NYRA Takeout adjustments being made to accounts.

[OTM Al]

Of course it's not going to be immediate, but the period they were "refunding" from was year three of the change, so in line with the example you give, they should have lost money. Year three is no longer in the land of short term after a change in price. This is the point I've been making. If we believe takeout matters, then it matters for them as well along the same lines it matters for us.

[Charli125]

Originally Posted by OTM Al

Of course it's not going to be immediate, but the period they were "refunding" from was year three of the change, so in line with the example you give, they should have lost money. Year three is no longer in the land of short term after a change in price. This is the point I've been making. If we believe takeout matters, then it matters for them as well along the same lines it matters for us.

Ok, I agree with that. Since it was a long-term thing, they lost money by keeping the takeout high. If they'd lowered it the year prior, then the positive trend could already be happening, and they could have made more money.

That doesn't change the fact that they kept 1% more of the reduced handle than they should have. They took an additional 1% out of the pools.

I think by changing what we're saying from "profit" to "amount withheld" we might be able to agree. In aggregate, they made less profit over those 3 years than if they'd had takeout at the optimal level. This year they withheld 1% too much from their customers. Their customers, by the way, are only NYRA rewards and NYRA on-track players, everyone else should be talking to their ADW's about a refund.

[lamboguy]

the adw that i placed my exotic wagers in was YOUBET.COM. they no longer exist so i guess i am out of luck in my refund. if i had been smart i would have placed my trifecta wagers in the NYRA account wagering division, i would have never had a problem getting a refund.

i am the first to admit it, i am not to smart. i should have thought of these possible math and decimal point problems ahead of time. shame on me!

[PaceAdvantage]

Originally Posted by Robert Goren

I think most people take the word of a reputable business. People had no reason believe that NYRA was not giving them the correct information with regard to the takeout.

Ummmm....they were giving the people the correct info. The takeout rate, as stated in the official track program every day, was exactly what the people were being charged.

[PaceAdvantage]

Originally Posted by lamboguy

i am the first to admit it, i am not to smart. i should have thought of these possible math and decimal point problems ahead of time. shame on me!

Not the ol' shuck and jive routine again...

[Robert Goren]

Originally Posted by PaceAdvantage

Ummmm....they were giving the people the correct info. The takeout rate, as stated in the official track program every day, was exactly what the people were being charged.

So they knew the amount were taking and publicly said so. They just didn't know the what the law allowed? Is that what you are saying? How is that possible?

[lamboguy]

Originally Posted by PaceAdvantage

Not the ol' shuck and jive routine again...

there's no jive here, you got your refund, and i can't get mine. i am sure there are other's here in the same boat.

[cj]

Originally Posted by Robert Goren

So they knew the amount were taking and publicly said so. They just didn't know the what the law allowed? Is that what you are saying? How is that possible?

This has been addressed many times before.

[FenceBored]

Originally Posted by PaceAdvantage

Ummmm....they were giving the people the correct info. The takeout rate, as stated in the official track program every day, was exactly what the people were being charged.

Ummmm...they were telling people they were legally entitled to take that amount. They weren't.

[Rutgers]

Originally Posted by FenceBored

Ummmm...they were telling people they were legally entitled to take that amount. They weren't.

The law clearly states all takeout rates must be approved by the NYSRWB. NYRA was charging the takeout rates that were approved by NYSRWB. They complied with law.

The other thing that is very clear is that the statute only applies to on-track wagers, not ADW’s and other off-track bet takers.

For the most part the rest of that section of the statute is contradictory and ambiguous.

NYRA was in compliance with the earlier version of the statute. The parameters of the statute changed, but the new parameters did not require existing takeout rates to change to meet the new parameters. It has long been established that in similar cases companies and individuals do not have to comply with new parameters, if they were in compliance with the old parameters. Therefore, you can not say the takeout rates were not in compliance with the statute.

And there is nothing in the law, that requires them to pay anybody the difference on the takeout rate charged and the intended takeout rate. So if you do get anything back be thankful. If you did not get anything back, don’t worry about it as you were not entitled to it.

