Tuesday, September 23, 2014

Improving Handle is Not as Difficult as it Seems

In this falling demand environment, handle increases are looked at like some sort of unattainable goal. In reality, a good old fashioned asset allocation model, from your average every day financial planner, can help quite a bit.

I was not surprised this week when I saw the Los Al handle numbers. About $400,000 per race was bet on this new meet, while last season - at the Fairs - only $265,000 was bet per race. The Cal Racing Fairs are a meet that simply - no matter what they do, really - could never drive serious handle. By allocating dates to a place people (somewhat) like, more handle was driven.

In Ontario over the last 15 years, slots changed the landscape appreciably. With 17 harness tracks - all with slot machines - the short-sighted legislation (and even shorter-sighted alphabets) demanded that the money from slots was doled out at said track, with no real organization. A lot of the tracks did not simulcast, didn't spend a lot of money on live cards, and were nothing more than a vehicle to redistribute gaming money.

These handles are well-known. $110,000 in purses at Woodstock Raceway for $8,600 in handle, and on and on.

At that time, a lot of us were begging the industry to allocate their financial resources where the most revenue could be gleaned from each dollar of a purse. For example, if London was generating $3 for every dollar of purses, where 50 miles down the road Woodstock was generating 8 cents for every dollar spent on purses, more dates, money or infrastructure would go to London.

If that did happen, handle goes up overnight. With 20 Woodstock dates generating $200,000 in total handle. those 20 dates go to London, and boom, like a magician with a wand, handle generated is $6 million. A 3000% increase.

The above sounds simple, but it isn't. The business is not structured to do that, because there is little central authority.

When, in Ontario, that central authority was created (ironically, after slots money was taken away), we see much more of this, by giving the dates to tracks that generate betting dollars, and culling those who did not. It's one of the reasons that for the third year in a row, per race handle is up 13.91%, and total handle is up 1.6% (despite a large drop in overall dates).

This being suggested now for states like Pennsylvania and New York is still considered blasphemy. But it's how any business tends to work - invest in areas that bring you the most ROI, and divest in areas that bring you the worst. Horse racing should be no different.

Monday, September 22, 2014

An Attitudinal Sea-Change on Marketing & Racing Under Saddle

I watched an SC clip with interest this week. The questioner asked dozens of trainers and participants "What Percentage of the Purse Pool Should Be Taken Out For Marketing"

This question was asked 5 years ago - before slots were taken away - through the development of the Racing Development and Sustainability Plan. At that time, I did feel there was grassroots support, but this was none echoed by the alphabets that represented them. The plan was never passed, and was placed in the dustbin; where plans tend to go in horse racing.

This last week, I was a little surprised at some of the numbers thrown around. From the 1% or 2%, to the "25%" or "as much as we need to give."

This is a sea-change, quite frankly (the original RDSP called for 5%, most of it out of slot dollars).

Here's the clip

We're probably seeing similar with Racing Under Saddle. The old guard is wary of using purse money for this type of racing (despite it being the same horse population, and trainers supplying the racing stock). It's new. To some, it's not an enhancement to offering a new live product to patrons, but a type of competitor.

Racing under saddle has driven handle when it's offered. At Flammy last week, $13,000 was bet on the under saddle race, which is a big amount, especially for something brand new to the wagering public.

We're seeing a change in the way harness racing - and throughbred racing too - operates of late. The protectionist and confrontational older guard - those who fight for higher takeout, lack of change, lack of experimentation, all to protect the purse money the sport has at this very minute - are losing their grip a little bit.

It's a realization that if harness racing was doing things right, it would be popular. Since it's not, maybe some new things, and a new direction, is in order.

Enjoy your day everyone.

Friday, September 19, 2014

Jug Day in the Books, Captain T Looks Done for a Career, & Yodeling

Yesterday's Jug is complete. It was another Jug day, that is just like other Jug days. Tons of people,  too much food, too much libation, a gazillion races, and what it means to enjoy the sport of harness racing. For a full recap, bullet by bullet, head to Harnessracingupdate.com for a column by a bettor, and a picture of beagles.

Also in Harness Racing Update, Captain T head Myron Bell says his career might be done. He's been sick since his Preferred race at Mohawk, and, according to Bell, there looks to be no use bringing him back. As most know, the Captain was syndicated for $12M, and they have to 'protect that investment'.  American Ideal, owned by the same crew, had a bone bruise early as a four year old and was also shut down in similar fashion. This is nothing new with four year olds, or even three year olds who get bought early for stud.

