Muddy Waters

I've often wondered: Who do you vote for if you are pro-horse racing? The answer, unlike many other factions which are fairly clear, is pretty muddy.

Today in the Las Vegas Review Journal it was revealed there is a plank in the Republican platform that wants to outlaw internet gaming. That's good for horse racing, because we have a near-monopoly on web betting.

In Ontario, of course, the Liberals (slightly left of the Dem's in the US) took $345 million a year out of horse racing. That's bad.

In New York, the takeover of NYRA is almost complete, done by Mr. Cuomo, who is a Dem. NYRA hasn't run NY racing like a well oiled machine, but I don't know too many that think this is a good thing.

One can conclude that banning online gambling, destroying an industry in Ontario and NYRA's takeover makes us all want to vote "R" or conservative, in whichever country you live in.

But not so fast.

In Arizona, the attack on betting on the net - which included horse racing - came from the R's.

In Indiana, they were close - very close - to losing their slots money last year, and that state is headed by a conservative.

In Pennsylvania, 16.7% of slots cash was taken away. That's a Republican governor.

Add the fact that gambling as a whole usually gets hammered by the "R" side, hampering expansion of slots at racetracks, for example. 

In today's political season it gets very polarized, with everyone calling everyone else names. And there seems to be a visceral hatred of R's or D's, where nothing is wishy-washy.

If you are pro-horse racing, it's not that easy. It seems everyone is against us in some way, shape or form.

Friday Notes

Yesterday there was an article confirming the frog juice positives in New Mexico. That wasn't big news in itself, split samples rarely don't show a difference. It was what was buried in the article that was eye-opening. 

•  the harshest regulatory penalty the trainers face will be a one-year suspension, a $5,000 fine and forfeiture of the race purse.

So, hypothetically, a trainer can use something that's 40X more powerful than morphine. He knows there is no test. He may have used to it score hundreds of thousands or millions of purses, because you are going to win races running horses on a pain killer like that. Because he wins, he gets more and more owners with big money, turning his small training business into a large one. He could, conceivably buy a beach house in Costa Rica and have a tax haven in the Caymans if he or she is good at business.

If he's caught he pays one purse back, along with $5,000. And, of course, he has to spend a year at the beachhouse, or on vacation, catching up by seeing old friends, or bar-b-queing in the back yard.  Then he can come back and train again.  That's not a bad gig, is it? Or am I missing something here?

 There's some Frankel chatter going on, and it's not of the good variety. He is skipping the Arc, skipping the Breeders Cup, and racing (it appears) one last time  on October 20th. Earlier in the week I read an article saying 'for the first time in his life he'll have to take a risk' by going to the Arc. These connections do not seem to like risk.

Zenyatta used to get hammered here in North America for being a ducker. No she wasn't a world traveller, she did not face the boys each month. But she did get the job done.

Some people (mostly) wanted to see her in New York, in a race like the Personal Ensign. Why, I don't know, because beating Persistently in 205 with a 27 last quarter would not do her or anyone else a lick of good, other than gain her airmiles™, but I digress. Regardless, over time she did do what she had to do, and she built a resume, not being compromised too much by overstepping month after month to ensure a long career. Each year we knew she'd race at the end of the year in the Breeders Cup, but in two of three years she raced in the Classic, the richest horse race in North America, not the Distaff. She did that twice, and she did it on two different surfaces, which for the latter people still thought they'd "duck" as most recently as the October beforehand.


If Frankel was Zenyatta, he would've done more in three years of racing rather than race 14 times in tailor-made spots. Certainly this year he would've been in the Arc - the year end spectacle that's tantamount to a Breeders Cup Classic here. But he isn't. Now that's ducking.

Things I don't much understand- "Horsemen want to race at Leamington"

•   "The group has to convince the ORC that it can make a financial go of it,” said Bain, who also noted that the horsemen involved will have to overcome the obstacle of securing transitional funding from the province in order to do so and have met with the transitional panel.

For those who don't know Leamington, it's a fair track that can race in the day, and it does not simulcast, so handles are microscopic.   I think the government report released last week that said horse racing must be handle and customer driven didn't sink in too well. It does serve as a useful reminder that someone needs to control the purse strings of the transitional funding.

Bill Finley over at Harness Racing Update has been attending the Lou Pena trial. For updates sign up for HRU for free, or go to the website.

Have a nice Friday everyone.

Deterrents Are More Important Than Positive Tests

We've all heard the line "the cheaters are always ahead of the authorities" and I think there is some merit to that statement. This goes for racing, with synthetic drugs for personal use or for doping in any other sport. There has been plenty of documentation in the matter. If one molecule is changed, the drug can be used with impunity, because they are testing for the old drug. It is a cat and mouse game, with millions of dollars at risk.

The authorities in some sports have changed their methods of late. Rather than look for a drug, they are looking at profile's of athletes. This is to not catch them with positive tests, but to change behavior..

At the Science of Sport Blog, the results since the introduction of a "blood passport" for cyclists, are eye-opening. The profile and the system around it, look for markers that suggest doping of some sort. The profile is compared to a normal one, statistics are applied and red flags show up, or don't show up. After a process, the athlete is determined to have doped, or not doped.


The results of the passport introduction have not "caught" dopers, but it has changed behavior:

•  Say you have a stretch of road that is known to be a high accident zone as a result of speeding - guys hit 100 mph in the 70 mph zone.  Authorities might decide to install cameras to catch people speeding.  They might estimate that in a given week, an average of 500 cars speed through this section - it's impossible to know the precise number, because it can't be documented.  Having installed cameras, they review the statistics and find that they are now catching 2 speeding cars per week.  A failure? Are they looking in the wrong place? Not necessarily, for the obvious reason that as soon as drivers know that the risk has increased (provided they also believe that the punishment will be enforced if they offend, of course), they modify their behaviour accordingly. This is an obvious and simple example that just because the passport is not catching doping cyclists, it may actually still be exerting an effect on the professional peloton as a result of what I would crudely describe as "fear" that this new system can catch dopers.

Makes sense doesn't it? Look at this following graph:

In 2003 the EPO test was developed and EPO presence (the green portion of the graphs) fell appreciably, which is good. However, the pink portion (presumably riders moving on to another drug which does the same thing) skied and there was no change of behavior. The cheaters, according to this graph, still cheated.

Now, look what happened when the introduction of the blood passport happened in 2007. The results are astounding: Everything fell. The sport is appreciably cleaner because if it.

I'm not smart enough to wonder if this will work for horse racing. My last chem course was in my last year of high school. But can you imagine if it could? Not only could it weed out dirty trainers, it would get them to stop doing what they're doing, and we'd save millions on testing. And more importantly, it would help stop our equine athletes (in some barns) from being used as amateur science experiments.

Hat tip to my pal Scott Ferguson at Sport is Made for Betting for the initial link.

Notes: Speaking of science, how about this? A DNA test has been developed to identify horses who should excel at trotting or pacing. It seems all good horses have a specific marker for gait. Fascinating. Iwish I could get this before the yearling sales this year? Who's with me? :)

Wednesday Notes

Good morning everyone.

There were a few items that caught my eye today:

Bacon reported that trainer Chris Grove got a class I positive test in West Virginia recently.  The drug, as far as I know, has been tested for a long time, and it's not exotic, like the tree frog drug was. This strikes me as odd, and I feel a similar way whenever a positive test is handed down with blatantly tested for bad drugs with someone who should know better: Why would someone with so many starts, who is making a good living, knowingly use a drug that everyone knows is tested for? There's a lot of "one strike and your out" talk going on, and that's fine; we have a problem in racing. But, when the circumstances around it don't make sense, that's where the one strike rule breaks down. In these cases especially, the accused needs a day in court.

