REBATES - BIG BENEFITS !
You may have heard the name Zeljko Ranogajec and Mike Walsh. For those who haven't he and his university buddies operated what was thought to be the worlds biggest betting syndicate. The punters club as it was known traded billions of dollars each year on various sports using sports modelling software and algorithms to identify trades. One of their main beneficiaries was leading betting exchange Betfair, were they had a deal to supply the platform with market making and liquidity. In return the Punters Club received commission free trading, and part of the revenue raised from opposing trades. In effect, they had free trading and when the opposite party won they received part of that players commission. You could also call it a rebate, because it’s really the same thing.
Without the Punters Club it is thought Betfair would have struggled to gain traction, although it wasn’t long until other companies such has Bettingpromotions came along. The new competition meant the Punters Club had viable opposition, and that in turn meant lower margins has the markets became more competitive. The actual trading was identified by what is called a Bot, and part of the job was to identify arbitrage opportunities. That meant using other betting platforms such has Pinnaclesports, IBC, Singbet and IBC, bookmakers who accept professional action. In fact, these bookmakers don’t just accept professional action, they actually pay agents to collect bets. That in turn meant another discount for the Punters Club, so another rebate!
While the rebates from Asian bookmakers are minimal (0.1 to 0.3%), every cent counts. However, in horse racing massive rebates can be had from pari-mutual betting systems around the world, because this is pooled money and shops/agents are paid commission to collect the bets. It’s exactly the same with lotteries, when you buy a ticket from your local newsagent they get say 10% for supplying the service. As a Betting syndicate you can cut out the shop/agent and go direct to the supplier, by doing this the syndicate can claim the rebate. And, part two of that is bigger turnover means the possibility to negotiate an even higher rebate!
In some countries such has Hong Kong and Singapore, the Pari Mutual is operated by a state monopoly. In Australia and the USA it’s regionalised and for the benefit of the racetrack and prize money. Nevertheless, for the operators it’s a numbers game, and offering large rebates to syndicates of sales outlets is part of the dynamic. Normally a pooled bet will have a fixed rate of deduction, which may vary for the type of bet or other contingencies such has government taxes and operating costs. For example, if the win pool deducts 15% and their is 100,000 bet then their will be 85,000 returned to the punters. If the value of winning tickets was 10,000, then the payout would be 8.50 for 1.00 (1000*8.5 =85,000). Maybe the shop owner/agent would receive 7%, so the syndicate would be looking for at least that sum has a rebate.
Did you know that in countries like Hong Kong the track have introduced rebates for big punters. If the bet is over HKD 10,000 (US$1290) losing bets are entitled to 10% rebate. The idea behind that was to slow down illegal bookmaking, and get the money into the track. In the USA rebates can be upto 10%, albeit you need to churn a minimum of 1-5 million per month to qualify. Of course it varies state to state has in New York they only deduct 14%, whereas in Arizona it can be a whopping 25%. Their was even talk of Regis Downs planning a cut to10%.
Loads of countries across the world offer pool betting, and their are loads of bookies offering direct rebates. Syndicates don’t need the middle man, because they can usually organise the rebate themselves. We bet on the French PMU and we have organised ourselves a 7% rebate on single bets, albeit we had to do it in a round about way. Don’t believe different, plenty of value can be found with pari mutual operators if you are big enough to strike up a deal.
We would just like to add a quick note to say that if you don’t understand the concept of value, you will never be a successful punter. However, whether you will ever have enough turnover to be offered direct rebates is one thing, but many online bookies give part commission back (racing). Our tip - chase every cent!!