Buying live racehorses before their careers are done is a relatively new phenomenon. Before, they were purchased after, or near the end of a career. With the "Gural Rule" where a horse must race past his three year old year, breeders have not changed tactics - they're still buying horses early. This, in no small part, probably makes racing careers more managed now, where losses are exacerbated, and its most important to avoid them. Even ten years ago a three year old would not race only 14 times a year. As well, even if there's a hint of a bad four year old year coming, it's easier to shut them down.

In any other business a change in tactics would likely occur - i.e. instead of stud farms buying a horse at two, where they don't know what they'll be at four, buying the horse later, when you know if he's a true, not paper champ would occur. But in harness it's easier to lobby to have the rule changed. Or get mad at the guy who suggested it.

I am of the belief that racehorses sent to stud for big money should be the pinnacle of the sport, and should be able to race and win at four.  If your horse can't do past three, that's not Jeff Gural's fault.

Having said that, I completely agree with Myron Bell's selling of the horse. He will get great mares, and he is probably one of the most can't miss prospects we've seen in awhile. He's a good grinder, and those make excellent sires, his bloodlines are flawless, and he's the best son of the beach to set foot into the shed. The fact that handicappers like me were flamed at times for pointing out last season that he was beating up on a poor crop was nothing more than that - handicapping - and had absolutely nothing to do with his success in the shed.  He'll get to prove his mettle, deserves the chance, and has a high probability to sire many $200,000+ yearlings.

I noticed a funny last night. Churchill Downs for Downs after Dark is having a yodeling contest, and some sort of chicken dance (for en francais readers, that's 'dance poulet'). Considering that Kentucky Downs touts big fields, low rake, and good racing to get people out to their product, the northern neighbor has some work to do.  If they're trying to get people to bet, not dance, they should not have raised the takeout in April.

Have a nice Friday everyone. Enjoy your weekend.

Tuesday, September 16, 2014

Trixton & Great Horses

Hambo Champ Trixton broke Saturday evening at the Canadian Trotting Classic, and his future is in doubt. He might have re-injured the ankle he had surgery on last year. In HRU, Takter noted that this horse, off that surgery, has had to be babied a little bit. It's "one of the reasons I drive him", he said. Catch drivers can be incredibly hard on horses - the aggressive drivers win more races - and with a horse like that, Takter (wisely, imo) took matters into his own hands.

I was reading a book recently (A Few Seconds of Panic) about being inside the NFL.  It was a good tome that touched on the fans and media, and their proclivity to bumper sticker the intricacies of the game. Often in the stands or in the media, a guy is a dummy for throwing a pass or missing a block, but we have no idea what happened behind the scenes. With zone blocking, 150 plays a game, dozens of schemes and reads each play, players in the book said the breakdown often occurs with a player or mistake that the media does not see. Funnily enough, some of the players said in the book that 'former players are as bad as anyone' because they have to pile on to get noticed.

We see it with talk radio guys, and others all the time. There are some people out there who believe Eli Manning is better than his brother because "he has two ringzzzz". Football, a team game with 60 players, is never about one guy. Bounces, defensive plays, thousands of other factors result in wins and losses. There is no universe, here or in fairyland where Eli is "better" than his brother - a brother who fought through an injury that should have him at a stud farm somewhere, too - but it's a narrative. 

Racehorses go through the exact same thing.

Trixton is judged with wins and losses. In the stands people scream "put a driver on him Jim". In real life this is a horse with issues that has fought through them to become an 8 for 11 winner this season, who captured the World's biggest trotting race for three year olds in 150.3. He did it on talent, guts and mettle. He did it on the toughness that standardbreds are known for. The story with this horse is not Jim Takter's driving, if Father Patrick is better, or how he did last night. Trixton's story is Trixton.

We see this with plenty of horses with or without issues. The bar is set by a "he's got ringzzzz"public, and it's completely unreasonable.

Zenyatta was looked at by "speed figures" and people were talking about her "racing on plastic". This mare, growthy, not manageable early, who really should not have amounted to much, raced twenty times, won 19, came second once (where the winner got a beyond perfect trip) and raced for close to four seasons. She won 13 Grade I races over that period, on two surfaces (she probably could've won on three if they tried). She did it by being a closer in a speed game. She did it by being babied (does anyone out there really think she wins more than one grade I race in a factory stable rushing her, or trying to race her 12 times a year?). She didn't have a down year like so many. The "transition" from year to year was similar, not an anomaly. She never threw in a bad one like happens almost all the time, and an excuse is not needed when horse's show up every race, at any racetrack, on any surface.  That's a remarkable career.

Suntracer won the Kentucky Turf Cup last weekend. Byron King noted on twitter the colt lost an eye and wears googles. He fought through it.

