Wednesday, February 22, 2012

Tampa Bay Downs Provides Strong Lesson for Racetracks

Today in the Washington Post Andrew Beyer looked at Tampa Bay Downs' handle for this season. Handle is down about $500,000 per day, and Mr. Beyer mentions two main drivers of that: Field size and the presence of super-trainer Jamie Ness.

I agree those are two factors affecting handles. Studies show that field size is correlated to betting handle, and as we as players know when you have 3-5 shots that are beatable on paper, but seemingly unbeatable in reality, we tend to skip the race.

However, I think two other issues are at play. And I think racing better learn them and learn them quickly. Both involve trying to squeeze a dry lemon for more juice.

Rumor has it (and it was mentioned in cautionary terms by HANA in December before the meet started) that Tampa Bay raised their signal fees for this meet. This is a takeout increase on volume ADW players, which effects their bottom line. Time and time again we hear of aggressive racetracks wanting to "get more of the pie". There is only one player, and when you take more, he or she bets less.

Second, this year there was a dust-up between Tampa Bay and TVG. TVG is a good promotional arm for racetracks, and if your signal is not out there in a crowded landscape you can get lost. From last December when TVG announced they were not hosting Tampa Bay this season:
  • Last season alone, as the Tampa Bay Downs signal continued to increase in popularity, $20.2 million was wagered on TBD through TVG, a virtual 33 percent increase from the previous season. “The ball is in their court,” said Tampa Bay Downs Vice President and General Manager Peter Berube. “They have severely underpaid us for a number of years and we are finally in a position to be compensated at market rates. "
It's great to want to get paid more - I don't know anyone who doesn't want to be paid more - but market driven realities dictate price, not the seller of the product. Why should TVG get a better deal? Because they market your signal for you, add to your betting handle, and provide a service.

If the seller of the product squeezes, he will get less handle. Tampa Bay, in my opinion, seems to be (in part anyway) living that reality this year.




3 comments:

The_Knight_Sky said...

Mr. Beyer should have left out mentioning trainer Jamie Ness in this article. While it is true that he is currently operating at a torrid 45 wins from 98 starts for win rate of 46%, he also has a positive ROI for this meet at 1.16.

This is not a new development this year for the bettors. During the same time frame during last winter's meet (up to February 22), trainer Ness started similarly 91 horses. Despite a 34% win rate he was showing a positive 1.15 ROI during the comparable period.

The bottom line is that field sizes and how smaller fields markedly affect wagering in the trifectas and superfectas, Pick 3's and Pick 4's due to the fewer combinations being offered up for wagering.

Since this will be problematic going forward, why not make Win - Place - Show pools worth playing again? This move benefits novices as well as the experienced bettors by providing more overlay opportunities.

ITP said...

Tampa Bay's 25.9% takeout on tri's and super's coupled with the raise in host fees when the product is deteriorating has killed their growth in handle.

I actually can't believe it's not down more. It will be soon if they keep making moronic decisions like raising the price on a product which is getting worse.

Still not quite sure how Berube and TB were labeled as "bettor friendly" when it's obvious that they are obviously "squeeze the lemon dry" types.

Seth said...

Good post- shows that the perception was that Tampa Bay was bettor-friendly, that is no longer the case.