More Money for Horse Racing & McIntosh Pulls No Punches

According to CTV News, an additional $100 million is being earmarked for horse racing. There's no indication if this is part of the slot rent, or something already announced and repackaged. We'll see, I guess.

Horse racing - minus the Adam Smith laissez faire thing where slot cash was dumped into purses like a drug - is not a terrible bet for a government. Similarly, horse racing, minus the Adam Smith laissez faire thing, has a shot with the government guiding it. $100 million could certainly help.

Interesting development.

Further tonight, hall of fame trainer and winningest trainer of Breeders Crown's, Bob McIntosh took a chance with a tweet.
It's always an interesting discussion in horse racing on social media, at the track or on chat boards. i.e. what was worse, the Ringers and rascals of the past, or modern under the radar pre-race, blood builders etc, a la the Tour de France?

Bob, who has been around the block about 1,000 times, gives you his opinion to that.


Does Woodbine Want to Stand Out?

With the government, CPMA, racetracks and ninety four other alphabets under a quasi commissioners office umbrella with the new Ontario racing paradigm, one thinks change can come quickly. As we all know, historically change is stifled because faction A opposes something that factions B through F all want, and faction A wins. This is different now.

Does a place like Woodbine want to stand out?

Here's a chance. Today at the Dubai World Cup, you'd have thunk the skies opened when an inquiry was taking place. I've always looked at the glass as being half full with the government takeover of Ontario racing. Most think I'm cray. Prove me, or them, right or wrong. You have a chance. Opportunities like this can come each day.

Admiration & Racing's Big Data

Sometimes you fall in love with a horse, just because.

To see Foiled Again in the paddock, hanging around in crossties, or in the post parade, it's a bit of a yawn. For those who have not, think of the movie Seabiscuit during the match race scene, when the strapping, tall, blue-blooded, powerful and beautiful War Admiral came out. Picture the opposite, and you have Foiled Again.

All that "ordinary looking brown horse" has done is race 200 times and is the top money winner in harness racing history. As a nine year old he was in the running for the horse of the year. Last week, in his ten year old debut, he won, beating four and five year olds. No problem.

What makes him so good? His heart. He’s not the biggest, he’s certainly not the fastest, but he knows exactly what he’s doing. Last week was the perfect example. I was loose-lining him until about halfway in the final turn. Then, he saw (Apprentice Hanover) coming and he swelled up. He knew it was time to go to work." said driver Yannick Gingras.

That's what I have a deep admiration of. Him. He rarely looks like he is going to win, but he wins. When he loses, he is right there. If on the off chance he loses badly (virtually never), you know he is going to scope full of mucous, or he has a serious problem. Heck, even then it makes me wonder. That horse, with a problem, would probably run through a wall.

In fifty years I believe a lot of people who are still harness fans will be talking about this horse. He's something else.

In HRU last night,(pdf) Finley talked about the PETA thing, and harness racing. In one note:

"That’s probably the way a USTA Board Member was thinking at a public organizational meeting in 2013 when the issue of whipping was brought up. This person rebuffed another Board member who wanted to discuss whether or not they should at least look into the whip issue, saying, “People don’t care about whipping. I watch the fans at my track and when the horses come down the stretch all I hear them say is ‘hit that sonofabitch again.’” It’s that sort of neanderthal line of thinking that can really get you in trouble."

This is not a statement about whipping, that's for another day, it's a statement about racing. It's sad to say, but this is not isolated. This is horse racing's big data, and has been for some time. 

"I walked around the grandstand and I've seen no one talking about takeout."

"Overlapping of races is no big deal, because I walked into the simo-center and some of the TV's are not even on the race you are talking about"

"We need to make races go off every five minutes because people in the slots like action"

Decisions in racing are made like this every day.

Bill did mention 'kicking' nudging in his article. I hope people finally understand what many (including me) were talking about with kicking. It doesn't matter to anyone if it hurts the horse or not, or whatever argument you want to use for it. Steve Asmussen is getting hammered on a video for backstretch vet work. The video has like 200,000 views. People just see "kick" and "horse". That's why the practice has to be eliminated, and the top drivers in the sport have to come out and lead by example. If they don't, the industry has to sit them down for weeks or months. It needs to stop. Period.
___________________________________________________________________________

Larry Collmus, truly one of the good guys. 

There's more talk of federal legislation today. For that and harness racing, check HRU on page two, for that. It's by a bettor. Not a racing insider.

Keeneland is after the Breeders Cup. Oh my, that would be a beautiful setting.

Have a great day everyone!




Old Boys Club

Connie has a neat post up today about working the backside.  It's filled with many interesting anecdotes, a snapshot into the culture we do not often see, and is a really nice read. Actually, that's not strong enough: It is a really important read.

One paragraph sums up a problem, in my opinion. Regarding finding something untoward, she writes:
  •  I had no one to tell. I was completely clueless as what to do about it. I recently said as much to some horse racing folks and I was told I should have gone to the stewards. I thought about that, but here is where things get murky. For one, if you are a new hotwalker at the track, knowing no one, you have no idea if your whistleblowing is going to cause you to lose your position. Second, the stewards do not live in a vacuum. One steward was having a relationship with an assistant trainer backside and had a brother who was a trainer there, too.

She hit the "wall".

Judges/stewards who are pals with participants; that's only one part that doesn't make much sense.

Do you want to break in as a track executive? Well, take a racetrack industry course and learn from others who worked in the industry. Don't get an MBA from Columbia. Despite it being one of the most sought after business degrees on the planet, that won't work because it might not help you run a racetrack.  Bill is a trainer who fills the entry box and his kid needs a job. For god's sake, cheerlead at all costs, because even if you don't for one second - showing some independent thought - you might be in trouble and never work in the business.

Racing boards, old time board of directors for a racetrack and other power-fiefdom's don't have "need grey hair, and be a man who spends money or knows someone who spends money" listed as a job skill on an application, but I don't blame you for thinking so.

Is this why change is so hard? Is it why the customer has long felt ignored? Is this why innovation, new ways of doing things, new opinion, taking chances are all so difficult?

I think it plays a big part of it. This is an industry where a guy like Stronach is considered someone who 'doesn't know business' and 'failed.' What a crock. The man created one of the world's largest car parts companies from his Toronto basement, while barely knowing a word of English. He didn't just get dumb when he bought a track.

