The Twitter Moral Suasion Machine

Last evening I saw on twitter that a horse in Southern California had broken down:

A few minutes later we learned the horse had earned some serious cash and was dropped into a $12,500 claimer. This drew the usual outrage.

Because trainer Bob Baffert is on twitter, his feed was talked about as well. Not long after the alleged euthanization occurred, Bob was tweeting about watching the football game. I assume he found this in bad taste when he saw the chatter about his broken down horse and deleted those tweets. But of course, they stay around.

Let me stress: I do not know what happened in this case and I am making no judgement regarding Mr. Baffert or the owner. I don't know either way, and I am only reporting the above from what I've read on twitter.

However, and in general, dropping a horse down that may have problems is a part of racing. In the past when it happened, outrage of some sort would occur via a phone call or a grandstand conversation. Now the outrage is palpable and in-your-face on a social network like twitter.

Moral suasion occurs when " economically rational individual behaviours of economic agents do not maximise collective welfare. Moral suasion will therefore be a more effective policy tool if these rational economic agents can be persuaded that it is in their long-term interest to comply with the intended government policies, even when they are not profit-maximising in the short run."

I think twitter has become a moral suasion machine. If you want to maximize your stable profit, expect a pushback like the above. People are watching. 

Maybe it's none of anyone's business. Maybe conclusions are jumped and it's unfair. But it's there. I think more and more people are thinking twice before dropping down a horse who's been good to them. It's not 1980, and the outrage does not happen in silence any longer. "Part of the game" doesn't necessarily mean "good for the game" and the people who feel that way now have a really big megaphone.

Sunday Notes

This weekend's racing at the Meadowlands was a pleasant surprise. Handle was up, but more importantly the races were pretty competitive, which may portend more good news. The classification system seems to be working. I often look at Compubet, to see the race breadth in the ratings. The last couple of days the breadth has been really tight and the tote board has been similar.

Slots have thrown racing into disarray, whereby some of the smaller handle tracks have the highest purses. This is different than in the recent past where a place like the Meadowlands had the highest purses, and the best horses each Saturday evening. The Meadowlands will continue to struggle in that regard, however carding good races can breed handle, and they're clearly making some headway on this.

I had a chat yesterday with Darryl from Standardbred Canada about the PMU in France. Darryl is a supporter of a central organization doling out signals and bets, like is done in France, and would like to see similar in North America. On paper he is likely correct - it makes sense. Instead of hundreds of racetracks all fighting for signal time, setting takeout rates, dealing with horsemen groups, one central group seems to be preferred.

Unfortunately, it's kind of like comparing apples and alligators. A central organization will set rates, but like in France they will be set high. With no competition there is little chance for horseplayers to get a break. France works for mainly one reason: The PMU is protected by government decree. This is what Betfair noted when they were stifled in entering the market, as were other bookmakers.

• "French legislation will certainly benefit the incumbent players and the ultimate loser will be the French consumer. The new law does not adequately open the former monopoly's market to true competition from other operators.

What on paper may make sense often times isn't, because when competition is stifled there is a loser. And the loser is the consumer. In North America, where upwards of 40% of handle is rebated (which is a central organization will probably quell) it seems like a non-starter.

In effect we have a mini-signal aggregator here in North America in two locales: HPI in Canada and Twinspires in the US. How's takeout at those ADWs?

It's sad that some tracks can't get a leg up, because they're trying. Yesterday some of the most entertaining racing in North America happened at Turfway Park. The poly was playing fair to late and there were some excellent finishes.

As we spoke about yesterday on the blog re: slots, we think that the narrative racing uses should change from jobs and "the government is stupid" to "not in my backyard with your gambling expansion plan, please".  The problem with some arguments by racing - like for example, the government will somehow do worse if slots are taken away from tracks' -  they don't pass the smell test. If an argument doesn't pass the smell test, all the other arguments tend to get discounted as well.

Charles Town, a long time whipping boy for "bad racing" has turned the corner. Their handle continues to grow. Charles Town has been aggressive in marketing and lowered their takeout quite a bit a couple of years ago.

Did you ever want to see harness racing try something crazy to up interest? Here are 5 crazy ways to improve the sport in HRU (page 4 PDF).

 Have a great Sunday everyone.

Standardbred Canada Jumps the Shark & The Truth About Slots

We've all read the stories. Cangamble even did a post about some of them titled "C'mon Man".

Ironically, the ESPN "article" written on Standardbred Canada yesterday took it to a whole new level.  The opinion piece designed as an article, I believe, does more harm than good. I think they're jumping the shark.

There has been so much written about the OLG and Liberal government's decision to end the program it can make your head spin. Opinion pieces like the above disguised as "news" rule the day. It's even gotten more brazen of late, as people sit around a table with the same opinion, which only solidifies it more and makes it more insular. No wonder everyone is confused.

It doesn't have to be that way if you look at the "facts". This is a simple piece of legislation.

The OLG "modernizing" of gaming simply means expanding gaming so the Province can make more money. In fact, ending the slots at racetrack program and increasing supply, in part, is projected to increase government revenues by $740 million per year. No matter what SC says, or comment after comment that you read in the industry press, that's what they're after. From the "2012 OLG Strategic Business Review"

This makes common sense, in fact.

Think about it. Right now they have 17 slots parlors and they have to give a whack to the city and to racetracks. They're hamstrung. This unleashes slots on the entire province, the private sector will pick up a lot of the costs and infrastructure and the government will take the money and run in a form of "licensing". They're following much of what British Columbia is doing. It's not new.

They clearly see some fruit on the tree. Per capita gambling revenues in Ontario are lagging:

It sucks for me and you as an Ontario horse owner. It might not be fair. It has surely been implemented poorly. But it is certainly not "utterly senseless", "reckless" or anything else. It's what they think is good for their bottom line.

If the shoe was on the other foot it would sound like a great idea, wouldn't it?

What if there was no internet wagering for racetracks (just like you have to physically have to play slots) and there were 5 tracks in the Province. Of those five tracks $100M was bet, and racing owed a 20% fee to the government for all betting. Now, we in racing say "open it up, allow us to open 50 tracks, let us pay the expenses, and we will increase wagering and revenues".

That would sound like a good idea. 50 tracks surely will have more betting revenue than 5 tracks. I bet everyone in racing would love that idea.

That's what the government is doing, but they're doing it with slots.

The next time you read a Standardbred Canada story, don't get fired up and angry reading the editorial wrapped up as a news article. Don't get bogged down on subsidy revenue sharing talk. Don't worry about 47% or 75% or 10%.

Just remember: The Slots at Racetracks program is being cancelled for one reason and one reason only - So the government can expand gaming and make more money.

This is why I firmly believe the battle lies not with propoganda or calling people names in the press, but with sound logic. Do the people in this province want slots on every street corner? Do we want more and more of our hard-earned money going into a slot machine at a "bingo hall" down the street? I think the answer is no. Keep slots at a tightly controlled racetrack. Work the splits. That makes sense and, in my opinion, it's racings only worthwhile narrative to win the fight.

2020 The Year of the Racetrack?

Moving closer to New Year's Eve, I think I am  going to make a resolution. Buy a racetrack; sometime soon anyway.

Public policy, like most things, ebbs and flows. Over the past several years cash-strapped governments have been pushing casino gaming like an inner city dealer has pushed crack. 'Come one come all, bet til you lose all your money. It's okay, if we get the proceeds for schools, or Solyndra subsidies.'

It's not only happening here in North America, but elsewhere too.

But it makes me wonder. When will the dam break? When will the public say enough is enough?

In Italy, strict betting laws were relaxed about ten years ago to try and bring in more cash. What's happened is not overly pretty. 

