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Showing posts from 2015

Takeout Moves, On Selected Bets & Game Theory

There was a little news this week about takeout, and most of it is welcomed for casual horseplayers.

Hawthorne (which has a mandatory pick 5 payout tomorrow) has lowered pick 4 juice to 15% from 25%. 

This 15% has also been applied to the pick 4 for the new harness meet, which starts this spring.

Also, the Meadows has dropped trifecta takeout to 20% from 27%, making that pool a little more playable for casual players. 

Both of these moves are not earth shattering by any means, but do show some good will towards customers. As well, the Pick 4 for harness at Hawthorne was needed. Players have embraced the Balmoral Park pick 4, making it a staple and seeing 400-500% handle increases, on average, since the takeout had been reduced on its pool from 25% to 15% back in late 2009. Hiking it ten points, while unsuspecting customers think they're still paying 15%, is not good business from an ethical standpoint.

Overall, these small changes in one pool do not mean much for a couple of reas…

The Use of the Numbers in Horse Racing; Those with Substance

Horse racing has more opinions than races, and that's a good thing, since we're handicappers. But without a central office which lays out business cases, we see and hear a great deal of opinion that's based on conjecture, feel, or the qualitative.

Fortunately in some quarters we have evidence that forms an opinion, rather than using an opinion as evidence.

Today on @o_crunk's twitter feed he shared some data.
2015 will be the first year with fewer than 40,000 Thoroughbred races in the US since sometime in the 1960's.Today, almost half the races raced, have field sizes of 7 or less. "In NA in 1960, there were 29,773 distinct horses in 37,661 races run, avg field size of 8.95."In 2015, it will take 49,579 distinct horses to run around 38,700 races for an avg field size of 7.8." That, of course, flies (partially) in the face of the foal crop argument. The simple fact is, horses are racing fewer and fewer times. The business could spend millions, could co…

Cub Reporter's Christmas Eve Party Report

This year's horse racing party theme was "Celebrating the one percent handle gain in in 2015", and Cub Reporter was there. Yes, folks, we have the details.

The party was sponsored by Frank Stronach and was held in New York City. Admission was free, but in a slightly odd twist, if you worked for the DRF you were charged 50 cents to use the bathroom.

Owing most of the handle gain, if not all, to American Pharoah, he was invited as the guest of honor. "Thanks AP" signs, distributed by the Zayat's, were everywhere. Spurred by this surge in handle, needless to say, happy faces were sure to be in the hall. Security was tight, however, and several folks were not allowed to enter the party, and I.D.'s were checked.

The first people I saw were Joe Drape and Sid Fernando; Sid with a craft beer of some sort and Joe with punch. Drape was reading a brand new New York Times editorial.

"It looks like we want to ban the iPad in New York State," said Joe. &qu…

#ABRLive vs #ABWLive

Our pal @sidfernando was speaking a little social media today on the social media box. He was even throwing in some posts and thoughts from what feels like a lifetime ago.

Sid was generally focused on the tweet storm from Hong Kong recently, where local social media types were promoting Sha Tin's (maybe Happy Valley's, I get them mixed up) big day two Sunday's ago. "America's Best Racing" is never not a hot topic.

When you ask someone about promoting racing via social media, in the current form that #Americasbestracing does, you will get a cacophony of opinion. Some of the harsh words are likely warranted, some likely not.

I'm in the middle, and on my demographic horse, so to speak. 

There is nothing - absolutely nothing - wrong with promoting the sport via social media, with bands, food trucks, booze, celebrities and floppy hats. This is simply PR, like Pepsi doing event marketing with a celebrity, or the NFL working with the United Way. People seeing…

DFS, Jackpot Wagers and Riding the Market's Coattails

We noted last week an interesting betting trend in DFS: Tournament play has been falling at a pretty decent rate.