There has been a lot of talk recently about the "culture of the backstretch" and that's needed, I am sure. However, the front side can probably use some updating and modernizing, too. It's not 1950, but at times it sure looks like it.


Can't Get Away

I figured I would wake up this morning, get prepared for a massive storm, talk a little with my friends about something non-PETA related, and get to work.

I did wake up, I made sure my snow blower has gas, and I already have done some work. It's the third one that was hard. All of my friends are talking about that PETA thing. It won't stop.

Last evening, on a call with a bunch of horseplayers - "the PETA thing"

Chatting with my pal Nolan - "the PETA thing"

Reading Jessica - who says "it made me feel real shame to be silent" when she saw bad things near her stable -  "the PETA thing".

Fellow Bruins fan, and someone I find is an all around good egg Mike MacAdam, writes a very well thought out editorial that pops in my timeline about........ "the PETA thing".

The smart, affable and usually non-frustrated and non-confrontational Ryan Goldberg pops up.

"The PETA thing".

I, at various times the last few days, have defended Asmussen for being the fall guy, waxed on about the way factory stables work, been wondering how something positive could happen with something so cultural and non-legislative..... it's been all over the map. I find no black, no white. No villain to get mad at; no white knight with solutions. In fact, I know I am not the sharpest knife in the drawer, but I don't even know what a solution would look like.

It's a mind bender; it's a mind bender that will not go away.

So, today's post is not about Gural's visit to Anthony MacDonald's get together, the Rainbow Six, the Meadowlands, my buddies who are at the Horseplayer World Series, or whatever catches my eye. It's about, again, "the PETA thing". Apologies, I guess.


Malaise

Andrew Cohen's piece in the Atlantic is getting a lot of play the past 24 hours. If you have not read it, it's here. In one section of his piece, he speaks about the mushy middle.
  • So it is from the third category of horsemen and horsewomen, the far-too-silent majority, the good people who see wrong but won't give their all to right it, where serious reform must come if the sport is to survive and thrive.
This narrative has provoked discussion on social media, and elsewhere. There are a lot of non-zealot, mushy middle, well-meaning people who have taken this as a criticism; like they've done something wrong.

Let's analyze this.

Look at the history of the sport, at times. 
  •  Delahoussaye has a lengthy list of rulings in the Association of Racing Commissioners International database going back to 1984, when his license was revoked for a felony conviction. He was eligible for reinstatement in 1993. Since then, he has had at least two suspensions for possession of needles, syringes, and injectable drugs (one in Ohio in 1998 and another in Michigan in 2000), and in 1998 he was banned by the Ohio Racing Commission for one year for an incident at Beulah Park when he was ruled to have “mistreated, abused or engaged in an act of cruelty to a horse” and used an “appliance other than whip for the purpose of stimulating speed.” The appliance was described in court documents as a “wooden stick with stripped electrical cords stuck to it.” A veterinarian and two assistants testified seeing a horse at Beulah Park “jump two or three feet in the air” and then witnessed Delahoussaye unplugging an electrical cord from the wall. Delahoussaye appealed the case but ultimately lost.
Note the last line. "He lost"

But in 2010, six years later:
  •  A former horse trainer at Penn National Race Course charged with illegally doping his steeds with Red Bull-based “milk shakes” and other performance-enhancing stimulants won’t be going to jail. Two grooms who worked with Delahoussaye testified that they saw him administer the illicit milk shakes and snake venom to horses to boost their performance. One groom gave police bottles of a performance-enhancing substance that Delahoussaye had given him, according to the jury.
and
  •  A consent order accompanying Delahoussaye’s ARD admission bars him forever from training race horses in the state. It doesn’t prohibit him from practicing his trade in other states. 
Someone gets convicted of "abusing a horse" (along with other violations for years) and they let him back in to, well, do it again. Then he is caught, again, then he is finally not allowed to work with horses, although not in all states.

Think about that. If a man was convicted of drunk driving a school bus he isn't going to drive a school bus any longer. That's common sense. If for some reason the man is allowed to drive a school bus again, it will result in a firestorm. Some grandmother who teaches Sunday school and runs the church bake sale will go Blasi on their ass. Others will follow. The media will report it. Calls will be made. Something would get done.

In horse racing, we expect the same thing. I'm sorry, that's not going to happen, and has never happened. The above episode was news - for a day. The horse racing commissions didn't run with it, the media was apologizing, or hoping it went away - silence.

What's the "mushy middle", who are beating up themselves, supposed to do when no one has their backs? What's that church going, horse training grandmother supposed to do when this is treated like nothing? They become lonely voices in the wilderness.

This malaise is not the fault of the mushy middle. For those of you hand wringing, quit thinking you've done something wrong. It's not your fault. Racing has put you in the position because when well-meaning people see something so egregious and sociopathic like "plugging a horse in" results in a wrist slap, they go about your business, trying to make a living, trying to do the right thing. That's what happens when no one has your back.

It's different today in racing. Commissions, like those in Ontario have made great strides. In Louisiana and New Mexico, class I's are being treated with long suspensions, not six month ones. This is mostly being done without overreaction, i.e. some "mistake" a trainer makes that is not his or her intent is still being adjudicated with some common sense. The lynch mob has not won (nor should they ever win).

For the mushy middle, your time seems to be coming. It'll be a lot easier to have your voices heard as commissions and others who are stewards of the sport, want to hear you. Shouting at a brick wall gets old real fast.

Throw Out the Life Preserver

Andrew Cohen of CBS/60 Minutes wrote an opinion piece at The Atlantic today regarding the events of the past week in horse racing. It remains to be seen if the jeers will outnumber the cheers because it is a very tough, no nonsense missive; but it is well-thought out and very well written.

This is certainly not 2013, where we saw a muted, often times apologetic reaction to the New York Times Joe Drape story on breakdowns. There - as Cohen calls them, even by name through linking in the piece - the apologists held a strong upper hand. Now, it's much more than that. As an industry person said last week "this has legs". He is looking to be correct.

One part of the Cohen piece that strikes to the core (for me at least) is his talk about the "middle". These are your average, every day folk who like working with animals, who do the right thing; who are just trying to make a living in a sport they truly enjoy. If something comes out of this episode, they will be the ones most affected; and not in a good way.  As one of my all time favorite, short, business related blog posts said regarding things like this, "Every revolution destroys the average middle first and most savagely."

Despite your views on this matter, Andrew's article is worth a read.



