The 15-30 Takeout Solution. Would it work?

[AndyC]

Originally Posted by Andy Asaro

Exchange wagering is good. Doesn't 12% take WPS and Exactas get you closer to that?

The only way you get positive things done for Gamblers is by force. The Industry would change in less than a month if we could knock down handle by 30% or more at a major track.

Exchange wagering fixes my odds. Lowering the takeout does not. Betting parimutuel is like betting on a coin flip where you are offered 3/2 before the flip but are forced to take 7/10 before the coin hits the ground.

People who advocate closing the windows 2 minutes before post time miss the point. There will still be late betting that changes odds but the late betting will be happening at 2:01 before post. The issue does not get resolved but bettors get pissed off because they get shut out having become accustomed to timing their bets to where the horses are relative to the start of the race.

[Andy Asaro]

Originally Posted by AndyC

Exchange wagering fixes my odds. Lowering the takeout does not. Betting parimutuel is like betting on a coin flip where you are offered 3/2 before the flip but are forced to take 7/10 before the coin hits the ground.

People who advocate closing the windows 2 minutes before post time miss the point. There will still be late betting that changes odds but the late betting will be happening at 2:01 before post. The issue does not get resolved but bettors get pissed off because they get shut out having become accustomed to timing their bets to where the horses are relative to the start of the race.

I agree but we're talking about moving in the right direction. We both know that the Industry isn't investing in the future with the latest technology.

[Parkview_Pirate]

Originally Posted by AndyC

Exchange wagering fixes my odds. Lowering the takeout does not. Betting parimutuel is like betting on a coin flip where you are offered 3/2 before the flip but are forced to take 7/10 before the coin hits the ground.

People who advocate closing the windows 2 minutes before post time miss the point. There will still be late betting that changes odds but the late betting will be happening at 2:01 before post. The issue does not get resolved but bettors get pissed off because they get shut out having become accustomed to timing their bets to where the horses are relative to the start of the race.

The point about locking the wagering early is not to avoid the late avalanche of money that changes the odds.

Locking the wagering early and displaying the odds prior to the start removes all doubt that any "hanky panky" can happen during the running or after the race - in other words, the integrity of the betting system itself is maintained. Personally, I don't think this is that much of a problem, but not everyone is comfortable with the current system, and some believe the pools are changed late.

As for people getting shut out, yes, that can be a source of irritation. But back in the old days, the tote would lock when the first horse was loaded. And even today, you better be on the ball to avoid getting shut out at Woodbine - they launch most races at precisely post time. A period of "adjustment" would be necessary where players would bet early, but a clearly displayed countdown timer to lock up would help avoid some of the shut outs.

[AndyC]

Originally Posted by Parkview_Pirate

....Locking the wagering early and displaying the odds prior to the start removes all doubt that any "hanky panky" can happen during the running or after the race - in other words, the integrity of the betting system itself is maintained. Personally, I don't think this is that much of a problem, but not everyone is comfortable with the current system, and some believe the pools are changed late...

If I thought that there was "hanky panky" I wouldn't bet. I prefer a last second close so that I can view my horse's behavior at the gate. I do know that there is no solution that pleases everybody.

[JohnGalt1]

Do the takeout rates posted for NY and Canada factor in the dime breakage? Collecting $9.70 instead of $9.60 is big plus for win betters.

[ultracapper]

Originally Posted by thaskalos

If the WPS wagers and the exactas were so "efficient" at growing long-term handle and revenue...then the more complicated wagers would have never been introduced, IMO.

How obvious is this point? Every new wager in my lifetime has been to grow handle. Until the past 5 years I'd never heard the term "canabalize pools", which makes me believe those initial introductions of the P3, Trifecta, Superfecta and P6 accomplished attracting new money.

Maybe the betting menu is a little saturated as it is, but major contraction to WPS and exacta by means of pricing other bets out of play seems rather extreme, and counter-productive.

[ultracapper]

Locking the windows early would ultimately be a positive. Even though, if you placed your bet with 5 minutes to post and betting was closed at 2 minutes to post, your odds could go down dramatically in those 3 minutes, you don't feel like your odds got hammered because your horse broke well and others still had access to the pools 10 seconds into the race. That's the big complaint about late odds moves. They happen during the race. Lock the windows at 2 minutes to post, and even though your horse may get hammered late in the betting, you don't feel like it's getting hammered turning for home.

[Mike_412]

I saw exchange wagering mentioned in a previous post. I wish the industry had some foresight along with a willingness to work together years ago and created an industry owned exchange. I'd like to think the cost of a bet could have been kept low, liquidity at this point would have been rather high, and those new bettors racing wants to target would have dipped their toes in the water by now. I probably should have my head examined for thinking this could have been possible considering post time coordination in 2017 seems to be a foreign concept.

As far as Mr. Pricci's article, he lost me the minute 30% takeout was mentioned. No thanks.

I love this sport but my biggest frustration with it from a gambling perspective is what racing is vs. what it could (and should) be.