Pathological gambling and its associated problems are not easily swept under the rug. Slot machines on every corner, lottery stands, all the quick and easy games that the government uses to bridge budget gaps...... I think, maybe in a half a decade, we are going to see a backlash and a political party will start pulling a "sugary drink". I think you're still going to see gambling of course, but I bet it'll be at places like, oh, a racetrack.

Hedge fund and private equity types look to buy assets that are out of favor, and underpriced, because if the fundamentals are there, they can return to glory. I think they'd likely be looking long and hard at a racetrack or two. Or maybe I've just had too much egg nog and rum.

Notes:

The Big M opens tonight with a pretty nice card. Bill Finley at Harness Racing Update looks at the new classified racing system, and the plans for the meet (pdf).

HANA Harness handicappers helped out a horse charity. Allan and the crew did an amazing job there. Way to go guys.

Neat promo at the Meadowlands. Gural bought a 1% share in pacer of the year Captaintreacherous and he's giving it away to a lucky fan. If the colt's potential is realized, 1% of a couple of million is a nice prize.

What's harder to decipher, third year calculus at MIT, or how to get a proper handle number from Santa Anita?

Have a great day everyone.

A Strange Horse Racing Merry Christmas (With Text Hacks)

I was trying to think of a Merry Christmas post and I had a mental block, just like I usually do. I wasn't going to post one this year as a result - other than "Happy Christmas" with a gratuitous Kevin Bacon and/or TOC takeout hike reference -  but by happenstance one kind of fell into my lap.

Yesterday I was chatting with Sid Fernando (the most interesting man in racing ™) via text message, and this is how it went.

I chuckled. What a silly goose.

Anyhow, as most know, Sid is an omnipresent pedigree guru, amateur weather videographer and has something like 186,000 twitter followers. What you may not know is that he has plenty of contacts on his phone, too. Somehow a glitch occurred and my phone hacked into his phone. Suddenly I was seeing Christmas greetings and various other text strings from the virtual who's who of racing.

It would seem (to many) that the right thing to do would be to inform those folks that I had their private messages, but I got to thinking: That bigwig NYRA meeting last week was all about "transparency", so let's not just talk the talk.

To be extra-fair I've published a few of my own phone messages, too.

Off we go.

Here's my correspondence with racing customer, breeder, horse owner and all-around warm and fuzzy guy, Inside the Pylons.....

 Ed Derosa's presents have changed  .....

Economics professor & horse rescue head Caroline wants to have some fun. Sounds like a great time....

A rare glimpse at the symbiotic relationship between the Toddster and Not the Toddster (language warning!) ....

I thought the Paulick/Cummings break-up last week was fine, but now I wonder  .....

My chum O_Crunk and I share some introspection this Christmas....

Steve Byk talking to one of his listeners from New York.....

People have been wondering where Joe Drape has been getting his information.  I didn't find out (who do I look like, Matlock?) but I may have uncovered some clues ....

I found this discussion fascinating ....

Was Dana from Hello Race Fans right when she surmised that NYRA expert Mr. Mann was a closet Madonna fan?

I didn't know Steve Crist and his nemesis shared texts ....

Paulick can't help himself, (and neither can I)....

Doug O'Neill is more than just a guy in a hat, he's quite the jokester......

Sid ™ sometimes gets fixated on the twitter. Thankfully NA & Euro Trainer Magazine's Frances J. Karon knows how to handle it ...

For twitter watchers who know Minxified she has similar problems on her phone  ....

Jerry Jamgotchian is the man, but he seems to struggle with technology  .....

This was an interesting snapshot into the Frankel-Black Caviar courtship ....

And finally, from me to you ......

Enjoy your day everyone.

The Jackpot Obsession

Taking a little break here from wagering between races, I just read John Pricci's piece on a reader who suggests a new bet. It's called the "64" where a pick 6 ticket can be taken but it can have no more than 64 combo's for a dollar. The hope is that newbies can participate in jackpot bets, because (as we all know) syndicates and big players tend to shoot for large jackpot bets, and crowd out the little guy.

Noble I guess, but this fixation on jackpot bets, especially for newbies, really kind of irks me.

Newbies, or small players playing the markets can go to E*Trade and make a few plays, scalp, straddle, whatever, for a few dollars here and there, and they are charged $6 or $7 a trade. They can make a little scratch, get better, and try and learn the markets at the same time.

Betfair is very popular with new players, because you can trade (a version of scalping), dutch, and grind out a little scratch with (sometimes, if you are good) zero takeouts. 

In racing, newbies get their head handed to them betting these "jackpot" bets, and many don't come back.

Why the obsession in getting them to play low hit rate high takeout bets? Do we want to kill their bankrolls and get them to never come back?

For a primer on these bets, their fair odds, and strategy, you can read it here on the blog.

If a newbie or smaller player wants to have some fun, and have a chance at a 100-1 or more score, perhaps the pools will be large enough at Sam Houston with its 12% 50 cent pick 3. Or scan the list of HANA racetrack takeouts and pool size and search for a low takeout daily double. Jackpot bets, whether you play $64 or $640, usually have you up against it.

Good luck to everyone playing today.

Frankel Data & Racings Business Strategy of Hope

"A sold-out crowd of 32,500 people watched Frankel win Champions Day at Ascot in October" says CNN in a story yesterday.

32,500 people. That's quite a number. The Hamilton Tiger Cats would like that crowd. So would the Toronto Blue Jays.  That's a larger crowd than any NHL game. 

If 32,500 people show up at whereever in NA - which for arguments sake would be about 30,000 more than usual - each would play maybe $40 into the betting pools. On-track, takeout breeds much more revenue for the home track than off-track, so again for argument's sake, lets set the rake rate at 20%.

30,000 bettors each betting $40 is $1.2 million of handle. 20% of $1.2 million is $240,000. It can be argued that a horse like Frankel brought in a quarter million of revenue for the racetrack (from only betting).

If you add another $40 for parking, program and concessions, we have another $1.2M in revenues. So, off a back of a napkin, let's say the wonderhorse brought in about $1.5M that otherwise would not be brought in.

That sounds like a lot. But is it? I think it is.

The NFL, for example, has about $100 in per capita spend at each game. That includes plenty of cash from merchandising. People buy Adrian Peterson shirts, they don't buy Frankel jerseys. Still, the "FCI" (fan cost index) of $100 for the NFL is equal to some studies, like the one in California, that showed an FCI of $100 for racing at Santa Anita.

Ignoring television revenue one would think the two "sports" would be more on par with each other, but really they aren't. A football fan is a repeat customer. I know very few people who have watched, or attended one football game. I bet you or I can name a thousand people we know who have gone to one horse race.

Because we have so few horses that have star power, like a Frankel or Zenyatta, and there are only so many Kentucky Derby's each year, we don't have real television revenues, and our repeat customers are tiny. 

It's why - and we've gone over this many times - racing must concentrate on increasing handle as a growth strategy. Getting someone who bets $100 a weekend to bet $200 a weekend and then $500 a week, because they bet a little on Wednesday and Thursday now, is a goal that's attainable. That pays the bills: Turning the casual fan into a weekend warrior into an every day bettor.

Customers of anything - cable TV, coffee drinkers, Norm at Cheers, whatever -  have a lifetime value. It's a common metric. Football fans are fans for years. They watch a Sunday ticket, go to a game or games, have a super bowl party and buy a shirt or a hat. They buy their kid Madden 2013, and 2014 and 2015. Getting a horseplayer to play more and form racing as a habit is our Madden.

The problem with that is winning and losing. Winning something - anything no matter how little - breeds excitement and loyalty. Losing sucks. In horse racing, beating a 25% takeout is not easy. It's virtually impossible. And high takeout is here to stay, just look at the headlines.