The "Video" Might Not Affect Horse Ownership

Barry Irwin's missive on the TDN is making the rounds. His three main points/arguments:
  •  For racing to exist, the owner is the key
  •  The advent last week of PETA’s report on the operation of Steve Asmussen has our game in peril because for the first time there is video evidence for all to see of how sordid, uncaring, unethical and illegal the caretakers of our horses can be. 
  • Once a game is found to be covered in scuzz instead of quality, the desire for further participation by owners is going to evaporate.
The above possesses a number of assumptions: Horse racing needs a person to buy a horse to survive. A video was released that will stop people, potentially, from buying horses. The video being public stops new people from buying horses.

I think he sounds good, but he is assuming something that I believe just is not true. He assumes horse owners are irrational.

As long as a purse exists, there will be horse owners. Social Inclusion has a potential $8 million or more in purses to race for in 2014 alone. If he wins a couple of them, he could be worth anywhere from $10 million to $30 million, or even more in the horsey brothel.  Is an owner really going to say "I don't want to pay, say, $2 million or more" for that chance? No, because they are rational investors.

The horse ownership equation is based on some metrics. The return on investment, probably around 50 cents on the dollar, has to be buttressed by the entertainment/ego component along with the shot at getting a big horse worth millions. Some may find that equation irrational in itself, but it's the way things work.

Rational investors do their due diligence. Really, this is the "first time there is video evidence" and "the desire for further participation by owners is going to evaporate"? I'd think not. Anyone who claims a horse, or spends millions at a yearling sale know what the costs are, the risks are, and the people who are in the industry. Heck, to learn that, all they have to do is read the TDN for one of Barry's articles over the years. Seeing this video is nothing new to a whole lot of people who are investors in horse racing, or for the people who have researched the possibility.

Horse racing investors, like any investor, or anyone who runs a business are usually ahead of the curve anyway. Remember the health care law debate in 2008? If you turned on CNBC during that time, you'd see CEO's saying "I want to see how this shakes out before committing funds to new hiring or expansion".  They weren't Obama haters - some were his donors - they were just acting rationally. They wanted to see how much their costs would go up and what changes they would have to make to keep their company on sound financial footing. They were acting before laws were passed, just like they always do.

Horse racing is no different. To try and make us believe that all of these investors, or potential investors in horse flesh were suddenly awakened by a video from a fringe group is asking us to believe they are irrational. They aren't.

I don't disagree with Barry. I do believe the way the business has been run discourages horse ownership. I do agree with him that this business - one with a culture where "unloading a lame horse" on someone is considered smart, while doing something tantamount to that in regular life could land you in jail - is not attracting the best owners. But I think this has been happening for a long time now. It's not new.

If I am right, perhaps now in 2014, the "video" may end up being a leading indicator for a resurgence of horse ownership. If it somehow leads to some fundamental change, perhaps things will get better, quicker than we think. Why? Because horse investors, like most, aim and fire; they don't fire and aim.

Interesting Reactions From Casual Fans

The 'video' is certainly causing a lot of consternation in horse racing the past several days. It's been quite interesting to read.

This episode has one key difference from the "24 horses a week" New York Times meme from a year ago, in my opinion. At that time the reaction was "ya, at quarterhorse tracks in New Mexico, so what?". Now that can't be said. Many things on that video happen each day - getting a horse healthy enough to run.

The seasoned handicapper, owner, or racing insider can lie in two camps with this: One, those who want change, or federal oversight saying "things need to change". Two, the backstretch insider who says "they did nothing wrong, they were just getting a horse ready to race and its how the business works."

To many casual fans, however, this stuff is very new. And it's making those people - the mushy middle - think.

Sid Fernando and his "gifs" on this tumblr blog often uses the fictional "Skip" to share opinion......

Years ago things were different. It was, "The horse has a little chip, Skip, and we gotta get that fixed up. We'll have him ready in eight months. He'll need to be kicked out in the field, but he'll be back better than ever and should have a long career"

Now is it, "Skip, I'll patch him up and drop him and get him claimed. I know the stable needs turnover or we're f***ed. Don't worry, we'll get rid of him."

The casual fan is asking themselves "Is this why horses make so few starts now?"

Years ago, we'd see horses claimed for $20,000 and race in purses under $20,000. Most common was "Want to claim a horse Skip? I've researched Bill's Boy and he is sound, he makes 14 starts a year and competes well in twenties. I think we can give him a month or two off, fix em up and he can make a little money in 30's and he can be a good moneymaker for us."

Now it sounds more apropos to hear, "We can claim this horse for $20,000 Skip, inject everything, drop him into a 12 and race for two times his purchase price. Who cares if he gets claimed?"

The casual fan is now asking, "is this the right way to do things? Aren't the vets making the slot money?"

The casual fan is asking themselves questions like,

"I see those men talk about how much they love the horses all the time, why are they laughing about buzzers?"

"Is this why so many horses never race the same after the Kentucky Derby?"

"I see smart people saying those guys are doing nothing wrong, so is everyone doing this?"

"A big trainer called us idiots, saying if we knew what goes on we would not make a bet. Was he right?"

The casual fan is getting an education; they're learning the modern culture of racing.

Regardless, it does strike me (I am not sure you agree or not, it's just my opinion) that I see some innocence with the casual fan base that's being lost.  And that is much different than what we saw after last year's New York Times study. This feels like more. It feels real.




A Quagmire in An Industry that Can't Pivot

Other than the obvious, from a cold-hard business, corporate, political and PR perspective, this past couple of days has been interesting. We have a video showing what happens, at times, on a backstretch. That video has hit the mainstream, where people do not know what goes on in backstretches (at times), and you have a reaction.

It's anyone's guess as to what happens next.

Some businesses that work with animals get assailed like this, and pivot. For the last thirty years, the circus business has taken a ginormous hit. Me, like a lot of you, don't know what goes on behind the scenes with circus animals, but when that was exposed, changes were made. They went in two main directions: Standards were set, which caused a pivot, and a real business pivot happened.

The pivot to me is really interesting. In 1984, Cirque du Soliel was created, and in fewer than two decades it achieved revenues that Barnum and Bailey took a century to attain. One of the reasons its growth exploded was that it created a new market for itself. From adults, primarily.

