The Rise of Bet Takers in North America - By Fred Pope

re: The Rise of Bet Takers in North America - By Fred Pope

Barry Meadow — Wed, 04 Aug 2010 05:46:14 GMT

Fred Pope wrote, "Re takeout, I don't care if the takeout is 15% or 25%."

Well, your customers do. Including every single one of the large rebate teams, who at some tracks are responsible for 20% or more of the handle. Raise your price (takeout) by 10% and that money is gone, immediately.

In addition, high takeout means players go broke faster, which lessens churn, which reduces pool sizes, which makes players less likely to make big bets because their bets affect the odds. In addition, a horse I might have bet at 3-1 is now (due to the higher takeout) 5-2 or even 2-1, so instead of betting $1500 on the horse I bet nothing because his odds are too low.

It may be true that a couple on a date betting $10 a race may not care about the takeout. But all your big players do.

Why stop at 25%. Why not 35%, or 60%, or 95%? Won't that raise the money going to horsemen?

Not in a million years.

Geez--why is this simple concept so difficult for some people to understand?

re: The Rise of Bet Takers in North America - By Fred Pope

rwwupl — Wed, 14 Jul 2010 15:14:56 GMT

Cangamble wrote...

"I have to laugh every time Pope writes something. He so doesn't get it.

His specialty is marketing? He doesn't have even the foggiest clue about the customer.

Better Than Bonds, what you said has been explained to Pope over and over again, and he just doesn't get it.

Horse racing total handle should have taken off since ADWs are everywhere and betting can be made at home in almost every state. But it hasn't because it fails to compete for the customer. Takeout is way too high, and if left to Pope he would do nothing but make at least 25% of the current customer base say bye bye.

Horse racing needs to stop appeasing the horse owners and should start working on attracting new customers"

The "Me First" business plan and leadership has to learn that with out customers,the business will fail.

The "cooks " have to serve the meal that the customers wants...not what they want.

Good for cangamble.

re: The Rise of Bet Takers in North America - By Fred Pope

Cangamble — Wed, 14 Jul 2010 13:49:51 GMT

Wow, Jersey Boy if I had a quarter from all the horseplayers who say they can beat the races and a 20% takeout, I'd be rich.

I'd also come out with almost exactly the same money if I took a quarter from these same people who were lying about beating the races (some don't know they are lying).

The reality is that many of the ones getting rebates are very good players and some are making a living betting horses.

Google Dana Parham and tell me why he should quit again.

Seriously, you should educate yourself a little more before putting comments here and acting like your points are relevant.

re: The Rise of Bet Takers in North America - By Fred Pope

JerseyBoy — Mon, 12 Jul 2010 13:18:39 GMT

Well, this is the last I have to say. If they need rebates to make a profit they must not be very good. They should stop gambling.

I have been betting for over 30 years, am I am not exactly poor.

re: The Rise of Bet Takers in North America - By Fred Pope

Dwelt A. Start — Sun, 11 Jul 2010 21:58:10 GMT

Jersey Boy wrote: "The rebates simply reduce their losses."

Jerseyboy you are really ill informed.

The rebates turn losers into winners. Without the rebates, many of these players will go away.

That is a FACT.

re: The Rise of Bet Takers in North America - By Fred Pope

David — Sun, 11 Jul 2010 15:35:21 GMT

In fairness to JerseyBoy, the price of a bet on the horses is invisible to most. The vast majority of those attending live racing and, for that matter, bet online or at an OTB fail to acknowledge anything except whether they won or lost. The maybe 20% of those that do actually know the rates they’re being charged (like the one in this discussion) account for a disproportionate portion of total handle; if you decrease the hold for them (thru rebates) churn increases and handle goes up, right? Short term, yes; long term, no. What happens is that fewer dollars get channeled back to the other 80% of the players and, the other 20% takes a bit longer to lose their original stake. You guys are the choir; what really needs to happen is for the 80% to graduate to the more sophisticated 20% side of the equation. Good luck on that one.

re: The Rise of Bet Takers in North America - By Fred Pope

JerseyBoy — Sun, 11 Jul 2010 12:17:07 GMT

I have attached a link to takeouts nationwide.

I like the introductory note:

"It is always preferable to wager at tracks with a lower takeout in the same way that it is preferable to shop in store with lower prices or a state with lower taxes."

I hope it is accurate.

www.sportsbettingacumen.com/horse-racing-track-takeout-chart.asp

re: The Rise of Bet Takers in North America - By Fred Pope

Cangamble — Sun, 11 Jul 2010 11:43:32 GMT

Jersey Boy, you are completely out to lunch here.

We aren't talking $1000 but $250.000 to millions for the largest rebate players per year. So yeah, 7 points matter.

Rebates allow even smaller players to last longer. When they are betting on horses, they are more likely to be drawing in friends or family as well....at least a lot more likely than if they weren't playing.

That is the same with lowering takeout. The longer a player lasts, the more likely they are to bring in others, the less likely they are to quit, and less likely to find a new hobby or something other than horses to bet on.

