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Showing posts from April, 2014

Systemic

I was going to write a post this morning about charging more money for a big event (in economics it does have a place, of course), but by doing it with imagination, as to not hurt the event, or the brand. It was also going to incorporate some thoughts on field size, etc.

Then I read this.

No post on reason or economics fits. So I won't.

I had to head to the place where we all get sleep last night, but I saw the tweets giving play by play of a radio show in Vegas on the Derby. Since the show was a betting show there was little talk about a favorite getting off a plane, it was bettor focused.

The tweet stream, relaying the thoughts of a New York gambler:
Matties probably won't play Churchill after Derby week re: takeout increase.
— Caroline Marie (@CarolineMBetts) April 30, 2014
Matties's handle has dropped on NY state tracks since new tax imposed. Betting Hong Kong more now as a result.
— Caroline Marie (@CarolineMBetts) April 30, 2014
Matties will move from NY if things get…

Fox Hill Farms Beef Is Not Out of Bounds & Thankfully Doesn't Happen Often

I read Rick Porter's post last night about the trouble he and owners have had in getting seats or what have you at the Kentucky Derby.

Frankly, I was floored. Days like this, especially with grade one and two stock with investors who put their money and heart on the line, are sacred. This is where the sport needs to cater to them, because it's their Super Bowl; it's where losing 50 cents on every dollar invested in horseflesh is buttressed to some degree; it's where a perk or two - with a good result on the track hopefully - eases the pain of the other days. It's where people who invest in horseflesh feel alive, like its all worth it.

There's a lot wrong with harness racing, just like there is in Thoroughbred racing, but one thing harness does well is treat the owners right, especially for big events.

I remember our stable had a horse in a big event several years ago. We were three nobodies - me, a guy who works for the government and dabbles and a professio…

Today's Notes - Letters, Hedge Hogs and Hikes

Good morning peeps!

It was a long Saturday (I was bacheloring with the dog) so I missed a lot of the news. I am sure you can read the trade press for those stories. Here are a few other things I found of interest.

Sometimes you read a letter that speaks to the industry and find it in a different place. One little letter to HRU today (pdf) exemplifies it.

"The tracks don't think that way, though. Instead of working with the online bookies to expand the off-track market, the tracks and the politicians they control put penalties on the online bookies so that they couldn't afford to offer large rebates anymore. I used to get a 5% rebate. Now I get less than 1%. Everyone loses. The sport doesn't get new fans, and the total handle is less. When I was getting 5% back I bet about $30,000 a year. Now, I only bet a few bucks here and there."

As signal fees go up, this is why handle goes down. This is not a whale, it's a fellow looking for a way to make racing slightly m…

Customer Defections Are A Very Big Deal

It's not a newsflash that horse racing has lost customers. However, in horse racing, like some other businesses with repeat customers, that lost customer is not a dollar lost, or a fan lost, it's lifetime dollar value lost, and a lifetime dollar value fan lost. It's not like losing a family that patronized your restaurant once a month, it's much more like losing a cable or cell phone subscriber.

In horse racing, the lifetime value of a customer lost is not computed. And its a huge mistake for racetracks not to.

Take this example:

A large Plasma company wanted to learn what the annual value of a defection was costing the company. A defection simply means that a loyal blood donor stopped giving blood. What they found that in the short term, the value of one donor was about $5,000.

However, the average person donated blood for 3.4 years, so the value of losing one person - just one donor - was $18,040.
Determine your current annual defection rate. Determine the life of a …

Churchill Downs Taking Hits From Everywhere

When did I first notice it, was it the NOLA.com series on Churchill Downs and the Fair Grounds? The Paulick Report story titled "Holding Churchill Downs Accountable for Fair Grounds Decline"? The Takeout Hike? CDI executive comments? Their compensation? The tweets, the blogs, the opinion?

On a stand alone basis, none of those. But cumulatively, wow.

Just last week I was speaking to a friend in marketing about brands. We discussed the fact that Churchill was "racing" and it was their brand: The biggest, the best, a signature. But after they hiked takeout - allowing them to be considered a "smaller" Kentucky racetrack - they were pretty much telling everyone that they weren't "racing"; they weren't Keeneland, or Churchill Downs, they were Ellis Park.

