Thursday, May 3, 2012

Some Derby "Anti-Branding" From Churchill

It's been no secret I am a huge proponent of making sure our biggest days are promoted as best they can be. And it's also no secret I am impressed with organizations like the Breeders Cup and Churchill Downs Inc for what they've done with them. Our brand on big days is so very important, and even with handle getting killed the last ten years, these days still bring in customers. They've all done a pretty good job.

However, one move that Churchill made this past couple of weeks, I believe, is taking a step backwards.

Via a post on the Betfair chat board:
  • We regret to notify you that as of now we will no longer be offering exchange markets on racing from the all Churchill Downs-controlled US tracks due to contractual limitations placed on our US affiliate, TVG, by Churchill Downs. The impacted US tracks are:  Arlington Park, Calder Race Course, Churchill Downs, Fair Grounds, Hoosier Park, Oaklawn Park and The Meadows.  The 2012 KY Derby Ante Post market will be carried to its fruition, but no day of race market will be offered. 
About four or five years ago I wrote a white paper on exchange wagering for Canadian racing. For the paper I spoke to a player who plays at Betfair professionally.

This player was a huge racing fan and bettor in the 1990's, but after discovering poker, he left the game and did not play a cent in our game. Poker's takeouts, as you all know, allowed him to make money, and you can leave being a bettor of a game pretty quickly when something else is a better bet.

Then along came Betfair, and he began dabbling in racing again. If a race was on the site, he would look at it and play it. He also began betting in the pools again, re-following the sport, and watching it on television, because he had a rekindled interest in the sport.

I asked this player: "If Betfair stopped carrying tracks, how much would you bet into the pools?"

His answer: "Nothing"

Not "I would cut down my play", it was "nothing".

There seems to be a belief in the executive halls of racing that if you offer something like betfair, people will leave the pools and it will hurt handles. There is never (that I've seen) anything said to the opposite effect.

I spoke to him this week and asked who he liked in the Derby. After finding out the markets can't be traded, he won't even download the card. He'll catch the race on TV later.

No pick 6 tickets, no superfectas, nothing. If he can't play the markets, he won't spend precious gambling time on the race.

The Kentucky Derby market at Betfair is one big billboard for the race. It's an advertisement to fans all over the world. Millions of dollars will switch hands and be traded. Stories on how the horses are doing will be read by many people. It's a branding mechanism that any TV commercial cannot buy.

In my opinion, when you eliminate it, like they have this year over contractual ilk, the brand suffers.

Our big days are great. Racing needs every avenue to promote itself. When you shut one down I believe you will not get bigger, you'll get smaller.


3 comments:

Tinky said...

You are absolutely correct. This is a profoundly stupid move, albeit predictable.

The money wagered on the Derby on Betfair is a tiny fraction of a drop in the bucket in real terms. So, as you suggest, its marketing value far, far exceeds the value of an (unrealistic) dollar for dollar transfer into the pari-mutual pools.

Tinky said...

One other point:

Churchill Downs (and Magna) look at Befair and see a competitor, reflexively looking to fight them. Were they wise, far-sighted, and truly sensitive to their customers' needs, they would look at Betfair and see a superior betting platform, and figure out to best adopt utilize such a system.

Pull the Pocket said...

I agree.

One other thing I forgot in the piece. A couple of weeks ago The Blue Grass card was on BF from Keeneland, and the Arkansas Derby which was going soonafter was not on BF. Considering they were two big preps I spoke to someone beforehand about the races that plays solely on BF (with some cash smattering into exotics via ADW). I asked who he liked in the BG and he told me. I then asked who he liked in the AR Derby and he did not even know who was running in it.

I know we like to think all bettors are fans, but it's simply not the case in many places.

If we offer places to play at a decent price to all types of players, we'll gain more market share.

Protectionism in an internet world is never the answer.

IMO.

PTP