Your statement that rebates don't matter shows you are completely out of touch with the customer base. Leads me to believe you are either a breeder, horseman, or track exec.

re: The Rise of Bet Takers in North America - By Fred Pope

JerseyBoy — Sun, 11 Jul 2010 11:40:39 GMT

BetterThanBonds:

I am an occasional horseplayer.

I never said the takeout should be 25%. I said " a higher percentage of the takeout should stay with the host track regardless of where the bets originate".

I love horseracing and will be playing horses the rest of my life.

I am good at it.

I stand by my statement.

Horse racing preceded rebates and will outlive rebates.

My frontal lobe is intact. That is why I remain rational.

Nice rant.

re: The Rise of Bet Takers in North America - By Fred Pope

JerseyBoy — Sat, 10 Jul 2010 20:52:42 GMT

People betting on horses are gamblers first and rebate recipients second. They bet in the hope of making money.

It would be remarkable if they bet say $1000 just to get the rebate of say $75. A gambler is a gambler. It is largely addictive.

They would never go away if the rebate is reduced or eliminated. If they tell you otherwise they are deluding themselves. The rebates simply reduce their losses.

re: The Rise of Bet Takers in North America - By Fred Pope

Kime — Sat, 10 Jul 2010 20:27:26 GMT

I agree with most of the comments above, the pricing and the distriubtion of the product is backwards. If you can't control the distribution of your own product you're screwed. As well, the takeout is so high in racing that it prevents it from becoming a success, too many player lose because it's impossible to overcome a 20% chop on every bet. Racing, however, is an extremley expensive gambling event to put on. The costs of putting on one race can't compare to the miniscule costs of a roll of dice a craps table or a hand of BJack. Lower takeout would be great for the players but how does the track get there without going out of business? If handle doesn't increase in tandem when takeout is lowered you're out of business; there's no guarantee it will go up enough to offset the loss of revenue so most CEO's won't take the risk. But you'll likely be out of business if you dont do something, it may just take a bit longer. Betting Exchanges may be the answer, but when is TVG going to start building racetracks of their own?

re: The Rise of Bet Takers in North America - By Fred Pope

BetterThanBonds — Sat, 10 Jul 2010 17:49:59 GMT

"Who cares about rebates? If you bet $1000 and get $75 dollars back as a rebate, why is that a big deal to a big-time gambler?

Am I missing something?"

Yes, perhaps your frontal lobe.

Do you think ANYONE can beat a 25% takeout long-term? Very few can beat football long-term and that's playing into a 10% take.

Let me ask you Jersey, are you an owner or a trainer because you can't be a horseplayer?

re: The Rise of Bet Takers in North America - By Fred Pope

jb — Sat, 10 Jul 2010 17:25:58 GMT

I think more than 20% of total handle in US racing is generated by large teams playing for rebate. Without rebate, these 20%+ handle will be gone overnight.

Large share to tracks means less rebate. Less rebate means lower handle. Believe it. It's the reality.

re: The Rise of Bet Takers in North America - By Fred Pope

David — Fri, 09 Jul 2010 19:14:05 GMT

Having (literally) an act of congress officiate a dysfunctional business is not the answer. Nor is having so many seats at the table you’re constantly dealing by committee. This business is no different than any other in that camps exist. The difference is with racing is even if consensus could ever be achieved (which it never is), factions not getting its way would rather stonewall a process rather than see initiatives of different persuasion go forward. Racing is a parochial endeavor that only pretends to want something different.

re: The Rise of Bet Takers in North America - By Fred Pope

JerseyBoy — Fri, 09 Jul 2010 18:50:39 GMT

Fred:

I believe you have assumed too much knowledge on the part of some in your audience, like me. I had to read the Interstate Horseracing Act of 1978 to understand what the issue was.

I agree that a higher percentage of the takeout should stay with the host track regardless of where the bets originate. But in my reading of the legislation it seems that this is a matter of negotiation among the parties.

Who cares about rebates? If you bet $1000 and get $75 dollars back as a rebate, why is that a big deal to a big-time gambler?

Am I missing something?

re: The Rise of Bet Takers in North America - By Fred Pope

Cangamble — Fri, 09 Jul 2010 15:28:23 GMT

Breeders should get out of the way. Contracts have nothing to do with them. It would be like Wal Mart having their suppliers price their products to the consumer.

Lower takeout, and more players will eventually be created. More money for everyone from tracks to owners to breeders.

Focus on getting more horseplayers, forget about owners and breeders, they will reap the benefit once lower takeouts are implemented industry wide.

re: The Rise of Bet Takers in North America - By Fred Pope

concerned — Fri, 09 Jul 2010 03:18:14 GMT

It seems Australia has the successful business model. IHA should be changed to require breeders sign simulcast contracts. The breeders have all the risk and no political power. It is the breeders who create the product tracks show and betting venues distribute and who support the farms.

re: The Rise of Bet Takers in North America - By Fred Pope

David — Thu, 08 Jul 2010 23:30:10 GMT

Why do persist in decreeing the federal government to do what the tracks and horsemen should be doing for themselves? Face it, the industry deserves exactly what’s happening.

re: The Rise of Bet Takers in North America - By Fred Pope

Dwelt A. Start — Thu, 08 Jul 2010 21:55:49 GMT

If Mr. Pope's ideas were actually implemented, he would become the George Costanza of the industry.