This is to be expected on a number of fronts, but primarily, and simply, it's that people have expectations regarding a wager (any wager) and when the bet, or payoffs, do not meet expectation you can have a serious drop in play, quickly. DFS - especially tournaments - is very hard and when one realizes it's too hard for them, they stop, or pivot their play. This has been exacerbated by the number of newbies who joined this year, after millions in ad spend.

Today we saw more evidence of this, when Superlobby showed some stats on NBA DFS play. Yes, shockingly, NBA play is growing, up to the point it is "indistinguishable" to the NFL. That's just nuts and something no one was predicting a year ago.

Again, it's the market moving away from big tournaments, and looking for a soft spot to land. Perfectly rational, and reason number 35,321 this whole New…

The 'Issues' Discussions

I watched the DRF podcast this morning up on the Youtube (embedded below if interested). I know the "issues" when it comes to (primarily) betting are not for everyone, but this discussion - although I might disagree in several fronts - was really quite good.

One of the parts I did enjoy was about New Jersey's foray into exchange wagering, which is supposed to go live this March. The DRF discussion was level two, not one, which is very refreshing. There was no Al Queda is using it to launder money, jockeys will be jumping off horses, the world is going to end. It was much more mature, and that's welcomed.

New Jersey's main issue with the exchange, is like all exchange issues in other jurisdictions - watering down its main selling points by i) charging too much ii) not having proper liquidity iii) not linking NJ and UK pools; short-changing the exchange, if you will.

I fear that will be its biggest challenge and I do see little way around it. The business thinks l…

The Horse Racing Politboro

What a morning in horse racing land!

First, we have the Sports Illustrated Fan Vote for Sportsman or Sportswoman of the year that was announced today. Horse, American Pharoah, who is the first Grand Slam winner in eternity was the runaway winner of the fan vote with 280,000 of them, but he was snubbed for a tennis player who only received 6,000 votes.

Twitter blew up; worse than it blew up for lots of other things it blew up for.

Deadspin got into the act with a headline with a damning article (not on the vote, on the reaction to it). Cross promotion on my timeline had football guys who know nothing about horse racing chatting about it and linking Horse Racing Nation articles. Neither of the above are flattering, but so be it.

Leaving aside the fact that votes have never meant much for horse racing - "lower takeout" wins most bettor votes and "hey, which one of you voted for increases in picnic table prices, anyway?" happens - it shows this fan base to be passionat…

And the Winner is...... Tom LaMarra!

Yesterday was kind of an interesting day in horse racing land.

At the RTIP Symposium, the final four entrants for the "Innovation" award (and $15k) presented their ideas and a winner was chosen. Two of the three ideas were kinda of sort of betting, and one was a 3D scan that would quickly help identify lameness (and hopefully help the breakdowns).

The two betting ideas were interesting, in that they were both not really about betting.

First there was a pick 20 in a row quick pick ticket idea based on the MLB game called Beat the Streak. Beat the Streak has not been won in the 14 years since it started. By the looks of it, it might last until Justin Bieber's great great grandson is inaugurated.

The second idea. Swop Stakes, according to Scott over at the PR:
"How the game works: Players purchase “quick-pick” tickets that include runners in a series of races. While the tickets are random, players can then buy, sell or trade tickets with the “bank” or with each other…

Going For the Gusto Versus the Grind

There was an interesting graph posted today by a gambling industry analyst. It shows the reduction in play for larger tournaments in DFS.
The big GPP tourney's at FanDuel & DraftKings continue to shrink - I think mostly due to shift in player preferences — Adam Krejcik (@akrejcik) December 7, 2015 Sure New York and Nevada are no longer taking customers from the start of the year, sure the big marketing push for week one was going to show declines, but like Adam notes, this looks significant. Players in DFS are moving away from harder to hit GPP's (lower hit rate, higher takeout bets) to head to heads and 50/50 play (higher hit rate, lower takeout, more of a grind betting).

