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Cannibals & Control

The CHRB meeting yesterday yielded the usual gems. This time about "fantasy horse racing".
  • "I view fantasy horse racing as a very significant threat to our existing business model," Daruty said.
This is horse racing codespeak for "I view something we can't control as a threat." It's what horse racing does, or runs to, over and over again. Considering the existing business model - falling handle, falling revenue and a reliance on slots or government help - is no great shakes one wonders what one is protecting, but that's neither here nor there. It's simply the codespeak.

Racing has always lived with a mix of entitlement (we were here first as a monopoly, so gamblers are ours), fear (anything new is something we need a piece of because it will destroy us), and stagnation (anything fresh offered in the space needs to be looked at as "cannibalization" and should be immediately stopped).

This is nothing new.

Exchange wagering is a good idea, most think. However it is stopped because the margins are not 16% and it will supposedly - despite solid evidence elsewhere proving the opposite - "cannibalize" wagering. It's also a great idea if Monarch runs an exchange, a terrible idea if TVG does; well, from Monarch's perspective, anyhow. Derby Wars seems to be a decent idea for the sport (as Mike points out below) but the margins aren't 30%, and aren't mine (they're "stealing", y'know?). Let's kill em.
Cannibals are ok, I guess, if they're the ones doing the eating. Otherwise, they are a threat to the business model for horse racing. (I bolded that, because it's kind of a tagline for the sport. The insider "Go Baby Go", if you will).

The problem with this whole thing - this is not new, we have been discussing it on the blog for a near a decade -  is pretty apparent. When racing controls something - internet signals, pricing, innovation, ADW - it almost always ends up being worse off. There's little vision, there is no want to recreate systems, create new offerings, innovate products. This is, after all, a sport whose so-called most successful recently introduced bet had to be stolen from a racetrack in Puerto Rico (no offense to my Puerto Rican racetrack friends).

Racing's problem isn't about cannibalization, or that they don't get seven bucks in takeout returned to them for a Saturday Derby Wars game. I think the big wigs know that.  I think they just focus on these small silly issues because they have no idea how to solve the real ones.

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