Stopping the Insanity is a Good Place to Start

How do we help racing? There are a thousand answers from a thousand different factions. However, if we fix some of the simple things first - the most insane, asinine, make-no-sense to any rational person things - it would be a good place to start.

Frank Angst had a piece in the Thoroughbred Times today, looking at breakdowns and casino money in New York.

• $7,500 claimers with a $40,000 purse
•  ....veterinarians advised that purses should not exceed claiming prices by more than 50%. At the lowest claiming levels at the current Aqueduct meeting, purses are more than 500% higher than the tag—ten times over the 50% recommendation. 

Horses worth $7,500 going for $40,000? To any rational person that's ridiculous. It makes no sense; none whatsoever. It's the commoditization of living, breathing animals that the public hates and it ensures a system that is not based on economics in any way shape or form. In addition, what rational person from a horsemen group can make a business case that a purse for these events can not be $25,000, with $15,000 being used to grow the sport instead?

How could we ever let this happen?

As Alan at LATG points out today, there appears to be an anti-racing Governor in the New York Mansion. This is exactly the kind of stuff that can be used against racing to further his cause.

This is not unlike the absolutely incredulous policies that permeated the landscape in Ontario. There were some tracks that had $5,000 of nightly handle, while giving out $80,000 in purses. Time and time again people said "that's insane".

No one ever did anything about it.

That insanity helped the governments case against racing when the time came to pull the plug this week. Similar occurred in New Jersey with the Atlantic City/Casino subsidy.

We have a lot of problems in racing, but many of them are self inflicted; trying to shove square pegs in round holes. If we start by eliminating the ridiculous first, the contentious issues can be looked at next.

Horsemen Group Head Responds to Gural Slots Idea

Horsemen group head Joe Faraldo responded to Jeff Gural and the USTA poll regarding putting more money into the sport of horse racing from slots.

Here's some of the language. Yes folks, this is what our sport is about, and why nothing gets done.

•  was a malodorous “push-poll” worthy of a political campaign
•  time for the truth about the disingenuous wording 
•  As to the insinuation
• “push polls” never provide all the details

$lots World, Episode 12

We've been on this story for years. We've been to wagering conferences speaking of upping the bet from slot cash, we've written white papers on trying to bring exchange wagering to Canada so we can try and get a new demo involved in racing. I've probably argued with you on twitter about New York's most recent slot deal and how I think sticking all the cash into purses or site improvements like Ontario and Pennsylvania did is a sure-fire way to lose. We've been trying.

But I'm only a dumb bettor that owns a few horses.

Now we have someone smart who seems to be getting his message through.

Jeff Gural came out with a statement today on slots and racing. it was covered in virtually every trade - thoroughbred and harness so far.

• In a statement released March 14, Gural said a poll of USTA members in Delaware, New York, and Pennsylvania—states with racetrack gaming that supports racing—shows 84% favor using gaming revenue for enhanced equine drug-testing, and 87% support using funds for the marketing of harness racing, particularly efforts to attract younger participants.
• “To continue to wait for track owners to reallocate money from the prime business of casino gambling is foolish."

Further, he touched on something that I think is vital to the whole proceedings - the disconnect from horseman groups.

As we've seen in California, the chasm between what the customer wants and what the TOC wants is as wide as the grand canyon.  This is emblematic in the industry as a whole and no matter what side you're on, this is a huge issue that protects the status-quo. In Canada, the recent plan in Ontario to use some purse money for other things to up the bet, was rejected, despite gathering over 1000 signatures from rank and file horsepeople to do just that.

Gural: "He commented that there appears to be a disconnect between the leaders of the horsemen’s association and the members. He is however, hopeful that these poll results will finally bring action on the part of the industry to use a small portion of the hundreds of millions of dollars from slots revenue to solve the drug problem, get us on national television and utilize other marketing tools that are available but at the present time unfunded."

I wonder if someone is going to listen since more than just dumb bettors are asking for it? I hope so.

Further news:

Windsor Raceway looks to be finished.  Hiawatha as well.

Fort Erie is likely done. In the broken record file (for blog readers anyway) this quote from a lottery insider states the obvious. “How do you justify sustaining it,” the source said. “It’s not making money. Thirty-five per cent of the purses from every race comes from the race itself and 55 per cent of the purse is propped up by slot revenues. The business model is not sustainable.”

For those who think that's just at Fort Erie, think again. About 35% of revenue for purses in US thoroughbred racing come from machines. This year with slots at NYRA, it'll probably go even higher.

It's a Slots World. But sooner or later the money dries up.

Fort Erie, Windsor & Hiawatha Slots to Close

That didn't take long.

Storied Fort Erie Racetrack, host of one of the jewels of the Canadian Triple Crown is reported to have their casino shut down within "months".

In addition, Windsor Raceway, home of the Provincial Cup and host to many harness racing greats over the years is likely to shut down as well.

Hiawatha Horse Park in Sarnia, is also reported to be on the list.

One day - three racetracks.

How many more? Likely quite a few.

Full report on CTV News.

Slots at Racetracks Program Ending in 2013

Some thought they might take a scalpel to the slots program in Ontario, but it appears they brought out the hacksaw.

The program, which pours about $345M into purses, will be ended by March of 2013.

What replaces it is unclear. As we surmised earlier, it seems Woodbine will, or should, be okay. Many of the other tracks are in serious jeopardy of closing, or having a smattering of fair type racedates.

Racing was never the same when slots came to the industry in 1998. It'll never be the same post-2013 either, by the looks of it.

Stories:

Reaction from Horsepeople
CTV story
Valueformoney Website

Help Me Understand Please

Today in HRU Bill Finley (pdf alert) looked at the reinstatement in Pennsylvania of a trainer, calling it a "disgrace".

• In 2001, he was caught injecting a horse with an illegal substance, which caused the horse’s death. In 2007, his license was revoked after he was charged by the Saratoga County District Attorney’s office with conspiracy over his involvement in the trafficking of EPO and snake venom. These are not trivial issues, they are serious matters involving the death of an animal and then involvement with notorious drugs that are a plague to the sport. In a sane and rational world, Mosher would never be allowed to have anything to do with harness racing again. 

I don't know much about this trainer, only having bet a few of Sarita's horses now and again. But it begs the question, how much is too much?

The Paulick Report did a story awhile back on a thoroughbred trainer who was also licensed.

• ..... in 1998 he was banned by the Ohio Racing Commission for one year for an incident at Beulah Park when he was ruled to have “mistreated, abused or engaged in an act of cruelty to a horse” and used an “appliance other than whip for the purpose of stimulating speed.” The appliance was described in court documents as a “wooden stick with stripped electrical cords stuck to it.” A veterinarian and two assistants testified seeing a horse at Beulah Park “jump two or three feet in the air” and then witnessed Delahoussaye unplugging an electrical cord from the wall. Delahoussaye appealed the case but ultimately lost.

Both of these gentlemen were let back into racing to train.

I am not a hang-em-high type guy. I understand there are circumstances, I understand there are different degrees for and of wrongdoing, I understand that decent people will make some mistakes; many deserve second chances or third chances, in life, or in racing.

But I don't understand this.

EPO and Venom is evil. Venom masks pain that not only endangers horse's lives but jocks and drivers too. EPO turns a horse's blood to sludge.

What the thoroughbred trainer was convicted of above, well that just makes me sick.

Michael Vick did some bad things and can't own a dog. If a daycare operator abused a child, he or she would never be able to work with kids again. If a school bus driver is caught with a DUI, he can't drive our kids around, that's for sure.

Why oh why, for egregious penalties on this scale, is racing so happy to have these same type people back?

Help me understand please, because it's something I can't wrap my head around.

Notes:
Plenty of action today in thoroughbred racing. As usual, follow goatzapper.com. He has the previews and results as they happen.
Higher and Higher won the Overbid elim last night with a decent kick.
Big M outrider was taken to hospitial last night after that 8th race debacle.

Handle Wars: The Bottom May Be Here, For Awhile At Least

One of the things we've noticed this year in U.S, thoroughbred racing, is that handles seemed to have bottomed. Wagering is up so far in 2012, and we finished the year a little better than we did in 2010.

Harness racing, perhaps the leading indicator for all of racing, seemed to hit bottom about a year ago. The average mutuel pool for example, has been up for quite some time, and total handle in 2011 saw the first green number since about 2003.

So far this year, harness racing has seen a resurgence. Where the only metrics are kept - Canada - handles are up over 18% in 2012.

Harness racing did a number of things that thoroughbred racing seems to have done, but they did it earlier. In 2009 and 2010 they started paying attention to the customer with lower takeout and guaranteed pools. They also consolidated: They carded better, deeper field races. Long gone were the 5 horse fields that no one bets.

In the thoroughbreds a similar thing started to appear in late 2010. Tracks began lowering rakes and looking towards bigger pools. They also have consolidated. Field size is up. The only major jurisdiction that raised takeout in 2011 was the California tracks, and they got totally spanked last year. If they would've stood firm, we probably would've had a much better year in 2011. It's ironic that after raising takeout, California tracks, starting with the Hollywood meet last year, went to a low takeout pick 5 to help stop the bleeding.

