Thursday, July 17, 2014

Horse Racing's Data Bog & The Decisions It Makes

With most of us, at work in our jobs or while we are handicapping the races, we need data to make a decision. If we do "x" we need to know what happens to "y". Reading a couple of headlines it makes me wonder how racing does the same thing. I guess the short answer is, it probably doesn't.

As Alan at LATG talked about today in his Saratoga notes, NYRA has increased admission prices to the storied track, but they've also changed their policy on "spinners" who buy more than one admission for free stuff.
  • Excessive spinning will be limited to two extra vouchers at a time, in an attempt to prevent hoarding and to give more people a chance to get the items; and the extra vouchers sold will not count towards attendance.  So the phony crowd figures - to me one of the treasured traditions of Saratoga - will become a thing of the past. 
So, if racing tries to answer a question like "did a fairly large percentage admission fee increase hurt attendance?" they can't. The old data is bad, they changed two variables not one, and even worse, it's probably planned anyway. When attendance goes down it's because there "were no spinners", so of course it went down.

Ass covering, maybe. But worse, no one learns anything about proper policy or revenue generation.

It's even worse, like we see with Churchill Downs. Although the field size issue has been debunked dozens of times (Churchill's field size is down almost exactly what horse racing's is in 2014, yet their handle was down by 800% or 900% more than national handles), it still is thought of as "the issue". This is bad because the real problems and the real data points that need action, are overlooked. As Matt Hegarty tweeted the other day:
The Kentucky Commission, approved taking money away from drug testing to help CDI purses yesterday, probably due to the fact "that field size issue" is a real bear.

Even when they have data points that make sense - e.g field size down average, handle below average, so the takeout up is the only major factor left to attribute the losses to) - they don't use them.

Does raising admission fees at Saratoga matter? Who knows. NYRA has a built in excuse and it will be hard to measure its benefit or detriment to revenues either way. Internally they probably will, but if the policy looks like a dud it's unlikely they will broadcast it.

At Churchill, should they lower the takeout rate back to try and make more money, and get back customers they've lost? Who knows. Just take $125,000 out of drug testing to give them more for purses please. Purses did crappy last meet.

Horse racing is frustrating. It trudges along in a data bog, making decisions that either already fit a prescribed political agenda, represent the path of least resistance, or use the data in a way which makes little sense in the first place.

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