The Secret Weapon: Rebates
Here’s where the story differs from your usual high roller strategy. Ranogajec realised that in the right kind of betting, you didn’t actually need to win more often than you lost. What you needed was volume – and the right kind of deal.
In horse racing totes and big pools, bookmakers take a small commission out of the total bets, and the rest goes back to the winners. For the average punter, that means you’re always fighting against the built-in house edge. But if you’re turning over insane amounts of money, the bookmakers start to need you more than you need them – and they want to keep you happy. So they cut you a deal, in the form of rebates.
Think of rebates as cashback on steroids. While most of us are thrilled to get 2% back on a credit card, Zeljko was negotiating 8-10% back on every dollar wagered. Sounds mad, right? But, at the time, his syndicate was reported to be responsible for up to a third of Betfair’s Australian activity and as much as 6-8% of Tabcorp’s entire annual revenue. When you’re betting billions, the house will happily pay to keep you in play.
So, he gets his rebates. But what does that actually mean for his bankroll? Well, that’s the smart bit. Even if his bets broke even – or were slightly losing – the rebates turned the maths upside down. Imagine betting $1 billion in a year (we should be so lucky!). A small house edge might leave you down $10 million. But if you’ve got a 10% rebate, that’s $100 million handed back. Suddenly, you’re not just winning – you’re wildly profitable.
“But why would the bookies let him do that? Surely they’re just giving him money?”, we hear you ask. Uh, not exactly.
You see, the bookies don’t operate on the simple idea of more losers = more revenue. They make their money by taking a percentage of the total turnover from pools, meaning that a large, stable pool is more profitable than a small one, even if more money is won than lost. So by putting his money in their pools, he’s doing them a favour – and they’ll pay for the privilege.
That’s the heart of the Ranogajec playbook: don’t gamble for winners, gamble for volume. Let the rebates do the heavy lifting.