Thursday, January 3, 2013

Rebates & Takeout Chatter

There's been quite a bit of takeout chatter of late.

First, the NYRA fan advisory council asked NYRA to use some of the slots windfall to lower their rake. This has been asked for, for years from players and those who care about the future of the sport (especially when slots are sure to be taken away). Let's hope NYRA listens and asks for lower juice.

Second, for those of you on "andymays" email list, there are rumors that So Cal racing might raise the takeout on the low take players pick 5. I don't know how true it is, but clearly that's a branding error in a state which seems to thrive on them.

Third, we're seeing a few people talk about rebating. Some track heads (obviously) and some players believe that eliminating them will "level a playing field" and help the sport. The thinking is that when some get a lower effective rake others pay slightly higher (that's true), and if they are eliminated lower rake for everyone is possible (that's false).

All hiking the takeout (reducing a rebate) will do is kill handle, in a sport direly in need of it.

Here is a rebated player's (not a whale, check the rebates) ROI that I got my hands on.


That's $1.476M bet and $1.478M received back, for $2,000 profit for 36,000 tickets. If you worked out a per hour wage you'd make more making Nike shoelaces. When the rebate is added (i.e. his takeout reduction), this brings the total up to a $60,000 profit. More worthwhile, certainly. This is quite common. Almost every large player works on zero ROI, or negative ROI.

Now, let's eliminate this persons rebate. "Level the playing field" as they say. What does he bet?

Who's going to work all year, 20-50 hours a week for nothing? Nobody. This player will send his handle to poker, or work the stock market. His handle will be zero.

Multiply that by thousands of players and you see what lower takeout can do, or what eliminating it will do.

If rebating is a barrier to low takeout (I honestly do not know where that correlation lies, or how that myth started), HPI in Canada would have the lowest takeouts in racing. They don't. Frankly they're shooting themselves in the foot. Cultivating players to break even and giving them a boost keeps them interested and away from a poker website.

The NYRA fan advisory council is right. NYRA should lower takeout. For everyone else, or if it never happens, shop around and find yourself a rebate. They're there for everyone (another myth is you have to be a whale to get one, you don't) and you'll be betting more, enjoying the game more, helping handle, and the sport, at the same time. They are your only way to get lower juice in a sport that clings to high rake like it's the last life preserver on the Titanic.


2 comments:

Pacingguy said...

Unofrotunately, in some states such as NJ, you aren't legally allowed to shop around and find a rebate. You are stuck with one ADW; one which offers nothing.

Indulto said...

Most people advocating the elimination of rebates also advocate the concurrent lowering of direct takeout for all.