Monday, March 9, 2009

Late to the Party

I often read Seth Godin and link him here as you know. He seems to emote common sense business in the new economy. A couple of days ago he spoke of today's emergencies and how the writing was on the wall for some time, yet no one seems to do anything. He wrote a section about media:

Six years ago, I gave a mildly controversial talk to the newspaper publishers at an annual convention. I explained in detail why they were just a few years from bankruptcy and how they could use the momentum and assets they had to build up a hyperlocal internet presence and permission asset now, because it would be too late when the emergency hit. Of course, my talk wasn't an emergency, they had other priorities, and so the dire prediction comes true.

Sure we will speak about racing like this as well. But is racing the only business who has not looked forward with the writing on the wall? No. I remember four or five years ago having dinner with a friend who runs a fund. He got rid of his mortgage and housing holdings because the bubble was going to burst he said, or alternatively, the government would soon act. He noted that the then Treasury Secretary was probably going to go to Congress soon to sound the alarms and if I had a few dollars, some well placed puts might be worth a few bucks. Sure enough the sec did go to Congress, everyone ignored it, and the bubble was allowed to grow. There was no emergency. Lucky I did not buy puts. Short term ones anyway.

This reminds me of a long ago conversation I had with a few in racing about rebates. I was getting them and my handle exploded. I am not the worlds greatest handicapper, but I won enough to make me an every day player, and the rebate bump made me a large every day player. I wanted others to be able to get this as well, as I know how many people leave our game because it is so hard to win at. Most of my friends were leaving for the poker table at the time, and on some gambling chat boards we were considered outcasts for even playing the game of racing. The writing was on the wall, and I thought if I showed folks some numbers they would embrace this new way of doing things, and we might raise handles.

But I heard crickets. I was told that racing "could not afford it." I was dumbfounded. Here is a way to raise handles, increase customer satisfaction, and grow racing and all they could say was "we can't afford it?" How could we afford not to, I thought.

I then read the Harness Tracks of America conference transcript on rebates way back in 2004. I was amazed that it seemed like every person that was speaking on behalf of the tracks could be so outside reality, my reality as a customer anyway. Do these folks even make a bet? Track heads are speaking about bettors like they are consumers buying cars; and even worse they are arguing with them. Could they be this out of touch with what their customers do daily?

Now, several years later we see that handle is getting killed. It is now an emergency. Thankfully rebates are no longer a bad word and 4% rebates (something racing said was 'impossible' a few short years ago) are considered something for every day players. Tracks are now paying people to play and they have been embraced, even in California, the staunchest anti-rebate jurisdiction on the continent. But is it too late? I guess we'll find out. I hope before the next emergency.

I don't know where we are going to go in racing or what to do to fix things; I am not that smart. But I know our prices are too high, and we have no idea how to distribute our product properly to gamblers, and until we address those issues and make them our focus, the sport's future will continue to look bleak.

4 comments:

Raleigh said...

great piece Dean, as usual. I really do wonder where horseracing will be 20 years from now.

I like to imagine and hope it will be thriving, in it's proper place as both one of the most compelling and enjoyable sporting events around, and one of the most intellectually stimulating and intriguing puzzles one could ever hope to set ones mind to in the unending endeavor of man vs. market.

But inertia has it headed somewhere entirely altogether different.

ITP said...

Wilmott's a moron comparing bettors to car buyers 5 years ago while wanting to end all rebates.

What's even worse was just last year, Scott Daruty, head of Tracknet, was making exactly the same point verbatim except he was comparing bettors to watch buyers. Just amazing!

http://www.paceadvantage.com/forum/showthread.php?t=42911&highlight=daruty

Wind Gatherer said...

You might also enjoy this. He focuses on journalism and print media but his points are similar.

Cangamble said...

It is pathetic to read what Willmot said. If he had a clue, handles would triple at HPI at minimum.