This is pretty clear evidence of betting behavior  - winning is important and winning infrequently is not much fun. Moving to pools with a chance of winning more, with a longer term chance at profit, is perfectly rational behavior.

That market is becoming more and more mature.

Churn Killing Bets are Approaching the Absurd

Gulfstream Park announced today they are starting "Rolling *Jackpot Super High Fives". Yep, you read that correctly.
"The Rolling $1 Super Hi-5 will have a new twist that has the potential to generate jackpot-size payoffs. The innovative wager with a $1 base will be offered in every race, challenging the bettor to select the first five finishers in exact order. The new twist requires the bettor to hold the only winning ticket in order to cash. If no one holds a unique ticket or if there are multiple tickets with the first five finishers, the entire pool will be carried over to the next race." * So, they sent out some sort of correction of the above - the high fives will be rolling, but if multiple people hit one, they do get paid. The rest of this piece is about generic hard to hit bets and churn.

Gulfstream Park now has rolling high fives and a jackpot pick 6. As most know, these bets are based on very high takeout, which almost eliminates any churn. Players like y…

Saving Racing, by Eliminating Customers One at a Time

Well, the big news today is that racing is saved.

"Stronach" tracks have sued contest site Derby Wars.
The suit alleges DerbyWars contests are a violation of the Interstate Horseracing Act (IHA), the Racketeering Influence and Corruption Act (RICO) and California Business and Professions Code and inflict “intentional interference with prospective economic advantage.” Shutting down this scourge will hopefully increase handles back to where they were, inflation adjusted, a decade ago. I'm sure of it. Horse racing is saved.

This is on the heels of other big entity decisions to save horse racing, like takeout hikes at Churchill Downs, signal fee hikes in various jurisdictions, and ADW taxes in some states.

Tongue in cheek? Of course.

Takeout hikes are anti-customer. So are signal fee hikes and ADW taxes. Add to the list the suing of a contest site that patrons (particularly new ones who are scared of the pari-mutuel system) enjoy, and use to qualify for NHC events and B…


There was an interview with CJ from TimeformUS on the Paulick Report yesterday. It was pretty well done. CJ is an interesting dude, and what they are doing at TF is never uninteresting either. One comment caught my eye, however. which was related to old versus new ways to handicap a horse race.
Handicapping can only be done with paper and pencil, and your knowledge, experience, and most importantly, your observations and interpretations of the horses involved in any given race. Leaving aside the fact that using Timeform (or other new ways to handicap that looks different than a printed DRF page), still allows you to use your knowledge and observations, this comment is prevalent in the space.

When we pull a switcheroo from the printed page with 8 horses in front of you, in your hot little hands, to something different, it eliminates what we're used to.

When I handicapped for years and years (especially in harness racing) I felt if I did not see the race on one page I was missing…

WEG's Jim Lawson Interview Shows Where the Customer Stands

In Dave Briggs' piece on TRC today, Seven reasons Woodbine might have a bright future were examined, through an interview with WEG's head honcho Jim Lawson.

Almost three years ago now Woodbine and racing in Ontario was given an ultimatum: Bring in more customers, or else. From the Chair who was running Horse Racing Ontario at the time:

"Everyone, collectively, has to think about how you attract bettors and customers to the track and regain interest in the industry. I said this yesterday: two years ago if we had one of these (industry consultation sessions) I don't think we would have heard 'customer' or 'horseplayer' mentioned. It would have just been about how much money there was and how we were going to divide it up."

So, at least some of these seven reasons were likely customer related, right?

Here is the only snippet in Dave's piece where the customer was mentioned.

"Higher commissions imposed by the Breeders’ Cup forced Woodbi…

Derby Wars, Exchanges & the Fight For Lost Customers

Today we saw some news from New Jersey, where it appears (finally, unless something happens) exchange wagering will be offered to residents of that state, sometime in 2016.

Meanwhile, back at the ranch, Derby Wars (and others) were looked at in an excellent piece by T.D. Thornton in the TDN.

