Friday, July 18, 2008

Thoughts On Track Takeout

By Cangamble

Just over a year ago, Brisbet's Ted Mudge really let David Willmot have it on a radio show. Willmot wasn't there, but his ears must still be burning. Mudge called Willmot a beggar, who without slots, would have driven Woodbine into the ground.

The point Mudge was addressing is Willmot's constant whining about other on-line gambling that is available, which Willmot feels, is hurting his corporations bottom line.

What Willmot is denying, either wilfully or deceptively, is the fact that the horse racing gambling industry has been in trouble for ages, even before on-line poker, rebate sites, and exchange betting sites arrived. The younger generations did not replace the older generations loyalty and addictiveness to horse racing. The younger generations gamble, and even more so than before, but they do so on games of chance that have a much smaller takeout or house rake.

Willmot, unrealistically thinks that if you ban the competition, you will get the
younger crowd. WRONG. The way to get the younger crowd is to give the gambler a chance to win.

Right now, the way the game is set up, with it's ridiculously high takeouts, and lack of marginal to bad handicappers adding money to the pools, pretty much only backstretchers and knowledgeable handicappers are left, to go head to head with each other.

To make things worse, with the slot explosion, the unsophisticated gamblers have put their gambling money to work on the one armed bandits and out of the horse racing betting pools. Again the vast majority of the money in the pools these days pools sharks against sharks.

Some history

Back in "the old days," if someone wanted to bet, they had to go to Vegas, or the track. In the 60's, a typical Woodbine or Greenwood card had 8 races, which included only one daily double, and one or two exactors. People left the track usually with at least some money, much of the time. This gave them enough incentive to come back tomorrow.

The 70's were the same, except more exotic bets were being introduced. Exactors showed up in most races, and then triactors appeared as well (this caused less people to leave the track with some money, but it was still OK) There wasn't any simulcast wagering. You could only bet on horse racing 5 times a week, and there were only 40 to 50 races one could bet on. The crowds were large, and families would go to the track, because there was little competition, especially on weekends.

The track takeouts were less significant, because it is much easier to leave a track a winner when you had a bankroll of say $100 to $200 and only had 8-10 races to play. People who leave the track with money, tend to want to come back and sometimes even bring friends next time.

What killed all this, was simulcast wagering. Now, players were impelled to play 10-50 races a day. The track takeout remained the same, so this bled to death the player in a much quicker fashion, making those who left the building with money an endangered species.

The way it is today is very similar to blackjack, with so many plays an hour. Except of course, horse racing's takeout is equivalent to a blackjack game where the player would need an 18-21 to win even if the dealer goes bust, and ties go to the house. If those were the blackjack rules, the tables would be close to empty, except for the the real idiotic bettors who just don't care how fast they go broke.

Gamblers love action. They only have X amount of dollars to lose each year. The lower the takeout, the longer they can last, and the more likely they are to play.

Just look at Betfair. Even with a $6 minimum (actually it is much lower if you are booking a bet that is under even money), the action is great. With a $200 bankroll you can all day, and most likely have money left to play the next day, thanks to the low house take (2-5% on winning bets only).

Shutting down the competition won't work. Besides being unfeasible, most players don't like guaranteed losses, so they won't go to the track regardless. In today's horse race betting environment, without a healthy rebate, you are pretty much guaranteed to have no chance at winning.

What is needed is a complete change in thinking by the entire industry. Change the track takeouts to 10% maximum everywhere. Embrace the idea of low takeout online exchange betting: The industry in North America should do it themselves, instead of letting a third party take a good chunk of the profits.

The racetrack industry must understand that their customer has only a certain amount of money he or she can lose gambling during the course of the year. Eventually, they will get that money, no matter what the takeout is. And a lower takeout will attract many, many more players, and some will actually win. There is no better form of advertising than a professional handicapper who plays all day long and has his house paid for thanks to winning consistently at the track.


Anonymous said...

Takeout quite simply- was why I quit horseracing. Years ago I was playing PHL on line and calculated a Pick 3 payout. I hit it...and lost something like 25% in takeout and then another 27 % in federal and state taxes.

Great game. Hit a tough bet and lose 52%.

You'd be an idiot to try to beat a game with PHL currently taking 30% and then beat the fed and state tax vig.

Hey best of luck to you! Losers!

Mrvee said...

The problem isn't the takeout, it's the average Joe with a few bucks taking a stab on the pick 4, pick 6, Hi-Five and such.

What we should be doing is educating the horseplayer on making inteligent decisions with his bankroll.

These super exotic wagers that you so called horseplayers yearn for are just a quick way to the poor house. Players with large bankrolls will always catch those huge payoffs, they can use wheels and double and triple key horses in these crazy bets.

Remember, the take out only affects the guy who actually catches a winner, if you can't handicap, they could take out 99%, it wouldn't matter, you didn't have the winner. They could take out 1%, you still need the winning ticket.

So, lets concentrate our efforts into educating the horseplaying masses on picking winners, keeping there bankrolls longer (money management), just making win bets and perhaps a cold exacta or quinella, the more you spread in these exotic wagers, the quicker your bankroll will erode.

Down here in Florida, at the simulcasting facilities, all the horseplayers do is bet numbers, looking for a big score. They are all busted. Few, if any, purchase a Racing Form, or for that matter, a program. And, the ones with a Form don't even know what there looking at.

So, lets make this an educational website first, then work on lowering some takeout. Besides, no matter what you think you can do with your mighty takeout crusade, the tracks just laugh at you when you mention lowering the take, as long as the action junkies are around.

George the blackjack teacher said...

Horse is a very difficult game. I can barely handle playing a good game of hold'em. Omaha, razz and the other variations of poker used in horse, combined together, makes the game very hard to understand and play. Nonetheless, I admire those who can play it and are good at it.