The LPGA Invests in..... Gambling

Life tends to come at you pretty fast in this day and age.

Commissioner Mike Whan of the Ladies Professional Golf tour announced they're looking at investing in a shot tracking system, because gambling could be something that will help his tour.

A shot-tracking system and database would help the LPGA control the information used in a variety of prop bets unique to golf. “If we can get our heads around this we have a chance to bring a whole new audience to our tour, both in the states and around the world,” Whan said.

Also of interest - betting in Asia. As most who follow the tour know, many of its best players come from golf-mad South Korea, Hong Kong, Singapore and China, and sports betting from that part of the world is enormous.

Mr, Whan, as the article notes, is also preparing his players for the eventuality of sports betting, so they know about the ins and outs, and integrity matters.

This is a theme you'll notice quite often of late - a league or sport preparing for, or investing in, sports gambling. As well, we've seen takeovers, mergers, and positioning by existing online gambling sites, and bricks and mortar casinos, to lay the groundwork to hopefully succeed.

We've asked for a couple of years, and many have asked several times since -- what has racing done to prepare itself for sports gambling? What, as Mike Whan said, have they done to try and "bring in a whole new audience"?

Other than positioning themselves to get a slice of a sports betting pie by inviting a competitor on their premises, it appears not much.

If sports betting does explode over the next decade, and in tandem we see racing handles fall, I think it'll be once again because of racing's very apparent Achilles heel - its lack of vision.

Why Horse Racing Can Never Go Blue Sky

I saw a tweet from Craig Bernick the other day.
We've seen comments like this for a long while now - those of you who remember the late Cary Fotias may recall his thoughts that "racing should be doing $80B in handle" with their internet quasi-monopoly back around 10 years ago. And I totally agree. Horse racing has the infrastructure, the regulatory edge, and the technology to make that happen; or at least approach making that happen.

What it doesn't have - and what it appears it may never have - is the ability to do look past its own intransigence to do it. That's been apparent for many years, and we are reminded of it often, like yesterday.

A report stated, "CDI objection stops DraftKings' Derby futures in Mississippi" and made its way around the interweb.

An objection from Churchill Downs Inc. led DraftKings to take down its Kentucky Derby futures Saturday morning, only three days after they were posted at the Scarlet Pearl Casino in D’Iberville, Miss., a source told VSiN. The source, who is a handicapper and horse owner, said Monday morning that CDI cited legal precedent as its basis to demand a stop to the betting.

This, if true, would not surprise anyone. Like the LAPD (I watched Adam 12 when I was a kid), it's there to serve and protect, and protect it does. 

But what in this case are they protecting?

The Derby Futures wager - a pari-mutuel creation - did $1.89 million in handle last year.  It's a pittance (about 0.8%) to the $225.7 million wagered on Derby Day alone. 

If it's scrapped completely, maybe CDI loses the probable $100k or less revenue (not profit), and that's what they're concerned with. But what about the upside? What if you're Craig Bernick and want the Derby card to do a billion in handle in ten years?

For that you'd need partners, and bettors with money on account being able to access the Derby wager everywhere, and resellers reselling the product. You'd need these entities to promote for you, to encourage bettors to not only bet a future pool, but to bet a whole day because they bet a future pool. You need the wager to be on platforms everywhere, both online and brick and mortar. You'd want these wagers to be part of the fabric of a society, not just in the backwoods, via an ADW. 

You'd, well, want a DraftKings. 

It's fun to flame CDI - they're low hanging fruit for fodder - but it's not just them. This industry has had this mindset for years. 

Betfair wanted to partner with racing back in '03; racing called them "pirates" in return. This was ironic because back in 2009, when I presented on a panel at a gaming summit with one of the founders of Betfair, racetracks were surrounding him with questions after the session, wondering what great sorcery they were committing to have gained all these customers and market power. 

That was one instance, but - Derby Wars, check, fixed odds, check, worried about a roulette wager at 8% juice hurting some other pool, check, a dozen other examples, check. This has gone on forever. 

