Churchill Downs raising takeout

[whodoyoulike]

Originally Posted by AndyC

... The reason some business schools really suck is because they teach crap like "the customer is always right". Nothing could be further from the truth. A good business person treats their customers with respect but sometimes they need to artfully explain to them how they may not be right.

I disagree with these comments. Personally, I do not patronize any business who doesn't treat me with respect. There are always alternatives even though they aren't of the same quality.

[AndyC]

Originally Posted by whodoyoulike

I disagree with these comments. Personally, I do not patronize any business who doesn't treat me with respect. There are always alternatives even though they aren't of the same quality.

I'm confused. You said you disagree with my comments because I said the following:" A good business person treats their customers with respect..."

I said that there are many times the customer is not right. If a customer tries to walk out of a store without paying for an item and the front door guard stops them should the guard just accept a statement from the customer that they paid for the item? After all the customer is always right.

[Dave Schwartz]

Originally Posted by AndyC
... The reason some business schools really suck is because they teach crap like "the customer is always right". Nothing could be further from the truth. A good business person treats their customers with respect but sometimes they need to artfully explain to them how they may not be right.

I would amend that to say, "The customer is never wrong."

Not exactly the same thing.

I said that there are many times the customer is not right. If a customer tries to walk out of a store without paying for an item and the front door guard stops them should the guard just accept a statement from the customer that they paid for the item? After all the customer is always right.

I think you are confusing "customer" with "criminal."

[Tom]

He might not always be right, but he is always the customer.
A fact totally lost on some tracks.

[AndyC]

Originally Posted by Dave Schwartz

I would amend that to say, "The customer is never wrong."

Not exactly the same thing.




I think you are confusing "customer" with "criminal."

You can be both a customer and a criminal at the same time. But I made a ridiculous example illustrate my point.

Of course the customer can be wrong. They are never wrong regarding their opinions but they can certainly be wrong about facts.

[Stillriledup]

Originally Posted by DeanT

Looking at purses paid out I would guess a few hundred thousand, maybe a little more.

It's irrelevant though. Price changes aren't looked at as a success or failure over a short period. Steve Wynn could raise slot take 3% for a month and make more money. But he knows his customers would slowly get ground down, and it would be a negative revenue tactic over time. Bean counting over a month or a quarter or a meet when your customers are annuities is specious.

To add to this point a bit, i think racing is a bit different in the sense that Steve Wynn's customer is someone who's physically in a casino owned by Wynn. That person drove to the physical location, parked their car, said hello to the doorman that they know by first name, probably are staying in the rooms they are renting and have some sort of emotional attachment to the casino and are likely to be back and are likely to spend most or all of their alloted budget within the walls of a Wynn owned casino.

In racing, if CD raises their take, they might be making extra money on some guy who's in Grand Island Nebraska betting on 7 different tracks and CD happens to be the next race up to bet. Plenty of money that's bet on CD's races are bet by "non customers" people who, if they didn't bet the first at CD, might instead bet the first at Belmont, or the 3rd at Parx.

Its a little different but your general premise is correct, someone like Wynn wants to get the money from their slots players slower because they know they're going to get it anyway and they want the player to "enjoy" the losing and you enjoy losing more if you can spend 3 hours losing instead of 1.

[Poindexter]

Originally Posted by AndyC

I am not sure I follow your logic. If the bets (because of the takeout) are so bad that a rebate player won't play, how can this be good for a non-rebate player? The Rainbow 6 chased away the big players (for the most part) and the regular players were rewarded by being allowed to play in the 52% takeout pool all by themselves.

Without the whales the everyday players will still have the track take collectively removed from their bankrolls. If they can withstand the higher collective takeout by allocating more of their personal funds to betting then everything will be hunky-dory.

This is a short explanation I gave in another post that sort of drives the point home about why rebating sharps/whales drives up the takeout on the general public. I have discussed it numerous times so I do not want to bore everyone with it again.


Regarding Whales. Here it goes. Local Downs has a 16% take on $100,000 bet by the locals. Then at the last minute they accept $40,000 by some whales. The Whales lose about 3% pre rebate but get a nice 6% rebate. So of the $40,000 they bet they lose $1200. However, their $40,000 bet requires 16% or $6400 removed from the pool for Takeout. Where does that extra $5200 come from? Everybody else, of course. So instead of losing 16% collectively, the locals now lose 21.2% collectively.

