Lower Takeout v. Rebates

[PrairieMeadows]

In looking at the circumstances associated with lowering takeout, there are at least two ways of doing it. Lowering the takeout % on wagers and rebating wagers.

With one, the winning tickets are awarded more money. With the other, every ticket sold is "cheaper."

Any thoughts on which is better and why?

[phatbastard]

to grow the sport, everyone needs the good return, or keep it to just a few and bet against each other as the pools wither and die

[Charlie D]

Hi

Store A is selling a product at X amount , store B is selling that same product, but at X number of points lower than store A


I will be buying my goods at B and avoiding A and i would presume that many more shoppers would do the same.


This is what makes the Exchanges/bookmakers more attractive to the UK bettor than the Tote.

Hope this helps.

[BillW]

Lower takeout or an equivalent rebate is the same thing as long as the rebating ADW is available to everybody, and all ADW's/tracks offer the same rebate. Unfortunately that is far from the case, only the lower takeout would be available to every player (and thus have a greater positive effect on the industry).

[cj]

Originally Posted by BillW

Lower takeout or an equivalent rebate is the same thing as long as the rebating ADW is available to everybody, and all ADW's offer the same rebate. Unfortunately that is far from the case, only the lower takeout would be available to every player (and thus have a greater positive effect on the industry).

Exactly the reason I voted for lower takeout. Nice post Bill.

[Charlie D]

Originally Posted by BillW

only the lower takeout would be available to every player (and thus have a greater positive effect on the industry).

Spot on Bill.

A shame those in charge of setting these rates don't seem to see it the same way.

[Cangamble]

I'm for all ADW's to be open to everyone, and let them all compete for my business.
I think everyone should have the ability to open up an account anywhere.
If the above happens, I'm for a bigger rebate because those who choose not to have an account (like those who just show up for the Derby or Breeders Cup, or a race track dinner once a year) can give the track what they were giving them all along.

[Pace Cap'n]

I am absolutely flabbergasted that some of the same folks who have been champions of a lower takeout voted instead for rebates.

[Cangamble]

Originally Posted by Pace Cap'n

I am absolutely flabbergasted that some of the same folks who have been champions of a lower takeout voted instead for rebates.

I'm being realistic. If tracks decided to make takeouts 10-14% tomorrow, I would be satisfied. But realistically, this won't happen, and all we can hope for his a very competitive rebate market.

[Indulto]

Originally Posted by PrairieMeadows

In looking at the circumstances associated with lowering takeout, there are at least two ways of doing it. Lowering the takeout % on wagers and rebating wagers.

With one, the winning tickets are awarded more money. With the other, every ticket sold is "cheaper."

Any thoughts on which is better and why?

If takeout is lowered, but some are still rebated while others are not, the playing field will still not be level.

One advantage of rebating is that it increases churn. If there were an option for rebates to all resulting in equally lower effective takeout for all, I would choose that option

[trying2win]

I would have added one more category to this poll:

Lower Takeout and Lower Breakage (i.e. nickel breakage instead of dime breakage). All Canadian tracks are on nickel breakage, as opposed to the vast majority of American tracks which have the rip-off dime breakage (New York tracks being the only exceptions).

If Canadian tracks and New York tracks have a policy of nickel breakage, in my opinion so should all the American tracks. I suspect most American racetracks would say it 'can't be done by us, because it is a state law'. I say...that's just an excuse. I say to these American racetracks..."Lobby your state government for the racing fans' sake then, to get breakage rates lowered."

Lower takeouts plus only nickel breakage, equals greater returns to the bettor, which gives more horse players hope that some of them can make a long-term profit. At the very least, it keeps them in the game longer. Not only that..but with increased churn of money bet at the racetracks, that equals more money for racetracks and state governments in the long run. Seems common sense to me! Unfortunately, too many racetrack executives and state government brass suffer from 'poverty consciousness' (except New York state government officials) because they'dl argue that lower takeout and breakage would mean less revenue to their coffers in the long run. I say NONSENSE!

T2W
----------------------------------------------------------------------
~"Don't make excuses. Make things happen. Make changes. Then make history."