So, when people ask why racing's (very few) successes involve only the margins, like a 2% here or there, or a Derby Day doing $200 million instead of $180 million five years ago, I always answer the same way:  The sport sabotages itself so the blue sky can never happen. It's the way it was, is, and (unless something changes) appears will be the way it always will be. 

My Eclipse Award Ballot

I thought I’d share with you all my Eclipse Award Ballot.

Who am I kidding, Vladimr Putin has a better chance of getting an Eclipse Ballot. Hell, I don’t even know all the categories.

But since I see everyone voting and I feel left out, here are my votes for the various categories I think are categories.

Jason Beem
King of All Horse Racing Media Award

The nominees: Shades, Hoosier Buddy, Jason Beem

My Vote: Jason Beem. The man writes books, has a podcast and does that goofy awards show thing. On the side he is the voice (for two weeks or so) of Gulfstream Park West at Calder Racetrack. Hands down, easy winner.

Best Marketing Crew

The nominees: NYRA, the people who put their pick 4 tickets up on TVG, Garett Skiba and Inside the Pylons (the duo who market the Jockey 7 bet)

My Vote: ITP and Skiba. They’re so good, when I forget to take a jockey 7 bet, I sit and stare aimlessly and without hope, wondering what kind of terrible man I’ve become.

Top Two Year Old

The nominees: A Baffert horse, A horse soon to be moved to Baffert, Instagrand

My Vote: Instagrand. When the owner said he wasn’t going to race in the Juvy, everyone on social media lost their mind. That horse had serious power.

The Mattress Mack ‘What Track Gave the Most Back to Bettors Award’

The nominees:

Top Older Male

The nominees: Accelerate, a bunch of other horses who raced Accelerate that no one has ever heard of

My Vote: Accelerate. His stretch battles with horses no one has ever heard of were epic.

Top Older Female

I marked Zenyatta, just like I do every year, to piss off Carly Kaiser.

Bettor of the Year

It's gotta be Sea Bass, because holy crap he looks the part.

Top Horse Racing Blog (maximum 8 posts since June)

I voted for myself.

The “Will the Roulette Wager Catch On” Award

I voted no.

And the big one, Horse of the Year.

The nominees: Justify, Accelerate

I struggled with this one. Then I thought of it, like I often do, with pure logic and reason.

For years – many years -  I heard how tough it was to win a Triple Crown. I remember how that sage and wise Wilford Brimley looking fellow talked about how it was impossible, like trying to kill James Bond. I think back to the many people wanting to add time between the races because horses bred to run could not run in such a short period of time (even though we watch Winx do it regularly).

Plus, Apollo. I mean, that’s a curse way worse than when the voodoo people on the other side of the island made a doll that turned Gilligan into a crazed lunatic.

Short answer: I totally buy into this narrative.

So, I said to myself, “Pocket, there was that guy who climbed Mount Everest, and when he hit the summit, he drank a pint of vodka. Then he headed back down, and when he reached the bottom he said ‘no one has done this twice in one day’ so he went back up. He summited, with ease, then when he was on the way down he saved a half dozen mountain climbers from sure death. When the amazing climber reached the bottom, people – people who gathered when they heard of this heroic feat - threw flowers, and hundreds of Sherpas gave him a standing ovation because they never saw or heard of anything like this in their cultural history.”

And then, at the year end mountain climber ball, he comes second in the voting for Mountain Climber of the Year.

I can’t let that happen. Not on my watch. Not with this fake Eclipse Award ballot. I voted for Justify.

Enjoy the Eclipse Awards everyone. If you’re going, the price is $425 for a ticket, or for you horseplayers, that’s $200 win place and a $25 jockey 7 bet.

Operation Christmas Horse and How the Horse Industry Was Saved

It all started with a note on a dark web forum populated by several horse racing people called MIDAS – “messages the industry doesn’t actually see”.

“I saw Operation Gift Horse on twitter and it got me thinking,” wrote frequent BARN guest Inside the Pylons. “Let’s do something to improve the industry.”

"We need a big wall around high takeout tracks," suggested POTUS Capper.

“Gift cards for lower juice,” wrote Charlie Davis, the former wrestling star and NHC third place finisher.

The winner came from noted horse intercourse guru Sid Fernando.

“In my travels with the horse sex crowd, I’ve passed by a secret door at Churchill Downs that houses the takeout control room. I’ve been told there’s a switch in this room that controls industry takeout. If you find a way in, you can lower takeout for all,”  Sid noted, while sipping on a craft beer.

crunk, artist likeness
“Let’s call o_crunk. He can hack the schematics,” added Sea Bass.

“This better be important, I’m watching a Phish concert,” growled Crunk.

Sea Bass explained the plan.

“I can have that for you in two hours, now go away,” said an irritated Crunk.

 How could we pull this off?  For that we were lucky to have a thinker.

“This is easy,” said Superterrific. “We start #operationticketloser on twitter. Everyone’s sends their losing tickets to someone creative, like you Keeneland Gal, and she’ll create a giant paper mache horse. Once Crunk gives us the plans, we FedEx the horse to Churchill Downs as a present to that CEO guy, Scrooge McCapitalist, or whatever his name is”.

Here’s where it got really good.

“Inside the horse will be someone athletic, nimble and quick, like former minor league baseball star Andy Asaro. At night, Andy sneaks out, and with Crunk’s guidance, he will enter the secret takeout room and lower the dial.”

“Incredible,” said Charlie. “You’re like a criminal mastermind.”

"It's sneaky, like how no one knows I'm the one who does the Timeform figures," added Elsie Milkowski.

“I saw something similar on an episode of Law and Order ,” replied Superterrific.

“I JUST WANT TO SAY IF YOU GET CAUGHT I WILL REPRESENT YOU FOR FREE”, interjected Jerry Jam, much to everyone's delight.

“Who else should we invite to help?” asked Gate to Wire. “A lot of people we know work in the industry. Can we trust them? Would they even want lower takeout?”

“I agree,” said Pylons. “I like DeRosa, Beem, Candice Hare, and you know I love Todd Schrupp’s ticket construction, but they’re insiders. The only person I trust to add is Chip Reinhart, because he’s not related to anyone so he'll never get a job in the industry.”

“Thanks ITP” said Chip.

“Well, off we go,” said Multiracewagers.

MONTAGE. People planning; Crunk doing schematics, Keeneland Gal making a horse, ITP playing some track no one has heard of, all to “No Easy Way Out”, the theme from Rocky IV.

It was now the day. 

While the FedEx package was delivered to the front door, Robin Howlett, posing as a CDI employee, was late.

“I parked in Ron Turcotte’s parking spot and it was like three miles away,” he recalled later. 

Arriving just in time, Robin said to the guard, "Send this to the basement, or I’ll have your job!” 

The ruffled security guard complied. 

Andy Asaro was getting sore inside the paper mache horse, but his drive for lower takeout was allowing him to push beyond all physical and mental limitations. It was like he was at Striders OTB, half corked on whiskey, and he had to find the strength for one more bet. 

“The coast is clear,” said o_crunk in his earpiece. “Go” 

Andy, with crunk’s guidance, found his way to the door. But it was locked solid. 

Suddenly, with all seemingly lost, out of nowhere popped Ed DeRosa. “I caught wind of this. Here’s the key Andy. Remember you didn’t get it from me,” he said.

Andy felt tears well up in his eyes. Ed wanted lower takeout, too. 

“Thanks Ed,” he said, trying to hold back the emotion and love he felt for him at that moment. 

Andy made his way inside. At the head of the entrance he saw a sign, “high takeout makes us champions today”, that industry employees would touch when entering. There was a long hallway with portraits of racetrack executives (he thought he saw one of a woman, but it was just an old white guy who looked a bit like a woman). At the end of the hall there was a statue of Frank Stronach stroking a large cat. 

Then he saw it. A big golden dial. MIDAS intel was right - it was turned up to 11. 

With sweat pouring from him, Asaro tried with all his might to turn the dial down, but it wouldn’t move. With so many years of high takeout it was stuck. He tried and tried, but could not summon the strength. 

Then he heard a soft voice.

“Go the distance,”

It was Jason Beem. 

“You can do it, go the distance Beemie Award winner,” he heard in his earpiece again. Unbeknownst to everyone, Beem was visting Crunk's Jersey pad, after a late night snack at the Cracker Barrel. 

With the power of Hercules Andy turned the dial again, and it moved. He had set the industry on course for lower takeout. 

High fives erupted at MIDAS headquarters. Groans turned to cheers. Everyone loved Jason Beem. Beem for President! 

There was still work to do; Asaro still had to make his escape, and because of the delays, racetrack employees were making their way to work. 

“Quick,” said Crunk. “Head out the door, look for the "We Must Crush Kentucky Downs in '19" poster and take a left into the main grandstand” 

Andy made his way but was stopped in his tracks. He saw Stronach, one of Stronach's kids yelling at Frank, and a couple Churchill suits. 

This plan was dead without a diversion. 

Suddenly and without warning he saw Candice Hare. “I got your back Andy,” she said.

Hare sprinted to the program seller, and realizing she had to start a ruckus she did the only thing she could do. She asked for a DRF. 

In the mayhem, with Churchill execs running to the scene, Andy slithered by. 

“Candice is still one of us!”, Racetrack Kyle exclaimed. 

“Yippe ki yay!” Dink yelled. 

Then at the front entrance, with escape only feet away, a row of security guards formed. It was going to be impossible for even someone as athletic as Andy to pass. 

"This is worse than the day I stared at the eclipse," said POTUS Capper.

“We need a miracle,” muttered Angle John.  

That’s exactly what happened.

Todd Schrupp came through the front door and said: “Ladies and gentleman, I am Ed Helms, star of stage and screen and I'm offering everyone free autographs!” He winked at Andy as the crowd converged on the TVG star.  

“I love Todd Schrupp,” said ITP. 

Waiting to pick up Andy was a resilient Robin, who again made it the three miles to Ron Turcotte’s parking spot and back. 

The job was done. 

A year passed and no one in the industry knew what had happened, but there was a hike in handle. The racetrack executives - figuring the takeout dial was stuck on super-high for years - didn’t even think to check. And their internal reports showed people really liked the wiener dog races and concerts. They patted each other on the back. Some even got stock options. The status quo remained (except there were plans for more wiener dog races). 

As for the members of MIDAS, they stayed anonymous. They lived their lives, bet their bets. And to this very moment, none of them have ever spoken about Operation Christmas Horse and the day they saved racing. 

Please allow me to wish you and yours a very Merry Christmas.

No One Knows What Sports Betting is Going to Look Like, But it Ain't Going Anywhere

I was digging through some old electronics recently and came across my Slingbox. For those who don't know, a Slingbox attached to your cable box at home and allowed you to watch your home TV from anywhere in the world (over an internet connection). I purchased one way back in 2008 or 2009 so I could watch TV at the little place in the sticks, and have it when I traveled (I hated hotel rooms where I didn't know which channel was which).

This device - developed in 2002 by a couple of guys who wanted to watch the Giants play baseball on their local feed when away from home - was a fantastic piece of tech, well before its time.

Now, many years on, I see this company (purchased by Dish a few years ago) has halted production. And when I go to hotel rooms, or out of the country, I watch a hotel TV, or try to login to several apps and can't because of geo-blocking and other restrictions. The tech world, when it came to streaming and TV channels, has all changed.

Right now in the US, it's 2002 for sports betting. For evidence of that, pull up the Legal Sports Report twitter feed.

There are companies jockeying with others for deals, new states coming aboard, new contest and parlay game marketing. There are massive amounts of money being invested into new tech, especially for in-game betting; there are large companies buying data companies for some pretty nice valuations. And of course, as we've spoken about numerous times over the years here, if you have a book of customers prequalified to bet (like DFS companies do), they're worth a lot of money and are hard targets for M and A.

What we're seeing at the present time is the boom phase, which is a little bit of wild west.

How is this all going to shake out? I don't think anyone knows. Things are so raw and the industry is so nascent you can look silly trying to decide which way is up.

But two things I think are safe to predict: One, what we're seeing now with all the machinations, investment, products and companies is not the long term reality. There are a whole lot of slingboxes out there that won't be around in their current form in ten years. And two, this industry - like the evolving of streaming and television offerings -  is not going anywhere, and will only get bigger and bigger.

There's More Than One Response to One Big Aftercare Ask

Crunk tweeted this today --
On the surface, and for regular horse fans and bettors, this is pretty basic - Help aftercare with a touch of a button. Great idea.

If we slap on the critical thinking hat and look a few rungs below the top of the ladder, it becomes a little more problematic.

If you're at the track for the very first time and see this, your response might be different.

"They don't have a plan to take care of these horses when they retire? What kind of business would do that?"

If you're a politician out for a stroll that is unaware of the size of some of the tax breaks, or gaming subsidies, you might say, "I have to find out how much they're getting from the public, because some of it should be used for aftercare."

If you're more of a casual fan, you might be introduced to the topic and look into it more and more. You know an owner of the three paid $900,000 at the OBS for this colt, and you start to wonder why the horse ends up going to Mexico a couple of years later.

Jonah Berger wrote extensively on this topic in a book called Contagious. When people are alerted to something they were unaware of (or assumed was being taken care of) it has a very big influence on them. It causes them to learn about the problem, rather than the solution, and if the problem doesn't make sense to them, it could do the opposite of what's intended.

I like the idea of being able to give $20 or whatever to aftercare. I drop money in the jar each time I go to the track. And maybe I am the proper audience for this tactic. But I know I'm not the only audience.

Have a great Monday everyone.

Grinding Down the Bankrolls of the Masses

David Schwartz of UNLV wrote a neat article on blackjack in Forbes today (h/t to Charlie).  In it he explores what's happened over the years as casinos have tried to make changes to the margins to earn more rake from each player. This includes 6-5 blackjacks and standing on a soft 17.

Proponents of 6:5 and the other edge-padding rule changes argue that the vast majority of customers don’t know the difference. Walking a casino floor and seeing 6:5 tables packed with smiling players, they might be right. But the numbers tell a different story. 

Since 2000, the number of blackjack tables in the state of Nevada has fallen by over 31 percent. Yes, but the amount casinos win from blackjack is still the same, some might argue, so things aren’t that bad. Factoring in inflation, though, the amount Nevada casinos have won at blackjack has fallen by 46 percent.

This is not much different than is seen with a marginal takeout increase in any game. Betting volume depends on a few things, one of which is bankroll size - as bankrolls get degraded less is rebet. But also, the enjoyment a bettor gets from a game is directly correlated to them having a chance to win, and although the black jack changes are marginal, over time this enjoyment degrades too. 

The same phenomenon was seen in scratch off lotteries, but things went the other way. These ticket bandits started at well over 50% takeout because lottery players scratching tickets were deemed to be not in any way price sensitive.  Over time this was proven incorrect, where now - at least in one state - scratch off ticket takeout on larger sized ($20 or more) tickets is lower than Del Mar exacta takeout. 

In horse racing we don't talk about this much, and frankly, takeout increases are normally hidden, then trumpeted with a short term revenue bump. The key to that is short term, because in the long term, bankroll degradation is something that stunts growth, and what's particularly penal about it as a strategy - you don't even see it happening in real time. You just wake up one day and wonder where half the people went. 

Have a great Tuesday everyone. 

No One Knows What Sports Betting is Going to Look Like, But it Ain't Going Anywhere

I was digging through some old electronics recently and came across my  Slingbox . For those who don't know, a Slingbox attached to your...