It's anyone's guess what happens in Ontario, but it appears Ted McMeekin (the Minister of Agriculture) is up for listening to the recent panel, which recommended that $50 million over three years is not enough to help horse racing survive. If so, that's fairly good news. $100 million over three years may help sustain racing, if the various fiefdoms can be controlled. If they can't, racing will have a very tough time.

@o_crunk on twitter kills me sometimes.

If enough peeps say racing's "not dying", doesn't that make it so by default?Further, would anyone actually reading it be convinced?
— o_crunk (@o_crunk) August 29, 2012

What he is referring to is that almost every time an attendance figure is posted that is good, accompanying it is a tweet from someone (retweeted a dozen times, with many in agreement) saying "so much for a dying sport". Looking at the anecdotal, rather than the overall numbers has plagued horse racing for dozens of years. Social media doesn't fix that, it tends to accelerate it.

I think we need a "handle clock". I watched Chris Christie's speech late last night at that political convention. In the background I noticed there was a National Debt Clock. That's probably a smart move - most people realize that the status quo is not an option if you are constantly spending more than you are taking in. In racing, while handles have been precipitously falling since the early 2000's, we seem to see one number at the end of the year and shrug. Handle - not slots deals, or giveaways, or an attendance at a Travers Day - represents the health of racing. It's the only number that matters from a business point of view.

Jay Cronley took a look at public handicappers in his last post, and it was kind of funny as usual.  Speed fig handicapping is fine, because the fastest horse tends to win the race. However, with developing horses, different distances, and differing pace setups, the "fastest" horse in speed fig land might not be the fastest horse at all.

Jessica (who is back doing some blog posts, which is nice. She's one of the better ones out there) thinks Alpha is a "hanger". If you watch the Wood, and the Travers, that may be so. However, as horse's season and learn what they're out there for, they often develop ways to run through that phase. If Alpha races for a couple of years, we'll see if he's a hanger, or it's just one of those things.

Speaking of Alpha, I had an interesting weekend. He was my Derby horse and he won the Travers. Golden Ticket is a horse I have been throwing on tickets for awhile, because in the Tampa Bay Derby he was along the inside and closed well, on a track where the rail had been awful the previous couple of weeks. He dead heated with him. Dullahan, who won the Pacific Classic, is a horse I think is a superstar. Three horses I like won two races. Funny, I could not turn that into very much money though.

Speaking of Alpha II, I find the most overused catch phrase in racing (toolspeak according to Tom LaMarra) is "the horse dug in", like he somehow sped up at the end, not decelerated more slowly. Often times it's because the other horse wouldn't go by and digging in had nothing to do with it. If Jessica is right, Gemologist did not "dig in" in the Wood by speeding up when he saw Alpha like so many stated as fact, he simply kept going while Alpha faltered.

This weekend one of the best cards of racing in the sport occurs at Mohawk, perhaps for the last time. Take a look at these races! If you are a harness bettor and fan, cards like that don't come along too often at a place where pool size will be formidable. It's a must play.

Have a great day everyone.

Saving Us

Watching the racing industry in Ontario is tough, for many reasons.

Currently there seems to be some denial going on, as the industry is failing to plan for the future. It's not all their fault. The structure stinks with no leader, and there is a ton of hopium out there, looking for some sort of White Knight, or a government report to surface where slots are returned to racetracks.

Cangamble looked today at some items in the industry report, and looked at some things that may help, like holding the yearling sales later this year instead of this next month. We need to hear more of this.

Today, Woodbine poured some water on those who think the status-quo is still an option. They've deleted all Thursday cards for the rest of the year, hoping to save about $3 million dollars.

Our industry will never be the same. The status quo has left, never to return. And horse racing in Ontario is not the only industry that has been affected in this way. The line is long.

Seth Godin wrote a perfect post about this several years ago, mainly in response to the newspaper industry's unwillingness to change. Called "Who Will Save Us?" here is a portion:

Who will save book publishing?

What will save the newspapers?

What means 'save'?

If by save you mean, "what will keep things just as they are?" then the answer is nothing will. It's over.

If by save you mean, "who will keep the jobs of the pressmen and the delivery guys and the squadrons of accountants and box makers and transshippers and bookstore buyers and assistant editors and coffee boys," then the answer is still nothing will. Not the Kindle, not the iPad, not an act of Congress.

We need to get past this idea of saving, because the status quo is leaving the building, and quickly. Not just in print of course, but in your industry too.

Woodbine is starting to make some preparations, and the rest of Ontario has to come together as soon as possible in the same way. The status-quo is gone, but there is still a chance at a new paradigm if the planning starts today.

The Body of Work & Dullahan

I watched a replay of the Pacific Classic last evening. Dullahan, in my opinion a remarkably talented horse, had a nice pace set up and rallied home huge, earning a 111 Beyer.

Owner Jerry Crawford had this to say:

• People are going to insist that this is a synthetic horse because he has won three Grade Is on synthetic. But there’s no one else in the country that has won three Grade Is on any surface and placed in graded stakes on the turf and finished third in the Kentucky Derby. “I would respectfully submit that the question with Dullahan is not what surface can he run on, but what surface can’t he run on?

I think that's a good quote.

Today careers are abbreviated and a horse cannot complete a body of work. If a horse fails at 10f once, he may be labelled distance challenged, and will never try it again, because he's off to stud four months later. If he wins a poly race in a Beyer slower than what he wins on dirt he can be labelled "not good on the fake stuff". It even happens to the best of them. Curlin, who I think everyone agreed was tailing off, lost on turf and that experiment was labelled a flop. Maybe he had a bad day, or maybe he is not very good on turf. Who knows with a data point of "one".

This labelling based on limited starts can befall even great horses, and a lot of the times it would be completely false. What if Frankel pulled a muscle before his last and never put on the 10.5f show that he did last week? He'd be labelled as a "brilliant miler." Zenyatta was constantly labeled as a poly specialist who didn't like the dirt much, because she only carded a 94 Beyer in the Apple Blossom. Thank goodness they tried the Classic at Churchill where she ran a good number in a gallant loss, proving she could excel on either surface against the best around.

Dullahan is a little different because a trend has developed. He surely looks better on turf and poly, however, his Derby was fine, and his Juvenile was not bad either. At the Belmont he seemed to struggle badly around the 3/4 pole, looking totally off his game. The surface was blamed by some, but how does a horse work like a flash on that same surface a week earlier and not like it? He may have been up too close in the Haskell as well, and that might have compromised him. Regardless, he may have been simply not up to the task in those two instances.

Fortunately, Dullahan, will not retire after this season, so he will complete a body of work. We may see him try dirt in the BC Classic and I hope he does. If he fails again, then so be it. But, in my opinion, pigeon-holing talented horses like that without letting them try and build a body of work shows them disrespect.

Saturday Notes

Our part-owned Angus Hall yearling learning the ropes. 

The Ontario news has been reverberating throughout the Province and elsewhere. Folks seem to be coming to grips with it and none are very pleased. The added uncertainty is killing the thoughts of having a good sale or two this year (blame in this, in my opinion, is squarely on the government):

• Horse breeders in the province were totally deflated by the news. The thoroughbred industry is set to stage its yearling sales on Sept. 3, 4 and 8, while the standardbred game has its first auction (the Canadian yearling sale) Sept. 15-16. With no firm commitment about racing’s future, consignors to the sales were devastated with the news. There is wide speculation that many breeders will withdraw their horses from the Canadian yearling sale and then look to sell privately if a viable plan does come later in the fall.

