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#1
02-08-2010, 09:42 AM
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Basic question on Economics of Off shore rebates
I don't understand the economics of off shore rebate shops that deal with wales that play millions of dollars at say break even or a slight loss where the rebates push the wale into the black. What is the profit model for the rebate shop in this equation? Why would they continue the relationship? Can someone with knowledge into this enlighten me please?
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#2
02-08-2010, 10:00 AM
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Quote:
The bookmaker would end such a relationship.
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#3
02-08-2010, 10:21 AM
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Quote:
As an example, instead of making .12 cents on a bet (per dollar), they take .04 cents and kick .08 cents back to the bettor. By attracting and keeping the big player that churns, they take a lower profit on a big base. A big player that stays close to even is guaranteed a profit after rebate. A term for it in retail is merchant banking. The Club Store Industry (as started by Price Club/Costco) operates a similar model. Low overhead, big volume, small margin.
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All ambitions are lawful except those which climb upward on the miseries or credulities of mankind. ~ Joseph Conrad A long habit of not thinking a thing wrong, gives it a superficial appearance of being right. ~ Thomas Paine Don't let anyone tell you that your dreams can't come true. They are only afraid that theirs won't and yours will. ~ Robert Evans The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command. ~ George Orwell, 1984. Last edited by Kasept : 02-08-2010 at 11:37 AM.
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