According to the bestseller "Blue Ocean Strategy":

"There was increasing sentiment against the use of animals by animal rights groups. From a competition perspective, circuses remained unattractive. One of the first Cirque productions was "We Reinvent the Circus"

They foresaw what was happening in the circus business, so they created and marketed a circus without animals. As cities were banning circuses with animals, this filled a huge void. 

According to IBIS World research (2012) "Trends toward contemporary, animal-free circuses are boosting demand and profit"

Good. So if something major comes out of this whole thing, let's just pivot!

The clear, hit-you-over-the-head-with-a-hammer learning of the above, is that i) Racing pivots about as well as I mambo (that's not good) and ii) What in the hell can it pivot to? This is horse racing. It races horses.

I think that's why this episode, especially if it gains traction (yet to be seen), is pretty important to the future of horse racing. I don't think that can be overstated. Because the business can not pivot to a new market by a complete change in model like a circus, it must work towards change within its existing model. It's limiting and bound. It's a quagmire.

For years racing was dealt pocket aces - a monopoly on gambling, little oversight in a number of areas, a partnership (i.e. they let racing race and it gives them money) with governments. A year or two ago it was sitting with pocket 9's. Today its hand is much worse. Figuring out how to play these new hole cards is far above my pay grade.


Hey, So There's This Video

I am not sure what was bigger news on the twitter last evening, planes kinda-possibly being found, or a video. Since I follow more horse racing people, I think the latter. If for some reason you have not heard about the video, or seen it, it's linked.

Here are some FAQ's that aren't really FAQ's (these are a bunch of things I saw on twitter), and I am not really answering questions (they'll be simply my opinion), but here goes.

Q: It's from PETA, did they make it all up?

A: It's from them. It's clearly not made up.

Q: It's agenda-driven, and is being used to manipulate me.

A: Yes. PETA does not make videos as a journalistic enterprise. It's PETA, not 60 Minutes. It's incendiary, clipped together, and made to get the most bang for the buck.

Q: They made a big deal about injections and vet work. Like, really?

A: Yes, that part sounds like it was added to inflame, but most of it was non-sensical. My beagle went to the vet last week and got a needle put into his bladder to check for infection. It wasn't pleasent for him I am sure, but it fixed him up. A horse getting fluid drained from his knee is not horse abuse.

Q: Blasi sure likes to swear.

A: I can't disagree

Q: Gary Stevens comes off bad.

A: I can't disagree. 

Q: The Nehro stuff was gut wrenching. That is not common is it?

A: I was shocked. I know a lot of good horses who are running in a field right now with those problems, because their owners and trainers decide its best. But to think it's an isolated case is probably fooling ourselves.

Q: The industry will ban together and get mad.......... at PETA.

A: The everyday-apologists for racing, yes. For the rank and file, last year I would agree, too. This year I don't think so. Something is going to happen, but I am unsure what. Let's face it, this video is tough. I bet even the Bad Newz Kennels guys cringed at a couple of parts.

Q: This is a bunch of left wing nuts who don't like racing and it will only appeal to other lefty nuts who don't like racing. So what?

A: A righty friend of mine awhile back talked about how he would like regulation of how food through the slaughter of animals is handled; that he would be happy to pay more, knowing they are treated with respect. If I send this video link to him, he would probably email me back, slamming me for watching a "bloodsport". It's not just crazy wing-nuts, and you don't have to be a fanatic to know it's a different world, and things in that video don't sit right.

Q: PETA will never be appeased, so why try?

A: I agree. I think they won't be happy until undocumented alien cows are given drivers licenses. However, not trying to fix horse racing because it might forward a group-we-don't-like's agenda is not a preferred course of action.

That's my 2 cents.



Reaching a Handle Critical Mass

Most everything (there are exceptions of course) needs some sort of level of interaction, size, or mass to succeed. Facebook with thirty seven people IPO's for a Big Mac, cell phone service never gets off the ground with sixty seven people. Cable bills would be $40,000 a month with few subscribers.

In harness racing, one of the biggest detriments to handle growth has been pool size.

Pool size matters because of value. Betting into a $50 double pool, especially with money coming in late is a game for fools. Betting $20 to win, where the bet knocks your 9-5 shot to 2-5 is not much fun. Playing a pick 6 into a pool with $1,500 is probably a dumber bet than a 96% rake lottery in Minsk.

When the harness racing industry was beginning to be restructured in Ontario, a couple of things occurred. i) there was a decrease in supply of races and ii) takeout rates were lowered. These two things caused something rational to happen: With fewer races to bet, horseplayers' action was concentrated on those fewer races. With a little less taken off each bet, a little more money could be bet.

This is why we've seen, for instance, Western Fair handles go from almost the unplayable: $100,000 per night a few years ago on many cards, to where they are today: $338,000 last night and $333,000 a night before.

At $338,000, the card then becomes playable for medium sized everyday-type bettors who might be playing other tracks. A $300k handle in harness racing at a B track is not small, and is a destination worth looking into.

Having ten tracks racing, six with handles of less than $50,000 per card, and four with handles of $100,000 per card were almost completely impossible to wager on from a demand perspective. Today, with some of those cards eliminated, the money has been shuffled, which has given players a critical mass to play into. With work and patience, these handles can, and should continue to grow.

Spending Money on Stakes? Make Sure You get Depth

I saw a tweet yesterday from a DRF tweeter mentioning that the Wood Memorial at the Big A is planning to pay out to last place. This, hopefully, allows the race to have a few more entrants than planned.

Industry types will often say it just adds traffic to the field, and another entry who can't compete is not good for anything. Sure, if the horse is 300-1 fair odds I suspect they are right, but if it attracts even one or two more capable horses, it will add to handle.

Back in 2008, when the HANA racetrack ratings were introduced, field size was a main component. Emprically, and theoretically, adding a horse to a field adds choice and more combinations, and when choices are added for customers, more money is bet. This is why we see a Kentucky Derby handle be "X" with twenty horses, and "<X" when its scratched down to 19 horses. Frankly, you could run a ten horse Derby with Spectacular Bid, Affirmed, Secretariat, Big Brown and six other past superstars, and the handle would be less than Mine That Bird against nineteen others.

We see this almost each day. It happened again this past weekend, at Oaklawn for the Rebel Stakes card.

The Rebel Stakes card was stacked, better than last year's and overall handle was up - despite attendance being down.

But in the Rebel Stakes itself, the handle just was not there.

Last year:


This year:


Last year's field of 11 brought in much more handle. Remember, total handle on the day is showing its up.

