Must read HRN: Gamblers say stop the cheating and lower the takeout or else

[classhandicapper]

Originally Posted by Track Phantom

Reminds me a gambling story.

Bettor bets with a bookie and loses all NFL season long. After that, he hardly cashes a bet on NBA basketball. It's not much better on college hoops. Finally, MLB rolls around and he gets killed. Bookie says to the bettor. "You might want to try hockey". Bettor responds "Hockey? What the hell do I know about hockey"?

[Poindexter]

I think the big issue with takeout is that the idea is that less takeout means everyone does better. I don't think that is necessarily true. I think in todays game the caw/high rebated bettors will continue to do their thing.

My understanding it is sort of a secret what different players get for rebates. Maybe one team bets 20 million a year and gets this set of rebates and another team bets 100 million a year and gets that set of rebates. Maybe I am dead wrong. All you can do to figure out how takeout will affect other players is know what these teams are doing pre-rebate. If a team bets 100 million a year loses 5% betting into the pools but gets 10% in rebates they make 5 million a year profit. But not all pools are treated the same. Maybe the make 4 of the 5 million in highly rebated pools like trifectas or superfectas and they sort of hold their own on the rest.

Racing knows how much these groups are putting in to the pools and how much they are leaving in. The rest is simple math. If the pool has a 15% take(like a win pool) and they know these teams in total are losing 1% (or 4% or whatever) with their action and are betting 30% of the pool, it is easy for them to figure out how much the public is losing and how much a take out reduction might move the gauge. My guess is as long as rebates remain a big part of the equation, general players will not really benefit from takeout reductions very much. Thus the reason that you don't really see takeout reductions. Either racing puts their hopes in all players or just a few. They have chosen a few and for whatever reason it works for them. For the masses this game is entertainment with a hefty price. That is reality. But keep in mind that the teams that are dropping 10k win bets at post time have a fairly good idea what they will get back while joe Public with his $20 win bet is not sure if he is getting back 5/2 or 6/5. That fact alone speaks volumes because it tells you that the small bettor has no say in how much he will bet back on any given bet while big bettors/teams seem to have it all figured out (at least over the long haul).

Honestly I am way past caring about this subject. If racing thinks they have the winning formula and that gamblers are thrilled with losing 25% to 45% of every dollar they bet, who am I to argue. They have been banking on this losing formula for like 30 years now. If they haven't figured out that it is bad model by now, I have to assume that it is taking them down a road they want to travel. I hold no delusions that this game is changing in any significant way anytime soon. My guess is this game become whale vs whale long before any significant changes are made.

[the little guy]

Originally Posted by Poindexter

I think the big issue with takeout is that the idea is that less takeout means everyone does better. I don't think that is necessarily true. I think in todays game the caw/high rebated bettors will continue to do their thing.

My understanding it is sort of a secret what different players get for rebates. Maybe one team bets 20 million a year and gets this set of rebates and another team bets 100 million a year and gets that set of rebates. Maybe I am dead wrong. All you can do to figure out how takeout will affect other players is know what these teams are doing pre-rebate. If a team bets 100 million a year loses 5% betting into the pools but gets 10% in rebates they make 5 million a year profit. But not all pools are treated the same. Maybe the make 4 of the 5 million in highly rebated pools like trifectas or superfectas and they sort of hold their own on the rest.

Racing knows how much these groups are putting in to the pools and how much they are leaving in. The rest is simple math. If the pool has a 15% take(like a win pool) and they know these teams in total are losing 1% (or 4% or whatever) with their action and are betting 30% of the pool, it is easy for them to figure out how much the public is losing and how much a take out reduction might move the gauge. My guess is as long as rebates remain a big part of the equation, general players will not really benefit from takeout reductions very much. Thus the reason that you don't really see takeout reductions. Either racing puts their hopes in all players or just a few. They have chosen a few and for whatever reason it works for them. For the masses this game is entertainment with a hefty price. That is reality. But keep in mind that the teams that are dropping 10k win bets at post time have a fairly good idea what they will get back while joe Public with his $20 win bet is not sure if he is getting back 5/2 or 6/5. That fact alone speaks volumes because it tells you that the small bettor has no say in how much he will bet back on any given bet while big bettors/teams seem to have it all figured out (at least over the long haul).

Honestly I am way past caring about this subject. If racing thinks they have the winning formula and that gamblers are thrilled with losing 25% to 45% of every dollar they bet, who am I to argue. They have been banking on this losing formula for like 30 years now. If they haven't figured out that it is bad model by now, I have to assume that it is taking them down a road they want to travel. I hold no delusions that this game is changing in any significant way anytime soon. My guess is this game become whale vs whale long before any significant changes are made.

If takeout goes down, all rebates go down a similar amount.

[Poindexter]

Let's say we had just one takeout reduction. wps went from 15% to 12%.

My understanding is that currently at somewhere like nyra or Santa Anita, a big group(or all the big groups and sharps in aggregate) might be getting a 6% rebate and losing 3 %. Assuming that is correct, 40% of the pool is going to lose 3 % or 1200 on a 100k pool. Since the takeout is 15% the total takeout is 15 k, in which the whales/sharps contribute 1200 on there 40 k bet and the public pays $13,800 on their 60k bet. That means the public would be losing 23% on a -15% pool. Now if racing brought the takeout to 12% instead of 6% rebates and losing 3%, I assume the math for whales adjusts to maybe breakeven with a 3% rebate. Assuming the same amount bet, for their 40 k they break even for the publics 60 k they lose 12,000 and thus the public goes from losing 23% on the current 15% pool to 20% on a 12% takeout pool. Now obviously 20% is better than 23% but does that mean it is in racing's interest to sacrifice 3% of pure profit to move the takeout 23% to 20% on the general public (and that doesn't even account for breakage and higher takeouts on exotics). That is the point I am making. The public will still get crushed and racing will just make less money. The numbers are obviously hypothetical, I do not believe they are that far off however from what I have read in the past.