This is one major reason, I believe, racing focuses on hope as their business strategy. We see it almost every day. The hope that a Frankel or a Zenyatta comes along each year and brings people to the track. The hope that a Secretariat film will jolt the energy back into racing. The hope that "all we need is a Triple Crown winner". The hope that an HBO series will help. The hope that somehow, somewhere, something will happen to get people flock to racecourses again and spend their $100 per capita like they do at a Raiders game.

Unfortunately that hasn't happened and won't happen. Hope isn't a business strategy, it's what rudderless ships lost in a storm cling to. Racing needs to lose the hope, and develop some change instead.

Expression

Jamie Berk wrote an article yesterday that spoke about the state of journalism in racing. In it, Jeremy Plonk said:

• "If you're writing about horse racing and you stick your neck out and make a statement about somebody or about a bad topic that kind of sheds bad light on the game, it can hurt your business," he said. "There aren’t very many mainstream outlets for horse racing coverage, so that's why a lot of that stuff doesn't get written about."

I think most would agree that's true. People are very close-knit in this niche sport, writers included. Many don't rock the boat on virtually any issue.

Why that happens I don't know, and I'll leave it to smart people to discuss and debate.

But one thing we do notice is that the way we express ourselves (and get our information) has completely changed, and I think it's pretty fascinating.

I was trying to think of an idea for my yearly Christmas post here on the blog and I looked back at 2009. There I wrote a post about a fake Christmas party with everyone from the blogosphere. These folks were the people who expressed themselves freely, without an editor; many of whom had a pretty good understanding of many facets of the sport.

What would generally happen (way back then) is a story would get written by the "turf press" and it would be discussed in a blogpost - one that took a little bit of time to write and think about. Later, others would come and discuss it with him or her. Someone might write a blog post of his or her own to counter, or agree. If you pieced it all together it was like reading one large essay, with points and counter-points. It was not difficult to make a decision regarding what side of the fence you were on after that kind of discussion. It's the way the world worked.

Now it's much different. The blogs have dried up and it's much easier to express oneself in 140 characters or less, or on Facebook, in a similar amount of characters. In fact, that's evidenced in Mr. Berk's piece. The "tweet" in question from John Asher, was in jest. They seemed to work that out later, where else, on twitter.

Although it is wonderful to broaden the opinion and expression tent through the medium, I suspect this shift - for discussion purposes - is not a great thing.  In 140 characters there is rarely a meeting of the minds, it's disjointed, sometimes over the top, and not a whole lot seems to get decided. In a way, it might be a metaphor for racing as a whole.

From reading and processing thoughtful turf writing then waiting to write a letter to an editor, to the interaction of the blogs, to arguing with one liners. We probably need a Ritalin.

Racing's Version of Mark Sanchez, Tuesday Notes

I went to a Bills-Dolphins game about ten or so years ago. Starting for the Bills was Rob Johnson, the former Jacksonville quarterback. Johnson was a big signing. The owner appeared to like him and they gave him a nice sized contract. He was their future - the new Jim Kelly.

But a wrench was thrown into that plan - he was awful. That day, and every day.

After a first half when the Bills could barely make a first down, Johnson was throwing balls a grade six quarterback wouldn't throw in a schoolyard and looking particularly horrible, he trotted out for the second half. Flutie did come in about four series later, and led the team to a couple of touchdown drives, but I wasn't there, I had gone home.

Doug Flutie won games but rode pine. Johnson played, series after series, looking horrible. The team stuck with Johnson because they had put their money where their mouth is; they had to. Or they'd be proven wrong.

Simlarly last evening, a quarterback who looks to be playing worse than Johnson ever played, again trotted out series after series. Committing five turnovers didn't seem to matter. It's like the coaching staff has a "fatal attraction" to the quarterback.

Why is this happening? In the New York Times today this was not lost on one reader:

•  “A simple reason: politics. Specifically, the politics of managerial self-preservation. The GM, Mike Tannebuam, had made too many bad picks and too many bad signings over too long a period to concede that Mark Sanchez was another. He saw it as the straw that might break the camel’s back. So rather than admit as much, the Jets fashioned an Orwellian environment in which they consistently denied a reality that was obvious to everyone. Tannenbaum is obviously of the mind that if he refuses to admit the existence of a problem, no one else will figure it out. The organization’s motto has effectively become “Just deny it, baby.” But now, after another bad season, the emperor’s clothes are becoming so sheer that even Tannenbaum will have a hard time insisting that they’re silk.”

Which brings us to racing.

We've seen decisions over and over again that did not work, won't work, and will never will work. Things like the preservation of the current outdated pari-mutuel system, high takeout, or a reliance on slots (which will be taken away.)

These ideas have been clung to like Rex Ryan or Ralph Wilson clung to a quarterback. If they're turned on their head and changed, everyone has to admit what they've believed, pushed and advocated was wrong. It too is Orwellian.

For every story from Andy Beyer saying "give slot money back with a takeout reduction", there is another from a slots horseman executive saying their 30% rakes are just fine. When Australian executives go "all in" in 2008, saying that Betfair will destroy racing if they're let in, but when they are, two years later we see record handles and purse hikes, they cling to their original warnings (and a year later succeed in hurting them with new rules).

Racing has its own Mark Sanchez, and it's the status quo. Racing is married to it, and despite these policy failures, they're staying married, come hell or high water.

Notes:

Jen Morrison reports Woodbine is laying off 20 in the TV department, and the first high profile person to go is Renee Kierans. I liked her. She seemed to always have a smile for everyone at the track.

I'm a pretty live and let live dude, but allowing slots and other casino games in New Jersey on the web seems a little crazy to me. It's more than a tax on the stupid. Giving someone a quick fix on a game they are 100% sure to lose on, and placing it on the web, in the long-run is bad policy.  Only skill games should be on the web, in my opinion.

I get an inordinate number of hits from weird places. Yesterday's satirical Doug O'Neill post was no exception. The interweb is a big place.

Jay Bergman's use of the word "takeout hawk" as a pejorative in the DRF did not sit well with many on twitter yesterday, and rightfully so. There are scores of academic studies saying takeout is too high. Racing is losing market share, Pennsylvania tracks are among the worst in terms of losses. Costco is not a "hawk" for offering low margins, neither is Etrade, nor is a craps table and nor are the people who advocate it. They are simply advocating proper pricing, and good business.

Funnily enough, Andy Beyer wrote a pro-lower rake article yesterday in the Washington Post. I guess Andy is a "takeout hawk" too.

O'Neill Interview With "60 Minutes Sports" (Pre-Air Notes)

Bacon wrote last week that 60 Minutes Sports was planning a story on horse racing, and that Saturday, the interviewers would be meeting Doug O'Neill at Hollywood Park. Bacon's piece focused on the fact that the narrative would be pro-racing. As most know, Doug  has been interviewed in the past and had his medication violations and TCO2 positives brought up, both here and in the Chinese press, so that was a welcome proclamation.

I, as your cub reporter, can confirm that Paulick is correct. I travelled to Hollywood Park and clandestine-like sat like a snake in the weeds catching most of the interview. I found the reporters questions to be softball. What was striking to me, however, is that it seems some of the negative press has gotten to the Kentucky Derby winning trainer. He looked to not be his usual cheery self. At times - and this is simply my cub reporter opinion - he seemed very defensive.

Anyway, you can judge for yourself. I have transcribed my cub reporter notes and I present them below.

60 Minutes: Hi Doug, how are you? Would you like some juice or water?

Doug: Juice? What's juice? I know nothing of this juice you speak of.

60: Orange juice, apple juice, to drink.

Doug: I swear on my kids' eyes I don't like juice. No juice.