At slots tracks especially, but at all tracks it happens. A stakes race is put on for say, $300,000, and it attracts five horses. Fans on twitter or Facebook get all excited, the track sends out neat promo's of come see horse "A" against horse "B".  But bettors yawn.

If racing is going to spend all this alternative gaming money on stakes racing, as we've seen, they better find a way to card a schedule that attracts more than five or six horses. Betting dollars - not column inches - pay the bills.


Sunday Notes - Joe Bongiorno, Mandates Aren't Strong & Do Away With Claiming

A few items catching my eye this Sunday.

We'll have more on the Joe Bongiorno story later this week maybe, but right now if you want to get caught up it's in Harness Racing Update, page one (pdf).

It's an interesting situation that boils down to what the public needs and should know. There is also a dichotomy of sorts with regards to judging: How is it a sport can reprimand a kid for telling the truth, but look away when a star driver takes a horse to the back at three to five odds, messing around with the betting public? This sport has a long, long way to go before it gets things right.

For an early analysis about this situation (that I tend to agree with), from someone who i) bets money ii) is quite smart and iii) is my stable partner, so don't hold that against him, it's here.

Also in HRU today, a not-very-popular-with-the-industry article about "Getting Rid of Claiming Races" with references to slots, the NYRA issues last year, and the fact that claiming races with a purse more than a purchase price throws the system out of whack. It's on page two.

I was a big fan of Strong Mandate after last year's Breeders Cup. Yesterday we had a horse coming off a nice prep, that should've done him good, he was on a soupy track that he has liked, and he had a good post and a good pace scenario. I don't bet chalk, but I thought 2-1 was approaching "a steal" status. There is really no other way to put it, that was disappointing. Lukas said the horse is fine and it's onward and upward. Horses do have bad days, so we'll see.

It's been reported that the Rainbow Six is being distributed June 29th, which is 'meet closing'. If June 29th and meet closing are two phrases that mean nothing to you, join the club. The Gulfstream brand is being diluted, in my opinion. I understand they want people to play those post-April cards, but really. Enough is enough. Pay out the bet in April.

I usually have my "Derby horse" a day or two before the Derby. This year will be no exception. I have no idea who I like, dislike, or who will even make the field at this stage. Confused.

 William Perretti passed on at age 87.  He was a giant in the sport.

Ken Middleton Sr, track handicapper at Woodbine/Mohawk, and father of track announcer Ken, also passed away. Mr. Middleton was a nice guy, and always willing to talk harness racing.

Tom LaMarra put the entries at Beulah up on twitter today. Lots of five horse fields (Beulah is ranked 66th in field size in North America, according to the HANA Track Ratings), as per usual. It begs the question: If you are going to offer five horse fields at 18% win takes (approaching an obscene 4% rake per horse), why bother offering betting at all? Run the races for fun, as a slots revenue distribution mechanism.

The 2014 HANA Track Ratings will be released on or about April 2nd, a little bird tells me. Doing this year's math for the ratings is Mike Dorr. You can follow Mike on twitter here. He's a good egg and one of the sharper numbers guys that I have come across in the sport.

Have a nice Sunday everyone.


No Tries Breed Some Consequence

Tonight at the Big M:
Two schools of thought, I suppose. 
  •  It encourages "Driver speak" where they are not trying to win but don't tell anyone.
or....
  •  It's a gentle reminder that this is a $2B betting business, and the actions on the track have a meaningful monetary influence with the people who pay for purses - the bettors.
Since bettors are not treated very well in this sport and participants often forget the latter, I think in this case two trumps one.


Social Media Stats Illustrate the Cheltenham Buzzfest

Yesterday we spoke about how racing in the UK had to mature to an effective marketing and betting industry much faster than here across the pond. It's sink or swim and has been that way since virtually inception.

Because of that the culture and racing's willingness to fight for market share (spending more time on the product than, for example, adding alternative gaming) some of their big events are not only big, they're huge. It didn't happen by accident.

Case in point, the Cheltenham Festival.

Via Social Mention, these stats (to the left) are quite good.  The racing is over right now, but we are seeing one mention each minute. The passion level of 49% is a good number. You can see tweets by searching for the hashtag #cheltenhamfestival.

Next up, we look at sentiment a little deeper in the following couple of graphs. 

Most of the tweets are scatter-plotted around differing sentiments. These sentiments range from "Excited" to "Happy" to "Pleasant" to "Alert"to "Elated"


These folks are watching racing, and they are betting racing, but they are one happy group.

Next, the related word cloud.


Notice the difference compared to, say, a Kentucky Derby over here?

"Matched" refers to being matched on a betting exchange on a horse. "Bet" and "Win"seems self-explanatory.  Few tweets about horses, trainers, riders. There are a lot of gambling hashtags, though. 

Like we've spoken about here, and you've seen elsewhere, like was echoed by Gibson Carothers at Thoroughbred Commentary last week: By selling betting, you are selling the sport. What do we think people all doing all day at the Cheltenham Festival, just modeling hats?

Racing has had some serious problems in North America, but when you look at the above, one may think it has a tremendous upside. Watching the tweets shows just how infectious a betting and racing event is.



"We're Not Down as Much as They Are"

If you get into a discussion about handle at a track the last dozen years or so, inevitably, someone will probably say "we're not down as much as they are."  They'll show their numbers, say, down 38%, and then show another track or jurisdiction, that's down 44%.

Take that.

Thomas Edison said, "We now know a thousand ways not to build a light bulb." That's a pretty poignant quote about innovation. Successes come from failures, and if you never have a failure, you will likely never have a success either.

The culture of "we're not down as much as they are" is as innovation stifling as a Communist regime. It's throttling; it's an albatross to the sport. It's an out when the numbers go bad.

Today in Thoroughbred commentary, the different culture in the UK was examined. As you all know, things are a little different over there. Since the 14th century or sooner, betting was happening and people were trying to find ways to make money from it. When horse racing betting came around a couple of centuries later, racing had to fit into that predetermined betting system and compete. They were not given a slice of the market - and a pari-mutuel monopoly - to do with what they want.

With that came a little more resiliency, a little more innovation; a focus on price, on the way racing is presented, and in betting shops; alternate revenues from sponsorship or live attendance. It created a betting system where, if you shop around, you can get 4% win takeouts, and no one will say "you can't do that, we have to put on the show." It created festivals, a system where races go off every ten minutes at a handful of tracks to maximize reach and revenues from the off track audience. Its revenues come from taxes on gross profits, where if the pie grows the business all makes more money.  It created a betting exchange.