Handle would see some serious shrinkage.

re: The Rise of Bet Takers in North America - By Fred Pope

Fred Pope — Thu, 08 Jul 2010 20:09:58 GMT

John, the problem now isn't the ADW's, it is the receiving tracks where 60% of all off-track is still wagered. They get 16-17% and only pay the host 3-4%.

While the tracks know the ADW's are going to steal their bettors, they will not give up the 17%. If they will just change the IHA and split the takeout when they are the "host", then they will move up from 3-4% to 9-10% and charge that amount or more to the ADW's, OTB's, and Casinos.

Believe me, most of the net importing tracks become net Exporters when they start getting half (9-10%) of the takeout as the host. They just need to run the numbers and get on board with changing the IHA to their benefit.

Re takeout, I don't care if the takeout is 15% or 25%. I have yet to see a group of takeout specialists put up their money and buy a track to show everyone how to do it.

re: The Rise of Bet Takers in North America - By Fred Pope

john roark — Thu, 08 Jul 2010 16:58:53 GMT

Fred: Allowing

Betfair to own TVG is like letting the fox guard the henhouse. It allows the bookmakers to get our signals basically free and take wagers without paying us anything.

In addition, to turn the adw mess upside down would require simply a not-for-profit adw in which the adw received a small amount for taking the signals and the majority of the revenue would be returned to the host tracks and horsemen. The bettors would get better andlarger fields to bet into and also, the site could offer the players free information and other incentives they don't get anywhere else unless they wager certain amounts...

re: The Rise of Bet Takers in North America - By Fred Pope

Jason — Thu, 08 Jul 2010 16:05:54 GMT

This article is @ssbackwards if you ask me. The problem with the industry is that they are unable to embrace technology and get the product out there. There are a 100 competing sources of entertainment and betting now a days, the goal should be making the product easily accessible to the bettor, on all technology platforms and get it out on as many sites as possible. Instead we have this constant control and "fear" of distribution. Australia has an OTB or online betting facility everywhere...you can't escape horse racing...it's everywhere you look...it thus becomes top of mind and something everyone participates in.

Mr. Pope is one of those people who dreams of the "old days" and fails to recognize that times have changed and the industry has to change with them.

re: The Rise of Bet Takers in North America - By Fred Pope

stanley — Thu, 08 Jul 2010 16:03:26 GMT

MR. Pope;

your anaysis conventiently skips over the history of the IHA and why the legislation exists. There was much fear back in 78 when simulcasting began that small "LOCAL" tracks could not compete with major racing venues; thus the plan for distributing simulcast dollars was slanted to give small local tracks a bigger piece of the pie to ensure their survival. it was a conscious decision by the designers of the legislation that the sport was better off including all the existing tracks rather than just a handful of "brand" venues where most gambling dollars would go. the industry decided that they didn't want a handful of powerful tracks surviving at the expense of the future survival of most of the small local venues.

Your analysis now seems to insinuate that the economic problems of major tracks today is due to small tracks proportion of simulcasting wagers.

This plays well to an uninformed audience and to the owners of the big tracks. But how does your plan address the potential negative consequences of a new distributive model to existing small tracks. Much of your new plans addresses the "whales", and current rebate scene. The more complicated aspect of changing the IHA is how do we not kill off small local venues.

re: The Rise of Bet Takers in North America - By Fred Pope

BetterThanBonds — Thu, 08 Jul 2010 15:41:51 GMT

"If your biggest worry as a horseplayer is reduced takeout and getting a bigger rebate, YOU deserve a Turfway fall meeting without a Kentucky Cup and having to listen to Maggie Wolfendale tell you about the "full field of six runners" in the next race at Colonial."

Can you please explain this to me? 98% of all horseplayers lose because of the high takeout. You are either a) one of them or b) an owner/trainer that doesn't bet a nickel.

Cangamble has is right. If takeout continues this high and handle continues to fall horse owners will go back to running for ribbons in a field. Have you lost sight of the fact that purses are paid for by handle.

By the way, I happen to own about a dozen runners as well as being an every day player.

re: The Rise of Bet Takers in North America - By Fred Pope

Mr_Punch — Thu, 08 Jul 2010 15:36:36 GMT

Jesus, what an embarrassment. Pope gets even the most basic facts wrong: France opened its entire gambling industry earlier this year, awarding licenses to over a dozen foreign vendors, including those providing online poker and sports betting. PokerStars and Party Poker are already in, for example -- would Pope care to speculate how much further US racing handle would decline w/online poker fully legalised in the States?

Racing is dying in the US because those "putting on the show" charge too much for a product that is too widely available, too infrequently compelling, and too tainted by doping.

At a time when meaningful leadership would help, Pope suggesting that the way forward is to imitate... the French. (Try imagining another US industry doing that.) And of course, he whiffs on even the basic facts of what the French are actually doing.

Sad stuff, but not atypical.