[Seabiscuit@AR]

There is some merit to Pricci's proposal

Rebate players bet some pools more than others. Target these pools most frequented by rebaters for big takeout increases to offset their rebates and then cut the takeout in the other pools less frequented by rebate players. Not a bad idea

Exchange wagering would be the best overall solution however. Parimutuel betting is nearing the end of its life

[Dave Schwartz]

15-30?

It seems like that was where we WERE years ago.

15.33% was too much when Santa Anita was charging that 3 decades back and they were one of the lowest!

Horse racing is FAILING because they are just not competitive.

The tax is just too high.

They say that we need to see horse racing as "entertainment," sort of like a movie. But that metaphor breaks down fast because it doesn't cost $100s to go to a movie and nobody goes (especially at that price) three times a week.

As someone said in another thread, the fact that it costs racing too much to put on the show does not cause the customer to say, "Oh, okay. I'll just pay more."

The reason they are in this mess is because they did not grow the sport as the other sports did back in ESPN revolutionary days. That is because management was not willing to sell their signal for a reasonable fee.

So, all the other sports have video revenues and horse racing does not.

Remember that until 1986, horse racing was the #1 spectator sport in the world; even higher than soccer.


Amazingly, horse racing once had higher handle than the NFL!

The title from this article from Forbes says it all. Thanks To Roger Goodell, NFL Revenues Projected To Surpass $13 Billion In 2016

This article in Blood Horse says that racing's handle was just under $11b in 2016.

So, today it is NFL $13b and horse racing $11b. It is only a few years ago that racing was at $14b.

[AndyC]

Originally Posted by Seabiscuit@AR

.......Rebate players bet some pools more than others. Target these pools most frequented by rebaters for big takeout increases to offset their rebates and then cut the takeout in the other pools less frequented by rebate players. Not a bad idea.....

So let's say a rebate player is getting 10% in the trifecta pools and a track raises their rate from 23% to 30%. What would you expect the rebate player to do? Bet the same amount? Quit betting? Or ask for a higher rebate? Clearly rebate players are generally smart players so I doubt that they would continue betting the same amount. Not betting trifectas would be a disaster for both the track and the ADWs. Giving bigger rebates would not work given the razor thin margins that they operate on. The ADWs would go back to the tracks and request a bigger piece of the trifecta pie. So targeting rebate players favorite bets may not exactly be the answer.

[Andy Asaro]

Twitter

[Jeff P]

Because different bets have different demand curves/elasticity values.

Example:

Historically, show pools have a lower demand curve than both place and win.

Yet almost universally (at the same track) all three pools (win place and show) have identical takeout rates.

One could make a strong argument that handle data suggests tracks could maximize revenue and purses by experimenting with takeout rates in an effort to seek an optimal pricing level for each pool separately.

Imo, Oaklawn demonstrated this with their on track show pool bonus during their 2017 meet.


-jp

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[AltonKelsey]

I don't think it has ANYTHING to do with demand curves.

They traditionally imposed higher takeouts on exotics because they assume horseplayers are idiots and would not notice the rake off a much higher average DD , EXACTA, TRI , SUPER payoff.


This recent P5 lower takeout is going in the opposite direction, for whatever reason. Promotional value would be my guess.

There's actually ZERO justification for a single race bet (ex,tri,super) to have a higher takeout.

Multi race, I can see, as you are getting, at least if you are alive after a leg, more than once race worth of action for the bet. Less churn for the track.

The only curve they care about is your money curving into their pocket.

[toddbowker]

Originally Posted by AndyC

So let's say a rebate player is getting 10% in the trifecta pools and a track raises their rate from 23% to 30%. What would you expect the rebate player to do? Bet the same amount? Quit betting? Or ask for a higher rebate? Clearly rebate players are generally smart players so I doubt that they would continue betting the same amount. Not betting trifectas would be a disaster for both the track and the ADWs. Giving bigger rebates would not work given the razor thin margins that they operate on. The ADWs would go back to the tracks and request a bigger piece of the trifecta pie. So targeting rebate players favorite bets may not exactly be the answer.

Assuming the track didn't raise the host fee, the high volume rebate player in most cases would be getting 17% and not the same 10% (at least they would at PTC). Their effective takeout rate would be the same (13%).

If the track raised the host fee, then the high volume player's effective takeout rate would go down. There would be a possibility that their wagering on that track/pool would decrease, or they would try to find another ADW with a better deal.

The proliferation of the multi-race bets kills churn. Using a P4 or P5 as a track's low takeout "promotion" bet is a mistake IMO because there is too much money tied up for too long a time. If a track wants to do a promotional rate, it's far better to use a single race bet that is easier to hit (WPS, EX or maybe a TRI), or if you have to, the DD.

These bets were only put in during the time when the industry thought they could compete with the lottery if they had "jackpot" sized payoffs. It was compounded by the carryover Pick(n) bets (I know, my bad, I wrote the rules for the first one in the US in Ohio for Beulah Park). Look at how much money gets tied up for weeks/months/entire meets. That's money that could be churning every day which is instead sitting around doing nothing.