The betting ecosystem there is fundamentally stronger because of competition, and the rules and laws of business. It's by no means perfect - they go through issues just like any other business - but its foundation is built on dollars and cents, and that matters.

The statement, "we're not down as much as they are" does not elicit sympathy in the UK. That quote would probably find you in the unemployment line, because if you are focused on how you aren't growing, rather than what steps you can put in place to grow, they don't want you around.

Racing across the pond has created a lot of bad light bulbs, but what they've learned from it helped them create some light over an industry for hundreds of years, in the most competitive gambling climate in World history.



Round Down

A little bit of news filtered around the sport yesterday regarding ADW wagering and "the button". Amwest is giving horseplayers the option to donate whatever amount they want from their accounts to Thoroughbred horse retirement.

Good idea.  But I would like a choice too. The choice to round down.

I hate seeing $349.39 in my account. It makes me long for the old days where if I bet $40 to win on a $6 winner, I got $120. Not $120.11, but $120; six crisp twenty-spots.

Now with ten cent superfecta's, twin super-quadrefecta's or whatever they were called (I forgot, that Stronach idea didn't pass muster) we get those "micropayoffs". I can't stand them.

I would like Twinspires, HPI or the Expressbet people - and whomever else - to allow me to "round down". Any time my account has 49 or less as the last two significant digits - after any time I cash a ticket - take those pennies away. Stuff them in a little Al-Gorian lock box. Put them in the top shelf where they keep the peanut butter. I don't really care. Just get those nasty digits out of my account and make it "00".

Then, at the end of the month, or year, or whatever works, make a donation from me, to a horse retirement farm. Don't tell me how much is in there - I don't want to know -  just get rid of it and buy a retired horse a carrot, one of those balls they like to play with, or a new pair of shiny shoes.

"Ditch the digits". Buy a horse a pair of shoes. I like it.

Probable Success at the Big A, Lawsuits & A Little More

Alan over at LATG made a strong point today, using something I like - a little irreverent comedy.
  • And there was some really good news.  As reported by the News: The death rate at NYRA tracks is now 1.5 per 1,000 starters, the lowest in the country.

    Wow, that's excellent, and an impressive turnaround from when the 21 horse deaths in the winter of 2012 sparked enough outrage to get the indifferent governor involved. 
Now, we should probably look at sample size and other statsy things that smart people use in their daily work and betting lives. But, fundamentally, rent a horse, jams, wheelbacks and the like in slotsville, with high purses (many higher than the claiming price), are probably not good for the horses. That's what happened last season to not a tiny degree. This season? The participants have been mindful of what they're sending out, the stews and vets are vigilant, the purses have been restructured. Things that should work were tried.

I think it's safe to say that this all hands on deck strategy has worked.

Alan's broader point is right, in my opinion. When things are going bad, the press and the industry  should point it out. Carrying water results in bad policy and the continuation of bad policy. However, on the flip side we need to see the same when something does work.

In Ontario, pointed out on this blog and other avenues, the same issues the Big A and NYRA faced were noticed years earlier. The Ontario Racing Commission made policy to stop it, not unlike happened at NYRA last year. The whole industry should've known about it, so those pitfalls could be avoided. That didn't happen.

Let's hope the next track that gets high fuelled slots purses, say like have just been passed in Ohio, writes races and puts protocols in that NYRA has this year, not like they had last year. Good policy needs to be copied, bad policy avoided. And the press should cover both.

Notes: 

Breeders in Ontario are suing the Ontario Lottery and Gaming division for $60M for cancelling slots, among other legal thingies, I imagine. On the surface this looks like folly, but I am no Ben Matlock.

Andy Beyer is talking run-up times again, which is a pleasure for people who have been fighting for this for a long time. Beyer carries a stick. We don't.

The head of NYRA, I assume, will be leaving NYRA in 2015. So far we've seen policy changes for the customer which include a signal fee hike/ADW tax, and admission increases. I suppose horseplayers will not be sad to see him go (if it happens), but he probably didn't have a lot to do with these policies anyway.

Have a great day everyone!

Creating Compelling Racing Content

No, this is not a seminar about SEO, or something marketing-geeky.

Yesterday we wrote about television, and racing big events, in the context of the big past weekend in racing. It's clearly not enough for racing to just be on TV.

Case in point, this tweet a couple of minutes ago:


It's not enough to have something interesting - like a college basketball tournament. It has to be interesting, in a whole different context.

NFL games are fun and have always been. The fact we can bet them, pick office pools, or field fantasty football teams makes them compelling.

The World Junior Hockey Championships are a huge success in Canada. It went from a tournament no one watches - most never even heard of - to a Holiday winter TV staple with millions upon millions of viewers. TSN (Canada's ESPN) made it so.

The X Games was a "new Olympics, without the stodgy stuff". It created a legion of young television sports watchers and doers.

There clearly are other examples.

In racing, the Triple Crown is "compelling". It's been around for a long time, has a storied history. Three races in a month and a half, starting with a race in Kentucky will do that.

What's "compelling" about the rest of the year? It's not compelling enough to drive a TV audience, so far at least. With lotteries, or betting, or something tangential, to go hand in hand with an event, or series of events, it **might** make things compelling enough, but who knows.

It's not like it's easy. Golf tries the same thing outside the Majors. The Match Play championship was created, as was the FedEx Cup. So far, it's been a bit of a blah.

What can racing create that's compelling enough to be cross marketed, cross branded, and create some buzz? What can be March-madnessed, or Junior-hockeyed into this sport? That's probably the million dollar question. If it's answered, non-Triple Crown racing might have a chance on the tube.


The Racing Box Office Continues to Thrive

Good morning everyone!

Or, good morning when we all got teleported to an episode of the Xfiles, where we all wonder why it's 9AM instead of 8AM, and where we were for an hour.

Yesterday it was a "big day" in horse racing. There were a few cards which generated excitement within the community - at Gulfstream, Tampa, and of course, Santa Anita. The latter card was stacked, and with the addition of east coast invaders Will Take Charge and Mucho Macho Man, it was a compelling event from an entertainment standpoint. We all want to watch horses we like and we know, knock heads.

