EPMA Roundtable PROFESSIONAL PUNTERS EPMA Roundtable PROFESSIONAL PUNTERS DENNIS VERRIOS Page 1 EPMA PRESENTATION DENNIS VERRIOS DIRECTOR BUSINESS DEVELOPMENT –TOTE TASMANIA CHIEF OPERATING OFFICER – AGILITY INTERACTIVE [email protected]4 October 2010 DENNIS VERRIOS DIRECTOR BUSINESS DEVELOPMENT –TOTE TASMANIA CHIEF OPERATING OFFICER – AGILITY INTERACTIVE [email protected]4 October 2010
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EPMA Roundtable PROFESSIONAL PUNTERS DENNIS VERRIOS
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EPMA Roundtable
PROFESSIONAL PUNTERS
EPMA Roundtable
PROFESSIONAL PUNTERS
DENNIS VERRIOS Page 1EPMA PRESENTATION
DENNIS VERRIOSDIRECTOR BUSINESS DEVELOPMENT – TOTE TASMANIA
average for each average for each average for each average for each
sectorsectorsectorsector
Government
Taxes
.0161 x Y =
16,100
.0161 x Y =
23,000
42.9%
42.9%42.9%42.9%42.9%
Increase to Increase to Increase to Increase to
GovernmentGovernmentGovernmentGovernment4444Sales Tax .0147 x Y =
14,700
.0147 x Y =
21,000
42.9%
DENNIS VERRIOS Page 13EPMA PRESENTATION
Racing Product
Fees
.013 x Y =
13,000
.013 x Y =
18,571
42.9%
27.9%27.9%27.9%27.9%
Increase to Increase to Increase to Increase to
industryindustryindustryindustry444450% of op’s
gross profit to
industry
.03 x M + .015 x
P = 30,000
.03 x M + .015 x
P = 36,429
21.4%
TOTAL TOTAL TOTAL TOTAL 73,80073,80073,80073,800 99,00099,00099,00099,000 34.1%34.1%34.1%34.1%
Therefore it can be seen that the introduction of professional money, has increased
government revenue (through gov and sales tax) by 42.9% and increased industry
funding (through product fees and 50% of gross revenue) by 27.9%
DENNIS VERRIOS Page 14EPMA PRESENTATION
SERVICING PROFESSIONALSSERVICING PROFESSIONALS
How do we service the professional?
What are the types of Professional bettors?What are the types of Professional bettors?
There are three distinct types of pros
operating in the industry who are
differentiated by the way they determine
the value of a horse (similar to stock
market analysts):
Technical ���� much like technical analysis in the stock market, technical pros observe changes in the ‘price’ of a horse in order to determine ‘the future’, and assume all
Fundamental ���� In the stock market this means someone who looks into all information regarding the share to evaluate the shares value in the future, and a fundamental pro is similar. They evaluate the entire field and determine, as a consequence of studying form and every aspect affecting the horse, what the chances
DENNIS VERRIOS Page 15EPMA PRESENTATION
changes in the ‘price’ of a horse in order to determine ‘the future’, and assume all information in forming that price is correct.
This can be seen with the following example: in a race of however many starters, one horse’s odds have widened to 4 to 1 while another horse’s odds have shortened to 4 to 1. In simple terms, a technical pro believes this represents that the horse whose odds have shortened has a higher chance of winning than the horse whose odds have widened, even though the same odds are being offered.
studying form and every aspect affecting the horse, what the chances of each horse of winning the race is.
Hybrid ���� uses both technical analysis and fundamental analysis to determine who will win the race. For example they may have determined the form of the race but then also watched fluctuations in the market and take note of horses coming in or out.
What are the key items required?What are the key items required?
� Technical
� Constant stream of data in regards to runners paying dividends and pool sizes
� Historical pool and price movements
� Fundamental
� Access to historical video footage
� Sectional timings (they create these if not provided)
DENNIS VERRIOS Page 16EPMA PRESENTATION
movements
� Advanced models regarding price movements and impact across pool types
� Fast transactional processing systems
� Detailed market information including trainers and jockey info
� Environmental data: Weather, Going etc
� Large Database and regression systems
VIP SERVICE – FIRST AND FOREMOSTVIP SERVICE – FIRST AND FOREMOST
� The CRM is the first point of contact for the clients, they are assessable 24/7
� Transfers and deposit transactions are completed upon request 24/7
� Prompt CRM service and communication (product managers speaking to
clients on a regular basis and instantly when problems occur)
� Support clients in obtaining greater profits via specialised products e.g.
Betpro.
DENNIS VERRIOS Page 17EPMA PRESENTATION
Betpro.
� Attend “prestige” events with clients
� Communicate “Priority” benefits to the client on a one on one basis (call,
invite out to lunch)
� The CRM division work closely with the Call Centre and IT departments to
ensure The TOTE account holder benefits are maintained and meet.
