Much has been made in the blogosphere about how the horse racing trade press has ignored the Horseplayers Association of North America's organized boycott of wagering on California racing, though I find much of that discussion unfounded.
In various e-mail correspondence I have made it clear that I would love to write a story about the big bettors who are withholding their capital from California races. My stipulations are that the bettor(s) must be willing to identify themselves as well as give basic information related to their wagering patterns including both where and how much they bet.
No one took me up on my offer, so I didn't feel as if I really had enough to write about.
Then it dawned on me: Big bettors aren't talking because they're not boycotting. In fact, the biggest bettors relish takeout increases because that increases the margins their wagering outlets have to increase rebates.
The California takeout increase was touted as a way to increase the money from handle that went to purses, but all of the increase only goes to purses when the money is wagered in California. As Scott Daruty said at the California Horse Racing Board meeting on January 20, some outlets (e.g. TwinSpires) accepting wagers from outside California are paying as little as 50% of the increase to California purses. If those outlets (e.g. TwinSpires) are keeping the balance of the increase, then they very easily could pass that savings on to its biggest bettors in the form of a rebate.
Put another way, the hoi polloi of the race wagering world is forced to accept a 3% increase while those receiving rebates only had their takeout increased 1% or 2%, if at all! What big bettor is going to boycott a system that actually favors him or her? The answer, of course, is none, which is why I never heard from any whales wanting to decry the increase.
Churchill Downs Inc. owns TwinSpires, and a spokesman for the Louisville-based company said that Churchill does not comment on simulcast agreements.
Ed, I hope I'm not too big for my britches in criticizing you here, but you have it dead wrong.
ReplyDeleteWhen the signal fee goes up even by a quarter point, the big rebaters net takeout goes up too, which means there is less value than before in that pool.
The result of this takeout hike means that whales will most likely be betting less than before because their signal fees went up.
Sorry, Ed, but today's column makes no sense.
ReplyDeleteLet's say I was getting a 9% rebate against a 20% takeout, which means I effectively have an 11% takeout. Now I get a 10% rebate (since the ADW may pass on the part of the increase) against a 22% takeout, which means I now have a 12% takeout.
So I'm playing with a larger effective takeout (12% vs. 11%) into a handle that is sure to shrink as churn drops due to takeout increases.
And this benefits me how?
???
Barry,
ReplyDeleteIt doesn't benefit you (assuming your effective take went up at all), but it doesn't hurt you as much as it does me, so your advantage remains the same and thus the benefit still exists. If you have a similar advantage over the competition as before, then why wouldn't you continue to bet under those guidelines?
Put another way, if we flip a coin that favors heads 55/45, but we rig it so that coin only favors heads 51/49 you're still going to play the game with the coin that favors heads over a fair coin, right?
Ed, you are spinning your post now. You stated that big bettors relish the margin increase. In your example in your latest comment, you admit that it is a margin reduction.
ReplyDeleteMost whales are value players. There is now less value for them.
Now, what if they were only beating the game by 1% (or lets say they had a 1% edge on triactors previously). This increase now puts them at break even for all bets or maybe specific bets. Why should they be happy about this. Any way you slice it, their profit margin has gone down.
And as Barry points out, it is even worse because the dummy money in the pools becomes even less as churn drops and more dummies drop out faster.
You made an intuitive mistake here. Accept it, and move on to another topic. It isn't a bad thing to admit you are wrong.
Yes, possibly, but not for any amount near what you were betting before. Also, at that range, you look for a better game and there are plenty of them out there.
ReplyDeleteCangamble: I'm not spinning my post. I responded to Barry's comment.
ReplyDeleteAnonymous: Fair point, but why won't anyone talk to me on the record about finding "a better game" then?
Also, Depending on your bankroll and minimum bet required, it's conceivable that a 51/49 game could be more advantageous than a 55/45 game.
Yes, if you could get a million flips at 51/49 instead of a hundred at 55/45.
ReplyDeleteThe problem is that racing has no relation to the above.
You can't get a million bets at 51/49. Also if you actually bet a lot of money, the 55/45 turns into 52/48 after you make your bet. So a 51/49 turns into 48/52.
It's also tough for big bettors to step forward when so many people in the industry treat them with such disdain....Chris Scherf preaching that anybody who is a long-term winner is stealing money from tracks and horsemen....Willmot, Paulick and many others calling bettors that get rebates parasites, etc....The recent actions and statements made by the people in charge of CA....I could go on and on but I think you should get the idea.
ReplyDeleteOh, please, anon!
ReplyDeleteI'd say that bettors in general get treated with disdain so in that regard I can agree with you, but guys getting 15% rebates are not going to make my list of people the industry treats with disdain.
But yeah, in regard to "the recent actions and statements made by the people in charge of California," I agree and said as much here: http://bit.ly/h4hij5.
The ""Racing Press"" (whatever that is) is ignoring the HANA boycott on California racing because everyone else is ignoring it too!!!
ReplyDeleteThe news/press follows what humanity takes interest in, for better, bettor, or for worse.
The facts are that there isn't a significant representation of anybody boycotting southern California wagering in January of 2011.
It's humorous watching these HANA morons pretend that the terrible weather in much of the country, the economy and the loss of NYC OTB collectively have nothing to do with the minor declines in So Cal wagering this month.
"The Racing Press" (whatever that is) has repeatedly pointed out the poor organization of the so-called HANA boycott which had them boycotting when the handle takeout was 20% and still boycotting when it was 23%.
Any idiot could understand that the correct move would have been to wholly endorse Santa Anita wagering up through Dec. 31 and abruptly pull whatever plug they could collectively comprise.
The bottom line is that any so-called HANA boycott has been basically invisible in the handle data to date. To believe otherwise is to illustrate your full lack of understanding with regard to handle data.
These HANA clowns are akin to a guy on an inner tube out in the middle of the Pacific Ocean having attempted to start a tsunami in an attempt to knock the guy 40 yards away off of his inner tube.
The stupid f*cks needed to be somewhere near to shore in order for the tsunami wave to have any effect at all on their intended target.
The reason you got no response was this:
ReplyDelete"My stipulations are that the bettor(s) must be willing to identify themselves as well as give basic information related to their wagering patterns including both where and how much they bet."
Most big players don't want to go public with who they are or how/why they bet.
Ask them the general question of would they prefer high takeout with rebate, or low takeout and see what they say. My bet is that most will say lower takeout, thus proving your theory wrong.