60: OK, fine, how about some pastries, we have cookies, all kinds of baking.

Doug: Baking? I know what you're getting at.

60: I'm just offering you some cookies, Doug.

Doug: Ya, that's how it starts. I ran into Joe Drape on the backstretch this spring and he said, "Hi Doug, how are things", then all hell broke loose. This is the way you reporters roll.

60: No one is trying to strong-arm you Doug.

Doug: Arm, like you're "hammering" me? Arm and Hammer, eh? Ha ha, the joke's on Doug. Funny stuff. You guys are about as tough to see through as a window covered in mud. Or I mean one that's easy to see through. That's it. You're as easy to see through as a window that's very clean.

60: OK, let's move on. Bob Baffert is, as usual, having quite the year, and continues to be a force in Southern California. How do you compete with his powerful stable?

Doug: Are you saying he'd be even more dominant if he still had Richard's Kid in his barn? And that if he had Richard's Kid in his barn he would make more money for himself and Jill, and they could donate more to local orphanages? Are you saying I don't care about orphans? That I don't like impoverished children?

60: No, I was just asking if he is a formidable opponent to race against. Alright, let's switch topics. Richard Dutrow calls people "Babe". Do you have nicknames for anyone?

Doug: Who's Richard Dutrow? I swear on a bale of hay covered in bibles I don't know who that is. I don't want to talk about people I have never heard of.  If he has violations I especially don't want to talk about him. And I don't like nicknames. No one calls me anything but Doug. Just Doug.

60: C'mon Doug, you know, Richard Dutrow, the man who trained Big Brown?

Doug: Oh, I see now, you rascal. Big Brown pulled up in the Belmont going for the Triple Crown and lost. You want to talk about I'll Have Another being scratched in that same race and try to pin something on me. Joe Drape tried this and I failed to see through his mental wizardry, but fool me once shame on me, fool me twice shame on you..... maybe I have that backwards.

60: What are your feelings on race day lasix? Pro or con?

Doug: I'll do whatever Mike Pegram wants. If he's pro lasix I will be for it, if he's against it, I will be against it. If he tells me to eat at McDonald's I will. By the way, I swear on my german shepherd's box of milk bones I've never eaten at Wendy's.

60: Ok, so did you enjoy the notoriety regarding the Triple Crown series. I heard Santa Anita gave away a bobblehead of you? That must have been fun.

Doug: It was. My good friend Mark Verge did that - he was running Santa Anita. I was appreciative. It's something I will never forget. Mark and I go way back.

60: Oh, Mark Verge. Wasn't he fired recently, and didn't he have something to do with Richards Kid and the bad-blood between the O'Neill and Baffert camps?

Doug: Who's Mark Verge? I never heard of him.

60: Thanks for your time Doug.

Doug: You're welcome.

That's it from your cub reporter here at Hollywood Park. Next week we'll have a preview of an interview with Jeff Mullins where he shares his love of customer service.

Pocket, out.

Sunday Pivots

A couple of letters and articles were written this weekend about slots ending in Ontario. One, from Dave Perkins, lambastes the Liberal government (ballsy, The Toronto Star is a Liberal paper). Another, from Dennis Mills, does similar, but offers solutions.

We've read those tomes many times - people will be thrown out of work, it's a "revenue sharing" deal that works, and on and on. I believe most of that falls on deaf ears. The public is not stupid, if it walks like a duck, talks like a duck, it's probably a duck. And people know that when a subsidy/revenuesharingagreeement/whatever-we're-calling it, gets pulled, it will result in job loss -  whether it's in horse racing or wind farms.It's happened a million times before, and it will happen again.

I think the thing that might resonate is that the OLG plan expands gaming. Instead of slots and gaming being held at a racetrack, they're being moved to a street corner near you. People do not want it in their backyard. It similar to the fact that some people are for legalizing weed, but even they don't want a weed-smoking cafe down the block from their daughters school. We have seen this tact used in this debate, especially from the Conservatives, but that, in my opinion, is the only argument that gets the job done. If I were racing I would probably pivot a little bit, because focusing on 100 arguments where 98 don't resonate, rather than putting all your resources into the one or two that does resonate, usually works better.

The Ontario Racing Commission disallowed a raceday cut at Woodbine, Flamboro and Western Fair this week. I find this a curious move by the commission. If slots are gone March 31st, why not let racetracks start to prepare on January 1st? Either they know something we don't, or they're as poor a manager as racetracks and horsemen have been with slots money in the past. This is a pivot I can not quite figure out.

I don't watch Hollywood Park much any more (since they raised rakes) but I did yesterday. I'm not sure if it's betfair or Libeau, but their graphics package is excellent and it pushes betting. The electronic "the pick x starts here" in front of the gate is really good. They do the little things to up the bet there, things that are common sense to me and you. They also, with TVG, gave out a car as a bonus, if you are the only person to hit the pick 6. This is racings version of a hole in one. Well done.

11 Predictions for Harness Racing in 2013 is in Harness Racing Update today (pdf).

From "Superterrific" yesterday on twitter regarding the ""Cash Call Futurity" - I think they should call it the "Predatory Lending Futurity"

Why do places like Northfield show 0 minutes to post and run the race 5 minutes later? Handle.

The late pick 4 yesterday at the Woodbine thoroughbreds was guaranteed at $100k, but did $75. That thoroughbred season is long and seems to get stale this time of year.

Enjoy your Sunday everyone.

Bettors At The Governments Beck and Call

A couple of interesting items for the horse bettor hit the wires yesterday.

First, Betfair announced some news. This headline seemed to cause some confusion, though. The Daily Racing Form reported that "Betfair is pulling out of a dozen countries". This is not quite accurate, as they are pulling their marketing and promotions from 12 countries; they are still accepting customers, as they have been.

This is not shocking, I would surmise. It's like Twinspires putting $10M or more in marketing to South American countries, and having the governments come along and say they can't operate. Capturing a customer for online gambling (or anything on and offline) has a "CPA" or "cost per acquisition" and it forms a target. Government uncertainty is a component of it (risk), and it seems that number is becoming higher and higher. It makes little sense to spend like a drunken sailor on landing a new customer, when it can all be taken away at a stroke of a pen.

This is not unlike slots really. The government can come in, like they did in Ontario and Iowa, and say "no more". Poof, it's gone.

Meanwhile, The NTRA reported that tax changes for US bettors might be enacted, as that government strives to gain more and more revenue. These changes are so penal, that if passed, handle would get killed and you'd probably find several big bettors set up shop in Mexico or Canada.  Fortunately, it looks like it may be averted. Alex Waldrop tweeted that they expect the hole to be plugged. Let's hope it is.

As governments realize the fiscal problems are huge, and there aren't enough rich people to tax to pay for their largesse, they come for everyone else. Whether it be with taking slots money, adding more taxes to bettors, or shutting out overseas companies as a form of protectionism, it's what's done. We should probably expect more, not less of it.

No Need To Be Interventionist

We had our fun yesterday with the NYRA meeting notes. We haven't had that many retweets since I mentioned Justin Bieber once, so thanks for that. But the real story yesterday was that business began with the "New" New York Racing Association.

As most know, handle was up this past year at NYRA tracks. They're moving in the right direction, for mainly three reasons (in my opinion of course): 1) Field size was up over a half a horse 2) The NYRA rewards ADW has been pushed, and OTB money is being shifted into more profitable areas pretty well and 3) Takeout has come down a couple of points on exotics, adding a little bit of churn.

Things are going well.

When I read NYRA board member Bobby Flay say:

• "We got lucky, said Flay, in that video lottery terminals "bailed out NYRA. We don't have a product that the public wants to go see. We need to build the infrastructure of the racing product. We need to start doing that now, not later.