Santa Anita, and the group there, have always been excellent at promoting live events. Whether it's been Zenyatta or a Big Cap, or the Santa Anita Derby, they know what they're doing, and have for years. They can pack them in.  The crowd at Tampa, from what I saw was big too. Racing, despite it shortcomings, does really well on big days.

Conversely, the TV numbers are not in from Fox Sports 1's coverage of the event, but if the Donn Handicap's numbers are an indication, viewership will be in the 75,000 viewer range. Let's think about that for a moment. If it is 75,000, there were about 30,000 live on track, there were another gosh knows how many thousands watching at other tracks live. There is a chance that more people watched live, than did on television.

That's almost like the viewership of a Buffalo Bills game equaling the attendance. That's crazy.

Maybe this will never change. Maybe being at the track so we can gamble is the draw, along with the obvious - being at the track is bright, and fun, with all those other fans and bettors. Maybe the sport - other than branded events like the Triple Crown - will never fly on the tube.

Regardless, racing has become a lot like movies. The movie box office for a popular flick can earn $500 million or more in the day and age of digital downloads, and home theaters. Racing's box office is the track.

Does it have to be this way? Maybe not.  "Racing and TV" was looked at this morning in Harness Racing Update (pdf here). 

As for the race itself, it's nice to see Game on Dude deliver. I've seen comments about this horse for years. "He can't get ten furlongs", "he avoids good horses", "the only reason he wins races is because he is beating up on poor stock". Sure he had a bad day or two - which horse doesn't - but he has always been a fast horse. He was fast like he has been, but beat better stock yesterday. That of course makes a difference to many.

The other short Derby preps yesterday looked like glorified sprints. I did not get much out of those, nor did I find them overly interesting. I find that American racing is a whole lot of sprint and stagger on rock hard tracks nowadays.

Have a great day everyone!


An Important Article on Horse Racing Juice

Dan Needham wrote an article that I hope you all read. It's on the Thoroughbred Commentary website, and it's about takeout.

The whole article is quite good, but there are a few things I particularly liked.

The pricing set by racing in 2014, is not set by science, but "are a byzantine product of statutory taxes and a myriad of fees. They have increased artificially rather than through any kind of data-driven knowledge." We've stressed this before here and elsewhere. It's the house of cards; not the Netflix kind.

And to change those rates, or test them, you have to guide yourself through a regulatory, fiefdom-led minefield.

The reason those two points are so important, is because they defy all logic, and when your pricing mechanism defies logic, you are in serious trouble.

Go to a horsemen group, or track, and say "you should lower your takeout because it's too high".

The answer might be "we can't afford to, because we will lose money."

How do they know? They don't. The price they don't want to lower was not set by the market, it was set by regulators, beginning in about 1930, when they started to come after more gambling money. 

There is a chance - no it is a certainty - they are protecting a price that is meaningless. This probably explains a little bit why the legislature estimates of revenue for the California takeout hike in 2010 were an additional $200 million for purses, which were off by so much, it boggles the mind. When you make pricing moves based on false numbers, you get a bad answer.

It's not like that in any other business, of course. At a GM meeting, they won't say they can't lower a price of a car because they can't. They can't lower the price because they know what it costs, what it will sell, at what price point. Racing knows very little of that.

Dan's piece is important to read because it's what the "takeout hawks" or "those HANA people" espouse: Using data, experimentation, and the like, to come up with the best pricing possible to grow the sport.

In 2014, in the age of big data, in the age of ADW wagering and behavioral economics, racing is relying on numbers not based on logic, or science. It's using pricing numbers that are pretty much based on nothing. I don't care what side of the issue you are on. That's a huge problem.


"People Don't Resist Change, They Resist Being Changed"

Human nature is summed up by the quote above. It's from lecturer Peter Senge.

In places like Ontario, or a slots state near you, there is change happening. It's change that cannot be stopped; if it hasn't happened yet it will, and if it's happening already, you see what consternation, and in many cases hardship, it brings. As Seth Godin once wrote, "Every revolution destroys the average middle first and most savagely."

What has occurred from a nuts and bolts standpoint with slots in Ontario has been discussed quite a bit. There is no need to rehash it. However, there is the quote above that struck me in regards to this situation.

What's happened beyond the obvious, is that the people who were used to steering the boat, no longer are in the Captain's chair. The fiefdoms, the alphabets, those who controlled strikes for racedates, or the purse strings on capital improvements, or what have you, have been relegated to the back seat. They're passengers. The government, with industry help, are driving the bus with their de-facto commissioners office.

This is a hard position to be put in. I think you see some fight for the status quo, not because the future is bleak, or that the government is making bad decisions for the sport, or the funding is not enough. I think the fight is there because their jobs have changed. They've lost control. I wonder if I were in their shoes if I would not be acting the same way.

They are not resisting change - no one in their right mind thought the status quo from years ago was sustainable, and no one with a current system of slots propping up the business do either - they are resisting having their roles changed.

I think the fight in that dog is formidable, and it goes to show us how hard a commissioner's office would be to start. It's not going to happen through industry meetings, or consensus. The only way that probably happens is if the entire funding formula is blown up. If the business is blown up, like it was in Ontario.

That's an odd position for a lover of the sport - someone who wants to see it fundamentally change, and grow and be relevant again - to be put in.



Why Do I Need Four Betting Accounts?

Distribution of the betting product has, for a long time now, been a customer gripe.

"I need four accounts to bet the tracks I want; Why can't I play racing in one ADW?" and other such complaints are as common as a Kentucky Derby trainer saying "we're happy with the work"

Why does this occur? Why is a licensed ADW - licensed to sell and distribute a betting signal - not allowed to have all signals? Why do some tracks and corporations limit their availability, and is it good for the game?

The reasons a signal is not distributed are pretty obvious: It is important for some tracks and ADW's to crush any competition, and make more money. It's important for some in the business to keep you - the betting customer - betting into full boat takeout. It's no secret the business has a long-held belief that high prices mean more money. And by gum, no matter what the evidence, they're sticking to it.

Is it good for horse racing they are able to do this?

If you believe the customer's handle is the economic engine that drives purses, then no, it is not good for horse racing for customers to have to (customers who are already jumping through hoops because of archaic gambling laws) sign up for four ADW's to play the races. You won't hear someone saying "I love Etrade because they give me a good deal, but they've been shut out of the Nasdaq. I need to use Schwab for the Nasdaq." That's just silly. In 2014, with Groupon's and Amazon's and bare bones margins, with companies fighting tooth and nail for a customers money, racing's business model in this regard is 1914 - protect, slice, dice and price as high as humanly possible.

