There was good news last week coming out of the California Horse Racing Board, which announced that it is preparing to rescind what was among the dumbest rules in the history of horse racing. After a mandatory 45-day comment period, California will likely remove a rule from its books that prohibited its tracks from sending its signal to wagering outlets that provide customers with rebates.
It seems that someone finally figured out that rebates stimulate handle, exactly the reason why they should be embraced and encouraged, not banned.
It's simple math. Most players bet without rebates and into the teeth of destructively high takeout rates. That's among the main reasons that horse racing isn't more popular with most gamblers; it's just too hard to win. Even a savvy handicapper with a big bankroll will have a very difficult time staying ahead of the game and will be forced to limit his or her wagers. Either that or go broke.
But rebates change everything. The same bettor who used to lose can become a winner when a rebate is factored in. Thanks to rebates, there are many big bettors out there wagering millions each year who otherwise might not be betting a dime on horse racing. If you're a good enough handicapper to break even or even lose a small percentage under normal circumstances, then you can make a sizeable profit once the rebate is factored in. Some shops will give customers rebates as high as 10 percent.
It's good for the player, good for whatever wagering outlet is giving them the rebate and good for the track sending out the signal the player is betting on. Like any other account wagering firm, the rebate outlets pay their fair share to the tracks hosting the races. Rebates are good for business. Case closed.
Yet, somehow rebates have become taboo within the racing industry, which leads you to believe there are a lot of racing leaders who understand neither their customers nor economics. Would someone please explain to me what he or she has against rebates? I don't get it. The notion that it keeps players from betting at the racetracks themselves is preposterous. Is the big player sitting in his living room in Michigan really going to find a way to make on-track bets in California if unable to get a rebate?
End rebates and most big bettors would either wager less or stop betting all together. Prohibit certain tracks from sending their signals to rebate shops and the big bettors will just bet on other tracks. In all cases, the only losers are racetracks and states that prohibit rebating.
Fortunately, there are people involved with California racing that figured this out. Prominent horse owner Jerry Moss, who is also a commissioner with the California Horse Racing Board, proposed at a recent meeting of the agency that the rule be done away with. Moss's timing was perfect. With the economy battering business at racetracks everywhere, Moss argued that no one could afford to stand in the way of anyone wanting to bet on California racing or any wagering firm willing to offer the product. No one seems to be arguing with him.
According to the Blood-Horse, Moss said he was opposed "to anything that stands in the way of business."
It also seems that the rule wasn't being enforced in the first place. Magna Entertainment, the owners of Santa Anita, a track the CHRB was supposedly trying to protect, is even in the rebate business. Magna owns XpressBet, which offers a 2 percent rebate to its biggest customers. That's how silly this thing had gotten.
"Rebating is here and everyone is doing it," Hollywood Park President Jack Liebau said, according to the Blood-Horse. "I don't think the California Horse Racing Board should take any action that will discourage people from betting on California races. I can't believe you'd do that."
Good for Liebau, Moss and the others who took a stand. Horse racing needs to find ways to build its business and needs to take a harder look at things like exchange betting, proposition betting and rebates. Times have changed and they are tough. The game needs every betting dollar it can get its hands on. Rebating works, and it needs to be supported.
Bill Finley is an award-winning racing writer whose work has appeared in The New York Times, USA Today and Sports Illustrated. Contact Bill at wnfinley@aol.com.