Even in their annual report, gaming revenues trumped horse racing revenues for the first time.
In 2013 CDI's gaming revenue exceeded its racing revenue for the first time. It's easy to…

Wednesday Notes: Fall Guys, the Grassroots and PETA Ladies

Rusty Arnold's letter to the editor at the DRF is making the rounds.

He speaks about stabling beside Steve Asmussen and alerts to the fact his horses are well-cared for. I have little doubt they would be. The fella has millions of dollars in horseflesh and big money clients. Would you think they aren't getting name brand meds, good vet work and groomed daily to look fit and happy? Would you think he would risk that clientele and the living they provide by using backstretch supplied pre-race or magic juice? Not only is that not likely, it's probably impossible.

The complete mind-bend of all this, is something that's plagued many with their opinions on this situation. What Steve also has to do is be competitive, or he will lose clients. That's the grey area.

I tweeted out that I liked Rusty Arnold's letter and Kathy from PETA responded, in one way.
Rusty Arnold, if it's legal it's okay? That's a problem with racing today http://t.co/zjANIjjaA6 via @…

2014 Nightmare Kentucky Derby Scenarios

We’re getting close to Derby day and as we all know, horse racing is under siege. Not really (that is quite melodramatic), but we can say with some certainty that things are not going overly well.

Let's recap. Those PETA people are mad, Joe Drape is writing columns, people with three names from the Jockey Club have been releasing memos, Churchill raised the takeout on long suffering customers, (along with twitter blowing up over their published 2013 executives compensation) and of course, the granddaddy of them all: Frank Stronach is building a pharmacy.

Horse racing doesn’t need any more bad press, and everyone is wary. Worried. On edge.

Here are a few Nightmare Derby Scenarios that I figure horse racing cannot handle. If any of these things do occur, it could mean trouble. For the love of horse racing, let's hope none of them come true friends.

PETA gets an early release of the bloodwork for Derby horses and protests on the Churchill grounds asking racing to rid itself of t…

The Gural, Bettors and Fans on a Sunday Smackdown

There has been a lot of commentary of the business in Thoroughbred racing of late. People have been complaining that handle is poor, PETA is mad, signal fee taxes and hikes are deleterious to betting handle and the Churchill Downs team has shown about as much vision as a bat who lost his sonar.

But this Easter Sunday, the sport of harness racing has one-upped everyone.

There was a story in Harness Racing Update on Saturday morning where Bill Finley reported that the USTA voted 13-1 to not fund a $75,000 Jeff Gural initiative to get a major race on television. This brought the letters to the editor to new levels.

Today in HRU (give it a read it truly is interesting), here's a sample of the reaction:
Since the late 1990's it's been estimated that over $7 billion dollars has been realized by harness racing from slot machines. Sometimes we lose sight of what a billion dollars is nowadays (it's 7,000 million dollars). In terms we might be learn something from, 7 billion secon…

The Weekend Is Here

Good morning horse racing peeps.

My email this morning from Racetrackandy (not sure when the man sleeps) said for the Derby, Churchill has: "A ban on laptop computers, cameras with detachable lenses, cameras with attached lenses measuring six inches or more, camcorders and tripods"

Jessica tweets that she thinks that's to protect CDI and NBC broadcast and photo rights. Silly me, I thought someone might be smuggling in "Air Power" or something for the horses in those big lenses.  Regardless, she's probably right. There is no word if Churchill will be banning bettors from the Derby, but as we all have seen, they're trying.

Rich Eng let fly on the CDI takeout increase yesterday in the Las Vegas Review Journal.
Churchill has claimed they need the added revenue to keep its purses at their current level. What bean counters gloss over in their projections is they expect overall handle to stay the same. That never happens. Most of us who care about adding eyebal…

Frank's Passion

Oh that Frank!

Yesterday, Frank Stronach and the team came up with an integrity plan for Magna racetracks. I'll let you have a look at it and you can formulate your opinion (if you have not seen it).