VIP TECHNOLOGYVIP TECHNOLOGY
DENNIS VERRIOS Page 18EPMA PRESENTATION
VIP TECHNOLOGY – WEBSITEVIP TECHNOLOGY – WEBSITE
� BETPRO website – www.betpro.com.au
– The BETPRO website was created as a result of demand for a high-end wagering
system for pari-mutuel racing product, It is only available to a select group of customers
– Integrates with customers, often complex, wagering strategies. This additional level of
personal service offers customer flexibility with new functionality such as the upload of
personal ratings, interrogation of rating information against current market information
and the placing of bets either manually or automated based on user defined conditions
� The argument is even better when you look at complex exotics – with
almost no loss and mostly gain from every $ from a Professional
2 HOW DID WE ARRIVE AT THAT?
Economic Theory – it’s complicated!
2 HOW DID WE ARRIVE AT THAT?
Economic Theory – it’s complicated!
� The Favourite Longshot Bias (FLSB) means that, on average, punters tend
to overvalue "long shots" and undervalue favourites. That is, in a horse
race where one horse is given odds by a Bookmaker of 2 to 1, and another
50 to 1, the true odds (as determined by an efficient market mechanic
such as Pari-Mutuel) might for example be 2 to 1 and 100 to 1
respectively. Betting on the "long shot" is therefore a much worse
proposition than betting on the favourite.
DENNIS VERRIOS Page 30EPMA PRESENTATION
proposition than betting on the favourite.
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 1
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 1
To illustrate the effect of the PPME – some basic maths is used:
Final pool (Y) = small money (M) + pro money (P) Y = M + P
In the case where there are No Pros
- each dollar added to pool by professionals adds more
than a dollar in total
DENNIS VERRIOS Page 31EPMA PRESENTATION
In the case where there are No Pros
Y = M and M = m0 + m1Y
m0 = a bet placed regardless of pool size; an entertainment bet
m1 = a bet that is influenced by pool size
� As small punters place bets for entertainment it is likely that the value of
m1 is very close, if not equal to zero
Therefore we can say Y = m0
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 2
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 2
What if we add Pros?
Y = m0 + P and P = p0 + p1Y
p0 = a bet placed regardless of pool size; an entertainment bet
DENNIS VERRIOS Page 32EPMA PRESENTATION
p1 = a bet that is influenced by pool size
�As pros bet for monetary gain it is likely that the value of p0 is
very close if not equal to zero
Therefore Y = m0 + p1Y
After finding this we can use algebra to find the value of Y:
Y = m0 + p1Y
Y – p1Y = m0
Y (1 – p1) = m0
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 3
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 3
DENNIS VERRIOS Page 33EPMA PRESENTATION
Y = 1 / (1 – p1) x m0
Therefore it can be seen that the final pool is dependant on both
the investments of the small punters and also the amount that
professional punters bet dependant on the size on the final pool
As seen before, Australian professionals account for 30% of the final SuperTAB pool, and let’s therefore presume, given the market is self correcting and at a mature stage professionals are aiming for (30%) of the final pool. Therefore p1 = .3, and let’s say that m0 = 1,000,000
Y = 1 / (1 - .3) x 1,000,000
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 4
3 HOW DID WE ARRIVE AT THAT?
The PPME – Part 4
DENNIS VERRIOS Page 34EPMA PRESENTATION
Y = 1 / (1 - .3) x 1,000,000
Y = 1 / .7 x 1,000,000
Y = 1,428,571
As can be seen, with the professionals aiming for 30% of the pool, they have unintentionally made the pool grow by 42.9%, and this would hold true regardless of the size of m0
4 HOW DID WE ARRIVE AT THAT?
The Effect of the PPME on the Industry and the Govt
4 HOW DID WE ARRIVE AT THAT?
The Effect of the PPME on the Industry and the Govt
Background � The weighted average commission rate is 16.1%. This is then divided up by:
After running costs the operator has 6% gross profit from ‘small money’ and 3% gross profit from professionals. Of this, 50% is given back to the industry in the forms of sponsorship, facilities upgrades, etc.
Of the 16.1%Of the 16.1%Of the 16.1%Of the 16.1% Of the total Of the total Of the total Of the total
poolpoolpoolpool
DENNIS VERRIOS Page 35EPMA PRESENTATION
facilities upgrades, etc.
The affect of professional on the industry and government will now be explored, with m0 = $1,000,000 and p1 = .3 like in previous examples.
poolpoolpoolpool
Government
Taxes
10% 1.61%
Sales Tax 9.1% 1.47%
Product Fees 8.1% 1.3%
Operator 72.8% 11.72%
Thank you for your time. Please feel free to contact me
regarding any questions or alternative points of view:
DENNIS VERRIOS Page 36EPMA PRESENTATION
QUESTIONSQUESTIONS
regarding any questions or alternative points of view: