand, and you want to set your price based on the elasticity of demand (how price-sensitive the market is). The rebates are a form of price discrimination, which allows sellers to keep the price high. Some price discrimination is pretty harmless, e.g., supermarket coupons allow prices to stay high for most customers while drawing some coupon-cutters.

But the extent of the price discrimination here- the share of the market controlled by rebate players- means that you may not actually be able to raise demand by cutting prices. Which means the too high price continues to draw ordinary horseplayers from the market, which then increases the market share of the rebate shops even more, thus increasing the velocity of the vicious cycle.

At any rate, given all this, the best that racing can probably do is offer some products that aren't available to the rebate shop and which can attract ordinary players. And we're starting to see some of that. Hopefully we will see more.

[Poindexter]

Originally Posted by dilanesp

So, on takeout cuts:

1. The most economically efficient model is VARIABLE takeout. Takeout on races less attractive to bet (early on the card, weekday, short fields, off tracks) should be lower, perhaps even much lower. Takeout on the most attractive races (certainly the Kentucky Derby and maybe the Breeders' Cup, also races with large fields) should be higher.

There's various reasons the tracks don't do this.

-----------------------------------

First things first. You have to fix the pricing in this game so people actually want to play the game for more than 3 days. Once they fix the pricing, if they want to give a 5 % cash back for on track weekday wagers at xyz up to $100 or something, I have no problem with it.

2. The rebates are basically a form of volume discount. Just like if you buy 48 rolls of toilet paper at Costco you pay less, well, you pay less if you run a lot of money through the system.

--------------------------------------

You can't have volume discounts in pari-mutuel wagering. It knocks the system out of balance. Smart people are supposed to know that. I have made at least 100 posts on the subject over the years.


And because of that, takeout reductions that have the effect of making the rebates less valuable may not have the effect on handle people here think. If rebate play is decreased, it may offset the gains from non-rebate players in the lowered takeout pools. And this is probably a big reason you don't see more tracks lowering takeout, other than on certain bets that are less popular (see point 1).

-------------------

You are completely underestimating the talents of the CAW. They aren't going anywhere. I explained in pretty clear detail above (my fantasy land post). Yes if rebates were eliminated tomorrow and takeout brought to it's proper level tomorrow, the caw would bet less. As time goes on, the public would bet more and as the public bets more the caw bets more. So the suffering is short term but over time the game grows. You are reducing the percentage of caw money in the pools down to 15 to 20 % (tops-which is ultimately what this game needs) and by reducing the takeout you are make drastic cuts on the the amount of juice the layman pays so they don't feel like they just went through an afternoon of playing 3 card monte.

3. The Gordian Knot here is that the rebates produce so much handle that they override the normal rules of supply and demand. In a normal market, cutting the price raises demand and raising it lowers demand, and you want to set your price based on the elasticity of demand (how price-sensitive the market is). The rebates are a form of price discrimination, which allows sellers to keep the price high. Some price discrimination is pretty harmless, e.g., supermarket coupons allow prices to stay high for most customers while drawing some coupon-cutters.

------------------------------

This was all self created. I was posting about this many years ago. I believe you were arguing the same non sense back then (not sure-I know you are one of the folks I used to argue this subject with). Since then the game has lost far more money than it would have lost initially if they would have just eliminated rebates back then. Of course by now the game would be flourishing, but "smarter" people had better ideas




But the extent of the price discrimination here- the share of the market controlled by rebate players- means that you may not actually be able to raise demand by cutting prices. Which means the too high price continues to draw ordinary horseplayers from the market, which then increases the market share of the rebate shops even more, thus increasing the velocity of the vicious cycle.


---------------------------

Once again the caw isn't going anywhere. You eliminate rebates and they still print money (initially they will bet less and make less) and eventually as the market grows they will get right back to where they are now.



At any rate, given all this, the best that racing can probably do is offer some products that aren't available to the rebate shop and which can attract ordinary players. And we're starting to see some of that. Hopefully we will see more.


----------------------------------------------
Yeah maybe they can follow Woodbine's lead and add the swinger bet. That will save the day.

What does the industry have to lose by doing the right thing? As I said years ago, the status quo cannot work and will not work. Isn't better to try something that might work than accept defeat? If it doesn't work and 2 years down the line they decide they need the caw so than can go broke in 6 years instead of 4 years, you think the caw won't be there to print money. Seriously?

[dilanesp]

Originally Posted by Poindexter

What does the industry have to lose by doing the right thing? As I said years ago, the status quo cannot work and will not work. Isn't better to try something that might work than accept defeat? If it doesn't work and 2 years down the line they decide they need the caw so than can go broke in 6 years instead of 4 years, you think the caw won't be there to print money. Seriously?

I think that thinking in the short term is a malady that plagues business generally and is not unique to horse racing.