There's a lot of chatter about both betting systems; cannibalization, cheating, not giving anything back. Pick one, or a few of many. It is what it is.

The first rule, since we can remember (I think it started in North America with beaver pelt sales), is that when you lose a customer, you find out why. Did they not like your product, your hours, your store, your staff? From those answers you can likely improve your sales.

When it comes to horse racing, not nearly enough has been done in this vein, but from what people speak about, and using a little logic, we can make an educated guess. Lost customers were tired of losing, the product was not a good enough gambling product, pricing was too hig…

It's More Than Just Being an Immature Market

Some of you might have been following the lack of effort drive in last week's TVG prep at the Meadowlands. The New Jersey judges responded by giving driver Brian Sears a 15 day holiday.

Meanwhile back at the ranch, if you look at the entries for Saturday night at the Big M - 7 days later - there's Brian Sears driving Bee a Magician in the TVG Final.

I'm not sure why he is driving. Maybe President Obama knows.

Conversely, let's look at Aussie racing. I could give you a litany of "lack of effort" fines and suspensions, customer and bettor protection decisions, etc. But it's much easier than that.

Here's a stewards report from a few days ago. Just an average day at the races.
All trainers with multiple engagements in any one particular race were questioned in regard to their tactics.  Stewards questioned trainer R Veivers in regards to the performance of EMPTY ENVELOPE. He said that he had adjusted the gelding’s training regime in recent times and felt …

Getting Things Done the Right Way Is Difficult

Satire works when there is a grain of truth to it.

Today I read something satirical that made me laugh. A petition to the Attorney General of New York to stop bingo in the state.

This petition has the formula down.

Introduce something that people are doing down the block, show how said activity is a "gateway" to something more sinister (without evidence, of course), add a little horror like "theft and murder", and voila, you now have a full-blown crisis.

This is a New York Times editorial waiting to happen. Get Drape on the case.

This represents so much more, though. And in horse racing it's taken to the nth degree because horse racing has little leadership, or structure to get to brass tacks. It's a New York hyperbolic DFS debate on satirical steroids.

Lasix articles abound and they are filled with so many of the same tactics, it's astonishing. Field size is down, because of lasix use. Starts are down, because of lasix use. Breakdowns are up, becaus…

Horse Racing Business Fundamentals

Whenever something goes wrong two things invariably happen:

i) The masses want someone to blame for it, even when force majeure is the culprit

ii) Some antithesis of growth policy gains steam

Horse racing, because handle is losing more and more volume most years this century (when inflation is factored in, almost all years), has had their fair share of some major anti-growth policies.

Horse racing handles are down, so it must be Derby Wars!

Horse racing handle is down, so we should stop accepting bets from computer wagering!

Horse racing handle is down, so we need to eliminate rebates!

Horse racing handle is down, so we need to increase margins!

Fundamentally none of those things make any sense whatsoever.

The NFL, NBA, NHL, Nascar, PGA Golf and MMA all love the Derby Wars type platform. Studies have been released showing how they engage customers to watch the sport more and more.

Computer assisted wagering - conditional wagering, looking at overlays etc and batch betting and dutchi…

Skill v. Luck is Difficult to Illustrate, Because Professional Gambling Is Boring

The peeps were chatting about "skill vs luck" in pari-mutuel games today, in this case daily fantasy sports.

This, as we've seen, with statements from the press and others during this debacle (in my view, that's exactly what this is), is often misunderstood.

Winning long term at a game that involves skill versus luck is not sexy. It's not something you can "show" on a short youtube video. It's not something you can show on a TV commercial.

It's a grind, and it's really boring.

Picking a player that will likely do well, with some confidence, is not difficult. Todd Gurley should have a good game against the Vikings. Tom Brady should be able to score some fantasy points against Washington. Anyone should score some points against the Saints.

