Jessica Chapel posted on Twitter Monday, "People who reduce every problem in racing to a question of takeout remind me of supply-siders. Nothing's that simple, or so easy to solve."
I don't know if her missive was directed toward me or with me in mind at all, but I took it somewhat personally because takeout it my "pet" gripe with the pari-mutuel wagering industry in the United States.
Personally, I don't understand how people can get so bent out of shape about tracks changing the name of a stakes race, but 25%+ takeout on certain wagers doesn't bother them.
But I digress. My biggest issue with takeout is that it's not the same for everyone and the nature of the pari-mutuel system is that you're playing against anyone else in the pool and should thus be playing by the same rules.
The higher the takeout, the more rebates places that don't offer live racing can offer. If takeout were 10% with 3% going to the host track, 3% going to the host horsemen, 2% going to taxes, and 2% to the location taking the bet, then there is not a lot of wiggle room there to rebate your best players.
If, however, takeout were 26% with 4% each going to the host track and horsemen and 3% to taxes then that still leaves 15% for the location taking the bet. Giving a 10% rebate still leaves them with 5% of all wagers, which is more than they'd get if the takeout were 10%.
Those are extreme examples, of course, but it illustrates why some entities like high takeout. At 26%, it is very easy for bet takers to take care of their best customers while leaving the hoi polloi (likely anyone reading this) out in the cold.
The problem with this is the people receiving a rebate are playing an easier game than the people not receiving one.
If someone receives a 5% rebate on all win wagers bets $1,000 to win on a horse, that person is actually only betting $950 to win. A 3-to-1 horse is now actually 3.15-to-1 while a 10-to-1 horse becomes 10.5-to-1!
However, those same 3-to-1 and 10-to-1 horses who are 3.15-to-1 and 10.5-to-1 for those getting rebates are still 3-to-1 and 10-to-1 for you.
Same race, different odds. That's not fair.
Lower takeouts across the board and end the practice of wholesale rebating. The long-term survival of the pari-mutuel system to fund American racing depends on all participants playing the same game.
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I agree, but the problem with this argument will always be that there is no way for all tracks to simultaneously lower takeout. The bureaucracy of racing commissions in every state will never allow that to happen even if the tracks have the best of intentions. If every track were to lower takeout it would always be advantageous for one major circuit (KY, NY, CAL - take your pick) to keep the takeout high. The increased churn at the other venues would also increase handle at other establishments and hence, the highest takeout location would make a killing. Short of price fixing or an anti-trust exemption for simulcast pricing, I don't see how this could ever happen.
ReplyDeleteRight now there are plenty of racetracks offering wagering pools at higher takeout rates than the state minimums.
ReplyDeleteThat is absurd incompetency on part of the racing executives. It is their loss.
Over time their fan base erodes. And it has at many tracks.
At some point a racetrack that is bent on survival in these difficult times is going to say to the state, let us roll back the Win/Place/Show wagers to 10% permanently.
We must do that because the track may very well be unable to present quality horses and/or fuller fields.
Suppose a track like Turf Paradise or Philadelphia Park has relatively poor quality racing, why would you want to charge the public exorbitant amounts for wagering on it?
That's not going to get the nation's bettors interested in your racing product.
Lowering takeouts is akin to lowering the bar for every newcomer to remain financially solvent during in his/her early stages of learning this participatory sport.
New comers are not going to wager $1,000 in their first month and become eligible for "rebates". We want the newcomers to get their feet wet and proceed through what is a very steep learning curve of perhaps a half-decade of education before proficiency is achieved.
New fans must be kept in the game longer.
Only the best handicappers and bettors will graduate to become life-long customers. Racing must allow those seedlings to be nurtured, not squashed at the outset.
Anon is correct, he did leave out that the game is completely dysfunctional, and that tracks can't even agree on what base prices they should use to post results or drug policies that are consistent from one jurisdiction to the next.
ReplyDeleteI think that rebates need to be embraced, and available to all, at the same rates. Let it be up to the Horseplayer to decide whether they want an account that gives rebates, or if they just want to put cash through the windows and bet against the high takeout.
Believe it or not, some will choose not to have an account.
Ed, are you implying that I'm fine with 25%+ takeout? Absolutely not. I don't dispute that reducing takeout can be good business. What I do disagree with, though, is the argument occasionally advanced on various forums and blogs that every problem -- whether field size, attendance, purses, etc. -- will be magically fixed by the mere act of reducing takeout everywhere. As you said on Twitter, "Takeout is part of the bigger (and biggest issue in racing) of tote security, technology and pricing model." Exactly, it's "part of." Reduce takeout, yes. But don't overlook the rest of the issues.