Frank is an enigma. He is an excellent businessman, obviously, but at horse racing sometimes we wonder. I have often felt he has not done as well in horse racing because of his passion for horse racing, if that makes sense.

One comment on the link above at the PR kind of mentions it.
Mr. Stronach is trying to restore integrity in horse racing. And if anyone wants to view how he treats his own horses, he takes good care of his retirees. None of the horses that he personally owns end up in slaughterhouses. He even has had retired race horses have surgery to make them more comfortable; and I am speaking of geldings and not stallions. That does not surprise me one bit. If a Magna car parts plant is suffering and production has to be cut, Frank is very capable of doing what has to be…

Plenty Going on in Horse Racing

Good morning horse racing friends.

There's a lot going on of late in horse racing, and after an early morning work shift, I took a moment and got caught up......

It rarely surprises me. When a track does something cray cray, a lot of people gripe. But with takeout hikes, the people who gripe are oftentimes the most well-spoken and very smart. I just saw Mike tweet this:
@Equinometry does a fantastic job breaking down CDI's [bad, very bad] logic for raising takeout http://t.co/HIygoWYfpt
— Mike Dorr (@mikedorr77) April 16, 2014 Mike is a bright dude; one of those geeky MBA math types who looks at numbers most of the day. He, along with economists, gamblers and industry analysts like Mike Maloney and Lenny at Equinometry are all on one side. Horsemen groups and a corporation, whose CEO said that horse racing is 'no longer a business model' is on the other. It's not difficult for me to pick a side.

The twitter and social media verse blew up a little yesterday when As…

You Either Want Travis Tygart Or You Don't

Good morning everyone.

We'll interrupt our regular coverage of Churchill Downs and their juice hike for a moment. Just go to social media if you want to be kept informed. Or read a Vegas sportbook fellows view about it here.

The Bloodhorse reported today that USADA head Travis Tygart spoke in Lexington, KY yesterday to about 50 horse racing stakeholders about federal legislation and doping. The USADA is one of the organizations that federal horse racing legislation has tabbed for overseeing horse racing.

To readers of the Bloodhorse column, the reaction might be "ho hum, another legislator without teeth". However, I think that would be wrong.

Travis Tygart was the man who brought down Lance Armstrong.
Despite three death threats and Armstrong’s accusations of a witch hunt, Tygart guided a staff that compiled 1,000 pages of evidence and testimony from 26 witnesses, 11 of them former teammates, to bring down the cycling icon.
“We focused solely on finding the truth w…

Oh Those Mixed Reactions

Today the Bloodhorse has a story up on the Churchill Downs takeout increase. It's titled "Mixed Reaction to Churchill Takeout Increase"

This is kind of funny, especially since everyone who pays for purses - customers - are one side of the "mixed" reaction. In case you missed it, or ICYMI as the kids say, they think it sucks.

Marty Maline and David Switzer - both horsemen types - well, they think it's okay I guess.

This strikes me as odd, because in no business in the entire universe would that title be used in any article about a price hike.

"Mixed Reaction to Horse Trailer Price Increase." I don't think Marty and David would be too happy about that one on the Bloodhorse and I'm pretty sure the trailer making corporation would not be quoted.

"Mixed Reaction to $100 Price Increase in Adequan", would not be a headline on the Paulick Report tomorrow, with the "mixed" reaction from a drug conglomerate saying "we feel b…

This _______ Will Be the End of Horse Racing!!

I was checking Drudge this morning and came across this headline : "Week of the Blood Moon". I didn't read the whole article, but as far as I can tell, it pretty much says everyone is doomed.

We're doomed in horse racing, too. Just look at the headlines.

The New York Times and the "24 a Week " story. We're doomed.

PETA. We're doomed.

Churchill raising rakes while they build a new giant TV. We're doomed. 

Lasix: Doomed.

Declining foal crops that result in lower field size. Doomerino. 

And of course, one of today's missives: If you want serious reform, you might not be doomed. But maybe you'd be boomed, because you might be the unibomber. 

This - fill in whatever you want - is the end of horse racing.