In horse racing, we can all pick winners. In fact, the odds board picks the top two places about 6 or 7 of ten times.

Look at any graph at odds levels with low variance choices and expectation. It's a pr…


Perhaps you've seen a commercial recently with "Brad".

Out of the thousands of players who play and have fun with DFS partake in unregulated gambling that everyone with law degrees seem so upset about, Brad, with "$349" in winning teams was chosen as a poster boy.

Awful Announcing found Brad and asked him a few questions. It turns out Brad is really a regular guy who plays some tournaments with friends for fun, and just happens to have won a couple of dollars.
That’s one of the main reasons my winnings were $349. To be completely honest, last season was my first season in fantasy period. I had a lot of fun and kind of got bit by the fantasy bug. Then I started playing DFS with FanDuel primarily. So probably just a little bit over a year ago. I don’t play $25 buy ins to win a million bucks. Mainly just these fun games between me and my buddies just to make the season more interesting.  Or I’ll play some buddies in a 1 on 1 heads up $1 game, because if I l…

In Harness, Culture Changes Are Hard

As most of you who follow the blog know, we've spoken about lack of efforts by harness drivers with odds-on horses since its inception. For Thoroughbred friends, this is an issue because harness horses do not have running styles; try or no try is in the hands of the driver.

It's a real issue for a few reasons:

i) A billion or so dollars is bet each year on the sport, and bettors need to know they are given a fair shake.

ii) The judges have been reticent to do anything to participants when it occurs

iii) It makes the sport look insider based, and insiders feel they can do whatever they want, with impunity.

Yesterday's drive on Bee a Magician at the Meadowlands finally resulted in some action. Driver Brian Sears was given a 15 day penalty. This is not 15 days of course, he is not a regular. What it is, is a suspension for next week's stakes card.

Already, insiders have begun griping about it. That's what happens when a culture change begins - denial, anger..... "…

Reactions Sure Are Different When Things are Popular

Harness racing was popular at one time, not really that long ago.

That popularity helped push forth some interesting vibes from time to time, like the night when the crowd went crazy and rioted at old Roosevelt Raceway when a race was made official that should not have been. There have been many "riots" in some form in racing over the years. Attention-seeking politicians, every day folks, newspapers, all paid attention.

Now, it's just ho hum.

Last night there was an elimination race for the TVG Trot at the Big M. As most know, elimination races can yield some wacky results because the drivers don't drive - even though they are supposed to - for the betting public but for the trainer. Not all drivers, but some.

This one was arguably one for the ages, with heavy favorite Bee a Magician heading to the back of the bus in soft fractions.

There was no riot, nothing more than griping on social media, a ten or twelve page thread on a chat board. This is old hat now, and the …

An Historical Look at Racing Protests

Since the 60's - probably the 860's - protests have been frequent and ubiquitous; well in the free world anyway.

Some are very socially important and some, well, kind of aren't.

This morning's one might fit into the latter category. Yes, hundreds of 25-44 year olds with incomes over $75,000 per year, had a DAILY FANTASY SPORTS PROTEST in New York.

I doubt much will happen with this protest, because they're fighting the man, plus the newspapers, and Drape, and anti-gambling casinos (I think that's one of those oxymorons), and a church that doesn't like gambling unless it is being done at a bingo in their basement, and some rich people.

Regardless, it's nice to see young people today doing their thing.

It got me to thinking about some of the greatest horse racing protests in this sports' long and detailed history. You probably remember some of these, but let's recap.

The ZENYATTA MUST GO ON DIRT Protest - This, in the height of the polytrack era, w…

Politics Shows the Importance of Testing Under One Roof

As most of you who follow the machinations of gambling and governments know, the New York AG has asked daily fantasy sports companies to cease operations in that state. This is another instance of a state or jurisdiction in a growing list of them - California, Florida, Nevada, Pennsylvania etc - to weigh in on the legality of these games.