Will this change? Will racing ever have a distribution system that's fair, tailored to the customer, and uniform? I suspect not. The various fiefdoms - horsemen groups, corporate tracks, and states - probably assure it won't happen.

If you have four ADW's to bet the races and you are upset like most who do, take a deep breath and accept it. At least you don't need five.

The Immutable Law of Betting Value

I found it a little hard to believe that the lower-than-usual juice Players Pick 5 in California started out with a $100,000 pool.  The bet - one of the hottest bets in horse racing - now takes in much, much more money than that four years later.  But, as Caroline Betts (she's a doctor but she doesn't make you call her that because she's cool), horse rescue lady and economics professor would tell us, these things take time.

After all, if the government told everyone that the price of gas is going to $10 a gallon and staying there for three years, guys and gals with an SUV aren't buying a Smart car tomorrow morning. They will, when and if they find they are no longer getting value. I think it's a microeconomic law of some sort, but I was at the track for most of those classes.

Racing secretaries and some in the business don't embrace the concept of betting value, and it truly is, in my opinion, a detriment to the business.  There are several immutable laws of horse betting (I'd trademark them, but no one really cares) and at the top of the list is: Bettors will bet money when they have value, and they won't bet money when they don't.

Sure there are lottery bets like the Rainbow Six, or dollar and a dream pick 6's, or "fun" or "action" bets. But you can't build a skill gambling game with long-term participation on those. If people want to play a lottery, en masse, they will play the lottery.

You know some of the things bettors demand, because you are a bettor. Fuller fields, because 5 horse fields at 16% win rakes and 25% exotic juice are a mugs game. Takeout that allows you to have a chance at a payout that is somewhat reflected near true odds of the probability of the event happening; that kind of thing, which earlier this century was talked about in the corporate halls of tracks like it was an opinion, not simple betting math.

On a Vegas radio show last evening, a professional gambler (he's a nice guy, you should think about following him) was asked a simple question and gave a simple answer.
If you understand that he is not talking about the lack of entertainment in five horse fields, but the lack of value in five horse fields, you understand us. 

Tracks can card short, unbettable fields for only so long. Tracks can charge higher than average rake, for only so long. In year one it might look good to the bean counters, but in year four or five or six, your handle has been vastly reduced. The purses have been lowered. There's trouble in Dodge.

It's not because bettors don't like your food, or your leading trainer, or the fact you are running on polytrack. It's simply because betting is not a charity. People bet to make money, and if they see value they will, and if they don't see any, they won't.

The Ontario Funding Model, Coming to a Slots Track Near You?

The "new" funding model for horse racing in Ontario is being tweaked, and  pretty much finalized. 

In a nutshell:

$72 million per year is earmarked for purses at larger handle racetracks.

$8 million per year is earmarked for "regional" smaller circuit racetracks.

"Sharing the commission keeps horse people’s revenue from purses tied to the market and keeps everyone’s focus on the customer." Handle revenue is split 50/50 between tracks and purses

"Telephone account betting (TAB) will be operated within a single, province-wide home market area by a sole operator." So, no more "home market fees" that barely made any sense in the first place. America, take note.

Lastly, it appears that decisions will not be made on who yells the loudest or who has the best lobby.

"Growth of the industry – for all stakeholders – will come from performing well in the marketplace and expanding the fan base (particularly the horse players). The Plan encourages the industry to grow wagering revenues and enhance its fan base by creating and offering products consumers want." says the release.

Have a nice morning everyone.




Back In the Groove on a Monday

Good morning everyone!

I got back into the groove on Saturday and played the races for the first time seriously since December. I'd like to think I am responsible for the Meadowlands going over $4M in handle for the first time since 2009, but it might have been more than just me :). Great work by the crew there for doing many of the right things. Work to do, but it's a good accomplishment any way you want to slice it.

Harpoon was the most overbet horse on the planet this Saturday in the Gotham Stakes - Sid Fernando liked him, said so on twitter, and I didn't think he had that much pull, but apparently he does.  Strangely enough, he was the most impressive horse in that race for me, from a Derby-type perspective. He looked beat, but didn't get tired. He kind of kept right on going.

I used TimeformUS on Saturday, along with my jcapper sheets. I was impressed with the changes they've made since the last time I did a deep dive with them.

Leslie Joyce has an interesting story, and it does make you think when you hear about a Class II positive. Hers is nowhere near as advertised. You can read that on page 3 in HRU here (pdf).

Jerod's piece on Horseplayers, the TV show, has elicited a ton of response on the Paulick Report. I know it's a free country, with free thought, but some of those comments are pretty wild.

The Rainbow Six keeps chugging. Word is that the mandatory payout day may be sometime in June if it's not hit. The thing is, I don't and many of you don't care much about Gulfstream after the regular meet closing of at or near Keeneland. I hope they change that, maybe to Florida Derby Day. As you may know following the blog, I wrote last year when the pot got big that "no one is going to hit it", and it went about a week later, so if GP needs someone to hit it, pay me a few bucks and I will write another blog piece.

I have not watched the Academy Awards in like 20 years. When they snubbed Uncle Buck in the "people we lost segment" that was it for me. Like really. However, since most of you (if I check my twitter feed; you were playing Mountaineer with me) missed the awards, here's the story.

12 Years a Slave won best picture. I'm pretty sure this wasn't considered an upset. The worst actor in the Hangover did not win for his role in some movie I have not seen, which was good news for Hangover fans of Todd Schrupp's twin brother, Ed Helms. Matthew - I can't spell his last name so lets call him Matthew Leroidesormeax - won for his role in a movie I have not seen where he lost twenty five pounds or something. Betting actors or actresses who lose or gain weight for a role provides profitable ROI, and it was only enhanced this year. Sean Penn's mid-show tribute to Hugo Chavez didn't go over as well as he thought, with only 8 of ten in the crowd in tears. Not sure about that one, but I think it happened. The Academy of People, or whomever does the voting went overboard by giving Gravity a lot of awards. Ever since they blew it by not letting Star Wars sweep the awards in like 1977, they've been trying to make up for it with space movie honors. Anyway, all in all, as Burton DeWitt said, I don't think we missed much.
Have a great day everyone!


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