There is a dichotomy of opinion out there, as well. If you read the comments on my piece below, from owners, customers and bettors, there is a "they made their bed so they have to lie in it" meme. If you read the comments on SC, no one in the industry is to blame. It's a whole lot of 'the government is stealing our money'.

I think that belies two major problems with the policy. Being supply driven, the customers felt left out from slots.  Despite things like free admission, they felt taken advantage of, and felt that slots were not for them, only participants. We never had a customer cultivation program where anyone gave back. And because demand benchmarks were not set that the industry had to hit, participants felt like it was "their money", in total disregard for the fact that it was never "our money", we were simply keeping it warm. This continues to this day. Remember back when Aqueduct slots were starting to hum, and NYRA released a brazen PR about purse increases and stakes race bumps? Not a mention of the customer once that I've seen, and I don't think I've seen anything about the customer since. I'm sorry, you have not learned a thing people. This is more than about purses. It always has been, you just have to open your eyes.

Anyway, this story will continue to develop. It's not over yet.

Notes: 

Today in HRU, a bettor who likes a little bit of harness racing history, talks about racehorses of today, versus yesterday. Is speed killing the game, and hurting horses from staying sound? In addition, Bill Finley takes a look at the Ontario situation.

San Pail requalified. It will be interesting to see if he comes back well. I thought he looked okay.

Big card tonight at Mohawk. It's a must watch. Cards like that should break $2M easily with the Meadowlands closed. I have no idea why they don't do that number.

Have a nice Saturday folks.

Ontario Government Closes the Door on Horse Racing

Today the interim report by three former cabinet ministers in Ontario was released. Although the industry pinned some high hopes on a recommendation that the Slots at Racetracks program would be reinstated, that was not the case.

The points made in the document should, in my opinion, be read very closely by those jurisdictions that still have slots. We all know what this report details is currently happening in those jurisdictions, and it must be turned around and changed to survive.

Some highlights/lowlights (these are direct quotes from the 53 page report):

•  Without slots revenue or a new revenue stream, the horse racing industry in Ontario will cease to exist.
•  Absent some other new revenue stream, no Ontario racetrack has a viable business plan to continue racing operations after March 31, 2013.
•  The horse racing industry should be based on conducting races that appeal to horse players.
• Though it is outside our mandate to comment on the merits of the government’s decision to cancel SARP, we will nevertheless do so because so many people we spoke with advocated reinstatement of the program. It is the panel’s view that continuing SARP would be poor public policy. The program has contributed to a fractious industry that has lacked accountability, transparency, a common vision and a proper focus on the consumer. Continuation of SARP would allow the industry to keep evading the competitive challenges of today’s entertainment marketplace.
• The program has provided far more money than was needed to stabilize the industry – its original purpose – and has done so without compelling the industry to invest in a better consumer experience.
• The majority of purse money paid in Ontario does not come from horse players: it comes from slots players. In 2010, SARP funding made up 63.6 per cent of purses. 
•  Horse racing generates expenditures, jobs, exports and tax revenues. Moreover, horse racing is a cultural asset for Ontario communities. Given the significant public good derived from horse racing, the province should pursue a gaming strategy that includes horse racing as a key component.
•  The public interest also demands accountability for the use of public funds – but this has been weak where the Slots at Racetracks Program is concerned. As the Sadinsky report observed, while SARP at the outset referred to objectives such as enhancement of live racing and sustaining the agricultural sector, clear benchmarks were not established to monitor the achievement of these goals. The government simply paid over funds to the industry without guidelines or requirements, feeding a “culture of entitlement.”
•  The panel believes SARP’s “no strings attached” approach is one reason the industry has come to think of slots revenue as “their money.” In fact, in the panel’s view, it is public money belonging to the people of Ontario and the government can redirect it to other purposes if it concludes this is in the public interest.
• Fifty million dollars over three years is insufficient to build a bridge to sustainability. A viable, vibrant horse racing industry is simply not feasible today without public investment. The revenue currently available from pari-mutuel wagering – or from foreseeable growth of the wagering pool in the short term – is not enough to maintain the industry.
• Ontario horse racing has benefited from government help since Queen Victoria granted 50 guineas for the Queen’s Plate in 1860. The panel knows of no jurisdiction in North America where there is a thriving horse racing sector without government assistance.
• The panel is convinced it doesn’t have to be this way. In our view it is possible for Ontario to have a viable, world-class, right-sized horse racing industry, but only if additional revenue is provided either by the government directly or by allowing the industry to offer new gaming products. A sustainable industry can be achieved with significantly less public funding than now comes from SARP.
•  Ontario’s horse racing industry is fractious and has proven capable of very little collaboration for the common good. This is partly due to the flow of slots money that has enabled the industry to function without pulling together. The panel concludes that the industry currently lacks the cohesion to save itself.
   

As far as the overall read goes, I found it did lack some clarity and there were some minor mistakes made. And of course, much of this could've been written over a decade ago. However, as much as we don't want to read it or admit to it, it possessed some inarguable talking points.

It's anyone's guess what will happen.  However, I think the structure of what will happen is something along the following:

1. The Slots at Racetrack program is over
2. The sport will no longer be supply side driven, but will rely solely on demand, with a potential subsidy.
3. Transitional funding to help the industry reach the new normal will be higher than $50M per year.
4. The industry as we've known it is over.. There will likely be four or fewer tracks, and those tracks will host short meets.
5. There will probably be a massive dust up between thoroughbred and standardbred racing
6. The industry will soon begin to move from anger and denial, to working within this framework, so some sort of 2013 racing season can develop.

I wish I had better news, or a more optimistic outlook, but it is what it is.

Why Isn't Racing Lobbying Against Online Sports Wagering?

A headline this morning screamed: "While Hollywood movies grossed just under $26 billion worldwide in 2011, the South American online gambling and betting market by itself generated over $124 billion in revenue that same year."

This is an industry that is technically "banned" in many locales. And it appears to be only the tip of the iceberg. Facebook and Zynga are talking more and more about social gaming. There are rumblings in Vegas about it, New Jersey and California are talking about it. The list grows longer each day. And with only 1% of current gaming happening via mobile, that is sure to explode too, as Cantor Gaming announced today.

Right now in North America, racing has as close to a monopoly on online wagering as we can imagine.

When we hear racing talking about online poker, or gaming, it is generally about getting a slice, not worrying about its threat to their pari-mutuel wagering monopoly, and the reduced flow of money to purses and profits it will cause, over time.

As ITP on twitter pointed out yesterday:

@pullthepocket Racing has become so obsessed w/ finding alternative revenue streams that they don't/can't think about future of own product
— Inside The Pylons (@InsideThePylons) August 22, 2012

I think that's true.

It is interesting to see "Bet $50 get $50", cash back schemes, rewards points and all the rest in ADW's for racing now. It started maybe in 2005. As far back as I remember, private online wagering providers have been doing that and much, much more. That's how you grow in the Internet gambling world: By working on low margins, promotions and lifetime value of customers.  They've left racing in the dust.

Our strategy in racing is not a strategy, but a narrative: If you can't beat them, try and get a slice of their profits. That's been the slots thought since they were implemented, and it continues to be.

The problem with that, of course, is when you hang your revenue hat on someone else's business, that someone can squish you like a bug. If you cost too much and don't pull your weight, you are more than likely gone. Read: Ontario.

As well, it sounds nice to say "Hmmm, a $124B market, if we get 1% of that as a royalty, we'll make a billion or so for purses and profits". However, no one seems to take into account that you kill your core business in the process, because a competitor that offers a better value proposition in gambling always wins. This has plagued the industry for years. "If only we take 1% more in takeout..." they'd say, not accounting for a drop in handle, from the loss in value to the customer.

