I've been racking my brain (no jokes please) and I am completely flummoxed trying to find parallels.
Horse racing in North America has, for a million years it seems, dealt in a system of revenue with a percentage of margin. If takeout is 22% and it brings in $1,000,000, the one million is not split, the 22% is. 22% is a margin, not profit, or money, but it is somehow treated as a price, or profit.
If a track wants "more money" or if a horsemen group wants "more money" or a state wants "more money", they don't ask for more money, they ask for more margin. "You get 9% of takeout but we want 11%". "Well, we charge 22% but we can raise that to 24%, would that do?"
It's the only business that I know that even remotely works like that.
If Raptors guard Kyle Lowery wants a new contract, he is not paid in a percentage of a ticket. His agent won't ask for 3.4% of ticket sales, instead of 2.9% of ticket sales.
Wal Mart's margin is about 1.5%. No one in that board room who wants a raise gets one by saying "raise margins by 0.1%, and pay me please". That's just silly.
When my local mine growing up went on strike, they did not ask for an increase of margin on a gold bar sold, they asked for $20 an hour instead of $18, and a new plan for eyeglasses.
There's a simple reason it's not used in every day life; at my job, or your job, at casinos, horse racing in other parts of the world, lotteries, or in virtually anything. Margins are not set by union negotiations, or salaries, or Barack Obama, or the United Nations. Margins are set by the market. You can't tell someone what they are going to pay arbitrarily, they tell you what they are going to pay by buying things. Then what your margin is - through regular good old fashioned management- is maximized to grow the firm.
In horse racing, what Obama, the UN, Bill Gates or George Clooney or the King of the World (who might actually be George Clooney) can't do, is done as a matter of course. It sets a margin, and moves it around willy-nilly; it's used as weapon by tracks to other tracks, horsemen to tracks, tracks to customers. It's something to be added to with impunity, like dropping cubes of sugar into sour lemonade. It's a super-strange, sub-optimal, bizarre model. And it doesn't seem to be going anywhere soon.
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