I'm certainly not as optimisitic as you that the proliferation of rebates inevitably leads to takeout reduction.
In fact, I'm more inclined to believe that the proliferation of rebates leads to an institutionalized dependence upon rebates, and therefore the creation of a political lobby working for the interest of people who benefit from rebates.
Why would somebody who is getting a guaranteed return, let's say an eight per cent rebate on every dollar he bets, want to see an eight percent reduction in takeout, if such a reduction in takeout costs him his rebate? So that he can play on an even playing field for the good of the game?
I don't think so. And, in fact, while I certainly think that rebates represent a good purchase price for any punter and as such will continue to draw the enlightened consumer away from the track, I think the really shrewd guys in the rebate game are in it precisely to take advantage of the economic distortions caused by rebates. The're in it not to play the horses, but to play the churn. Which is why I consider rebate handle not to be natural handle growth, but handle growth on steroids.
For the moment the advantage of a guaranteed return on their betting is eliminatd many rebatees are out of horse racing and onto an easier game.
But still, we're talking about an industry that is becoming increasingly dedpendent upon "rebate" handle and a select group of entrenched bettors who benefit from the structure as it now exits. Seen from their perspective the bill to raise takeouts introduced in the NY State Legislature makes all the sense in the world. Throw the politician a little campaign donation, and let him start talking about raising takeouts. Not because you expect takeouts to be increased, but because as long as everybody is busy fighting against increased takeouts they won't have time to fight for reduced takeouts. Which, afterall, as sporting a notion as it might sound, might not actually be in your best economic interests? Ah, so is what we saw in NY last week, not the totally stupid action of some ignorant politician, but perhaps the savy first gambit of a developing "rebate lobby" watching out for themselves?



Post Edited (03-29-04 16:48)