Online gambling has exploded because they cater to customers. Horse racing gambling has fallen back because they don't cater to customers, and they invite competition into their home, as a matter of course.

Inviting a business to compete with you that has better pricing, better customer service, better rewards, and better retention rates is not a business model, it's a recipe for disaster.

If He (We) Only Knew

I bet Alpha in the Derby. Not as much as this guy, though, and well, if he read this Bloodhorse article this morning about Alpha and the Derby surely it didn't make him overly happy.

• "We were very disappointed at Churchill Downs but we had so many reasons for his poor performance," McLaughlin said. "It was very hot that day, very humid, and he just lost it in the paddock. He was very upset and washy and dripping wet and stepped on himself and lost a shoe.

You're at the track, you just bet $100,000 on a racehorse's nose, and he's having a conniption; throwing his shoe like I did at my cottage last weekend.

I was on twitter and I watched the track feed. I saw no mention of this. Maybe I missed it?

If not, this is kind of strange. Millions of people with their eyes on horses to bet the Derby and nary a mention on the airwaves? It's like it's 1932, and some bookie is still charging you -7 on Chicago, knowing the running back and quarterback are out with a hangover.

Notes: The three year old crop in horse racing reads like a medical report during a war. Bode was announced retired yesterday, and today it's Hansen. I wonder how many of these horses would be back if they were geldings. Some of these injuries seem treatable and healable.

The people who make takeout decisions in racing are horsemen groups and some tracks. Sometimes you hear toolspeak from them on takeout. On the other hand, a Horseplayer group uses some statistics. If the pick 5 was not low rake, and implemented, California's handle would probably be much worse. Keep in mind they are comparing it to last year which was pretty bad in the Golden State.

Racing Plan for Ontario Due Tomorrow

There's a lot of rumor and innuendo about the release of the Snobelen et al report tomorrow in Ontario. The hopes range from the crazy (they're going to give all the slots money back!) to the more sensible (a transition plan with more than $50M over three years, with some sort of structural industry blueprint to help it move forward).

I don't have the foggiest what's going to happen.

What I do hope happens, if this turns out rosier than anyone thought, is that the people who protect the status quo (yes, that would be the people who torpedoed the RDSP* in Ontario a couple of years ago), get off the reservation. The industry has to move forward, and hangers on, status quo protectors and people with their hands out have to go. They had a seat at the table. They had a shot to run the industry and they failed.

Regardless, for those of us with horses in the province, and more importantly for others who derive a livelihood from it, we hope it's good news.

* Racing Development and Sustainability Plan, where 5% of purses from slots would be taken out for marketing, wagering innovations, lower takeouts, seeded pools, promotions and horse racing sustainability should slots be someday taken away.

The Bygone Era

Dan over at Thorotrends has a neat piece up today. In it he looks at not only his family history, but a little bit about the history of bookmaking on horse racing.

In bygone times, Dan writes:

• One estimate I read suggested a betting volume seven times that bet legally at the racetrack. Today, when we read statistics that say 90% of handle is wagered off-track, maybe our reaction should be "Sure, but it has always been that way."

I sent a link to the piece to a professional gambler friend of mine. He is into the history of betting. He sent me the following back this evening.

He wrote:

"I've got the 1948 edition of Win, Place, and Show by Robert Dowst.

"...in 1947 over $1,500,000,000 were poured through the mutuel windows in straight, place, show or daily double betting on thousands of horses in thousands of races. A reader of course should understand that for every dollar wagered legally in the machines at the tracks possibly $5 or $10 are wagered on the same horse with illegal handbooks away from the tracks. If the ratio of illegal off-course to legal on-course betting is 5/1 to 10/1, it follows that approximately $5,000,000,000 to $10,000,000,000 are wagered each year in the United States on horses. No on conversant with the general facts will dispute the figure, and it is sufficiently romantic and impressive even in this era."

In the book, he generally assumes takeout to be 10%."

 I think that's true, don't you?

If they were betting $10B in 1947, in today's dollars that's over $100B of horse racing handle, or about ten times bigger than we are. Of course, now that we charge 22% takeout instead of 10% the handle would be a lot lower than that, all things considered. Regardless, some food for thought.

Conversely, here is how we've done since 2000 in harness and thoroughbreds, with GDP attached.

For more facts and figures on racing, please see today's Harness Racing Update.

Finley Interviews Jeff Gural

There was a decent article today in HRU with an interview, conducted by Bill Finley, of Jeff Gural.

As usual, Gural pulls few punches.

• Maybe the goal is to get the most money you can before the whole things collapses and disappears.
  I know that I have to make changes and I have to hope that some people will be willing to help us.
• Bayonne has been a big disappointment.
• The governor told me I wasn’t getting slots and he kept that promise. On the other hand, I never envisioned that Revel would be a complete disaster.
• [On Buying Thoroughbreds] Yes, I bought two, one for $160,000 and another for $50,000. Bobby Ribaudo will train them. Does this have something to do with my worries about harness racing’s future? Yes.

To read the full article it's here (pdf alert). 

Note: Standardbred Canada has walked back on their credit policy changes, due to backlash from members. For their sales, you no longer need to submit a credit app from your banker.

Ohio & New York Better Wake Up Fast

The battle from government and racetracks for slot machines has heated up dramatically the last year. Ontario, as most know, is going to lose $345 million of revenues starting next March. In New York, it looks fairly bleak as Alan details on his blog:

•  At this particular one, conducted by the Saratoga Institute on Racing and Gaming Law, industry types defended the tracks' share of racino revenue against the drumbeat of criticism from the Cuomo administration that has been starting to build; most recently a report from Comptroller Tom DiNapoli (which I have not seen) which states that the money has not resulted in increases in attendance or handle.  

This is a stark reminder to everyone that the world we live in is not the world of late 1990. Then, if you build it they will come, ruled. Meaning if you stuff every buck into purses, people will come and we'll have slots for a long time for purses, with pretty much impunity.

Now, for whatever reason, the powers that be are looking at ROI with this spend, and their own books and pet projects that they can spend money on. They want racetrack money, and they can make a good case for it.

Hmm, handle is down and foals are down (it doesn't matter that NY has had a bump, with their rake reduction and promo since last year; overall numbers suck). They're saying: Why are we giving you any money?

This is why (I know, I'm a broken record) places like New York (and Ohio who is just getting slots) have to spend a hunk - a large hunk - of cash earmarked for purses and profits on the game, and they have to do it now. Horsemen and tracks have to wake up.

• Lower takeout = more handle.

• Promote your ass off with giveaways, cheaper meals, bonus days, on-track rewards, and whatever else they can think of, because that will equal higher attendance.

If you show a growth in handle and a growth in attendance, then the State has a tough time using it against you. They still might use everything else, because they want more money, but at least you have a fighting shot if you can show increased numbers, on and off track.

New York should start a 15% (or lower if they can) takeout pick 5 right now. They should go to 15% and 19% juice on WPS and exotics (or lower), right now. That would only put them about where the rake is at Keeneland and Churchill, so don't tell me that can't be done when you get millions from slot machines and those two Kentucky tracks don't.

Ohio should do the same.

It doesn't matter if this should've been done ten years ago in every single place that got slots. That's in the past.

If these states don't do something right now, say goodbye to slot machines. Take that to the bank.

A Personalized Betting App Would Be Helpful, But It'll Never Happen

I read with interest this morning, a Mashable piece on the new Golf Digest App, available at the App store for $19.99 per year.