In 2012, we are seeing this momentum starting to firm. In addition to the scores of tracks who have lowered takeout and concentrated on carding deeper races like Charles Town, NYRA tracks, Woodbine, Calder, and even the Pennsylvania tracks who dropped rakes, we have some new developments.

NYRA is on the cusp of having a blowout handle year - their payouts went up, and they should be injecting more cash in the pools as they find people to pay back for the takeout debacle. Their field size should also improve, attracting dollars. California has begun rebating local players (which is a takeout reduction), which has lead, or should lead, to a handle explosion of rebate cash (60% of the handle is bet by only 5% of the players).

In addition, I think we'll see a few more things happen in the mammoth jurisdictions:

• I expect Woodbine to give even more back this season & continue to work the landscape for dollars
• In California, I expect by the Del Mar meet to see more takeout reductions. Joe Harper has to convince the TOC to do this, but I think with the new elections there with some new blood, he'll have an easier time of it this season
• In New York, I expect more takeout decreases in 2012, and better racing

If the above three things happen, we are assured (mathematically) positive handle gains. No if's and's or but's about it.

For years, bettors and wagering economists have asked racing to concentrate on a few items: Card better, deeper races to attract betting dollars, consolidate to do so, and look to lower effective takeouts.

We're starting to see some results of that in thoroughbred racing, and I hope we see more of it.

Good things can happen when you concentrate on the main two metrics that relate to increased handle, and increased customer satisfaction. Pay out a bit more so people can have a little more fun and bet more, and card some races worth betting with your customer in mind. It's really not that difficult.

Mystery Voucher Giveaway Spurs 2012 NYRA Handle

(Pocketville NY- March 8, 2012) - It was announced today on twitter that the New York Racing Association handles have been trending higher. February saw an over 7% increase in average daily betting at NYRA's current track: Aqueduct. This has occurred with no apparent increase in field size or racing quality.

Many in the industry are pointing to the weather, baseball not starting up,  Rick Santorum, and the results of the Russian elections for much of the increase. As well, track handicapper Sandy Merling says people are betting more because "I rock".

However, NYRA's CEO has an easy answer.

"It's our mystery voucher program," said NYRA boss Chuck Maynard.

"What we're doing this year is giving vouchers out to our patrons. These vouchers are used to bet for free. It's what casino's do with free play on slot machines. Last year we did not have that program. " added Chuck.

"About 1% of every dollar paid out each day is now given back to customers through this mystery voucher, so they're betting it into the pools", he continued.

The program that Mr. Maynard is speaking about was called the "Mystery Voucher Act" and it was passed in late December, mandating that NYRA increase payouts to their customers and fans.

"I love the new program. Who doesn't like free money to bet with?" said an unnamed patron wearing an "Easy Goer Was Better Than Sunday Silence" t-shirt.

"I'm winning more and enjoying racing more because of it. I love New York. And I love Easy Goer" he added.

In general terms, if this gentleman cashes $500 of winning tickets, he gets a voucher for $5, so he should be pleased. But it apparently works even better than that. He might win one or two bets with that increased payout, so that $5 increase in handle from the mystery voucher turns into more.

"$5 back to him would translate to about $25 of new handle, through something called "churn"", says University of Southern California economist Carolyn U. Bett.

"There are many more people than just that one player getting mystery vouchers. This program, with, for example, $5 million of daily handles, could be adding over a quarter million to the daily betting numbers alone", she concluded.

She then started to do differential calculus on her pocket chalkboard and I stopped listening.

Regardless, it seems like the mystery voucher program is an amazing success, and we wish all our friends at NYRA well with this new program.

-30-


Epilogue: Of course that's tongue in cheek, but I hope you enjoyed it. That's what the takeout decrease did at NYRA this year: Put about 1% more money in your pocket, just like a mystery voucher program does at a store, casino or racetrack. When people get a bit more cash through an increased payout they don't stick it in a sock, they bet more. Takeout reductions are not really that hard to understand. They add to handle, that is a mathematical certainty. How much? That's for others smarter than I to decipher.

Have a nice Thursday everyone.

There Are "Three Masters"

I found today's short but sweet Godin piece interesting. Called "Three Masters" it looked at the three facets that your industry can be guided by and serve.

Master One is your existing customer base. He says you should keep your promises to them and find ways to organically grow that space.