--Doug Hall

[Imriledup]

Very few areas in life have a level playing field, why should racing have one? Not every man or woman can have Donald Trump as their dad. You gotta make due with the hand you were dealt.

Rebates are available to every horseplayer. Just figure out a way to bet a million a year and you can have one too, no one is stopping you. (you dont even have to bet a million, there are plenty of places you can sign up with if you do the legwork)

[DanG]

I don’t know why it’s sometimes phrased as either / or.

Lowering the takeout is an investment in the future, while rebates can and will attract business immediately.

As Bill said; lowering the rake is a benefit to every single player regardless of level of play. Rebates should be scaled (imo) to reflect a player’s level of risk.

Let’s say my local restaurant operates on a 15% profit margin…

I eat there once a week and spend $100.00 on average. They make $15 clams a week every time we order the early bird Wiener Schnitzel.

My neighbor eats there 3x a week / orders quality wine with his meals and recommends the business to his many real estate clients. He averages $700 a week without factoring in the clients who spend on his recommendation. They clear $105+++ clams of him each week when he orders the Beef Stroganoff.

My neighbor is clearly far more valuable to the livelihood of this restaurant then I am. In the real world they might extend him a 3% discount on his meals saving him a tank of gas (maybe) per week. They would still clear far more then I can provide them and would build long term good will in the process.

When the whales take a big position on an exacta in NY they are frankly just a “better” customer then I am in any business sense I’m aware of. I don’t complain when Goldfarb swings and misses on a Dutrow claim and inflates my payout, just as I don’t complain when he is kicked back X amount of dollars for risking 1,000% more capitol then I do.

Regarding the posts I’ve read; this philosophy will be disagreed with far more then embraced, but in my corner of the world it just seems like a normal function of doing business. Your “best” / highest volume customers should be rewarded for their increased participation at Big Louie’s Bistro and at Prairie Meadows.

[trigger]

Originally Posted by DanG

I don’t know why it’s sometimes phrased as either / or.

Lowering the takeout is an investment in the future, while rebates can and will attract business immediately.

As Bill said; lowering the rake is a benefit to every single player regardless of level of play. Rebates should be scaled (imo) to reflect a player’s level of risk.

Let’s say my local restaurant operates on a 15% profit margin…

I eat there once a week and spend $100.00 on average. They make $15 clams a week every time we order the early bird Wiener Schnitzel.

My neighbor eats there 3x a week / orders quality wine with his meals and recommends the business to his many real estate clients. He averages $700 a week without factoring in the clients who spend on his recommendation. They clear $105+++ clams of him each week when he orders the Beef Stroganoff.

My neighbor is clearly far more valuable to the livelihood of this restaurant then I am. In the real world they might extend him a 3% discount on his meals saving him a tank of gas (maybe) per week. They would still clear far more then I can provide them and would build long term good will in the process.

When the whales take a big position on an exacta in NY they are frankly just a “better” customer then I am in any business sense I’m aware of. I don’t complain when Goldfarb swings and misses on a Dutrow claim and inflates my payout, just as I don’t complain when he is kicked back X amount of dollars for risking 1,000% more capitol then I do.

Regarding the posts I’ve read; this philosophy will be disagreed with far more then embraced, but in my corner of the world it just seems like a normal function of doing business. Your “best” / highest volume customers should be rewarded for their increased participation at Big Louie’s Bistro and at Prairie Meadows.

You overlook the fact that this is a state sanctioned pari mutuel gambling pool that should provide a level playing field for all bettors(like state lotteries) and not about some high volume buyer of widgets/meals/etc. produced by a private business. Special cash discounts to certain bettors in a pari mutual pool put other bettors at an unfair advantage.

[Cangamble]

Originally Posted by trigger

You overlook the fact that this is a state sanctioned pari mutuel gambling pool that should provide a level playing field for all bettors(like state lotteries) and not about some high volume buyer of widgets/meals/etc. produced by a private business. Special cash discounts to certain bettors in a pari mutual pool put other bettors at an unfair advantage.

That is a good point. I don't know of any state lotteries that give you a volume discount.