The rainbow six is a completely different topic and was ultimately won by a guy who put $15,000 into it and is so rich that the $15,000 is like 5 bucks to the masses relatively speaking. The goal of the wager is not to drive out large bettors, but to be able to say that you can win 2 million or 3 million dollars today if you are lucky.......It is just a marketing gimmick that has long term negative consequences on the sports customer base(which I doubt anyone involved in the sport cares about or has even thought about).

[Stillriledup]

Originally Posted by Poindexter

This is a short explanation I gave in another post that sort of drives the point home about why rebating sharps/whales drives up the takeout on the general public. I have discussed it numerous times so I do not want to bore everyone with it again.


Regarding Whales. Here it goes. Local Downs has a 16% take on $100,000 bet by the locals. Then at the last minute they accept $40,000 by some whales. The Whales lose about 3% pre rebate but get a nice 6% rebate. So of the $40,000 they bet they lose $1200. However, their $40,000 bet requires 16% or $6400 removed from the pool for Takeout. Where does that extra $5200 come from? Everybody else, of course. So instead of losing 16% collectively, the locals now lose 21.2% collectively.

The rainbow six is a completely different topic and was ultimately won by a guy who put $15,000 into it and is so rich that the $15,000 is like 5 bucks to the masses relatively speaking. The goal of the wager is not to drive out large bettors, but to be able to say that you can win 2 million or 3 million dollars today if you are lucky.......It is just a marketing gimmick that has long term negative consequences on the sports customer base(which I doubt anyone involved in the sport cares about or has even thought about).

But if the takeout is 16%, they lose 16%, not 21.2.

The extra money comes from the rebate shop's "cut" of the profits, not from other bettors.

[Poindexter]

Originally Posted by Stillriledup

But if the takeout is 16%, they lose 16%, not 21.2.

The extra money comes from the rebate shop's "cut" of the profits, not from other bettors.

I think we have had this discussion before.


The one thing I know for sure is that I will never convince you SRU.

[AndyC]

Originally Posted by Poindexter

This is a short explanation I gave in another post that sort of drives the point home about why rebating sharps/whales drives up the takeout on the general public. I have discussed it numerous times so I do not want to bore everyone with it again.


Regarding Whales. Here it goes. Local Downs has a 16% take on $100,000 bet by the locals. Then at the last minute they accept $40,000 by some whales. The Whales lose about 3% pre rebate but get a nice 6% rebate. So of the $40,000 they bet they lose $1200. However, their $40,000 bet requires 16% or $6400 removed from the pool for Takeout. Where does that extra $5200 come from? Everybody else, of course. So instead of losing 16% collectively, the locals now lose 21.2% collectively.

The rainbow six is a completely different topic and was ultimately won by a guy who put $15,000 into it and is so rich that the $15,000 is like 5 bucks to the masses relatively speaking. The goal of the wager is not to drive out large bettors, but to be able to say that you can win 2 million or 3 million dollars today if you are lucky.......It is just a marketing gimmick that has long term negative consequences on the sports customer base(which I doubt anyone involved in the sport cares about or has even thought about).

To sum up your point. The smart bettors do better than the not-so-smart bettors. If all of the not-so-smart bettors were given rebates equivalent to the smart bettors they would still be the biggest losers.

[Stillriledup]

http://www.bloodhorse.com/horse-raci...ill?source=rss

[Poindexter]

Originally Posted by AndyC

To sum up your point. The smart bettors do better than the not-so-smart bettors. If all of the not-so-smart bettors were given rebates equivalent to the smart bettors they would still be the biggest losers.

That is not my point at all. Smart bettors will always do bettor the not so smart bettors. If racing saw the light and lowered takeout on straight betting to 8% and on exotics to say 13% and eliminated rebates, there would still be sharps and whales betting large amounts of money. The difference is that they would now have to crossover into the profit threshold. They would not be able to bet $50,000 into a pool at -3%(with a 6% rebate), they might bet $20,000 into a pool at +3%. They are still going to make money, not so smart bettors will continue to lose money, it is just that the whales will bet less, and make less, while the everyday better will through increased churn eventually bet more(whales will eventually be able to bet more as handles increase). The effective take on the rest of the public would be dramatically less and the game would actually have a chance to grow instead of fizzle away. A lot of serious players that now require a rebate to stay in the game, might actually start grinding 2 or 3 percent profit, while the very sharp will likely do a lot better, unless there methodology is completely opposed to the whales/sharps.

