Tuesday, December 18, 2012
Playing With Partners
LOS ANGELES, December 18, 2012--To bet or not to bet.
One issue unaddressed by the New NYRA board members--once they understood that they themselves were not considered corporate officers and therefore would not be prohibited from wagering--was why shouldn't the new CEO, whoever that might be, be a horseplayer?
As good a start as David Skorton made in his debut as Chairman of the Board the New NYRA, the suspension of executive wagering privileges sends a sorry message to NYRA customers: The NYRA Board wants horseplayers’ business but they don’t want their executives engaging in the consumption of the product which might otherwise enhance their understanding of customer issues.
As a horseplayer advocate, I resent any restrictions on any horseplayer’s ability to participate in the greatest gambling game known to man, whether it prevents one making a bet in the privacy of one’s home due to State laws prohibiting Internet betting or in a CEO’s office due to a misguided mischaracterization of what it means to be a horseplayer.
Don’t misunderstand: Not all employees should be allowed to bet. The Drexel Frat Boys, for instance, permanently eliminated workers with totalizator access. Mutuel clerks shouldn’t be able to bet on credit or evade taxes as they once did at NYRA either.
There is a practical solution to this issue, however, which is simply to require all NYRA employees permitted to bet to do so through NYRA Rewards accounts, thereby subjecting them to the same scrutiny as their customers. Indeed, the opportunity and capacity to partake of the product via wagering should help NYRA executives understand and improve it.
I’m sure Churchill Downs thinks they improved their product by offering the Twinspires Player’s Pool which allows their customers to collectively conquer a Pick Six, even if they can’t brag about either their own handicapping skills or the return on their investment.
Indeed, on the day after Pearl Harbor day this year, the Aqueduct Pick Six carryover pool was attacked by a an undisclosed number of bettors -- each contributing whatever he/she was comfortable with -- toward the $21,704 total wagered on their behalf. (The actual tickets and a payout breakdown are available here)
The good news was that they took down the entire 6 of 6 winner’s share of $259,488 plus 71 5-of-6 consolations worth $169 each for a total payout of $271,487 and a gross profit of $249,783.
The better news was that everybody will be assessed only their fair and legal share of taxes on their respective winnings. There will be no "ten-percenter’s" services required, as was recently
The not-so-good news, however, was that after a 25% tax of $21,623.50 was withheld from each 6 of 6 ticket, the net profit was $206,616.50. Each Player’s Pool “share ”paid $95.19 for each $10 wagered, in effect odds of 8.5-1 odds. (One might assume that participants eligible for cash rewards/rebates did slightly better).
The bad news is that only three handicappers were privileged to have their participation paid for. If any CDI employee, including any of the three accomplished handicappers profited from an investment in that pool, directly or indirectly, then perhaps this ethically dubious situation is just what Skorton had in mind.
The worst news for the winners is that without the ability to form partnerships that legally distribute tax liability, law-abiding players, who share payouts requiring IRS form-signing in order to cash out, must find a way to balance each other’s liabilities. (This is especially difficult if only some, but not all, are subject to state income taxes that don’t allow gambling losses to be deducted from gambling winnings).
There is a larger ethical conflict here, to wit: Was an even larger carryover prevented due to a corporate bet-taker’s creation that gives it an unfair edge over the competition, which not only works against the best interests of competing bet-takers’ customers participating in that pool but also that of the host track that might have lost had the additional handle that might have chased that pool on site?
It’s my understanding that, perhaps for that reason, the Player’s Pool is not permitted to operate on California races.
According to Brisnet, ’access to the insights of its own expert handicappers, a huge bankroll, and a little bit of luck, makes the TwinSpires.com Player's Pool a must play. "I can't wait to help TwinSpires.com players take down another Pick 6,"’ said one executive.
But what happens when the Player’s Pool, having a big advantage over serious individual players, isn’t as profitable? It could result in a windfall for the successful competition. The more common result, however, is it likely will lower the rate of return to its own syndicate members because fewer participants will diminish economic leverage.
Larger questions remain: How did this result stack up against prior plays? Should prospective participants be privy to the Player’s Pool’s long-term performance? Do customers have access to those historical results? , but I was unable to locate, My own Google search failed to locate any summary of how the Player’s Pool has performed over time.
Of course, any player, betting anywhere, should be able to form an ad hoc partnership with any combination of other players with each individual taxed only on his/her designated fair share. After all, if such a pool is allowed at one ADW it should be allowed at all without restriction.
Unfortunately the Federal tax code remains unfair. Withholding status is still not determined by the gross profit instead of the cost of a single combination. Now it appears that “Fiscal Cliff” negotiations could negatively impact a horseplayers’ ability to deduct gambling losses against winnings on his Federal return. The NTRA is on that case.
Obviously, technology already exists to support what should be considered an enhancement to the social aspect of racing, which would by extension make small bankroll players more competitive with whales in exotic pools. Now is the perfect time for a grass-roots movement that bonds individuals together to better compete with whales of any stripe.