WTF! NZ TAB still doing Promo's!

[Agent54]

No idea still.  Keep talking take out rates on fixed odds bets.  

[mardigras]

The issue of profit on these is not as simple as just looking at the results of the bets themselves. Which I expect is what the TAB would do.

I'd suspect that they do not analyse them down to the profitability across all account holders betting relative to their betting over a period of x and how the promos translate to an actual increase or otherwise.

For the promos to be successful revenue earners, they need the punters betting on them to deliver greater losses than they would have otherwise, or attract other punters (with losses) that wouldn't have been losing with them otherwise.

And factor that against those punters that have won overall relative to their usual betting behaviour by way of the promos.

Having read many things from NZRB, and their many ideas they have on how to make more revenue, I'd be pretty certain they wouldn't even know how to do this type of analysis.

Of course, we will never know, because NZRB/RITA are not forthcoming with open information - and how that information has been arrived at.

If indeed they do such analysis - I'm surprised given how they always talk about things like how excited they are when turnover is up, only to find in the reports that it has had no impact on net revenue or overall profit. 

[Chief Stipe]

1 hour ago, Agent54 said:

No idea still.  Keep talking take out rates on fixed odds bets.  

Once again thank you for your comprehensive response.

I know there is no takeout rate on Fixed Odds betting.  What I do know is that there is a profit or loss on a book.  We do know that the tote is more profitable than fixed odds in terms of revenue.  The revenue i.e. profit from fixed odds BEFORE costs is substantially less than the tote.

From what we can with the minimal information that we are now getting is that bonus bets haven't done anything to improve the fixed odds profitability.

As Mardigras points out NZRB/RITA's betting product management is fixated on turnover NOT revenue.

 

[Huey]

49 minutes ago, mardigras said:

 

For the promos to be successful revenue earners, they need the punters betting on them to deliver greater losses than they would have otherwise, or attract other punters (with losses) that wouldn't have been losing with them otherwise.

And factor that against those punters that have won overall relative to their usual betting behaviour by way of the promos.

 

Can you give an example of what you mean by the above, do you mean they need to encourage punters to bet more than they would normally?

The reason I ask , is because the promo $ is just that promo isn't it, doesn't it need to factor in encouraging real punting on the event?

[curious]

Seems pretty logical and clear to me. If the promo encourages losing punters to bet more than they normally would, that would be helpful but seems unlikely because punter losses are pretty static. If it allows losing punters to lose more slowly then the outcome remains neutral. If it allows losing punters to win or lose less, then the TAB lose from the promo. If the betting of the promo recipients attracts other losing punters to bet more and still lose, that would help. Don't think anyone knows which seems to be mardi's point.

Not sure what you mean by "real punting" but if that's more turnover, it's clearly not a useful metric to analyse the effect of the promos.

[Huey]

27 minutes ago, curious said:

Seems pretty logical and clear to me. If the promo encourages losing punters to bet more than they normally would, that would be helpful but seems unlikely because punter losses are pretty static. If it allows losing punters to lose more slowly then the outcome remains neutral. If it allows losing punters to win or lose less, then the TAB lose from the promo. If the betting of the promo recipients attracts other losing punters to bet more and still lose, that would help. Don't think anyone knows which seems to be mardi's point.

Not sure what you mean by "real punting" but if that's more turnover, it's clearly not a useful metric to analyse the effect of the promos.

Isn't the promo just that a promo, so not real $ going on a FF bet? So how is it(that race) attracting any more real money than it usually would? Difference in prices or being impacted by Promo bets? I'm trying to understand how it is even supposed to increase turnover that unrelated to the promos going on the race. 

[mardigras]

2 hours ago, Huey said:

Isn't the promo just that a promo, so not real $ going on a FF bet? So how is it(that race) attracting any more real money than it usually would? Difference in prices or being impacted by Promo bets? I'm trying to understand how it is even supposed to increase turnover that unrelated to the promos going on the race. 

My understanding of their promos was that you placed a fixed odds bet, and depending on the outcome, you could be provided with a bonus bet. The initial bet being real money. The promo/bonus bet being nothing from a revenue standpoint.

With the idea being that punters will bet on the races with the promo, where they otherwise wouldn't. 

And my view is that all that is likely to do is shift where punters lose there money if the bets result in losing. They aren't going to lose on the promo/bonus offer, and then carry on losing the same amount as normal on the other races.

So if you don't attract new punters to bet (and lose) on your promo, or your existing punters aren't prepared to lose more than normal ,then the promo delivers nothing extra in revenue.

The only other potential upside is the promo is being used to retain punters that would otherwise go elsewhere. And if they keep the punter that loses overall, purely from the promo being available, then that is an avenue where the promo has benefit. A very difficult one to measure without some degree of understanding that your customers were planning to go elsewhere.

A TAB is unlikely to be able to increase revenue from an existing set of customers (outside of typical increases due to normal economic factors related to things like incomes which allows for customers to be prepared to lose a little more as they have a little more). Since revenue is losses. And therefore they need some way for their collection of punters to be prepared to lose than before.