Regarding your point about the not so smart bettors will always do worse even with rebates. So what? At least they will lose at a rate that is more comfortable to them and may actually enjoy the game a lot more if there life isn't spent trying to come up with a couple of hundred dollars so they can donate at the track at a 25 or 30% clip. If you want to grow the sport, make it fun. Losing at a 25 or 30 clip is not fun to anybody and will eventually drive away most recreational players(I believe they already have). That is why this sport continues to suffer. This sport is a hundred time more fun(so many variable, so many possibilities so many ways to attack the games.....) than any other form of gambling yet takes a back seat to every other form of gambling. I wonder why? It is not past posting and drugs.

[Stillriledup]

Originally Posted by Poindexter

That is not my point at all. Smart bettors will always do bettor the not so smart bettors. If racing saw the light and lowered takeout on straight betting to 8% and on exotics to say 13% and eliminated rebates, there would still be sharps and whales betting large amounts of money. The difference is that they would now have to crossover into the profit threshold. They would not be able to bet $50,000 into a pool at -3%(with a 6% rebate), they might bet $20,000 into a pool at +3%. They are still going to make money, not so smart bettors will continue to lose money, it is just that the whales will bet less, and make less, while the everyday better will through increased churn eventually bet more(whales will eventually be able to bet more as handles increase). The effective take on the rest of the public would be dramatically less and the game would actually have a chance to grow instead of fizzle away. A lot of serious players that now require a rebate to stay in the game, might actually start grinding 2 or 3 percent profit, while the very sharp will likely do a lot better, unless there methodology is completely opposed to the whales/sharps.

Regarding your point about the not so smart bettors will always do worse even with rebates. So what? At least they will lose at a rate that is more comfortable to them and may actually enjoy the game a lot more if there life isn't spent trying to come up with a couple of hundred dollars so they can donate at the track at a 25 or 30% clip. If you want to grow the sport, make it fun. Losing at a 25 or 30 clip is not fun to anybody and will eventually drive away most recreational players(I believe they already have). That is why this sport continues to suffer. This sport is a hundred time more fun(so many variable, so many possibilities so many ways to attack the games.....) than any other form of gambling yet takes a back seat to every other form of gambling. I wonder why? It is not past posting and drugs.

So the whales who are betting large amounts of money without rebates (if your idea came true and rebates were eliminated) would be depressing their own odds, while the small fish were getting full track price. A whale betting 2k to win on a 10-1 shot may knock that horse down to 8-1, but a minnow betting 20 bucks on a 10-1 shot gets 10-1. How is that fair?

[AndyC]

Originally Posted by Poindexter

So what? At least they will lose at a rate that is more comfortable to them and may actually enjoy the game a lot more if there life isn't spent trying to come up with a couple of hundred dollars so they can donate at the track at a 25 or 30% clip.

Not to be a smart ass, but I didn't realize there was a comfortable and uncomfortable rate of losing.

I don't know about you but if I feel the rate is too high and I can't win or be "comfortable" losing, I don't bet. If you want to grow the game teach people to be smarter bettors and not to be a comfortable loser.

[Poindexter]

Originally Posted by Stillriledup

So the whales who are betting large amounts of money without rebates (if your idea came true and rebates were eliminated) would be depressing their own odds, while the small fish were getting full track price. A whale betting 2k to win on a 10-1 shot may knock that horse down to 8-1, but a minnow betting 20 bucks on a 10-1 shot gets 10-1. How is that fair?

Who cares? Now you are bringing up the F word(fair)? That is prohibited at PA. The game is parimutuel. They can only bet as much as the pool will allow to not drive the odds below where they need it to be. If tracks did things properly from the beginning pools would be huge now, but since they did not they would have to grow the game all over again. Whales will be able to bet as much as they are able to bet. But as I mentioned, as people get more money back, more people stay interested in the game, more people become larger bettors because they are now able to win pools grow and whales will be able to bet more. It is a process. It doesn't happen in a day. Which is why it will never happen, because nobody that matters in this industry has the right vision and none of the bean counters will ever have the patience to wait it out.