Monday, November 15, 2010

Has Paulick Jumped the Shark?

We've always been a Paulick fan here because he tends to covers some tough issues. The thoroughbred trade press, who gets most of their revenue from breeders and other insider groups, can not be very controversial, for obvious reasons - i.e. they know where their bread is buttered. However Paulick's site in its early days was nothing of the sort; he seemed to not care who he angered, or who he praised.

But today, it looks to this observer like the Paulick Report has jumped the shark.

In an editorial titled "California's Push for Purses", he extolls the virtues of a purse increase in California which reads almost like an advertisement in itself - which I guess is fine. However, several quotes are not up to his standard.

For example:

i) "Anecdotal evidence shows that wagering does increase with a lower takeout, but to my knowledge no studies have proven the point that reducing the cost of a bet will increase the revenue to tracks and purses."

ii) "What is most amazing about the legislation projected to raise purses by 25% is that racetrack owners agreed to channel every dollar from the additional revenue to purses."

iii) "There is an enormous investment to put this game on, from the standpoint of the racetracks and the horse owners. It’s not poker, where the investment is a deck of cards or a web site."

In looking at each comment -

Of course there are studies on take reductions doing some good, both theoretically and in practice. Places like HANA, Maury Wolff, Barry Meadow, The University of Louisville (hell, Ray Paulick walked there last week) Jeff Platt, Eugene Christiansen and Wil Cummings (people who either gamble, have Phds or consult with gambling) all have listed them, or authored them. The old Ray would have sought them out before writing the piece for their opinion, instead of taking the CHRB's word for it. If he did he might have noted that a doubling of purses increase handles only 6%.

The "raise purses" line is even more old school. As Roger Way, commenting on the Paulick piece pointed out :

"Money was given to the horsemen for purses a few years ago via SB27($40 million) with the promise that it would solve the problems of racing. Here we are again with the same promise(2-3%increase,$70 million) for bigger purses."

The old Ray would have challenged the CHRB by asking "you raised purses $40 million several years ago to fix the same problems and now you are back doing the same thing. It did not work before, why would it work now, especially when you are going after overtaxed customers for it who have been leaving the game in droves?"

The old Ray might have looked at harness racing in slots states, where purses are obscenely high but handles barely break $100k a day and there is very little spreading of horse ownership apart from super-stables. The old Ray might have looked at the fact that vet bills and hyperbaric chambers and adequan and supplement costs all go through the roof causing every purse rise to go to suppliers and not doing a thing to grow the game. He might have noticed and asked about super-stables, with $5k a month bills, or factory like claiming outfits running vetted up 30,000 claimers for 10 to win a juiced up purse, turning horse owners off even more like has happened in dozens of jurisdictions with an artificial (and unsustainable) purse hike.

As for the "investment in the game" it is the whole 'cost to put the show' line that people in the industry like to use over and over again. Some of the above people tackle that line in the pieces that Ray seems to think are anecdoctal.

The old Ray might have asked "It costs billions to buy and run a casino, but takeout on video poker is 0.43%. It costs billions to cut down a tree, mine for sulpher, truck it and process it to make a pack of matches, but they are less than a dollar. Every wagering economist calls such logic specious at best. Why do you in power in the industry keep feeding us this non-economic demagoguery? "

You can usually tell the quality of an article in racing by the comments, and in the comments on the piece, and on chat boards, there is what I would call a dismay, but not from some of the usual suspects.

I notice Caroline Betts, who holds a Phd in economics and teaches it, poignantly challenged Ray's point by citing the Los Alamitos takeout increase stats, in more than one post. I can virtually see her pulling her hair out while typing.

"ITP" who is a California horse owner and large bettor who posts at Paceadvantage, was none too kind to Ray by typing: "When you repeatedly posted Fred Pope’s ramblings about revenue generated from wagering, I knew you had absolutely no idea about betting, gambling, horseplayers, etc. With this article, you now have removed all doubt to everybody that you know nothing about the betting aspect of racing."

Another poster said "I wonder what would happen to the Paulick Reports advertisers if he raised his rates above what is considered the norm."

I wonder myself. And looking at the Paulick Report's front page today, maybe these people are answering their own question.


Yep, a full blown paid ad from Cal Racing. Right underneath an "opinion" article about how great California will be with a takeout increase.

