Keeneland apparently raising takeout

[Afleet]

Originally Posted by GMB@BP

For those that bet solid money in this sport...

why do you do it?

I personally stopped a ways back, never could get past the break even point despite being pretty good at the game. With the straight up mathematics I am just wondering what is the attraction from a gambling perspective?

I'm starting to think I have an addiction. I rationalize it by saying I'm part of the industry now, so I need to support it (partners in a few broodmares and a partner in at least 20 thoroughbreds over the years). If you have ever hit a pick 6 that rush is hard to explain.

[Jeff P]

When Matt asked me about Churchill's numbers, for some reason I remembered - and mentioned - seeing the hit to income from racing operations on their YE 2014 financials.

What I failed to remember and mention during the interview is that Churchill announced some significant purse cuts too.


-jp

.

[Afleet]

Originally Posted by Jeff P

When Matt asked me about Churchill's numbers, for some reason I remembered - and mentioned - seeing the hit to income from racing operations on their YE 2014 financials.

What I failed to remember and mention during the interview is that Churchill announced some significant purse cuts too.


-jp

.

Why didn't you bring up the Oaklawn show pool cut-handle increased significantly. That would have thrown a wrench in his statement that lowering take never increases handle. Canterbury is a bad example-they were running quarter horses last year for 2-3 races per card-nobody bets quarter horses

[lamboguy]

it doesn't bother me one bit with what Keenland just did. i rather play Penn National and Mountaineer over them every day of the week. i like the racing better in those 2 places even though they don't have the superstars of the sport there.

[AndyC]

Originally Posted by highnote

......Now, you might think there is more value in larger fields at tracks with higher takeouts, but another bettor with your same ability who bets at track with small fields and a lower takeout will end up with more money than you in the long run, all else being equal.

Would you say that a bettor with equal ability would win more at a track with large fields and the SAME takeout rate than a bettor at a track with smaller fields and the same takeout rate?

Originally Posted by highnote

It is a matter of preference to bet into a larger or smaller field, but the mathematical laws don't change based on a preference.

Here is a math question for you. Would I make more money betting on horses whose actual probability of winning is 33% but whose odds are 7/2 or on horses whose probability of winning is 33% with odds of 3-1?

[Afleet]

Originally Posted by lamboguy

it doesn't bother me one bit with what Keenland just did. i rather play Penn National and Mountaineer over them every day of the week. i like the racing better in those 2 places even though they don't have the superstars of the sport there.

Even w/all their cheating? Do you play trifectas? 30% take-ouch

[Jeff P]

Originally Posted by Afleet

Why didn't you bring up the Oaklawn show pool cut-handle increased significantly. That would have thrown a wrench in his statement that lowering take never increases handle. Canterbury is a bad example-they were running quarter horses last year for 2-3 races per card-nobody bets quarter horses

Pretty simple:

He never asked me to comment on Oaklawn.

He asked me to comment on Kentucky Downs. And I did. (Handle at Kentucky Downs has more than tripled since the year they lowered exacta takeout.)

During the interview I don't recall him ever saying to me that lowering takeout never increases handle.

Had he done so I would have mentioned Tampa Bay Downs.

They basically doubled their average daily handle by making small incremental changes to takeout rates over a nine year period.

From the HANA Blog |Tuesday, November 8, 2011|
Tampa Bay Downs Lowers Takeout (again), New 15% pick 5 and Trackus Added:
http://blog.horseplayersassociation....out-again.html

Back in 2001, they handled approximately $1.8 million per day, now they handle over $4.2 million per day. During that same time, handle overall in North America has fallen precipitously.

-jp

.

[highnote]

Originally Posted by thaskalos

Do you suppose that these tracks will LOWER their takeouts...if I withdraw this "permission" that I've given them to raise them?

You specifically? No. LOL

Every valuebettor. Yes.

Withdrawing your permission means to refrain from betting on their product.

[highnote]

Originally Posted by AndyC

Would you say that a bettor with equal ability would win more at a track with large fields and the SAME takeout rate than a bettor at a track with smaller fields and the same takeout rate?

No. What I would say is that if they are of equal ability they will win the same amount.

A 3-1 horse in a large field has the same chance of winning as a 3-1 in a small field. There is an academic term for having the perception that their chances of winning are different, but I can't think of it off the top of my head.

Originally Posted by AndyC

Here is a math question for you. Would I make more money betting on horses whose actual probability of winning is 33% but whose odds are 7/2 or on horses whose probability of winning is 33% with odds of 3-1?

It depends. If you lose every bet you make at 7/2 and win every bet you make at 3/1 you will win more by betting on the horse with lower odds.

If your strike rate is 33% no matter which one you bet on then you will make more by betting on the 7/2 shot.

However, even if you strike rate is the same at both odds level, if you over bet at 7/2 and under bet at 3/1 you might lose more at 7/2 than at 3/1.

IF your TRUE chance of winning is 33% then you have a 67 chance of losing. 67/33 equals the true odds of a little over 2/1. This example does not include the effect of takeout. Your payoff will be less if the takeout is 17.5% versus 15% -- no matter how large or small the field.

Optimal bet size is a function of the odds, the chance of winning, and your betting wealth. The Kelly Criterion states that the optimal bet size is (Edge divided Odds) times your Bankroll.

If you have a $1,000 bankroll, and your edge is 10%, and the odds are 3/1 then your optimal bet is (0.10/3) x 1000~= $33.