So increasing customers becomes the easiest and most likely way to grow revenue.

[mardigras]

3 hours ago, Huey said:

Can you give an example of what you mean by the above, do you mean they need to encourage punters to bet more than they would normally?

The reason I ask , is because the promo $ is just that promo isn't it, doesn't it need to factor in encouraging real punting on the event?

Not bet more, lose more. Revenue is the collection of losses from punters (less the collection of profits from those punters that win overall).

The encouragement is the enticement of betting on an event with real money - in the anticipation that should it not win, but meet some criteria, you will be rewarded with an additional bonus bet opportunity.

If they simply give money away without requiring any betting, then I would expect that is done to attract a punter to bet in the hope that once they have lost the given money, they will lose some of their own money. So that is aimed at having say Ladbrokes get $200 from punter A by enticing them with $150 bonus bet - rather than Bet365 getting that punters $200. Ultimately, the punter in the long term is generally only going to be prepared to lose a certain amount - so it comes down to which betting provider is going to get it (or a share of it).

[Chief Stipe]

9 hours ago, mardigras said:

My understanding of their promos was that you placed a fixed odds bet, and depending on the outcome, you could be provided with a bonus bet. The initial bet being real money. The promo/bonus bet being nothing from a revenue standpoint.

Not correct Mardigras.  One type of bonus bet was where they would put $10 or more in your account as a bonus bet.  Obviously you couldn't remove it as cash well not straight away.

You then place a fixed odds bet using the $10 bonus.  For example Winx is paying $5 for a win.  If you used your own money NOT the bonus you would get $50 back if it wins. 

If you used the bonus they subtract the $10 and you get $40.  They do this when you place the bet.

The other bonus you get is when you deposit $30 or more of fresh money into your account and they top up with $20 or more of bonus money.

The trick with the top up is to use their money to reclaim the $30 in winnings i.e. withdraw the $30 from the $20 bonus winnings and keep playing with their money.  End result no advantage TAB.

[mardigras]

3 minutes ago, Chief Stipe said:

Not correct Mardigras.  One type of bonus bet was where they would put $10 or more in your account as a bonus bet.  Obviously you couldn't remove it as cash well not straight away.

You then place a fixed odds bet using the $10 bonus.  For example Winx is paying $5 for a win.  If you used your own money NOT the bonus you would get $50 back if it wins. 

If you used the bonus they subtract the $10 and you get $40.

I discussed that here.

9 hours ago, mardigras said:

If they simply give money away without requiring any betting, then I would expect that is done to attract a punter to bet in the hope that once they have lost the given money, they will lose some of their own money. So that is aimed at having say Ladbrokes get $200 from punter A by enticing them with $150 bonus bet - rather than Bet365 getting that punters $200. Ultimately, the punter in the long term is generally only going to be prepared to lose a certain amount - so it comes down to which betting provider is going to get it (or a share of it).

Ultimately, free bets are designed to attract a punter to lose beyond the level of the free bet, irrespective of what happens with the free betting money. Again, it would be interesting to see how they analyse the results from that type of offer.

Edited May 6, 2020 by mardigras

[Chief Stipe]

14 minutes ago, mardigras said:

Ultimately, free bets are designed to attract a punter to lose beyond the level of the free bet, irrespective of what happens with the free betting money.

Isn't it a bit like REBATES for the little people?  Must cost IF it doesn't entice people to LOSE more of THEIR money.  I guess it might get the pathological gambler to bet more.

At the end of the day bonus bets do COST the TAB.  I doubt that they return a profit and I haven't seen any evidence to the contrary.  Still waiting for Agent54's explanation on how they work.

Ultimately they are promoting further leakage from the Tote to Fixed Odds.  What we do know is that the % of revenue from Tote turnover is a lot greater than the turnover from Fixed Odds.  We also know that not only is the revenue generated by Fixed Odds is less on a percentage of turnover basis but also has much higher costs.  Even if the odds are auto generated as we are led to believe with this new computer system.  Which also raises the point that the reason RITA is in shit creek (in private enterprise terms - INSOLVENT) is they spent $50-$70m+ of hard earned or borrowed on a system that provides more Fixed Odds options!  Go figure!

I've said this many many times - why is it that the General Manager of Betting & Product, presumably the architect of the above, continues to keep his job?  Will be interesting to see if he is one of the 230 that goes or one of the 530 that stays.

He (they) keep killing the Golden Goose - the Tote.

 

[mardigras]

4 minutes ago, Chief Stipe said:

Isn't it a bit like REBATES for the little people?  Must cost IF it doesn't entice people to LOSE more of THEIR money.  I guess it might get the pathological gambler to bet more.

It's unlike rebates if it is based around people losing, not turnover. We don't have the information that would allow us to say whether the free bets ultimately make them money. I'd expect they don't actually know.

 

6 minutes ago, Chief Stipe said:

At the end of the day bonus bets do COST the TAB.  I doubt that they return a profit and I haven't seen any evidence to the contrary.  Still waiting for Agent54's explanation on how they work.

