great takeout article
 

Not sure why track execs cant figure this out.

http://www.troyrecord.com/site/News....id=31001&rfi=6

I'm confused.....Nick had to go to a blog to understand and/or explain churn?

The sad part is the people that can change things don't get it.

no idea, but I thought it was laid out well for people who dont really follow the take.

That was a long version of saying that higher takeouts mean less money for everybody in the longrun. (I wish that his example was correct in his assumption that the entire 10% take out for the second player went to purses, but it is far from the truth). The issue with takeout from a track management point of view is that many of them simply dont value their customers. The vast majority of players simply dont bet enough to really benefit from a lower takeout in their opinions. Like Brunetti said, "It is only a few cents here and there" or something to that effect.

Agreed, and many horsemen don't value the bettors either.

of course they dont, many of them are losing their ass. I play plenty of poker online, a deposit seems to last forever, its great entertainment for nada. I go on a losing run at the horses and yikes.

many horse "people" (lets be politically correct cmor) see bettors as a necessary evil.

yeah but most people lose at Poker too and very few ever make a real score like you can at horse racing.

The vast majority of owners that arent born with silver spoons got involved with ownership after being a bettor and most continue to do so. Based upon what I read and hear lately it is hard to say that bettors are particularly interested in the best interests of horseman either. Maybe the adult version is that this is a business and we all have our own best interests in mind first but understand the position of others in a global view. But the culprit in most of the issues with both horseman and bettors is the tracks lust for money and control and the states simple money grabbing tendancies. Maybe in cases of signals being withheld you can say that we are thinking of ourselves first but it is really the only tactic that we have. Everybody says the business model is broken. We are trying to make up for past errors that created that situation by being proactive with ADW's. No one likes this situation but the fact is in the case of KY, CDI simply is being unreasonable yet people like you want to place the blame at our feet. The situation is complex yet in the end CDI cares about racing on 2 days and is trying to squeeze the lemon dry on every other front.

what does that have to do with the "churn" that lower takeout produces?

I am not placing the blame at horsemen's feet. Horsemen and the tracks are both to blame.

no doubt, the last innovative idea a track had was the exacta.

Tracks have at least, albeit on rare occasions, asked for takeout reductions. Horsemen constantly ask for takeout increases.

That is simply not true.

Your comparison of Poker betting and horse betting. Your not able to keep your money longer in poker strictly because of the lower take but because of the different nature of the bets.

So entertainment dollar here.

I have a 1000 dollars, I lose it in a aweek at the horses, where I lose it over 6 months in poker, but I should be more inclined to entertain myself for the week because of the big score?

I just dont think that the wagering model is working with higher takeouts in horse racing, what do you think?

The influx of money comes from two sources, the owners and the fan.
In the long run, if these two entities are not satisified, its not gonna work.
Nothing goes if owners and fans dont put money in seems to me.

So who is going away to other forms of entertainment (with the chance for some money-the minority), the fans, owners, or both?

Seems to me its the fans.

I am not a businessman, but it seems that some entities that put on the entertainment do not know or care where the money comes from. Especially considering some of the horror stories I have read about treatment at tracks and online. And then the awful scam ridden treatment of owners in so many phases. Seems that the entertainers think the addicted gambler is the major player, and an endless source of money and the breeders, some horsemen, treat the owners as some host like a frkkn parasite.

Heck, maybe this sport can exist in a minor form with just owners supplying capital. Maybe the owners continue to foster the crazy buy to breed market, and the breeders just continue to supply this dead end. Maybe the situation as it exists is fun for the owners, this buy to breed is their entertainment.

And it seems incredible that with the advent of the internet things have actually become worse. I naively thought this would allow horseracing to absolutely blossom...

Dead wrong I was.

It is complex. But the driving force is the owner/fan combo. No offshore sites, data stores, HRTV, and right on down the line exist without the funds supplied by owners and fans.

Your logic is unusual. If you want to stretch your "entertainment" dollar, rent movies. As for the gambling dollar, yeah horse racing is a much better bet than poker despite the takeout. Because you lose slower at Poker it is a better bet? What difference does it make if you are assuming a loss anyway. The thing is that there is virtually no way that you can make a big score at Poker. You can do that on pretty much any card at a semi major track pretty much everyday of the week. I agree that takeouts are too high in most cases but unlike poker there are a lot of other mouths to feed from the horseracing dollar and the comparison is kind of an apples and oranges thing.

