I thought the 6-1 ratio was close to the norm as well, until I learned that brisbet was paying a 10% rather than a 3% fee to Magna before the signal cut-off. The lower 3% fee is what brisbet pays for signals such as Tampa, which is why brisbet has been offering 7% rebates since the cut-off. Brisbet's handle is way up since the cut-off, & in a recent letter to customers brisbet thanked Magna for "opening its eyes."

I agree with much of what Chris has to say, but like most issues in racing, rebating is complicated. Too complicated, perhaps, to address in a single letter.

From the horseplayers' perspective, rebates are a form of much needed & long overdue price competition for their wagering dollars, & theoretically at least, it's hard to argue with the economic principle that lower prices should produce higher betting volume. And that certainly seems to be what has happened in NY since takeout rates were lowered at the end of 2000. Handle is up about $1 million per day, & bettors received an extra $92 million more than they would have under the old rates.

If on the other hand you put yourself in the shoes of an owner, what you'd see over the last couple of yrs, when rebates exploded, is an increase in handle accompanied, for the 1st time, by a decrease in purses. The situation is even worse if you eliminate the bump from slots. So it's not surprising to find many who say that rebating actually siphons money from the industry. Mayor Rudy was recently retained by the NTRA to get to the bottom of the matter.

Based on what has been reported, for non-Magna tracks, I have to agree with asfuth. For example, if someone who usually bets at NY tracks switches to XpressBet, the NY track's share of the wagering dollar goes from 20% to 3%. Magna's role seems substantively the same in this kind of situation as an offshore rebate operation like RGS.

There is also a question of whether or not all of the additional betting volume which results from rebating is something the tracks want. Some percentage is computer-generated batch wagering, which causes a lot of the late odds drops. FG,Oak,& Tampa have removed their signal from wagering outlets which allow the practice. Calif tracks allow the practice.

The shut down occured less than a week ago & I already know that someone whose residency was in question has been contacted & questioned about his betting habits. It is even more remarkable to read that Magna has complied with the TOC's request for "information." It depends of course on exactly what that means, but as a general proposition this is not the kind of thing someone who is being hounded by the IRS or going through a divorce, to take just two examples, wants to hear. I imagine this news was greeted even less enthusiastically by some of the Soprano-type characters I have met at tracks over the yrs. The idea of Drew Couto poring over someone's personal betting records is, to put it mildly, downright scary.