What the app does is amazingly interesting (watch the short video below, it's neat). It allows the user to input his or her own statistics for courses (from a partnership with another company) and analyzes them against others. Then it does more than that. It finds out what your strengths and weaknesses are, and tailors content from the magazine for you, so you can better the game. The idea and work was spawned from the experiences of a golfer who happens to be a professor of statistics at Columbia University.


The advantages of an app like this are there, and there is value. It also helps a publisher - publishing revenue has dropped more than racing has - gain some much needed traction for their content.

If we flip it over to horse racing, the same principles apply. You'll often hear (I have written it here many times) that you need to know your strength and weaknesses as a player. You need to know your stats; what you're good at and what you're not so good at. You need to know your ROI on sloppy tracks, at Mohawk, at Arlington, on turf, in MSW, in stakes, in trots and in paces. And so on.

What if that was done in an app linked to your ADW? You'd see everything and get handicapping instruction on changing ticket structure, avoiding bets and tracks, and it reminds you right on your phone or tablet throughout the racing day.

In addition, with tailored stats and content in an easy-to-use app via PP data, it can be built for you. If you like to look at stats on a horse at a glance, but don't want to look at the hundreds of data points in a past performance, an app can help. If I am at  Woodbine and a race from Saratoga pops on, I might want to see a trainer stat, a track bias stat and speed figs and form figs for all horses in that race. I can look at it for two minutes and come up with a play; a play which might be much better than buying a form, or opening up one to a race I have to look at quickly.

I often handicap like this with Jcapper - which shows me at a glance numbers that I know are working at the venue - where I can play a half dozen tracks at once, fairly easily.

The possibilities in a data driven game like ours are endless.

The problems with that are obvious.

• I remember being at a wagering conference a few years ago and I was speaking to someone who shall remain nameless. He said that many big ADW's do not offer ROI based numbers because they're worried that people will see how badly they are doing and will quit racing. Hey, I suck at everything with 22% takeouts! That likely makes it a non-starter, for at least some ADW's, mostly of the track-owned variety.
• Golf Digest can do it because there are a gazillion golfers. There are much fewer horseplayers, so the power of numbers and economies of scale don't make the investment overly wise.
• An umbrella organization might be able to invest in the technology for this, and that would be welcomed, but we have dozens of ADW's, so standardizing it for use is almost impossible. Note that Golf Digest worked with Golflogix in partnership. Is TVG and Twinspires going to work together? I don't know, ask the Quarter Hog.
• PP's and betting stats are not easy to come by. This is not the NFL, PGA Tour or any other sport which wants you to see and use statistics. This is a fiefdom that has revenue coming in. Good luck if developers want to do something with PP data. They'd probably find themselves in court.

As with most things in racing, it seems an idea that can be run industry wide - either for marketing or to make players' lives a little easier - cannot get off the ground, because racing - unlike almost all other sports or games - is not built as an industry to do these types of things.

Wednesday Notes

There was an announcement today that trainer Stew Firlotte has passed away. 

Mr. Firlotte brings back some memories for me. As a kid, getting first interested in racing, his pacing colt Ralph Hanover was one I followed. Later on, when I moved to Toronto to go to school, we'd chart his young colt's and fillies progress from Florida, and get ready to bet them when they made their first start at Greenwood. Year after year it seemed he'd pay 5-2 or 2-1 with horses ready to blow the doors off the competition.

His horses tended to race good and look good and some, like Digger Almahurst, looked pretty hard to train too. I guess my two favorites of his were Town Pro and Ralph. I always liked Rare Review. For making a couple of scores Happy Family was one that sticks out. I liked that little horse.

Question: What lasts longer, a strawberry left out in the sun or a sophomore thoroughbred? Answer: Let me think about it. Bodemeister is off to Rood and Riddle for an undisclosed illness. If you ask 100 people on twitter if they ever expect to see him race again, 99 would likely say no.

Eric Poteck has a commentary on HANA about the OHRIA plan in Ontario.  It's not a commentary that's feel good, and one would expect that it won't get filtered around, but it may be the most accurate of the pieces I have seen written on the subject. What has befallen racing? Too many cooks in the kitchen, having to be appeased. The OHRIA plan does the same. I've often said, as you have, that racing has systemic issues and no matter how many band-aids you put on them, they are still there. You don't fix structural problems with band-aids. I don't think racing ever learned that, or will learn it.

What a mess? Not only has the industry not come up with any guidance for people who want to buy a yearling this fall, now we have a backlash over credit notes for the upcoming Canadian Classic yearling sale. I was thinking of maybe going, but I have no faith that anyone in the industry has my back. And I am certainly not filling out a strange looking credit application that likely means, or tells anyone nothing, especially since I have not shirked on any debt since I was about twelve. I don't know about you, but my bank account four weeks before a sale will not have anything to buy horses in it. You go to a sale not knowing the foggiest what you may spend, then you buy, then make sure there's enough to cover it a day later, by contacting stable partners, making deposits, or moving money around. I remember back in the 1980's having some friends who had a couple of decent horses attending a sale. They wanted to buy a trotting filly and their max spend was $25,000. Four hours later they bought a pacing son of Niatross who ended up being the top priced yearling sold in Canada. If they tried that this year they'd get told 'no' because their banker said so? Anyway, I don't know what's going on.

My chuckle for the day came from Kendal Hansen, owner of Hansen. This guy never fails to give me a charge. On his blog he wonders out loud if his horse was targeted by another trainer and rider in the WV Derby.

 Have a nice Wednesday everyone.

Kentucky Has Expensive Milk

It looks like there's an international incident brewing in Bellingham, Washington.  Some residents are quite annoyed that Canadian's are overflowing their local Costco looking for cheap milk, and gas. Canada, as most know, has a high sales tax, a high gas tax and milk is not subsidized. So it makes sense to make the trip to Washington and spend, spend spend. A facebook page popped up asking Costco to get rid of those damn maple syrup, back bacon eating Canucks.

Similarly, Jennie Rees wrote a story on the troubles at Turfway Park. Stakes races are being canceled, purses per day are microscopic, and places like Mountaineer, Indiana Downs and Penn National are taking all their horses. Turfway does not have alternative gaming to subsidize purses, so horsemen and fans are buying their milk in places that do.

Washington has cheap milk and gets tons of business. Kentucky has expensive milk and has no business. I guess it's economics 101 in action, but it sure doesn't make Kentucky milkmen and women feel very good.

Taking a Leap of Faith

Awhile back, I, like many of you, opened up the email to find the Battle Royale between Jeff Gural and Joe Faraldo.

Gural, as we all know, wants a portion of purse money (some of it to be matched by tracks) to be used to grow the sport, and he commissioned a poll showing over 80% of responders agreed. Faraldo generally believes the participants have done enough.

It seems, like most things in racing, we have the dreaded status-quo stalemate.

It’s no secret where I stand. I believe all of us have a stake in harness racing, whether we train, own, drive, groom or bet. So I am certainly biased towards Mr. Gural’s point of view.

However, I think it’s more than just a bias. I think its good business.

In late 2010 the Ladies Professional Golf Association (LPGA) was severely on the ropes. Television ratings were down, sponsorship money was fading, and tournaments – which were already at an all-time low number - were being canceled for 2011. LPGA players, upset with the direction of the Tour, called for the resignation of then Commissioner Carolyn Bevins, with two years left on her contract. Tournament directors, long dismayed with her abrasive management style agreed, and she was relieved of her duties.

Stepping into the job was a former executive with Proctor & Gamble, Michael Whan. Immediately things started to change. His management style was different, yes, but he also brought along a change in the culture of women’s golf.  It stemmed from his belief that the players needed to take ownership for the growth of their game. 