You will often hear people say that 4% of your betting wealth is a good approximation. The truth is, by blindly betting 4% of your wealth you could be overbetting or underbetting.

[GMB@BP]

I have not followed your posts highnote but they are very good...

[highnote]

Originally Posted by GMB@BP

I have not followed your posts highnote but they are very good...

THANKS! I learned from the best:

https://chatwithtraders.com/ep-137-dr-william-ziemba/

By the way GMP -- there is going to be a total eclipse of the sun on August 21. Will the dark side of the moon be dark during the eclipse?

[ReplayRandall]

Originally Posted by highnote

No. What I would say is that if they are of equal ability they will win the same amount.

A 3-1 horse in a large field has the same chance of winning as a 3-1 in a small field. There is an academic term for having the perception that their chances of winning are different, but I can't think of it off the top of my head.




It depends. If you lose every bet you make at 7/2 and win every bet you make at 3/1 you will win more by betting on the horse with lower odds.

If your strike rate is 33% no matter which one you bet on then you will make more by betting on the 7/2 shot.

However, even if you strike rate is the same at both odds level, if you over bet at 7/2 and under bet at 3/1 you might lose more at 7/2 than at 3/1.

IF your TRUE chance of winning is 33% then you have a 67 chance of losing. 67/33 equals the true odds of a little over 2/1. This example does not include the effect of takeout. Your payoff will be less if the takeout is 17.5% versus 15% -- no matter how large or small the field.

Optimal bet size is a function of the odds, the chance of winning, and your betting wealth. The Kelly Criterion states that the optimal bet size is (Edge divided Odds) times your Bankroll.

If you have a $1,000 bankroll, and your edge is 10%, and the odds are 3/1 then your optimal bet is (0.10/3) x 1000~= $33.

You will often hear people say that 4% of your betting wealth is a good approximation. The truth is, by blindly betting 4% of your wealth you could be overbetting or underbetting.

Highnote, you seem like an OK type of guy when you post, however, you missed Andy C's point by a country mile. I have no idea what you just posted above, as it has no relevance or meaning to what Andy was conveying about field size and long-term value....I enjoy your stock market posts, you seem to have better insight in that arena.

[highnote]

Originally Posted by ReplayRandall

Highnote, you seem like an OK type of guy when you post, however, you missed Andy C's point by a country mile. I have no idea what you just posted above, as it has no relevance or meaning to what Andy was conveying about field size and long-term value....I enjoy your stock market posts, you seem to have better insight in that arena.

I probably did miss it. I never claimed to be the most perceptive guy on the forum. I guess I tend to take everyone at face value.

So what's his point?

[highnote]

Originally Posted by Andy Asaro

http://www.drf.com/news/keeneland-ta...se-out-players

I had the good fortune to be able to have dinner with Chris Scherf several years ago at a TRA convention. He is very bright and understands the issues in racing better than most.

Haggerty, in his DRF article, quotes Scherf:

“In an ideal world, takeout rates should be lower,” Scherf said. “I absolutely believe that. But if you look at what happens in the real world, I don’t know if you can jump off that cliff. If you’re the one that makes that mistake, it’s pretty clear the next guy won’t.”

Scherf hit the nail on the head. Fear. The decision makers are afraid to lower rates out of fear that handle will decline (or will not increase) and they will be out of a job. Fear is a more powerful motivator than pleasure. That is, people will do more to avoid pain than to seek pleasure.

Racing executives do not necessarily fear HANA, but they probably do not take any pleasure from having to deal with the organization. If HANA makes executives uncomfortable the result will be the executives moving farther away from HANA to the safety of raising takeouts.

So that's one part of the equation.

Next part, Haggerty claims there is misinformation surrounding the topic of takesouts and quotes Jeff Platt, President of HANA, in attempt to prove his point:

"Platt, president of the horseplayers group, stated in an interview this week that a takeout increase 'has never been a revenue generator for tracks. It’s never generated revenue increases or purse increases.' "

Haggerty responded: "That is a popular view among horseplayers, and one that dovetails with the economic theory, but it also is not true.

When presented with those statistics, Platt responded: 'But what would their numbers have been if they didn’t raise takeout?'

Haggerty: That’s unknowable."

Haggerty continues by writing that the popular view among horseplayers and economic theory that takeout increase lowers handle is not true.

Platt argues that CD's revenue declined in 2014 compared to 2013, due to a takeout increase.

Haggerty argues that figure includes all revenue from CD's four tracks including a dramatic decline from Arlington Park, not the wagering revenue from CD itself.

So here's my question:

What about on-track handle and handle at each and every ADW and rebate shop? It might be the case that if there was an increase in handle after CD raised rates it was because large bettors who get large rebates increased their handle. The small bettor, and the on-track and mainstream ADW retail bettor do not get rebates. Small, retail bettors may have cut back on their wagering.

It would be interesting to compare handle from non-rebated players to rebated players.

Therefore, I would argue against Haggerty by saying it IS KNOWABLE by using statistics to study the effects of takeout on handle. The problem is, tracks like Churchill and Keeneland are not going to open up their books and show you. They can paint the picture any way they want and call it true, but there is no way to verify it.

And as Ronald Regan said, "Trust, but verify." Which I always thought was the same thing as saying do not trust until you can verify.

[highnote]

The bottom line is this:

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