ReplyDeleteCanGamble:
ReplyDeleteI think that rebates need to be embraced, and available to all, at the same rates.
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What about the dozens of folks who walk into a racetrack for the first time?
They have little or no knowledge about handicapping or wagering.
So how is giving $2 back on their $20 wagered going to keep their bankroll healthy?
That is if Rebates-at-the-Track ever becomes a nationwide reality.
Marketing should want them to come back again for the live racing experience and become regular customers.
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The way I see it is that racetracks like those in Texas are not going to gain national interest by consolidating their racing season. They just do not have enough top level horses to get the nation's bettors interested.
Texas must lower the price (takeouts) to get the bettors interested. Squeezing Ark-La-Tex horses into Lone Star Park is not going to cut it.
Rebates combined with takeout is the cost of the bet to horse players.
ReplyDeleteWe have computers now. There are other ways to reward the deep pocket players.Everyone should pay the same for the cost of any pari-mutuel bet.
A tiered variable rate system is a sham,and uncalled for by anyone with any sense of fairness or real concern for the customers.
The only way to grow the game(and have it survive the way we know it) is to expand the fan base. Forget about caps,t-shirts,slots and Quadrupple-Quadrafectas.
Lower the takeout and and allow horseplayers to rejoin the process as respected participants in our favorite game.
Let skill and knowledge separate us,...not our wallets
Success will follow.
rwwupl
Monmouth's pk4 and pk5 with 15% takeout,It's where 90% of my betting dollars go.
ReplyDeleteI agree that takeout is too high but don't have a problem with rebates. For a supply sider, you seem awfully hung up on "fairness". If someone buys 100 TV's, they will get a better deal than someone buying one. Why should someone betting $10,000 per day not get a better deal than someone betting $100?
ReplyDeleteEdward, i respectfully disagree with your comments. The system is set up fairly, but only in the end does it seem unfair. Your comments make it sound like its set up in the beginning to be not fair. Here's an example.
ReplyDeleteEveryone who is born in the world has the same exact chance to become a professional baseball player. (i'll use baseball as my example). But, when the time goes on, it weeds out the less talented and only the best baseball players get to play. People are weeded out because of their talent as ballplayers and not because of their color or religion.
This is the same thing with big rebate players. If you are a bettor who has the ability to wager hundreds of thousands or millions of dollars per year, you can procure a nice rebate of your very own. The system is set up just like a lot of things in life, its fair and it rewards the very best.
Under your system, everyone would get to become a professional baseball player (in my example).
If i told you that i want to become a ballplayer, would you write a blog saying that its not fair that i'm not able to play? I mean, i WANT to play. I'm available to play.
If you want a big rebate, you need to bet a lot of money. Everyone has the same chance, no one is being held back.
Also, and here's another reason that large players need rebates to survive. When a large bettor sticks 2 grand to win on a 3-1 shot, he could knock down his 3-1 shot down to 5-2 (depending on pool size). The 2 dollar bettor will get 8 dollars on his 3-1 shot (different races, different days, different 3-1 shots).
Is it fair for the bettor customer (the 2k bettor) to get 7 dollars on his horse when the horse was paying 8 dollars before his bet? The 2 dollar bettor gets 8, the big bettor gets 7. The rebate to the big bettor is just giving him some of his money back that he would have won if it was fixed odds wagering. (it is essentially fixed odds wagering for the 2 dollar bettor as he very seldom is going to knock his own price down at all when he places his wager).
I'm being totally frank here . . . most horseplayers either don't know what the takeout is and why it makes losers out of them or those who do don't care enough to do something about it. They are addicted to the thrill, not addicted to winning. If enough of us DO something about it, the tracks will listen. What tracks are the highest takeouts? What are the lowest? In this day of simulcasting, it's not hard to boycott the 25 percenters. We need to know who they are and organize!
ReplyDeleteI'm assuming that most people on here are thoroughbred players, but just wanted to alert the readers here to Tioga Downs, a harness track in Upstate NY. This entire season, the track has lowered takeout to STATE MINIMUMS, 10% at its lowest. The track spoke extensively with HANA before making the move. This is a progressive track with very progressive management that wants to cater to the horseplayer. I know it's a harness track, but I challege some of the supporters of lowering takeout to spend a few bucks playing the Tioga races and put your dollars where your mouth is. Oh and by the way, the track offers a Pick 6 on Sundays at the lowest takeout rate allowed by NY State.
ReplyDelete