In fact, the letters of the word “growth” made up the bulk of his 2011 strategy. 

“G” was for getting involved. “R” was for reaching out to fans to make their day. “O” was for being open and honest to the fans and media. “W” was for “worldwide”, where he sees the Tour going. “T” was for thank you’s. “H” was for having fun, because when you’re having fun, the fans are having fun.

Corny? Perhaps, but it was a big part of the battle plan moving forward.

Last year, the new commissioner ensured the participants followed these rules, gave them the tools, and they took up the challenge with a smile. For example, when perennial money leader Paula Creamer struck a fan with an errant drive at a tournament recently, she did not give out a customary signed ball, she gave the spectator her watch.  On Tuesday’s before an event, a “cheat sheet” is handed out to players, with bullet points about the sponsors complete with pictures of key personnel.  They are then prepared what to say and do in front of a microphone, just like a NASCAR driver is. At the end of an event, players personally pen and sign thank you notes to the organizers.

And guess what? Shudder the thought - they gave up some purse money.

A tournament was created called the “Founders Cup” in 2011. The purse money for the inaugural event was nothing; zip, nada, zero. Yet golfers, from the stars to the journey-women, played. Any meager sponsorship money the event made went to LPGA junior golf and the rest went to charities chosen by the top ten finishers. It was a way to give something back to the greats of the game, while giving up something for the future of golf. In addition, the players taking ownership of the event hoped they’d spark some interest in the event itself.

In 2012 it was announced this new tournament gained a sponsor, and gone are the days of no purse. It currently stands at $1.5M, thanks to the Donnelly Group.

Give a little up, get a whole lot back.

This new professionalism and leadership with a vision has infected the tour with a huge dose of optimism.  Golfer Christina Kim told the Wall Street Journal this weekend, “Everyone is very excited. It's been a roller-coaster ride, but we're past the dark chasm.”

With optimism and growth, comes dollars. Two years ago tournament sponsors were dropping like flies. This season there will be over 20% more events than last year, and they all have good purses. 

The players in the LPGA took ownership and pride in their game. They hired a true professional and did not dictate to him, but listened. They gave their time, patience and purse money. In the process they may have saved women’s golf. 

For those who say it’s impossible for harness racing to achieve similar, I respectfully disagree. It can be done. We need a budget, a leader, a new vision, and most of all, participants willing to take a leap of faith.

 This article recently appeared in Harness Racing Update. You can sign up for Harness Racing Update - Bill Finley's weekly paper -  for Free here.

Kentucky Downs Gets the Model Right

Corey Johnson at Kentucky Downs announced their takeout rates, purse structure and stakes program for their boutique meet this past week. The highlights: 

• Takeout rates are cut. They are the lowest in North America, below both Keeneland and Churchill.
• Purses will be a stout $409,000 per day.
• Stakes races are added, now totalling seven, including the Gr III Kentucky Cup

What we see here is a model that makes sense, and some promotion that fits like a glove.

We have a track that is subsidized by instant racing, but instead of stuffing all the cash into purses, there is a mix. The takeout reduction this year, and maybe next and next, might result in a small loss of revenue, but by using some of the instant racing money for lower takeout, and adding it as a marketing vehicle, it's telling players everywhere they are open for business. Hopefully, like Balmoral Park has shown, handle will grow and players will notice over time.

In addition, Kentucky Downs exemplifies what makes thoroughbred racing neat, when compared to harness racing, which tends to be watered down. They have a really unique turf meet which fans like. If they did it all summer it would be just another racetrack. By offering decent purses for the short meet they may attract more and more good stock, and more and more fans to the track and to the crowded simo screens in an ever increasing muddy market. A unique short meet is promotable.

Conversely, harness racing is always a fight over dates. In Ontario for example, with summer tracks like Dresden, Hanover, Hiawatha and on and on, imagine what would've happened if we did this, instead of getting as many dates as possible? What if those tracks were scheduled not against each other, but to enhance each other with festivals, and unique racing? What if we in Ontario did not try to punish customers with 26% rakes, but instead put money into value at the windows along with some neat racing?

Kentucky Downs is doing exactly what it's supposed to be doing - trying to attract not just horseowners and trainers, but customers too. I watch it every year (it really is a cool place) and I plan to again.

Now, if only other slots tracks would work on the same model. Customers matter too.

Notes:

There was an interesting tweet the other day by Steve Fezzik, the sports bettor.  Insiders talk of so many items when trying to grow racing. There are a million suggestions. Steve breaks down what a sports bettor like him wants - a shot at some value. I went to a restaurant the other day - it was a high end chain, but nothing spectacular - and I had a nice meal. The food was good, the service was good too. However, I got my bill and noticed that my pint of domestic was $9 and a glass of house red $10. The total bill was $120. I could get similar food and service across the street for $75. Price means so much in our every day lives, it should be no surprise to anyone that it means a lot in horse racing too. We don't live in Albania, we live in a capitalistic society.

Darryl Kaplan had an impassioned plea for saving Ontario's racetracks in the last edition of Trot. He's correct, having a track instead of another strip mall is preferred to everyone I know, anyway. The problem, as usual, comes down to dollars and cents, and some common sense. If the market cannot sustain it, we won't have those tracks. If we had put some slots cash into turning those tracks into a destination we might not even be having the discussion. But of course our business did not have that vision. We took the money and ran, hoping they'd be here forever. We can't turn back the clock, and even if we could we probably would not have made it happen, with racings fiefdom's fighting instead of building a business.

Harness Ownership Compares Favorably to Thoroughbreds

About a year ago Bill Finley wrote this on US Trotting.com:

“Just about everyone in the harness industry has an acquaintance or two or three who owns Thoroughbreds. Do the game a favor: Pick up the phone, call your friends and tell them they are in the wrong business.”

Over the past several years I have worked with the Thoroughbred industry from Keeneland to Socal, with the Jockey Club to vets. Although for the most part the discussions were focused on horseplayer issues, as we all know, betting issues overlap with everything else. This is a sport, but it’s a gambling sport, and the economics of the supply side meet the demand side not as a matter of convenience, but as a matter of survival.

What I’ve learned, is that Bill’s column was right then, and it’s right now.  

Let’s look at some of the problems and characteristics facing the Thoroughbred’s of late and juxtapose them with harness racing. 

Did you know 99% of thoroughbreds are on lasix? If you didn’t, you’ve likely been living under a rock, because the diuretic is currently under the microscope, with some states and jurisdictions looking at an outright ban. There are many Thoroughbred owners who dislike the drug – so much so that some have taken it upon themselves to lead by example, by taking their horse’s off it. I’m a harness owner who is not a fan of lasix, and I’m not the only one who feels that way. Many of you in harness racing who work with horses each day do not want to use the drug unless your colt, filly, horse or mare truly needs it. A lot of times it’s used only as a last resort.

If you’re a Thoroughbred owner who dislikes lasix, do yourself a favor, buy a harness horse.

I played some Thoroughbred races this weekend, as is the norm for me in this day and age. I scanned last year’s results for many of my prospective punts. I saw 2010 summary’s like this time and time again: 5 starts, 6 starts, 4 starts, 3 starts, 7 starts. There are 365 days in a year and you got to enjoy your horse at the track 5 times? Our stable has a horse who was recently retired that we bought as a maiden at a mixed sale for $14,000. He raced 143 times, at seven or eight tracks, usually every seven days. We paid $97 a start. How’s that for entertainment as a horse owner? This is not an exception in harness racing, it’s the norm. 

If you’re a Thoroughbred owner who goes to the dentist more often than your horse races, do yourself a favor, buy a harness horse.