New York (although most seem to think this is a big overreach) is an example of too many cooks in the kitchen, acting in a capricious way. The Feds passed a law stating these games are perfectly legal, companies invested capital in creating a form of them to be offered to the market, and the market - in massive numbers - has spoken. Now, the states are trying to find every which way to interpret that law, for whatever motivation (there are literally dozens, in my view) strikes them. It's a mess, with consumers (an estimated 60 million people enjoy fantasy as a hobby) caught in the middle.

Charles Hayward wrote an article today on his site, that I…

Horse Racing's Dangerous Margin Game

The margin for a product or service is a funny thing. It's a fine line between profit and loss, growth and stagnation, or success and failure. It's the building block, the foundation, for any real business, and it's something that's fought through each day.

In horse racing it tends to be none of those things, though. It tends to be a number that those in charge use not as a sextant or rudder guided by markets that tells you which way you're headed, but something they want to steer. 

Last weekend, Woodbine increased the takeout on Breeders' Cup wagers in Canada; some pools as high as a whopping 27%, which in real terms is 42% higher than what all other ADW's charged their customers. This was a function of the dangerous margin game.

Deals written between tracks and horsemen groups can take many flavors, but in Canada, for some time now, they've been written differently. Instead of giving 50/50 on simulcast wagering revenue, 4% for tris and 2% for exacta …

Friday's Juxtaposition

Here we go......

Enjoy your weekend everyone.

As Baseball Shows, Some Numbers are Just Numbers

There was a look today, from the Fox Sr. VP of sports programming, at the television numbers for the recently concluded World Series:
"As a longtime television partner to Major League Baseball, we at FOX Sports also engage in a decades-long debate about baseball numbers and their meaning, but in our case the numbers are Nielsen television ratings.  Here again, context is key, and differing points of view can paint sharply different pictures of the health of the game, as we see every October when World Series ratings are dissected by industry observers. 

The defining trend of media in our lifetime is fragmentation – the process by which the enormous audiences once generated by a small number of entertainment options have splintered over the years and have been redistributed across hundreds of TV networks and many thousands of digital destinations...... media content has become ever more individualized and on-demand." Yes, people are not watching the World Series i…

The American Pharoah "Experience" Starts About Now

There was an article this morning at Charles Hayward's site penned by a writer experiencing a strong American racing event for the first time, and what that "means for the health of horse racing".

I expect many around the world would be amazed at what's 'left' of this sport here in North America. But it is not surprising to us. We know 15 million or so watch a Derby, we know 10's of millions watched Zenyatta on 60 Minutes (and many tuned in for her Classic). We know sports' stories in a mad-TV sports and twitter world still exist, and in many cases thrive.

We also know that much of it has little to do with the immediate health of a sport.

This business - for years - has been filled with the knee-jerk. Things need to be fixed yesterday. Field experiments for takeout are a dirty thing, despite being done in some form by virtually every other business: Laurel lowered takeout for a week and lost money, don't you now. Tracks should be ripped up, then …

Mattress Mack Gets Taken to the Woodshed

There's quite the brouhaha going on, as you all know, I suppose. And right now, ol Mattress Mack is taking the worst of it.

This is the same Mattress Mack, who was described by ESPN in 2004 like this:

As the failures, injuries and losses mounted, McIngvale went through four trainers -- two-time Derby winner Nick Zito; Steve Moyer, a former Zito assistant; Leonard Duncan, a former night watchman at the racetrack, and Laura Wohlers, McIngvale's sister-in-law and a former employee at Gallery Furniture. From Houston, McIngvale would call Wohlers in Lexington, Ky., and tell her which horses should work, and how far. Mattress Mac looked like a buffoon, and racing insiders were amused.

"I think if I had it to do over, what I would do differently, I probably wouldn't buy so many horses so fast," McIngvale said. "I think I overbought horses, and I bought a lot of bad ones. And I was tampering with the trainers, saying I want to do this, I want to do that. …