It gives me pause. What means "build the infrastracture of the racing product the public wants to see"? If it means creating better field size and lowering takeout again, that's great. If it means more third and eighth races with high purses for short fields, or state breds, or a deep concentration on the nebulous "quality" angle, based on someone's opinion on what that is, well, I disagree. We saw that happen in Ontario. Everyone told everyone what they wanted to see, except the betting public, and the industry paid for it.

NYRA has a tremendous brand. It's why when they go off the turf in the summer and card a bunch of races with four horses, and several other races in the soup, handle is still really, really good. A contentious group of cheap claimers in a 10 horse field causes bettors to drop the Santa Anita form and look to a NYRA track, and they've been carding a lot of those this year.

Card bettable races with deep fields - claimers, allowance, it matters little. Raise field size. Continue to lower takeout - how about a cheap pick 5 or a 1% across the board cut in WPS? Bill Nader is not there, but it doesn't mean you can't act like him on takeout. Continue to offer player rewards in NYRA's internet betting ADW, and extoll their benefits, and empower customers.

There's no need to be interventionist. What they're currently doing is working all on its own. The market is telling them that, and the market is always right.

NYRA Board Meeting (Cub Reporter Notes)

I am here at the meeting and reporting, as cub reporters do. I present my notes from today's NYRA board meeting. Some of these things clearly didn't come across in the video and my twitter is broken. I describe them here, for you.

2:08 PM - Meeting called to order, new NYRA chair -  that doesn't know much about racings internal situation - is still milling around, talking to people. 

2:09 PM - New NYRA Chair introduces himself and shakes hands with Joe Drape. Crowd hisses. NYRA Chair looks confused.

2:10 PM - Ray Paulick shows up in gym shorts.

2:12 PM - Steve Byk enters, and proclaims "It's going to be a great year for NYRA"

2:14 PM - O Crunk enters

2:15 PM - O Crunk escorted out

2:16 - Tom LaMarra seen handicapping the sixth at Turfway Park. Serling tells him he likes the four on the turnback.

2:17 PM  - Brooklyn Backstrech is collecting for the Toys For Tots backstretch Christmas fund. Mike Repole gives her a fifty.

2:18 PM - Lasix ban mentioned. Trainers huddle up, and exclaim "no, not at this time". Repole nods.

2:19 PM - Fireworks! Todd Pletcher enters, meets @notthetoddster, freaks out because they have exactly the same haircut.

2:22 PM - Maggie Wolfendale seen writing twitter posts, types "Jerry Bossert looking fit, he could like the distance"

2:23 PM - Andy Beyer comes in, drops a signed copy of Beyer on Speed in the Toys For Tots box.

2:24 PM - Allan Mann seen listening to his iPod, having a fruit smoothy with that James Odato guy. One straw

2:29 PM - NYRA financials presented. Man in crowd wearing a "2016 Cuomo" pin shouts, "Fraud". Man escorted out to sit with O Crunk.

2:31 PM - Takeout changes discussed. Steve Crist says he doesn't know anything about them.

2:33 PM - Ray Paulick seen signing autographs, "Kevin Bacon"

2:34 PM - Sid Fernando comes in late. Had to wait for his take out Thai dish from Park Slope. 

2:36 PM - Nick Kling getting unruly, smoking a Cuban. Escorted out to sit with O Crunk and the "Cuomo 2016" guy.

2:40 PM - Man asks for OTB's to be re-opened. Crowd pelts him with finger sandwiches and other meeting buffet fare.

2:42 PM - Slots budget for 2013 presented. Eight hundred thousand million earmarked for purses, $927.16 slated for "Free Andy Serling Poster Day" for customers. Everyone looks happy with the 2013 split.

2:44 PM - Some woman asks Ray Paulick to dance like he danced to "Let's Hear it For the Boy". Replies "Later sweetheart"

2:52 PM - Someone looks over his shoulder and catches Joe Drape's next byline: "mangled meetings, maimed executives". Crowd buzzes.

2:55 PM - A throng of Asian men enter, surrounding a man in a white suit. The crowd goes wild. The man in the suit is  none other than Bill Nader. "I'm coming back to become President" he bellows.

2:58 PM - The wires hum. Paulick contacts the guy who really runs the Paulick Report - Brad "Louisville GOP" Cummings. Mann turns off his iPod, Brooklyn Backstretch opens her iPad. Others too open Apple devices to report the news.

2:59 PM - O Crunk let back in. Nader says "I like your stuff on twitter. I want to make you my Vice President".  O Crunk says he'll think about it. Nick Kling let back in, too. "Good to see you again Nick" says Nader. Bobby Flay presents Nader with a specially made cob salad. It's a joyous time. Festive atmosphere right now.

3 PM - New NYRA Chair says "Meeting adjourned for three weeks", and asks "Who's Bill Nader?"

Me, PTP your cub reporter, will be here in three weeks, reporting as accurately as I did today. It's never a dull day at a NYRA meeting.

Pocket, out.

Flip, NYRA & Studs

Before 2008, everyone tried to Flip That House. Now, well, not so much.

In the bloodstock world, buying a horse for $10M and piecing him a few months later with no appreciable change in market, or the horse, for closer to $14M ain't seen too often either. But, Sid Fernando reports on twitter that I'll Have Another, bought for that $10M after the Belmont sometime, is standing for $38,000 a pop, and was syndicated for $13.6M. Flip that Horse.

New York racing is a little odd. I don't particularly get it.

First, Governor Cuomo came in and took the whole thing over, feeling the wrath of virtually everyone. "He doesn't know anything about horse racing, he doesn't show up at Saratoga", etc. Now, Cornell head David Skorton has been named Chairman of NYRA. What's funny is that he knows "nothing about horse racing", too. Just like Cuomo taking over the organization after the takeout snafu, to rebuild it, this is consistent with taking over, and changing an organization. But, this time, for some reason, the usual pro-NYRA insiders aren't lambasting Skorton like they did Cuomo.

Not to be outdone however, Steve Byk doesn't like the headline of the piece calling it a "disservice". Interestingly, when NYRA was caught screwing up the takeout rate which was a harbinger for this whole mess, Mr. Byk wrote, "NYRA Lowers Takeout After Earlier Missed Opportunity" as his headline.

Like I said. I don't understand New York racing.

Good luck to Mr. Skorton. If history is any indication, he'll probably need it.

Perfectly rational stud movements are aplomb. They're coming to a state near you. Ohio is the latest target, as slots are removed from Ontario and added there. Almost daily we see a new one heading to the Buckeye State. You don't need a GPS to follow stud movements. They aren't moved for nice greenspace, good schools for the kids, the number of racetracks, shiny new grandstands or the Foie Gras in the turf club. Have slots, will travel.

Have a great day everyone!

Perfectly Rational

For border residents it is a common sight. If gas is $5.50 a gallon at home, but you can drive across a border, ten minutes away, and get the same gas at $3.85, you go across. If you have a double tanked Durango, even better. You have shoppers at a US Costco with B.C plates buying so much gas and milk the police have to be called. You have online shoppers looking for a deal, or people crossing a state border to gamble legally. You have people who make big money leaving France or England to go next door to escape new wealth taxes.

It's not because people hate their state or country, because they dislike the customer service at their gas station, or are really peeved at the cow farmer down the road. It's not because they're greedy meanies. They are simply acting rationally, like most of us act in a free market system.

I saw a tweet yesterday from one of my favorite people on twitter saying "if you are at the track don't bet on mobile with an ADW, because horsemen and the track get less money".

That's very true - they do get less money. The ADW gets a cut if you bet at your ADW.