And for what it’s worth:

Three things that I find funny about this whole thing. Nobody commented that the takeout increase in 2008 and the takeout decrease in 2011 did not conform with the law in respect to when changes to takeout rates can occur. (which says a lot about how seriously the legislature and NYSRWB take the statute)

Second, nobody commented on the fact that NY State law established minimum takeout rates. People comment on this board that optimal takeout rate is 10%, but that would be against NY State law, as would Pick 3’s or Pick 4’s with 12% takeout rates. I don’t have a real big problem with establishing takeout maximums, but as a horseplayer I am opposed to laws establishing takeout minimums.

And lastly, this whole issue arose because the state of NY wanted to raise takeout for two years and then lower it, but made no provision in the law to do so. Instead of blaming NYRA, the blame should be pointed in the NY State legislature for over regulating horse racing with poorly written statutes. (and I won’t even comment on the reasoning for the increase.)

[classhandicapper]

Originally Posted by Charli125

I'm completely in agreement with CJ's responses to Al. Long-term, they're going to make less. Short term, they withheld an extra 1%. So short-term, they made more money, which they've now returned. Kudos to them.

I don't think it's humanly possible to know whether they would have made less money long term.

That's what horse players WANT to think because we all want a lower take, but no one knows the optimal rate for track PROFITS. We only know that lowering the take will likely increase the HANDLE and vice versa.

I know I keep repeating myself on this, but some people seem (not you) unwilling to acknowledge and distinguish the difference between handle and profits.

They are two different things.

More importantly, what generates more profit for the track does not necessarily do the same for the government.

Suppose they lowered the take to 10% and the handle increased by enough to more than compensate for the lower tax on bets and the track made a larger profit. That's the good scenario.

However, suppose some of the increased handle came from people that were formerly losing a lot of money on lottery tickets that are now betting on horses but losing less because the take on horses is less than lotteries.

Then the government could be in the hole.

Why would they want to help racing and lose money?

That doesn't even count the times minor tinkering might increase the handle but not by enough to increase profits to the track because some of the excess money returned to horse players was diverted to other forms of entertainment.

No one has to convince me that the government is semi retarded and corrupt. I am 100% sure of that.

But I'm sure over the decades people in government have reviewed the results of various attempts to tinker with the track take and then looked at their own revenue streams.

If it was obvious government could make more by lowering the track take, they would have done it. But it's not obvious because money shifts around from other places where they also get a piece of the pie like lotteries.

Obviously, I'm not advocating higher takes.

But I think the argument for lowering the take is not as clear as horse players are making it out to be. If we want to convince the government and tracks to lower the take, we have to do more than just talk about economic theories and increased track handle. We have to examine the impact on lotteries, illegal betting (where government gets nothing!) etc.. so it's crystal clear that it's in everyone's interests because of PROFITS.

[FenceBored]

Originally Posted by Rutgers

The law clearly states all takeout rates must be approved by the NYSRWB. NYRA was charging the takeout rates that were approved by NYSRWB. They complied with law.

WRONG. The law clearly states that they couldn't charge more than 25% for certain types of wagers. If the NYSRWB told NYRA they could run a no-limit poker table in the paddock area that wouldn't override NY laws that say they can't.

Originally Posted by Rutgers

The other thing that is very clear is that the statute only applies to on-track wagers, not ADW’s and other off-track bet takers.

For the most part the rest of that section of the statute is contradictory and ambiguous.

NYRA was in compliance with the earlier version of the statute. The parameters of the statute changed, but the new parameters did not require existing takeout rates to change to meet the new parameters. It has long been established that in similar cases companies and individuals do not have to comply with new parameters, if they were in compliance with the old parameters. Therefore, you can not say the takeout rates were not in compliance with the statute.

Uh, yes I can. And so can the State of New York, which is why the State is requiring NYRA and the regional OTBs to make restitution to those who wagered with them directly on 3-5 horse exotics. They aren't paying anybody anything on P6's, cause the 26% was still legal on those.