Master Two is the people who aren't looking at you. To attract these people the author believes you must "make a different or bigger promise" to land them.

Last is Master Three: "Serving your muse, on making the song in your head real, regardless of who wants to hear it."

In our sport, Master One is the current horseplayer. They want (according to a recent HANA survey) a cleaner game, and better payouts so they can last longer as bettors, and enjoy the sport more, and more often.

Master Two is the poker player, or online skill game player who is part of a $500B or so market and, perhaps, the non-racing sports fan. To have a chance to land some of that poker and sports betting market, we'd need to do a few things with vision to our betting game first. To land a sports fan, we probably have to ensure our top competitors don't meet fewer than once or twice (or never) in their lives.

Master Three is serving ourselves and our muse, regardless what Master One and Two are telling us we're doing wrong.

Racing keeps "singing the song" and serving the muse that we can't have a cleaner game, better payouts, uniform rules, better racing, or compete with a casino. The song gets sung, and the business stagnates.

Precarious

Did anyone ever watch the "Rumble in the Jungle", where Ali employed the rope-a-dope against Big George Foreman?

Racing is getting rope-a-doped right now, but I fear the outcome may be different.

In the last several months:

• Pennsylvania has cut some slots funding and purses are trending lower
• Zynga Games (i.e. "Farmville") announces they want to get into gambling
• Ontario is looking to siphon off many millions from slots funding
• Canada is looking to legalize one game sports betting

And today: New Jersey is looking to pass online gaming, with no help for horse racing.

For healthy industry's these shocks can be withstood, via pivoting and changing a model. Racing has not been very healthy, stating the obvious, so one has to wonder how much more of this we can take.

Note: Harness Fans, there is a huge carryover and $100k guaranteed pick 4 pool at Balmoral tomorrow evening. 

Single Game Wagering To Ontario Racetracks?

A bill has passed that has amended the Criminal Code (I always laugh when I write that; betting the Cowboys with your buddy who's a Giant fan is criminal) where single sports wagering may become a reality. Currently, only parlay wagering is available in provinces.

• It will enable Ontario casinos to open “sports books” to attract people keen to bet on individual games instead of just the existing Pro-Line that requires gamblers to wager on a minimum of three games simultaneously.

It's not too much of a stretch to believe that any existing slot parlors in racetracks would also be hubs for sports wagering. Because of the recent headlines, this might be a bone to throw racetracks, in return for some of the slots cash. To say Woodbine would be jammed on Sunday morning in football season would be an understatement.

Of course, this is another drag on pari-mutuel wagering, though. As racing handles fall from the pressures a new competitor, we'll likely be in a similar spot in the future.

The Red Blood Cell Count & More Sunday Notes

For handicappers a horse blood test doesn't mean much, but it should. When a lot of handicappers see a horse race poorly they try and chalk it up to a bad ride or drive, a "bounce", the track surface, the pace or distance or any number of other issues. Often times the horse is simply a little under the weather.

Today in Harness Racing Update, a horse owner uploaded a pdf of his horse's blood test (it's in the letters section on page 6). It's always neat to get familiar with some of these items; for example "GGT" was a liver level that Uncle Mo had that they could not get down.

One level - the red blood cell count - is what the letter writer focus's on. This count, which can be elevated due to illegal blood builders like EPO/DPO and Aranesp, is generally a scourge and has felled several super-duper trainers before. The writer believes that elevated counts signal wrongdoing and we should start pitching people for high counts.

As it has been explained to me, the RBC can be elevated on its own, so that's why commissions can't do much about it. However, it seems that if some trainer had every horse in his or her barn with high RBC counts they could do something couldn't they? It's a question - a statistical one - that I have always wondered about. If anyone knows why they don't do more using statistical data, please let us know in the comments section.

Yesterday was a dandy day for thoroughbred racing. The Gotham, Big Cap, and the return of Pants on Fire and Dialed In were all worth watching. The Goat has full replays and recaps from yesterday.

It looks like (although I expect it a longshot) there's a chance California may allow sports betting. I suspect the lines won't be very favorable if so. As has been noted many times in Ontario, the government is not very good at running a gambling establishment.

Congrats to Balmoral Park. Their wagering per card is up over $342,000 in 2012. Good fields, contentious racing, promotion, a couple of low rake bets have all made a difference.

Oh, at the HRU link above we have some thoughts on distance racing in harness, as well. it is something that's always interested me, in a "let's test it" sort of way.

Last but not least - Ninja Cat broke his maiden. It's nice that a horse with a great name like that enters the "winners" record books :)