The free bets you are referring to - we have no information to say whether they lose them revenue or make them revenue. If a punter spends/loses their own money at NZ TAB rather than their own money at Ladbrokes, then they be able to suggest they make money from the free bets - if the punter chooses to lose that money at the NZ TAB because of the free bet offer.

[mardigras]

10 minutes ago, Chief Stipe said:

Ultimately they are promoting further leakage from the Tote to Fixed Odds.  What we do know is that the % of revenue from Tote turnover is a lot greater than the turnover from Fixed Odds.  We also know that not only is the revenue generated by Fixed Odds is less on a percentage of turnover basis but also has much higher costs.  Even if the odds are auto generated as we are led to believe with this new computer system.  Which also raises the point that the reason RITA is in shit creek (in private enterprise terms - INSOLVENT) is they spent $50-$70m+ of hard earned or borrowed on a system that provides more Fixed Odds options!  Go figure!

 

We don't know - since we don't know whether the free bet offer has meant the punter has changed their betting behaviour or not. 

I don't think the general rate of return has much to do with it. The bet on either tote or fixed odds, is still gross betting revenue if it loses. The commission on the tote is not taken from an individuals bet. The income is not derived as being commission rate * turnover for a punters bet. It is turnover less payout. The sum of those  (including the negatives) is your gross betting revenue.

[Chief Stipe]

2 minutes ago, mardigras said:

I don't think the general rate of return has much to do with it. The bet on either tote or fixed odds, is still gross betting revenue if it loses. The commission on the tote is not taken from an individuals bet. The income is not derived as being commission rate * turnover for a punters bet. It is turnover less payout. The sum of those  (including the negatives) is your gross betting revenue.

I know that Mardigras - you have drummed that into readers for ages.  However what we also know is that the Revenue from the Gross Fixed Odds turnover stream is on a percentage basis a lot less than the Revenue from the Gross Tote Odds pool.  Excuse the pun but the revenue from the Tote Pool is Fixed as a percentage.

We also know that it costs more to provide Fixed Odds than it does the Tote.

[mardigras]

Just now, Chief Stipe said:

I know that Mardigras - you have drummed that into readers for ages.  However what we also know is that the Revenue from the Gross Fixed Odds turnover stream is on a percentage basis a lot less than the Revenue from the Gross Tote Odds pool.  Excuse the pun but the revenue from the Tote Pool is Fixed as a percentage.

We also know that it costs more to provide Fixed Odds than it does the Tote.

For sure. The costs associated with offering fixed odds though won't be largely increased due to a few punters placing bonus bets into that market. So those costs remain close to the same.

To determine the success or otherwise of the offer(s), would require specific analysis of individual bettors and their betting patterns that have taken up the offer - not an assessment of the overall margin achieved through fixed odds versus tote.

Even though the average margin on fixed odds may be say 12%, the average margin on those punters taking up free bets might be 40%. So if the free bet encourages a punter to keep losing (where otherwise they may stop betting), then the free bet offer could be seen to make them money - irrespective of where the bet ends up.

The promo offers of bet first, recoup a bonus bet, may well be fixed odds only. But is that the case for free deposited bonus bets? Any TAB punters have the answer to that?

[mardigras]

As an aside, I'm not disagreeing with you regarding the profitability of these promos and bonus bets. But the reality is, we don't have the information to know. And as I said, I doubt the TAB properly knows, given how they operate.

[Dark Beau]

My belief is that they don’t know either.
If you look around the world, every betting agency is doing it, almost exactly the same, if not the same.

My guess is that one started it and they have all followed suit.  

[SLB2.0]

Has anyone noticed that promos are disappearing?

As an elite member, it's almost as if they have gone from 100 to 0 is a week.

[Yankiwi]

Maybe Taylor Swift will sing at the Melbourne Cup this year. 

[Freda]

and...getting off topic, but still TAB related...I was locked out of my TAB account when the platform changed.     With the help of a very nice lady on the staff, I finally got it sorted.   In the meantime, out of frustration, I opened a Bet365 acount.  Very satisfactory, and so easy to navigate even for a simpleton like me.

So..my phone died and I got a new one.   Found myself needing to re-log in on both sites and re-introduce myself.  Typically, I had saved my passwords on my old phone which,  with a charger broken off inside, was unable to be accessed to retrieve them.  Guessed, but got them wrong.  

No problem, said the  Bet365 website, re-set password.   Click.   Fine.   Re-enter new password.  Click.  Done. Welcome.  And away I went.

Tab said,  wrong password.  I know that.  Click reset.  We will email you a replacement password.  Still waiting.

[Chief Stipe]

56 minutes ago, Freda said:

Tab said,  wrong password.  I know that.  Click reset.  We will email you a replacement password.  Still waiting.

Yep I had the same problem.  Didn't get the email.  Apparently it was a bug.  But if they hadn't tested something as simple as that before putting into production well say no more.

Beside the fact they supposedly bought the software second hand.  Then spent $50m on it.

From what I've heard it costs millions a year to run and pay a license to use it.

[holy ravioli]

They obviously learned a lot from their previous experiences with betting software.Feverpitch I think was one flop ,introduced by serial,successful failure Derek Handley.