Let me preface this by saying that I always bet at a teller or betting machine on track. I choose to do that. But it doesn't always make the track and purses the most money. Why? Because for me, and many other bettors it is the irrational thing to do. And when we do the irrational, we're not maximizing our utility. 

For someone who bets at an ADW all they are doing is crossing the border to get $4 gas instead of $5 gas - but in gambling it is much more than that. If you are buying cheap gas you are getting a rebate and lowering your juice. If your betting ROI with rebate (betting in an ADW) is 1.03, but without it, you are at 0.97, it represents a monster difference.

A 1.03 bettor can bet tens of millions of dollars a year. A 0.97 ROI bettor would likely bet less than $100,000. This can work with 0.90 and 0.84 ROI's or 0.96 and 0.90 ROI's, on a sliding scale. The lower your ROI, the fewer dollars you bet.

Acting irrationally (for those bettors whose bottom line ultimately drives them) simply results in them consuming less of your product.

I go to the track (most times) with a professional bettor who bets a lot of money and has a very high threshold for risk. When we go on track he bets into the pools, as do I, right at the wicket or betting machine. His handle when we go? I don't think I've ever seen him bet more than $100 in an afternoon or evening. 

It's similar in track owned ADW's. I have one, and I bet peanuts into it. I am not getting an edge, so I simply can't play racing there seriously. I don't spend hours and hours a week trying to win money by sabotaging myself. That's irrational.

Those of us who play in ADW's do so not because we dislike racing, horses, the people who work with them, or track executives. Most of us are horse owners and friends with these folks. It's simply done because we are rational and being rational allows us to maximize utility, resulting in us enjoying the game of horse betting and the sport more (and betting more, adding more gross dollars for profits and purses than if we bet less).

The lineup of people acting rationally betting the races is as long as the lineup of Canadian cars for $3.50 gas at a Washington state Costco. It's nothing out of the ordinary. It's a perfectly expected outcome.

Grading Harness Stakes, 2013, & Sunday Notes

Is grading harness racing stakes a good idea? I, Mr. Giwner of the DRF, and others seems to think so.

Today in Harness Racing Update, the theory about why it's a good idea is put forth.

Last night in harness-land, a relatively interesting Cleveland Classic was contested. Bolt the Duer, who has been in and out (mostly out) the last while, charged up and ran down the very good Thinking Out Loud in 1:51. Pet Rock really had no excuse. A Rock n Roll Dance, who looked fumbly gaited throughout, looks like he needs a break after that very tough season.

Yesterday, as the card went on, there was a nice speed bias at Penn National. A couple of speed horses were let go at odds. You can almost beat their rake with an edge like that.

"Pacer of the Year" is a tough vote this year, mainly because very few pacers stood out, or lasted the whole year. I think the vote is between American Jewel and Foiled Again, leaning to the former. She had a great year in a pretty tough division.

In the spring I thought Check Me Out might have just an ordinary year. Ordinary for her being a year where she might win 9 of 18 or something like that. Then when she reeled off a few, I thought that was completely wrong. When I look back she probably did have a close-to-ordinary year. She was a strong favorite for "Horse of the Year" before the year started. Now she won't even win trotter of the year. Her two big wins were the Delvin Miller and the Elegant Image.

2013: Do we need more stakes for older pacers and trotters? I think so. Next year we'll see Check Me Out, Maven, Win Missy B, Personal Style (who I think is just coming into her own and finding her feet) along with all the other aged trotting mares. We'll see Market Share and Intimidate. We'll see Rock n Roll Dance, Pet Rock, Heston, Thinking Out Loud, Sweet Lou, and about ten others who can pace fast from this three year old crop. American Jewel and other good three year old fillies look to graduate into older pacers too. It should be quite a year.

Who am I most stoked to see next year?  Odds On Equuleus, for two main reasons. First, he was not taxed this season and each time you watched him on the track he looked 100% sound. Second, SBSW is siring precocious talent, but it appears the others caught up to him late in the year. Will his three year olds progress? I'd want to own Odds On Equuleus in a fantasy draft.

There seems to be some griping in Ontario about the raceday cuts. It seems we're hearing more of "I have ten horses and they need to get in every week to survive". That's true, but slots are gone. It's like the government cancelling a $300 million dollar deal with a factory and the factory saying "I have plant and equipment to produce $300 million more in products." Something has to give.

Jeff Gural, Gangham Style. 

Have a great Sunday everyone!

Pocket Takes Over Some Meadowlands Marketing

The Meadowlands hired a new marketing director today, Valerie Harlan.

Not long ago, Valerie asked Pull the Pocket to come up with a marketing plan to help bring young bettors back into the building.

Pocket had some immediate thoughts.

"I was up for the challenge, and was happy the Meadowlands chose to tap into my brilliance for a new marketing program" said the fit, smart, loquacious blogger.

"Bringing young people back to racing is a priority. Like really, who wants to watch a bunch of old guys sitting around the track cussing at Brian Sears and smoking Camel's. That's so 2008. We need new blood"

Using his vast knowledge and experience, he decided that using Jeff Gural as the new spokesman in all marketing made sense.

"I saw Jeff Gural on the O'Reilly Factor once. He's good in front of the camera and he appeals to hipsters, like those who watch Fox", said Pocket. "This was the ultimate of no-brainers. It was as easy as choosing that cuddly polar bear for Coke ads, or that where's the beef lady for Wendy's or Burger King, or whatever the hell the burger company was." he added.

"The only stumbling block was figuring out a way to make Gural relevant" noted Pocket.

For that he turned to Youtube. And the rest is history.

"A little youtube, a few dance lessons, and away we went" said Pocket

"I enjoyed it and loved that Pocket included the backstretch for the shoot" added Jeff Gural. "I haven't had that much fun since I made my first 50 million"

Both Pocket and Jeff hope you like the first commercial of the new marketing program. Please click to see it!

Enjoy your weekend everyone. :)

The Meadowlands Gets It Right & Transition

Yesterday the Big M announced changes to their stakes season. Out are the Sweetheart and the Wilson, in is a new stake for older trotters and pacers, with a chance for the top three year old to enter.

As written last week in HRU, the line has become blurred between three year olds and older. Somebeachsomewhere, Well Said, Rock n Roll Heaven, and many others could easily compete against older. Any number of 148 pacers this season in the three year old ranks could probably give them a tussle as well.

It's a little tougher for trotters, because they tend to need to find their footing, but Donato, or Dewey, or Market Share, or Intimidate would likely not be disgraced in such an event.

It's an event that allows for times to change.

It also lengthens stakes season, which might be an issue. To prep for a North America Cup, you need to be ready in mid May. It's a long year.

What of the North America Cup, Metro and other stakes north of the border?

According to a story in Harness Racing Update yesterday, it appears the Woodbine stakes season (for big events) won't look super-different next year, post slots, other than some purse cuts. Whether than means Woodbine is expecting transitional money to be there, they have enough in the til, or economically it makes sense post slots might be anyone's guess. But it appears these events will go on.

Common-sensically, if the Cup drops from $1.5M to 1.0M it won't make a lick of difference. If the Metro dropped to $750,000, it wouldn't either. If the Canadian Pacing Derby was $500,000, I don't think field quality would suffer. Especially with the strong Canadian dollar.

What Woodbine can do, in my opinion, is concentrate stakes a little better. When the Meadowlands closes in August, there is an opportunity to grow handle. I think we'll see good scheduling of events this year.

Where the transition post-slots is really being seen is in racedates.

Woodbine has asked for one day less a week this winter. Georgian is dropping their early meet Friday's. Western Fair is dropping Wednesday's. Flamboro is going from 5 nights a week to 3. This is the first step in the post-slots transition.

