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Horse-Racing Rebates. Over the past seven years or so, horse racing's biggest gamblers have profited handsomely from a loyalty-marketing program that some say is unfair to the game's smaller bettors -- and that perhaps undercuts the race tracks as well, reports Joe Drape in The New York Times. These big-time gamblers, known in racing's circles as "whales," collectively bet "as much as $1.5 billion a year on thoroughbred races in the United States." They do so through any of about eight "rebate shops" that "offer from four percent to 10 percent back on every dollar wagered -- win or lose." The cash-back does indeed add up nicely for those who gamble heavily. One such gambler says his average 10 percent rebate puts him at "two points above break-even" and in position to earn "that extra three or four points of profit at the end of the year that is usually there after the luck evens out."
Now, we're talking about a whale of a gambler who is betting a total of "$24 million a year in the hope of netting a profit of about $960,000." That's fine for him, but maybe not so great for the gambling "chum" who don't bet enough to earn the rebates and some say are being eaten alive by the "whales." In addition, the rebate shops -- which operate "off shore, on Indian reservations or in states with fewer regulations" -- are said to be draining revenues from the racetracks. "What you've done with rebates is you have put people in business with your own product and allowed them to undercut your price and steal your best customers," says Chris Sherf of the Thoroughbred Racing Association.
Karl Schmitt of the Churchill Downs Simulcast Network sees it quite differently, however: "Our view in general is we believe that offering better pricing for your largest-volume customers is consistent with American business practices," he says. In fact, it's a practice that seems to be working. The total dollars bet on horse racing in the U.S. has increased by 20 percent -- to more than $15 billion -- since rebate shops cropped up in 1997. Rebate -shop operators also contend that they are not only paying their fair share to tracks but also are attracting new gamblers to the game. Ah, but there's the tug. What attracts gambling's "whales" ultimately may repel its "chum." As Chris Sherf observes: "It's a game, not a financial market, and if people at the racetrack think they are chum and have been thrown out in the water for five or six players to take down, then the chum is going to move on to another game and the whales will move on to another financial market." By the way, the Kentucky Derby is this Saturday.
The Mango Man. He lives on St. Lucia and his name is Gregory, but most everyone knows him as "The Mango Man." They come running, the kids do, shouting, "Hey, Mom! Hey, Dad! It's The Mango Man!" Translation: "Give me your pocket change because I want some fruit!" Moms and Dads, naturally, are only too happy to hand over some fruit money. What's more, the baby boomers among them don't have to reach back very far to recall their own childhoods, when The Good Humor Man rolled into their neighborhoods, jangling his bells and selling frozen confections. The difference is, The Mango Man arrives via motorboat, signals his arrival by blowing into a conch shell, and sells not ice cream but fresh fruit -- pineapple, grapefruit, coconut, the sweetest of bananas, and most everyone's favorite, mangos.
Kids (of all ages) drop-dead love it -- especially those small, snack-size mangos that The Mango Man slices twice, cutting around the pit, selling three for about five Caribbean dollars (more or less, depending on what you have in your pocket). Gregory, taking gentle slugs off a Heineken, doesn't seem to mind a few questions from an inquisitive beachcomber. So, Gregory, how long have you been doing this? Twenty-two years, mon. Every day? Yeah, mon, almost every day. You pick all the fruit yourself? Uh, yeah, he answers back, slicing the beachcomber a sideways glance. How many beaches do you visit each day? Oh, seven or eight.
Gregory nods that he has a few competitors, but says none of them works as consistently as he does. It is doubtful any of them has a boat that looks like his, either. It is the smallest of dilapidated motorboats, painted green. On the side Gregory has scrawled in big, sloppy, silver letters, "Must Be There Happy Hour Floating Market." Atop his little ship Gregory has built a ramshackle scaffold, from which he flies about a dozen or more flags of various kinds, most of which are either faded, frayed or both. Where did you get all those flags, Gregory? Oh, off different ships. Okay, maybe that's enough questions for Gregory. Only question left is this: Why not The Mango Man (or woman) as The Good Humor Man of the '00s? Hey, Mr. Tally Man , tally me a mango ...
Tim Manners, editor
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