There have been good horses who raced with bowed tendons, off knee surgeries to take out chips, off sickness, or allergies or 100 other maladies. Some of them became very good or great horses, and we have never even known about their issues. When a colt throws in a clunker, some fan with a sports radio sensibility might call him a "rat", when in fact the knee he has fought through his whole life to run those big speed figs was a little sore. He's the exact opposite of a "rat".

Father Patrick might be a better horse than Trixton. Maybe if Trixton had a top driver he would've won in 1:49. It all doesn't matter, because what horses like Trixton do and what they've gone through to succeed is often remarkable in its own right. A lot of time we just don't know about it.

Monday, September 15, 2014

Don't Jurisdictions Ever Talk?

A whack of years ago the continent was surely not as connected. If a business in New York tried something new, and it worked, California businesses might learn about it in a magazine article or through some sort of word of mouth at a meeting (a meeting you drive to, at a physical location, with muffins). If an innovation is worthwhile, its diffusion happens, but it takes awhile.

Today things are much different. The World is connected, and innovations and improvements - or any experiment really - moves through a business or community like wildfire.

A business that isn't horse racing, I guess.

I am perplexed watching the California debate about their whip changes. The criticisms and arguments against are the exact same arguments Ontario went through in 2008, the UK went through, Hong Kong went through, and probably a few more jurisdictions I am forgetting. It's like this debate is brand new, and California is doing something ground breaking. I've got an idea: Call Ontario and ask how it went, get the FAQ beforehand, and stop asking the same questions. The questions have been answered a thousand times.

For the record, the whip rules in Ontario work just fine and have for years. Handle is even up over 25% since they've been put in, so you can put a sock in the handle debate questions at least.

Similar happened with exchange wagering discussions in the Golden State a couple of years ago. The same questions, already answered.

In New York, when slots came in, even on this silly blog we spoke about what happens when 10 claimers start going for $30,000 purses - hundreds of claims, horses jamming, bad racing, unsound horses thrown in for the big money, and on and on. It happened in Ontario when slots were brought in and the commission had to address it. Did New York racing not get the memo? It shares a border with Ontario for crying out loud.

Racing reminds me of a Bill Murray movie. We wake up and the same debates happen, like no one speaks to each other.

It's 2014. It's completely unacceptable.

Sunday, September 14, 2014

Saturday Round Up - Trixton, Kentucky Downs and a Little More

Good morning racing friends.

A lot happened yesterday.

In harness, Father Patrick won the Canadian Trotting Classic, with Trixton appearing to be injured, or at least sore.( Harnessracingupdate.com has a really good synopsis of all the festivities. ) That made the CTC one of the more anticipated races of the year, to just another race. The trotting field, outside Takter's big three, is not very deep. They just can't go with them.

Trixton is a wonderful horse, and we can only hope he's fine. Whatever may happen, he sure does have a stud career ahead of him. The owners, and him, will be clearly okay.

The sad part about matchups in horse racing is that we rarely get to see them. I am not convinced that Father Patrick is the better horse, and I know some of you aren't either. He's handier, flashier, and he makes his own race - if you bet Trixton against him on a half mile track demand odds - but I really don't know. Trixton has never had a two hole trip against him so we could see who fires home quickest.

Handle last evening at Mohawk was over $2.3 million, which rarely happened four years ago. Woodbine Entertainment Group is a long way from being bettor friendly (those rakes, and taking more takeout out of simulcast like they do is anything but), however they have come a long, long way. They've turned into a betting company by offering signals, asking for handle, and putting some thought into what they're doing. For years I documented what I thought they were doing wrong on this blog, and right now that list has grown shorter and shorter. The days of $800,000 of harness handle on a Thursday and a $1.3 million Saturday being considered "good" are long gone.

For a track that executives might want to look at as bettor friendly, take a look at Kentucky Downs. They had a record handle of over $4.2 million yesterday, and as noted on the HANA blog,  not long ago they did only $4 million for their entire five day meet.

Churchill Downs yesterday did $3.1 million. Los Al Thoroughbreds $3.9 million. Both those tracks raised rakes and made bettors feel like a necessary evil the past couple of years. Kentucky Downs, who could have as high a rake as Churchill (by Kentucky law), chose not to. They offer the lowest blended takeout nationwide, and had the largest takeout decrease this sport has ever seen in 2012.

They also used their instant racing money smartly, again with the bettor in mind. Creating races with full fields is most important. Four horse stakes races are not allowed.

Rome was not built in a day and neither is a racetrack. But those who actually do their best to cater to customers, end up getting them. Those who shoo them away end up doing exactly that. Sam Walton would say that being customer friendly is not rocket science, and it isn't.

Have a nice Sunday everyone.