What I think we'll notice early on in the year is a growth in per race handle. Ontario has its share of horseplayers that like the Ontario product. Less choice should mean better handles, not overall, but per card. We'll see what happens.

Have a nice Friday everyone.

Going FTW

I was reading a Blood-Horse article last night about computer bettors. They said this:

•  Panelists said from a handle perspective, tracks would be better off having seven races a day with 14-horse fields rather than 14 races a day with seven-horse fields.

I think this is correct for a number of reasons.

As Dana Parham noted in the piece "he rejects high takeout rates combined with a minimum number of combinations." That is clearly a factor. A five horse field with 20% win takeout is a mugs game. Try selling a mugs game to real gamblers, and you have a game that struggles to hold market share. It's simple math, and common sense.

In addition, also mentioned, when you have deep fields it opens up exotic bets. A superfecta bet in a six horse field causes the same issues; you'll likely be raked to death, and small payouts for these combinations cause serious bettors to look elsewhere. Superfectas, super high 5's and horizontal bets can yield fruit in deep fields. Payoffs will be higher, and the takeout can be reduced for a savvy player willing to do the work. More bets can be added as handle grows as well: The Triple Trio in Hong Kong is one example.

The above I think partially explains California racings struggles. Their fields were short, their takeout rates high. Why should any serious player play, unless it's a pick 6 carry, or the pick 5? When they raise rakes, they only exacerbate the problem.

Let's suppose for a moment we do have seven races a day and fourteen horse fields. That's good for the big player, because it gives them more choice and more available bets to play.

But what about for the casual fan and $2 to $5 bettor?

I think it does them some good, too. Super exotics are not for them. They're too expensive, they're bankroll killers, they're complex. They're everything that's wrong as an introduction into a gambling game. In horse racing they simply cannot cash enough tickets to have a good time. These folks should be playing into the win pools, and with a choice of 14 horses, some juicy prices and choice, they might be enticed to.

Getting us back to basics - playing in the win pools - is not a US or Canada phenomenon. It is however, an overseas one. At betfair, or with bookies, win betting is huge. Players enjoy it, they get lower takeout and can cash more tickets. This makes the game more fun, and makes people want to come back. The handles, in my opinion, in the UK and Australia are more healthy because of this "FTW" mindset.

Other things, like show parlays, can be fun and interesting in big pools for newbies. If a track wanted to offer 20 cent minimum exactas, that might help too. Pushing new people away from high takeout, low hit rate bets, is something that does as much, or more, than showing them a good time at the track. It gets them to enjoy the game of horse betting. We all know this: The game is much more fun when you win.

So, these bets attack two segments. We need big money in the pools, like Hong Kong has. We need newbies enjoying handicapping pursuits and cashing some tickets.

Why do we have five horse fields every second race at most tracks? Clearly we are not carding racecards for customers. When we don't card races for customers, we have fewer customers.

To gain market share I believe racing must change from inside out. If hitching fees need to be added to keep a horse population, and make fields deeper, make it so. If days per week raced need to be shortened, so be it. We can't start growing purses from handle, unless we start carding races people want to bet.

Notes:

Handle is up slightly so far in 2012. This is good news, of course. There have been some good things done in 2012 in racing. Field size seems to be better at our better handle ovals. Takeout has marginally been dropping (not one track this year raised takeout on anything, only dropped it). The inflation rate in the US is 2.2%, which means real handle has not grown yet again, though.

Transparency in harness racing. This is a very good idea, one which we've advocated for a long time. Notice it's an initiative of the Illinois Harness Horsemen Association. I hope it works well for them.

Another thing we've hitched our wagon to: Seeking out winners and asking if they can promote them. Good work.

Have a great day everyone.

Is the Core Product Forgotten?

I was doing my usual scan of the headlines and noticed a few whoppers.

I see the story on the big honchos who wrote the OMAFRA report discussing it and the comments below it, still - eight months later - arguing that slots aren't subsidies.

I see folks talking about fantasy games at the RTIP.

I see the French Pari-Mutuel Urbain dude at the RTIP talking about how France does it. 

You've seen those headlines and more. About table games, and Atlantic City money, slots. They never end.

From Wikipedia: 

•  Most subsidies are set in place by the government for producers or are distributed as subventions in an industry to prevent the decline of that industry (e.g., as a result of continuous unprofitable operations) or an increase in the prices of its products or simply to encourage it to hire more labor (as in the case of a wage subsidy)
•  Subsidies are often regarded as a form of protectionism or trade barrier by making domestic goods and services artificially competitive against imports. Subsidies may distort markets

We want slots to prevent the "decline of racing". We want table games too, for the same reason. I don't know how often we hear we want to be France. Well, because France is subsidized. Their 11,000 betting terminals are protected. Their pari-mutuel monopoly was opened alright, but new entrants have to pay what they pay in taxes and fees and can't compete on price, nor can they open betting parlors. A non-starter and another form of subsidy.

Conversely, what about using your product to kick some ass instead so you won't have to beg for subsidies? You'd think that would've been a huge focus for the sport, no?

Things like state lotteries based on horses and horse racing. If they're coming into your building to compete, then compete in theirs with your product. Fair?

Things like following the lead of online poker where their customers are modeled and studied, and low price, rake backs and the rest that help them become every day players, are implemented.

Things like a betting exchange. Doable, obviously. You're selling horse racing to a new demo, not three cherries or whatever other mindless pursuit we go begging for.

Why were things like that on the backburner, and why are they still on it?

Maybe it's the way things are. Maybe it's what the industry sees as its easiest path to success. Maybe it's what we've all become, as evidenced by the Detroit councilwoman asking for a bailout for her terribly run city.

If that's the way it is, then fine, hop to it. But if that is the strategy don't complain when a government shuts off the taps and the well runs dry. When you don't focus on your core product - which is your value proposition of betting on horse racing -  your core product suffers. When your core product  is neglected, you have nothing to fall back on.

In the Element

We've cringed a little bit here on the blog of late when Steve Crist writes about NYRA, and particularly management or the takeout snafu. It just doesn't read right, nor feel right; to me anyway.

In the muddy world of horse racing where everyone seems to be competing with someone else for PP's, Adw's, advertising or whatever, maybe we shouldn't read his shot at Churchill yesterday without a grain of salt, either:

• That is a sharp contrast to Churchill Downs’s new Kentucky Derby qualifying system, which threw the graded stakes system out the window in favor of a corporate-driven marketing plan to boost the importance of races at tracks owned by Churchill while punishing its rivals. The idea that winning the Grade 2 Louisiana Derby is literally 10 times more important than winning the Grade 1 Breeders’ Cup Juvenile is utterly preposterous to anyone not employed by Churchill

But that just feels right. It's like he's perfectly in his element talking about something he's passionate about.  And it is probably "preposterous" that the LA Derby is 10X as important as the Juvy to anyone, passionate or not. It will be interesting to see if some changes are made.

I took some time and watched the discussion linked here, by the former Cabinet ministers regarding the OMAFRA plan for horse racing in Ontario. One thing that cannot be discounted, is these ministers are in their element too.  They described what a government, drowning in red ink, needs from racing, and what they think racing needs in this new paradigm, and new debt-ridden world. They also discuss, succinctly and clearly, what a government considers good public policy and bad, and what it considers a subsidy. Disagree if you'd like, which not surprisingly the commenters on the piece do, but discount it at your peril.

Very few times does a horse have everything - lightening speed, an amazing won-loss record, a racehorse of a generation, and when he or she retires, a huge career at stud. Somebeachsomewhere is in his element in the breeding shed, just like he was on the racetrack. He sires such precocious speed (I am pretty sure if there was a million dollar race in May for two year olds, all the starters would be his), and such fine staying power, that he has captured the hearts and minds of breeders everywhere. Hanover has turned away at least 40 mares this year; some of them likely pretty good ones.