Have you owned or trained a horse that has broken down? I shudder the thought because it must be a horrible experience and it certainly affects the mindset of horse buyers. I know for myself I have trepidation being a thoroughbred owner because of the breakdown statistics. It’s such an issue in Thoroughbred racing that tracks – like Keeneland and Del Mar - have been ripped up to lay down a different, safer surface. Touch wood, in a harness race our charges can pace or trot on mud, on a tight track, on a scraped one; they could probably trot around on cottage cheese and we wouldn’t worry about a breakdown. 

If you are a Thoroughbred owner who is worried about breakdown rates, do yourself a favor, buy a harness horse.

Ahh, that horse racing sport is a rich man’s game. You need to shell out millions for any type of pedigree at a yearling sale. You have to have a top trainer to get your charge through a Triple Crown race at the highest level, and often times your horse’s career is compromised even if you attempt it. 

Not so fast. In harness racing a dozen or so people can purchase a nicely bred yearling at a sale for $40,000. This colt can be trained by a fellow whose day job involved selling cars. He is driven by a gentleman that is not a multi-millionaire driver. He can go 20 for 21, set a world race-record, make over $3 million, and retire as the most talked about three year old since Nihilator. 

Sure some thoroughbred classic champions have been bought for a song, but in harness it happens multiple times each year. Triple Crown winner Glidemaster $10,000, Real Desire $16,000, Rainbow Blue $10,500, A Rock n Roll Dance $15,000. I could go on for a dozen or more paragraphs, and heck, I have not even mentioned Googoo Gaagaa.

If you’re a sportsman who wants to compete at the top level in racing without owning half a Facebook IPO or a few oil wells to fund it, do yourself a favor, buy a harness horse.

I think that what I wrote above was met with nods of agreement. We all know it’s true: Buying a harness yearling is a huge opportunity with great value. Plus it’s fun too. In what other game can you jog your own horse on a Saturday morning? Try that with a Thoroughbred.

We’re competing with thoroughbred buyers, and the ego of owning a runner, against owning a pacer or a trotter, is formidable. However, if you look at virtually every complaint Thoroughbred owners have about their game, we have an answer. 

I wonder, with slots money still here in many jurisdictions, why aren’t we doing more to attract that ownership by highlighting these benefits? Why aren’t breeding farms and others socking away some seed money in a slush fund for a marketing program that extols the virtues of harness ownership? Why have I not seen ads on HRTV, HPITV or TVG talking about harness horses and the fun we can have for a modest investment, speaking directly to non-harness horse owner’s gripes? 

Maybe there is, and I just missed them. Either way, if we’re not telling everyone to buy a harness horse, we’re not only not doing our job, we’re doing our friends in Thoroughbred racing an injustice.

This originally appeared in Harness Racing Update. It's free and you can sign up here.

Wednesday Notes

With apologies to our pal Tom LaMarra, this made us go hmmmm.

This is the response from sports' leagues in their lawsuit against New Jersey wanting to offer sports betting:

• “Gambling on amateur and professional sports threatens the integrity of those sports and is fundamentally at odds with the principle… that the outcome of collegiate and professional athletic contests must be determined, and must be perceived by the public as being determined, solely on the basis of honest athletic competition,” the suit states. “Amateur and professional sports are an integral part of American culture, particularly among the country’s youth who often look up to athletes as role models.

That response would be fine, I guess, if states like Nevada didn't already have sports betting.  I see what they're doing (trying to stop a proliferation of sports betting) but it reads like the worst kind of outrage, in my opinion, the selective kind. Sports betting in some states is inevitable; it'll come.

If you read the news, or opinion, or even look at the sales, newspapering is "dead". Maybe it is, but the mainstream media still has huge influence. In the spring the New York Times hosted several articles on horse racing, drugs and horse safety, highlighted by the notion that racing is a rudderless ship. Much of what they wrote was somewhat hyperbolic, in my opinion, but when the mainstream gets a hold of something, others follow.

Not long ago racing insiders were the only ones speaking of penalties for rule breakers. Now everyone is. In a scathing article called "Cheaters Prosper at Calder Race Course" the author explores virtually everything nasty in racing. Much of it too,  is hyperbolic (again in my opinion), but at its core it talks about a lot of what we do as insiders.

I read with interest about the horse that was disqualified from Equestrian the other day for a scratch on the leg. Conversely, athletes everywhere are running with sore hamstrings, or coming off injury; even Usain Bolt was only 90% according to him. If you read some in racing, regarding race day meds, they'll use the fact that human athletes are taking something before races to make them well, so why shouldn't horses be able to as well? Well, precisely because they are horses. If Usain Bolt races with a bad leg he can pull up, get treated and go on to the next meet; that's his decision. Horse's cannot make them for themselves, and worse, they can't speak. If they "pull up" the penalty is not a few weeks off watching reruns of Survivor while getting a daily massage - it's likely death. We should stop comparing human athletes to equine ones. It's a red herring.

In racing and sports betting, sooner or later the problems, or issues come to a head. You can only put up so many roadblocks, or ignore issues for so long before the public gets ahold of them, or overzealous states flex their muscles. Slots will be removed from racetracks, race day meds will likely be gone, punishments for trainers will not be like it always was, new whip rules or other horse safety measures, sports betting and exchange wagering will come. It's only a matter of time.

Sportsmanship Is Alive and Well In Horse Racing

Let's say you and me own a racetrack. It's a long, long way away geographically from any racing epicenter. In that racing hotbed interstate after interstate away from us, slots churn, resulting in purses for $30,000 or $50,000 a race for any decent horse. There is probably a stakes race or two there, too, with not fantastic competition for $100,000. The race won't even have eliminations, and it's in their own backyard.

Our track has $1000 purses, but you and I grab some sponsors, and we get a purse for $60,000 for one race a year, with eliminations the week before for $20,000. It's on a half mile track so getting the eight post can wipe out any chance for a horse owner to even make the final. With our track 500-1000 miles away, it's probably a tough sell, but we're trying.

But a funny thing happens. We look at the entries and we see:

Real Nice: Top class pacer in New York, who has made more than $1 million.

Mystician: A horse who may make $2 million, and who won the richest pace for 2YO pacers in the world a couple of years ago.

Piece of the Rock: Third in the $1.5 million North America Cup.

And so on.

It's like we attracted Rachel Alexandra to meet Zenyatta on a bull ring in the Yukon.

The only race in the World that can get those kind of entries is the Gold Cup and Saucer, in Charlottetown Prince Edward Island. It doesn't matter if you are an owner or trainer from the east coast, Ontario, New York, Pennsylvania, or Delaware. It's a race you want to go to.

Racing is about dollars and cents, but don't tell that to the owners who are sending their horses to PEI this month. To them, it's about having fun, winning a race in front of thousands of racefans, and enjoying time spent with friends and family for one of the greatest weeks of harness racing around, in a beautiful part of the World. Good on them. Sportsmanship and fun is supposed to be part of this sport, because it always has been a part of this sport. Sometimes we forget that, and the Gold Cup and Saucer is a delicious reminder it still exists.

Sunday Notes

Yesterday at around 5:30PM things were a little dicey.

I was getting ready for the $275k New Jersey Classic at the Meadowlands and realized I had to watch Hansen at Mountaineer. I flipped over and caught the last half. Then I immediately flipped over and watched the Whitney at Saratoga; I caught that one just past the quarter. Then I watched almost the whole New Jersey Classic. Three stakes races, all run at the same time. Wow.

In other news, handle was down 7% in July and racing is again pretty much evens for 2012.

I thought the handle for the Hambo was up when I was scanning the pools yesterday, and it turns out it was. There was a 9% bump from 2011.