I just feel like racing has to have a competive starting point in this day and age. No rebates, maybe 10 % wps, 12% exotics, 15% super exotics, numbers where the general public will still get the worst of it, just not to point that they are losing 30/40 even 50%(depending on the pool) bet in and bet out under the blanket of entertainment. I could be wrong, but do not believe losing money with that velocity can ever truly be deemed entertainment, unless you have so much money you do not know what to do with it. Even those people can now bet 20 k on a football game or lose $500 a hand on the blackjack table, so it is not like they need the action anymore.

[The_Turf_Monster]

Originally Posted by lamboguy

not saying you are wrong, but what right does the customer have to tell the business what to do. if you don't like the game, just don't play it and go to something else. you don't need writeups, boycotts or protests, just take a hike.

Completely agreed. Don’t like a certain trainer’s ethics? Don’t play a race he or she has an entry in. Don’t like a track’s stewards? Don’t play that track. Don’t like a jockey colony? Play a different circuit. The list goes on. Don’t like the way racing in general operates? Go bet something else

[acorn54]

Originally Posted by The_Turf_Monster

Completely agreed. Don’t like a certain trainer’s ethics? Don’t play a race he or she has an entry in. Don’t like a track’s stewards? Don’t play that track. Don’t like a jockey colony? Play a different circuit. The list goes on. Don’t like the way racing in general operates? Go bet something else

i think a parallel can be made with the cigarette market, when the cost to the consumer increases, eventually only the die - hard addicts remain.

[Andy Asaro]

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[Andy Asaro]

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[lamboguy]

Originally Posted by The_Turf_Monster

Completely agreed. Don’t like a certain trainer’s ethics? Don’t play a race he or she has an entry in. Don’t like a track’s stewards? Don’t play that track. Don’t like a jockey colony? Play a different circuit. The list goes on. Don’t like the way racing in general operates? Go bet something else

i knew a guy that had a pizza joint. he did very well for years, then he decided to get cute and switched the type of cheese and tomato sauce that he used to save money. after a while people caught on and stopped buying pizza. he went back to the way he was making his pizzas. too late, the corona hit, and the old customers he had gone to other places that delivered good pizza and he never got them back. the same thing is now about to happen with horseracing. people can't take the drastic odds changes, so they stop playing horses and move on to sports. in sports you own your line once you buy your ticket. in horseracing you are subject to changes after the race starts.

[classhandicapper]

Maybe I'm misunderstanding something, but the high rebates for whales don't have a direct impact on the bottom line of other players as is often suggested.

It's indirect.

What impacts players is that the whales are generally smart money.

They are very good at finding inefficiencies in the pools and correcting them. That makes it more difficult for non rebate players to find pure overlays and small rebate players to find prices close enough to break even to make a profit.

The larger the percentage of smart money, the more efficient the pools become, the rougher the game becomes.

The large rebates themselves are not changing how much everyone else is losing.

What can be argued is that if we can afford to give large rebates to some players, that means we can afford to eliminate rebates altogether and cut the take for everyone instead.

How that would work out for the tracks is another issue.

[the little guy]

Here's how to say the exact same thing in MANY less words....

Large bettors that lose significantly less than the takeout raise the effective takeout for everyone else.

It's not that complicated.

[classhandicapper]

Originally Posted by the little guy

Here's how to say the exact same thing in MANY less words....

Large bettors that lose significantly less than the takeout raise the effective takeout for everyone else.

It's not that complicated.

That's not the subtle point I was addressing.

Some people think the "large rebate itself" is causing other players to lose more money. They are assuming that if the whales win more because of rebates everyone else must be losing more. That's not the case. The rebate money is coming out of the track's pockets. The large rebate itself is a business decision between the track and whales that does not impact the prices everyone else is getting unless it ups the volume of the smartest players.

[cj]

Originally Posted by classhandicapper

That's not the subtle point I was addressing.

Some people think the "large rebate itself" is causing other players to lose more money. They are assuming that if the whales win more because of rebates everyone else must be losing more. That's not the case. The rebate money is coming out of the track's pockets. The large rebate itself is a business decision between the track and whales that does not impact the prices everyone else is getting unless it ups the volume of the smartest players.

Unless I'm missing something, the bolded part is exactly what rebates do.

[classhandicapper]

Originally Posted by cj

Unless I'm missing something, the bolded part is exactly what rebates do.

I agree, but I've seen a lot of people do the calculations incorrectly.

They say something along these lines.

Whale loses 5%, gets 10% rebate, profits 5%.

Then they'd say that entire +5% comes out of the pockets of everyone else. That's not true. The 10% rebate came out of the track's pocket. The difference between the track take and the lost 5% is what makes it harder for the rest of us. You and I make it harder for everyone else too.... at least most of the time.

[AndyC]

Originally Posted by the little guy

Here's how to say the exact same thing in MANY less words....

Large bettors that lose significantly less than the takeout raise the effective takeout for everyone else.

It's not that complicated.

Any player that loses significantly less than the track take raises the effective takeout for everyone else. Obviously large bettors have a greater impact.