There's one problem; that's not the way it works. No one issue will sink or swim a business like horse racing. What grows it, or causes it to shrink will be simply done incrementally and its based on the industry's goals, and rea…

Underdogs

Golf and horse racing have something in common.

Today at the Masters there's a 20 year old kid in the final group and a number of compelling story lines, but, like always, you find people cheering for people they know. The Lee Westwood's of the world. If Tiger Woods, who makes the Churchill Downs execs look like paupers, was in the final group, scores of people would be pulling for him, even if he is against a guy singing for his supper. Same with Phil. The movie Tin Cup played well on TV, but if Kevin Costner's character was in a final group against a big name, he'd be heckled, not cheered for being the longshot. Canadian's will well-remember the 1999 PGA Championship when Mike Weir - a zero time Tour winner - was hammered by the Medina crowd in the final group with Tiger.

Yesterday, Danza overcame the odds board, won the Arkansas Derby, and the reaction was similar. "Danza who?"

In racing we want to see the best and we want to see them win. We cheer for…

Pocket Answers Some Churchill Downs Takeout Hike Questions

Boy, wasn't that a kick in the gut, huh? Churchill, in a very bad environment, raised the juice, in what seems like the highest juice game this side of the Turkish lottery. Your reaction has been acerbic, vitriolic, quite plentiful and frankly I can't argue with a lot of it. In fact, I bet there are hundreds of Churchill employees that can't argue with a lot of it.

Interestingly, or maybe not so, for some reason, I'm getting emails, like somehow my opinion means something. What's going on Pocket? Well, I will tackle some of these questions right here, to the best of my ability.

"Husker Fan" in Lincoln, Nebraska asks: Pocket, I am having trouble understanding this move. Why would they raise takeout when it hasn't worked so many times before? And in this market, when they are losing handle and customers are leaving in droves? It doesn't make sense.

I've been struggling with this as well, so you are not alone Husker Fan.

I got to analyzing all th…

Dirt, Dirthers, Plastic Lovers & Comments

I read Beyer's column this evening on the Keeneland switch to dirt. I found the article a little disjointed, but, whatever, it's an opinion column.

One thing struck me, though. Five years ago, or even three years ago, the dirt guys would dominate the comments section in these columns. There'd be an Army of Asaros, yelling and screaming about "plastic" tracks or bringing out some obscure statistic or anecdote about how kickback makes the track infield geese wheeze, or how some dude in the race office works at a rubber factory that supplies some of the track surface so he can't be trusted.

Scanning the comments on Andy's column - and other columns like his the last few years - the vitriol is not there anymore. The easy answer is because some of their favorite tracks have switched back to dirt, yes, but I think it's more than that.

Dick Powell wrote a post somewhere years ago about polytrack. He shared stories about when the Meadowlands opened for harnes…

Cub Reporter: The Big Churchill Video Board Insider

As you may or may not know, there is a big giant video board being installed at Churchill.

 Here's a huge picture from twitter.
You can't imagine how big #ChurchillDowns' new video board is. #Panasonicpic.twitter.com/lCeWagHouv
— Jennie Rees (@CJ_Jennie) April 7, 2014 Word is, the board will be paid for by advertising, and will also be used for internal Churchill promotions, notes, announcements etc especially during the Kentucky Derby.

Cub Reporter sat in on a special meeting this morning in the Churchill Mansion. A short breakfast was served (he loves free food) which was not unlike a continental breakfast at those mini-Marriot's, and then the Churchill braintrust got down to business to approve and disapprove the ads, announcements and big screen notes. Cub was forbidden to make them public, but he didn't overly like the breakfast sausage ("Bob Evans is no Bob Evans", he laments), so he sent them my way.

I publish the ones rejected for you here.

1. &…

What do the Yearly Numbers Tell Us?

You see lots of numbers from this industry pretty much each day. My meet went great. My meet went bad -  but we had 59 more people in the stands per day. My handle per race was up when we had seven or more starters on Sunday's when there was not an NFL game on. The Olympics killed us.