[cj]

Originally Posted by classhandicapper

But I think the argument for lowering the take is not as clear as horse players are making it out to be. If we want to convince the government and tracks to lower the take, we have to do more than just talk about economic theories and increased track handle. We have to examine the impact on lotteries, illegal betting (where government gets nothing!) etc.. so it's crystal clear that it's in everyone's interests because of PROFITS.

I agree with most of what you say. However, the steady rapid decline in handle means something has to be done to try to increase handle. Clearly, raising takeout doesn't work any longer. Also clearly, keeping it the same doesn't help either. If there is any interest in the survival of the sport, somebody is going to have to try something drastic. After all, even stupid politicians can figure out that 26% of nothing is nothing.

[Charli125]

First of all, I agree with the majority of what you wrote. I just have a few clarifications on the below points.

Originally Posted by classhandicapper

I don't think it's humanly possible to know whether they would have made less money long term.

That's what horse players WANT to think because we all want a lower take, but no one knows the optimal rate for track PROFITS. We only know that lowering the take will likely increase the HANDLE and vice versa.

I'm not going to say what optimal takeout is, but I have the handle numbers on my computer at work and I'll post them tomorrow. I'm not just looking at handle, I'm looking at profit as well. And while we can't ever know actual profit numbers because of how handle is split between ADW's, on-track, etc.(and we don't know signal fees), we can look at total takeout and come to some pretty strong conclusions. Tracks, and to be more specific pools, where takeout has been decreased have eventually had enough of an increase in handle to show an increase in total takeout. On the other hand, CA made less profit after their takeout increase.

One of the most important things to me is that we keep reinforcing the fact that takeout changes are not instant. It takes time for both price increases and decreases to have an impact on profitability. Anyone expecting to lower takeout for a month, and make more money, is going to be disappointed.

Originally Posted by classhandicapper

I know I keep repeating myself on this, but some people seem (not you) unwilling to acknowledge and distinguish the difference between handle and profits.

It's a huge point, and it's very important that we show the tracks that they'll make more money once they reach optimal takeout. I don't want them to lower takeout so that I pay less, I want them to lower takeout so that everyone bets more, new players join because the game is now "beatable", and we can actually grow the game.

Not sure what my day's like tomorrow, but I'll try to post actual numbers before lunch.

[Rutgers]

Originally Posted by FenceBored

WRONG. The law clearly states that they couldn't charge more than 25% for certain types of wagers. If the NYSRWB told NYRA they could run a no-limit poker table in the paddock area that wouldn't override NY laws that say they can't.



Uh, yes I can. And so can the State of New York, which is why the State is requiring NYRA and the regional OTBs to make restitution to those who wagered with them directly on 3-5 horse exotics. They aren't paying anybody anything on P6's, cause the 26% was still legal on those.

The section includes the following wording:

“The retention rate to be established is subject to the prior approval of the racing and wagering board.”

Which means NYRA can not change the takeout rate, whether an increase or a decrease, without the prior approval of the NYSRWB.

While the current version of the section does establish a takeout rate of 15-25% for “exotic” wagers, it does not address the fact that the previous version of the section established the takeout at 26% by including any provision requiring NYRA to make a request to the NYSRWB for new takeout rates on “exotic” wagers.

Furthermore, the revised section went into effect on September 15, 2010. But there could not be any rate changes that day because the section includes the following wording:

“Such rate may not be changed more than once per calendar quarter to be effective on the first day of the calendar quarter.”

If the NY legislature wanted to make NYRA change the takeout rates immediately they should have made the effective date October 1, 2010. By making the effective dates on a day when no takeout rates changes could be made (and with no provision requiring them to request new rates), it could be argued that the NYRA “exotics” takeout rate was basically “grandfathered” and NYRA was not required to make any changes.

As I stated before, it is clear that NYRA can only charge takeout rates approved by the NYSRWB, which is what they did. To say the rest of the section of the statute is clear is absurd.

It is actually the NYSRWB (granted it is a state agency) requiring them to pay the customers that were effected and can be identified. However, I am of the opinion that rather then spend time and money defending their actions (or lack thereof) and create possible ill will with the NYSRWB, they opted to just “pay their penalty” and move on, especially since they are finally getting the VLT money.