The first sign of being considered trade press has always been, to me, when you start editorializing like your advertisers. If that is the least bit true, Mr. Paulick's once daring and unapologetic site might now be considered just another part of the industry "trade press". If that is not true, well one thing is for sure - the Paulick Report's readers deserve much better editorial articles, because this one could have been written by the California Horse Racing Board.

12 comments:

Pacingguy said...

I just read the Paulick piece and am willing to give Ray the benefit of the doubt; one article does not mean he has gone over to the dark side or not. I suspect it was sloppy reporting.

Apparently, California racing interests are banking on the fact their takeout is relative low now and an increase will still have their takeout lower than many states so what are gamblers going to do? Get in a huff and wager on a track with a higher takeout rate? They don't understand that those dollars may just stay in wallets.

He is right with respect to all the money from the increase in takeout going just to the horsemen is unusual. Usually the tracks get their share of the increase as well. Of course, as gamblers do we give two hoots.

Could you let me know of a specific study that shows definitively that more revenue is generated? I rememver Phil Langley at Balmoral once wrote that handle would have to increase a very high amount to break even on a takeout cut. I am not doubting what you are saying; I just haven't read such a study.

The_Knight_Sky said...

I do remember Mr. Paulick taking the CHRB to task a few weeks ago regarding the topic of the current leadership in California.

So I'm willing to give him the benefit of the doubt. The challenging "old Ray" that you bring up is the kind of material that is in the best journalistic interests for those the horse racing industry. We need that "old Ray" dude back.

Perhaps he's recovering from aches and pains from his BC trek, so let us wait until after the Tylenols wear off before roasting him. Sounds fair enough. ;-)

Anonymous said...

Bingo.

If I want to read an article written by Keith Brackpool or Bo Derek, I will go to the CHRB site.

There is so much so very wrong with his article (if he in fact wrote it) than I honestly do not know where to begin.

Phil

Brian Zipse said...

As a fan of both of you, I appreciate your willingness to take Ray Paulick to task when deserved.

Anonymous said...

Reading Paulick (and those beholden to advertisers) and his ilk (eg CHRB/TOC) makes me appreciate people like Nicholson; and Shwartz and Nader from NYRA even more. Those gentlemen understand takeout & betting and have been able to hold to logic, despite being hammered by breeders and owners groups (who have way too much power in racing).

I do not think our sport has a bright future, obviously. Too few Nicholson's and too many CHRB's - with people like Paulick towing the company line.

RGT

Anonymous said...

The trouble with The Paulick Report has always been a lack of disclosure. TPR takes donations, promising confidentiality. There's no sense of a split between ad sales and editorial. Who initially funded (and may continue to substantially back) TPR has been a subject of speculation since the site's launch. Paulick claims to be independent -- but that's an assertion that must be taken on faith, and an editorial such as this on California undermines it.

Cangamble said...

I proudly haven't wagered on any California race since the bill was signed.
When a California race is on TV, I view it like a commercial, I either get up to grab a snack, handicap a race at a venue I do play, get up to take a wizz, or, if my wife is talking to me at the time of the race, I actually listen to what she is saying to me.

David H. said...

Honestly?

With all things in life, you take the good with the bad. Ray Paulick took a position, and people disagree with it. So what? The site is 1000x more informative than DRF.com or any other individual site, and I'll still load it 10 times a day.

Anonymous said...

Nice piece - but Ray is Ray. He is SO RAY that he posted your blog at the TOP of his website. So maybe you OUT-RAYED Ray. Yet I do believe that Ray is not a pariah as many want him to be. He has strong and counter-culture views on many topics, but not all. He can be mainstream, and that's why I keep reading the Paulick Report. Ray is like a box of chocolates . . .

Anonymous said...

to Anonymous, AMEN! I am a huge fan of Mr. Paulick. He speaks his mind but he is a GENTLEMAN. I do think the placement of the California ad in relation to the article is a bit suspect but after all it is the PAULICK Report so I think that gives him some leeway to place ads where he sees fit. Overall, if I want to see unbiased, unflinching horse racing news I will go to the Paulick Report. Thanks Paul, for being OUR voice! lisanky

Anonymous said...

A box of chocolates? Come on. I like being surprised by systematically insightful material, even if I disagree with it - but this is not and ridiculous to credit it otherwise. Virtually schizophrenic editorial commentary from Ray Paulick on the state of California racing. Either that, or this piece reflects a complete lack of comprehension of the economics and politics of racing and gambling in the state. And I don't believe that for a second.

Draynay said...

I especially like Ray's shorts in his water skiing photo.
Very stylish.