I wonder what Somebeachsomewhere paces if he was given Panther Hanover's trip?

For thoughts on Hambo Day and the performances, please see HRU, page 8, PDF.

Have a nice Sunday everyone.

Mansion's and Hambo's

There has been a lot of chatter on the interwebs about Churchill Downs' $9M expansion (or upgrade if you will) called the "Mansion". Some find the project a little bit anachronistic, or worse, looking back a the history of the south.

• Pick the adjective that would best describe Churchill Down’s notion that this particular image is a coveted entertainment experience. Arrogant? Insensitive? Tone-deaf? They can appeal to the rich all they want, and probably successfully, but surely, there are better exemplars of contemporary luxury than one that recalls an era that we should overcome, not replicate.

I'm less introspective than that, so it flies a little over my head.

What I think Churchill is doing is being loyal to its brand, and that's what they should be doing, in my opinion.

Writing for Harness Racing Update today (pdf), a similar notion was put forth about the success of the Hambletonian:

•  The Hambletonian has never, ever run away from its history. It has not gone for flash, it has not tried to be something its not. It has not changed to try to be a race at Ascot or Dubai, or to be a Breeders' Cup. This makes perfect sense, because it is not an Ascot or a Dubai, or a Breeders' Cup. Harness racing is beer in paper cups, and so is the Hambletonian. Harness racing is paddock parks, and high school bands, and cotton candy, and hot dogs, and country fairs, and so is the Hambletonian. Harness racing is American history, and so is the Hambletonian.

The Hambo is a "rural race" and always has been. It's what they are. Sure they could've tried to modernize, make it flashy, turned it into something its not, but they'd be breaking a golden rule of marketing - be always who you are.

I guess it all depends on your world view, or what you associate with something. Churchill, I think rightly, is playing into their historical significance as a "non-east coast" destination for east coast blue bloods, back in the day. It's playing into the rolling hills, instead of the concrete and cement of New York or Baltimore. It's playing into the atmosphere we all know is different in Lexington and Louisville to many city tracks we've all been to. It's also, of course, playing into the rich angle of thoroughbred racing, because, well, that's a part of the sport as well.

The Hambo, when moving from rural Illinois to New Jersey in the 1980's never lost its rural charm. It never tried to be big city. They weren't and aren't making a political statement, they simply are being what they are. Churchill, in my opinion, is doing exactly the same thing.  Some folks may see connotations regarding the use of the word "Mansion", but I see a few walls, some pictures and high class food and drink for a high class clientele at a southern, historically different racetrack, which is exactly what Churchill Downs has always been.

Willmot Retirement & Racing's Chasm

This week former Woodbine Entertainment CEO and current Chairman David Willmot called it quits. A man who dearly loved the "OJC", Ontario racing and racing in general certainly deserves to enjoy his retirement, and everyone involved in Canadian racing wishes him good health.

When we look at what Mr. Willmot did for Canadian racing, the list is very long.

Along with offering and promoting our big races with verve, Woodbine has heavily invested in racing, totalling over $385 since slots were introduced. Compare this to some slots tracks who are purely balance sheet driven. There is no comparison.

When you sit in the finish line bar, head upstairs to Champions, or visit the paddock, or turn on your television to watch racing, you see what Woodbine has invested.

Harness racing participants are some of the most conspiracy minded folks you'll ever see, and with David Willmot running the show (and being a thoroughbred guy), this was shown again and again. But when you looked at the facts there was no evidence for them to feel that way. Million dollar stakes races, big purses, a huge upgrade at Mohawk, a new paddock, a weekly show on the Score network for both breeds that they pay for.  He even invested his own money buying harness horses.

I don't think you'll find anyone in racing who does not respect his love of the game, and the willingness to want to grow it.

However, on the flip side, the betting side of the game is a different story.

When the parimutuel tax was taken off pools in the late 1990's (close to a 7% reduction on takeout), where Canada could've had either the highest rebates or lowest takeout in North America with a vision towards the future, Woodbine and the horse racing industry took it for themselves.

With hundreds of millions in slot money funding the game, Woodbine could've been a betting leader all on its own, cultivating their customers, but instead we saw 28.3% takeouts for trifectas, one of the worst takeout rates in North America.

With betfair making noise early in the 2000's, a partnership, or a Canadian betting exchange could've been on the radar. It wasn't even a thought.

When offshores were taking betting handle in the early 2000's, it wasn't a wakeup call that your customers were telling you something, instead we saw a PR offensive, trying to crush them.

I don't type the above to hammer Mr. Willmot. Each of his decisions and his teams decisions regarding betting are not malicious. They didn't want to hurt racing handles by not helping the bettor more. It wasn't a conscious decision. It just lacked the vision that was seen on the racing end, from this fine organization.

This was done like it always is in racing: Because time and time again, the person running the organization that loves the sporting end, has his or her expertise in that part of the business.

This is not a David Willmot only phenomenon. Think Mr. Stronach for a corollary:

It's who they hang around with in the Woodbine Club - breeders and owners. It's who they deal with on a daily basis - horsemen groups, government agencies, breeders and owners. It's their world view.

Conversely, few executives - David Willmot or otherwise - are overly at home sitting upstairs with a bunch of guys betting $40 across each night. It's not who they are.

I give Mr. Willmot high marks for his work for Canadian Racing - it would be silly not to, and the proof is in the pudding. However, one area he failed, in my opinion, was trying to handle betting issues himself, or with a hand-picked team which fit his wordview.

The Hong Kong Jockey Club has Presidents and some VP's that handle the racing side. Conversely, they have a VP who is a head of wagering that receives little interference from those racing VP's. North American structure does not do this, nor do they have it. That's why excellent executives like Mr. Willmot will get, and will deserve praise, but in my opinion it will always come with an asterisk.

The Badminton Federation is Hired

Last evening a few teams, for rather complex reasons, decided to tank their badminton matches at the Olympics. If you watch the video of the event, it's comical and a little perturbing, because the Olympics is supposed to be all about the passion of athletics. The crowd was pretty upset and it really put a black mark on their sport.

What happened next was eye-opening, however. The Badminton Federation let them have it, booting the teams out of the Olympics.

On Wednesday, the Badminton World Federation ejected eight doubles players from China, South Korea, and Indonesia for trying to lose on purpose. The federation charged them under sections 4.5 and 4.16 of the organization’s Players’ Code of Conduct: “not using one’s best efforts to win a match” and “conducting oneself in a manner that is clearly abusive or detrimental to the sport.”

"You cannot allow a player to abuse the tournament like that, and not take firm action,” Craig Reedie, International Olympic Committee vice president and former badminton federation chief, told the Associated Press. “So good on them."

Afterwards, the expelled teams went home. All is said and done.

Hmmm..... “Conducting oneself in a manner that is clearly abusive or detrimental to the sport.” Where have we heard that one before?

If this happened in racing, we'd likely see a different result.

The players in question would immediately appeal, so they could play the next day, allowing their ruse to come to fruition, angering both opponents and the fans. If another injunction came where they might not play the next day, the players would've likely contacted the Badminton's players union, and they would've come to their defense with gems like "you can't deny their ability to make a living". Other badminton players who think like they do would've probably rallied around them with excuses like "They're nice people and maybe they didn't really mean it" or "the commission rules are unfair, so I agree with what they did".

In the end, if it were racing, two teams probably would've been playing for the Gold medal and both of them would be on the podium to get their medals, with an incredulous public wondering who in the hell is minding the store in this crazy sport.

But it's not racing. The Badminton Federation kicked them out. Out meant out.

They're hired.