3 Reasons Why Takeout Decreases are for the Small Fry

Evangeline Downs dropped their pick 4 juice for last night from 25% to 12%. That's a pretty significant drop. Like most drops in takeout in one pool, at a smaller track, it's usually pretty good for the regular players, and it gives the track something to crow about.

In the grand scheme it's not earth shattering, but for the small player they should really be paying attention to it.

Drops like this are for them, and here's 3 reasons why.

1) It Levels the Playing Field - Evangeline Downs is a pretty good track for rebates. Rebates are searched for, and in many cases given, to big players to encourage them to bet more, and keep them playing racing, rather than another game. Although there are ADW's which give breaks to smaller players, they are often at a disadvantage.

At a 25% takeout, Joe Blow, playing at say Twinspires.com or Xpressbet will pay 25% takeout. Meanwhile, at another ADW, Wanda Whale will bet pick 4's at about a 12% takeout - 25% plus a 13% rebate.

When Evangeline moved the takeout down to 12%, this rebate goes away. Wanda Whale pays 12%, Joe Blow pays 12%.

It's a level playing field.

2) The Net Gain is Equal to Churn for the Small Fry - Wanda Whale's habits do not change, nor does she have more money in her pocket. The small fry gets the whole benefit of the rake decrease. Instead of Joe Blow getting a $375 pick 4 payoff, that same payoff is $440. He has $65 more to spend.

3) It Helps the Game - Wanda will bet $10,000 on pick 4's at the end of the meet. She doesn't churn any more or less in horse racing because she gets near the same payoffs at either rate. Joe Blow gets more money at the end of the year. Sure he might play it at Del Mar (probably think about avoiding exactas there Joe!) or Kentucky Downs, but he's playing it somewhere. That's good for him, and it's good for the sport.

With takeout decreases, even those at small tracks, the industry tries to look for this massive pool increase, or signs that money will be falling from the sky. This is frustrating for us as players, because insiders who have raised takeout incrementally on customers for 100 years - slowly killing off the base - somehow still think dropping one pool at a Texas racetrack will result in a massive change overnight. It doesn't work like that.

What happens is, each takeout decrease incrementally puts a few dollars in the small fry's pockets, and hopefully, over time, they rebet their winnings, bet a little more, come to the track more, and choose racing over the countless other entertainment and gambling options a little more often.

Have a great Thursday everyone. 

Note: Today the July issue of the Horseplayer Monthly was released. 44 pages, all free, with a focus on the Spa. You can download it here. 


Tinky said...

I have this image of you giving a slightly – only slightly – expanded version of this in presentation to audience of racing executives from around The U.S. Scanning the room, looks ranging from boredom to bewilderment can be seen.

Suddenly, an undercurrent of excitement spreads across the room, as the next presenter appears to the side of the stage – a representative of the Indian Gaming Association.

Tinky said...

To be clear, I think that the post is simple, straightforward and excellent. But in this business, I find that cynicism is always long odds-on to be warranted.

Anonymous said...

You don't seem to have a firm grasp on what you're talking about.

"Joe Blow" spent $40 on the Evangeline pick-4 two weeks ago, at 25%... and he lost his money like he usually does when covering 40 or 80 combinations out of 4096 or 10,000 possible outcomes.

"Joe Blow" spends $40 of this week's paycheck on the Evangeline pick-4, at 12%... and he loses his money again, as usual, for the same numerical reasons.

"Wanda Whale" still retains a vastly superior chance at cashing a ticket, and of reaping any small part of the so-called 'gain' from the takeout reduction.

Both you, and Joe Blow have been sucked-in by the smoke and mirrors tactics utilized by Evangeline Downs, and by the state lottery, and by advertisers all over the planet, to make you think you're getting something that you aren't likely to ever receive.

When Evangeline Downs mans-up and gives you your 12% (or 6%) takeout on the WPS pools is when you should first bother to alter anything about your wagering strategy in response to their efforts.

You sound like someone who never even noticed that the milk is always at the far back of the grocery store...

Tune-in and turn-on... before misleading people with this absurdity that in your mind only sees "Joe Blow" have anywhere near to a "level playing field with "Wanda Whale".

People are not that stupid, especially when even you yourself demonstrate that one only gets the monetary benefit from low takeout when cashing one of those bets.

The evidence about people not being that stupid lies in the fact that track attendance knows approximately zero fluctuation in response to mere takeout adjustments. The vast majority of North Americans, who have still never set foot in a race track, are not swayed by the smoke and mirrors for which you yourself fall hook, line, and sinker.

In contrast, when the stock market gets going really well, the random North American will indeed sit up, take notice, and invest.

Smoke and mirrors advertising continues to prey upon only the foolish...


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