I would be in complete agreement with every word Cannon typed...

But Freddy says he makes good money playing poker. So Poker has to be the much easier game to win at.

People who make money playing poker never tell...

How about people who make money betting horses?

Please direct to one time where horsemen asked for takeout reductions. If I'm wrong, I'll apologize, but I can't think of it ever happening. I might even settle for something showing horsemen fought against an increase.

That article should be required reading for anyone entering the track and for every legislator, and every horseman, in a nutshell:

"The track exec-coached player
is almost broke - he has
around $2 left. He has bet in
total, around $24,000. Not too bad at all. He
played for a long time and he contributed a lot to
purses. 15 percent of $24000 is $3600. That is
$3600 to purses and profits.

The professionally coached player, with the 5
percent rebate did better. A whole lot better. That
small rebate helped the player win. He ended up
with over $4000, or $3000 profit. Well, of course
he did, you say. He took some of the tracks profit
and purses, so he had to have made money. He
made money at the expense of us! He took our
$3000 profit for himself!

Not so fast.

Our player, with that small rebate, bet over
$330,000 in those same 150 days of betting.
That's three hundred and thirty thousand dollars!
How about the proceeds to the track and
horse-owners for purses? Well we gave a 5 per
cent rebate, so instead of charging 15 percent we
charged 10 percent. 10 percent of 330,000 is
$33,000. That player, with a little help, contributed
$33,000 to purses instead of the player
we did not help, who contributed $3600 - almost
10 times more.

More importantly, (the winning) player is still
playing. Remember, the first player is broke. The
winning player will be playing for a long, long
time too. And ... he will tell friends."

It should maybe be pointed out that if everyone followed Player 2 (lose at 4% but get a 5% rebate, then you can churn til doomsday and there will still be no money for purses, the state, the track or anyone else except the happy bettors. The comparison between the "contributions" to purses of the two players in the article is contrived.

The reason lowering the takeout percent could result in more overall takeout is not directly because of churning. It's because when people get a run for their money, they are more likely to come back with additional "bankroll". (and as the article suggests, they are more likely to tell their friends.) They will play more often and commit more funds to playing. Players who lose quickly are more likely to leave the game for extended periods or permanently.

Casinos learned this a long time ago. A row of slot machines that pay back just 80% of money bet is often less profitable than machines that pay back 90%. People get discouraged when they lose quickly. They are encouraged when they get to be ahead for awhile ("I should have quit when I was ahead!" type thinking), and they are more likely to experience being ahead with 90% payout than an 80% payout.

I'm not sure tracks have enough patience to wait for that kind of effect to take hold. If there is not an overnight jump in handle after a drop in takeout (and I'm not aware of anything to suggest that horse bettors are sharp enough to flock to a lower takeout), then the tracks will conclude that lowering takeout is pointless. If that happens, then the longterm benefits of lowering takeout will never be seen.

--Dunbar

The lower takeout can come from the ADW share via mandated player rebates (limiting ADW keep). The horsemen do control the signal, they are fully capable if they wanted to use that power for the forces of good, it seems to me. That's the logical choice if growing handle is the goal, rather than fighting over share of what currently exists.

which is why (for me) it is actually easier to make money playing poker than the horses.

i can play online where the rake is minimal because there's no brick and mortar, dealer salary, floor manager salary, shift supervisor salary, floor runner, or the expectation to tip any of them.

i can choose my table and assessing the talent of my opponents is easy with the tracking websites.

i can't choose to play against the worst horseplayers. i get the whole bucket. and i'm expected to pay the groom, hotwalker, jock, trainer, track operator, state licensing agency, and god knows who else off the rake.

all i have to do is put up with endless conspiracy theories as to why online poker is fixed by the losers. that and pay 5% on ring games and 10% on tournament entries. and there are ways to get rakeback.

you have to have a passion to crack horseracing. anyone with patience, minimal talant, and a 3 digit iq can win at poker.