Have a nice day everyone.

Ontario Sires Stakes in 2013 - Just Fine For Smaller Stables?

No one knows what the Ontario Sires Stakes will look like in 2013 in the Province. But that hasn't stopped some from saying the sky will fall. I tend to disagree.

In 2013, there will likely be a change to the model, and certainly it will have less money, but when you add a few potential salient points of discussion, it might not be too bad at all. If you purchased a nice son or daughter of Badlands Hanover, for example, at firesale prices (up to 30% or 40% off), your ROI just might be okay.

My opinion:

• The OSS "Gold Finals" will be smaller, or phased out to a more equitable plan. The Gold Finals are nothing more than a paycheck to a colt or filly who stands out. If you owned a nice 3YO pacer this past year, your gold final was at maximum a $60,000 purse instead of a $120,000 one, with Michaels Power. With divisions, you can dodge a horse or horses like that. With golds the OSS was top heavy.
• The funding, off the back of a napkin, will not be like zero. It appears the OSS will have near what Pennsylvania has for sires stakes. 
• Ontario sired or owned horses will take preference in overnights. There will be opportunities to race for okay money to pay the bills.
• Super horses, with the lack of stakes in Canada, will likely be plying their trade south of the border. Why would they race in a $20,000 sires stakes event every three or four weeks when they can go into a $35,000 3YO open each week at Yonkers, or a stakes race at the Meadowlands?
• I can't see Woodbine running many huge Open stakes next year. As part of a restructure, they may have to go back to working some races for Ontario breds instead. It'll look more like 1985.

A "decent" OSS horse in 2012 might have raced for $350,000 in purses between golds and grassroots. Next year maybe they'll have an opportunity to race for $175,000, but the chance of getting a slice of that money will improve for them.

In the new reality, and the industry seeming to wish what happened last year didn't, it's hard to have a discussion about what changes are in store. The industry will be smaller, yes. But it won't implode. The OSS is one area where I think smaller stables can make some money.

The Standard & The Matron

I saw Game on Dude win yesterday in 152.1 for nine furlongs. We've seen Breeders Cup Classic's slower than 2:03. We've seen big speed on turf this year, in the 12f Turf and Turf Mile at Santa Anita.

What's it all mean? Well, we generally go to the Beyers to find out.

In contrast, Standardbred racing is, well, standard.

On a mile track, with a nice day, if a horse goes 26, 54, 121, 149, we can likely compare him to others, that day, or any day. It's really not that difficult.

While the thoroughbred breed seems to have hit some sort of speed wall at various distances (especially route racing on dirt), the standardbred breed seems to be rapidly evolving. The one mile teletimer is being tripped pretty quickly, by virtually all ages and sexes, but especially with the younger horses.

At Harnessracingupdate today, this was looked at, and some of the horses who have been performing at a high level are discussed. It's on page two (pdf).

Notes:

This evening, year end honors for three year old pacers might become much clearer at Dover. The Matron Final is being contested, and candidates Thinking Out Loud and Heston Blue Chip are meeting head to head.

Scenarios (with an opine on grading):

If Thinking Out Loud wins, that gives him three big wins in 2012: The NA Cup (Gr I), Bluegrass (Gr II) and the Matron (Gr II)

If Heston Blue Chip wins, that gives him three big wins in 2012: The Breeders Crown (Gr I), Progress (Gr II) and the Matron (Gr II)

If neither wins, a vote for A Rock n Roll Dance ain't exactly rocket science. He has three Grade I wins in 2012: The Meadowlands Pace, the Battle of the Brandywine and the Hempt.

Racing's Encapsulation

We spoke about the NFL and horse racing a couple of days ago, and once again (like most of these silly blog pieces) it got me thinking.

I was watching a conversation between Sid Fernando and sportswriter today on twitter. The NFL writer writes for the about sports business only; behind a paywall.  Sid writes for a number of magazines, blogs and what have you, and he is immersed in many facets of horse racing. Sid's writings - for the most part - are available for free.

If you go to DRF.com, the Paulick Report, the Racing Post in the UK, or any other news and information site in racing you will see stories listed that are something like this in the scroll:

• Frankel to stand for big money
• Dutrow's appeal denied
• Synthetic tracks safer
• Lasix banned for 2YO's
• Havre De Grace sells for $10M
• Remsen Stakes preview
• Purses up 20% at Calder
• NYRA revenue up 12%

And so on. These are the stories we read each day.

For NFL.com, or ESPN.com's section on the NFL you'll see:

•  Brees throws five interceptions
• Giants-Redskins Game of the week
• Manning leads league in QB rating
• Rookie of the Year tight race
• Playoffs if the season ended today

And so on.

What you won't, or what you'll rarely see at NFL.com is a big story about the financial stability of the Oakland Raiders. A change to the playing surface at Giants Stadium. How Peyton Manning's salary is structured. A new type of flak jacket for running backs.

The intricacies or the business of the game is behind a paywall, or it takes a back seat. It's not that it does not matter or it is not interesting to the fan - surely it does matter and it is interesting. Just look at the NHL strike for that. But it's simply not the story. The story is the game this week, statistics, handicapping - everything is about the final product.

Racing is encapsulating. Every one of us who have been handicapping since we've been five years old have read the insider headlines. They've shaped how we think, what we are.

We read about track surfaces, we read about raceday meds, we read about where a horse is standing stud, we read about the costs associated with injections or palate surgery. We read about Mark Verge, frog juice, vets, suspensions, NYRA financial statements, when slots will be open at Beulah, the science behind changing a horse's ph with Arm & Hammer baking soda.

Everything racing is thrown at us. And we have not even handicapped the third at Gulfstream, or made a bet yet.

I wonder if it's a blessing or a curse. The curse is that we are so entangled in everything  - and maddened about much of it - that we throw our hands up and can't even enjoy the end product. The blessing of course, is that with such an impassioned group of people, it (fundamentally) should be able to spin off into bigger and better things for the sport.

Gural Ups the Ante at the Meadowlands

Jeff Gural, multi-gazillionaire owner of the Meadowlands, has decided to turn the screws another time in pursuit of a good racing product. He's requiring a signed waiver which will allow a racing investigator to enter a barn and out of competition test. Testing - at his expense - will likely be done in Hong Kong, with supertests. If you want to race at the M, you sign, or you race somewhere else.

Some folks have said that this might hurt entries, and it's KGB-esque. They might be right.

One thing though: It is certainly not groundbreaking.

A few years ago Woodbine wanted a similar waiver, backed up by the ORC which does OOC testing. It's really the same playing field that Ontario currently races under. Interestingly enough, when Woodbine required this, it triggered a (very poorly attended) strike at Woodbine by the then horsemen group on record, the OHHA.

It seemed - despite the bluster - that the rank and file at Woodbine didn't have too much of a problem with it. Not long after, a new horsemen group took over (COSA) and racing went on just like it always had.

Since 2008, Woodbine has been fairly healthy, with little labor strife. Handle has been up, and field size has been good for punters. The horsemen group and Woodbine have worked together on several items. It's clearly not perfect - that's pie in the sky - but it seems to be a good relationship.

I have a feeling that similar may occur here. This because horsemen groups underestimate the willingness of regular horsemen that generally agree with the policy.

And customers don't mind this a bit. Go take a look at Ray Paulick's story about Oklahoma tracks accepting entries from Frog Juice trainers. The chances of that happening under this policy are a flat-out zero.

Gural's comments (as usual) pull no punches. You can read Bill Finley's interview with him today at Harness Racing Update. It's a pdf file.