That's not even mentioning the numbers that come out of California, which to me, at times, look like Swahili.

What's that all mean?

TimeformUS completed a quiet look at the quarterly numbers for 2014 on their blog last week. It's probably the best look at the numbers I've seen in some time.

Handle is down.

Field size is down.

In March, where racedays were reported up, the number of races was actually down.

Q1 supplied higher class racing than seen in previous years.

So, maybe this is all just what's supposed to happen. We have smaller fields, fewer races run as negatives, and higher class racing as a positive. It should be near a wash right?

If only things were that easy.

Rac…

Sunday Notes & Chatter

Good day everyone.

Yesterday was a pretty interesting day in racing. So, we'll quickly share some thoughts.

The Wood, on paper probably the best betting and most interesting race of the day, delivered. Social Inclusion got the trip I thought he would, and to be honest with you, if the race was available in-running at Betfair, when he let it out a notch 7 furlongs in, I thought there was no catching him. I think the Aqueduct track yesterday was very fair (kudos to the track crew), and that fairness probably certainly did not help him. He got leg weary the last 150 yards after a pretty tough trip and fought gamely, coming a game third.

The winner, a logical horse, got a dream trip and returned to his good form, paying a really nice price.

How did that race clear up the Derby picture? In one way. A horse who many thought was a solid under 10-1 shot come Derby Day - Social Inclusion - will not be in the Derby. He's ranked 21st, and unless he comes back in the Lexington Stakes (no…

A Saturday Horse, And Ontario Racing

Penelope Miller of ABR published her travel web blog (I believe the kids call a web log a "blog") for the Santa Anita Derby today.

"Hoppertunity is a totally sweet horse, and I think I’m a little bit in love with him."

Getting to know a horse is one of the neatest things ever.

 I remember when I was a lad I found myself backstretch at old Greenwood Raceway in downtown Toronto. The family and friends stable (I say that and cringe, because it sounds bigger than it was; at that time I think it was a stable of one) had a homebred in to go, and I wanted to go meet him.

I walked and walked, looking for him, and finally someone said "a couple of shipins are over there", pointing to a barn. I turned a corner and there were two horses. Our little guy and this pretty filly with a big head. I said hi to both.

Our guy, the little homebred, versus that gal was striking. She was majestic. She was friendly too. She'd nuzzle up and was like a big brown dog, with a l…

Friday Notes

It's Keeneland opening day. And it's supposedly raining cats and dogs, or for my amateur French hobbyist Frances, chats and chiens. Sometimes I have to remember what the track is made of with all the chatter, but since it is poly, the field size should hold up some. So, I am handicapping to play the card.

Rich Nilsen has a "7 Reasons to Play Keeneland" piece up, that I found pretty good. Keeeneland's website usually has some great handicapping stuff up too, and is always worth checking for gems, that may help wade through the big pools.

Fred Pope is back on Paulick, looking for revenue. This time he doesn't want to tax players through higher signal fees, where magically handle stays the same (I call it "California Dreaming"). He's really on his horse though, and it appears he is not a huge fan of some power brokers in this sport.

At Keeneland, rumor (none of it makes a ton of sense, this is racing, so we'll use rumor) has it Keeneland wan…

The 9 Camps In the Keeneland Announcement

Keeneland's switch to dirt has been applauded, lampooned, assailed, and looked at with bewilderment. And sometimes these can come from the same person.

For the more curious aspect of this decision (and a bang-up review of the Wood) I send you to the lovely and talented Mr. Mann of Left at the Gate fame.

After you've read the good grammar and English at LATG you can come back here for my nonsense, that will more than likely revolve around using pictures, or other people's words. Trust me, it's better that way.

The reaction to this Keeneland thing seems to lie in a few camps. I'll try to summarize them here.

1. Andy Asaro: This man stands alone in his own camp. If the death rate was three horses per racecard on dirt versus 1.22 per thousand on synth, Andy would say the data must be wrong. The man has posters of dirt over his bed. His favorite movie is Joe Dirt. His favorite movie would be the Dirty Dozen, but he doesn't like the "y". He sprinkles dirt…