Wednesday, December 5, 2012

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.


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