Hello racing fans!
I spent lunch watching the USTA meetings today. Two items they were voting on were the budgets ($120,000) for television and $250,000 for the reputation management, digital marketing and outreach program that has been going on for a few years.
In the end both things passed, which is probably a good thing.
As a sport, harness racing has been left behind badly in this vein. The Thoroughbreds have the NTRA, the Jockey Club and the Breeders Cup with dedicated budgets doing those things. The spend is in, or near the tens of millions. Individual racetracks have departments doing much of it, as well, and let's not forget the money spent marketing for big races, like the Triple Crown.
Little of the above money spent is measurable in terms of new betting dollars or new ownership - in fact, both of those metrics are down. However, they have played a role in i) keeping the sport in the nation's consciousness and ii) help when the sport gets hammered in state houses.
Harness racing has very little of this spend and branding, and it is up to organizations like the USTA to bring people together to pass these things.
Why on online stories do people outside the sport of harness racing think all trainers are chemists? Dumb farmers? Thoroughbred racing has the same vets, and the same people wanting to sell backstretch brown bottles as harness racing. Thoroughbred racing has the same rural bent, but we don't hear they're "dumb" or "cheaters".
Thoroughbred racing has spent money on reputation management, spent money on their message and do so each year. And that's something that can't be measured by return on investment. It's measured when decoupling comes and Pompano Park is shuttered, while Gulfstream and Tampa Bay Downs happily card races.
When I watch these meetings what I find disconcerting is the lack of vision. The big picture either can't be comprehended, or is something that doesn't register. For all companies or sports, the ones with vision last, the ones that don't have it, fail.
Harness racing's initiatives will be under the same fire next year at this time. The same arguments against them will be made, the same criticisms will be heard. It's a perpetual merry-go-round, and it's one reason the sport is where it is. After watching today, I really don't see that changing.
Have a nice day everyone.
Monday, February 29, 2016
Wednesday, February 24, 2016
PTP Downs, No Janet Jackson, But Some Good Stuff
Hello racing fans.
I noticed that the head prince of Dubai, or someone like him, announced that Janet Jackson (Miss Jackson if you're nasty) will be playing, or dancing, or singing ,or what have you, after the Dubai World Cup card.
This announcement is fresh off the heels of Daughtry being added to the Belmont Stakes day card, which too seems to have a little cash from the slot machines to pay some acts.
At PTP Downs we might have slots like they do below in Pennsylvania, but the cash used from them will not go to concerts - well, maybe we'd set aside a few bucks for a Nickelback cover band - I think they'd go into the product. And I don't mean every last dime into purses.
At PTP Downs we'll have a slush fund for instant carryovers. Our broadcasting money will not be spent on concerts, but on dedicated time on a racing channel, with a vibrant betting menu to own a night or day. We'll have some juice that makes sense, not what someone says it should be, based on an arbitrary price-setting mechanism when the only gambling one did was in the back of a pool hall or the racetrack.
Our races will go off at the off time. We'll sell our signal for a blended takeout rate fee, not in the archaic way they are sold now. When a favorite loses by racing poorly, we'll use that slot money for an on-course reporter that asks the loser why, in the same verve he or she chases the winner for a quote. We'll spend $129 for a set of cameras with sound in the stewards room when on-track infractions are being discussed, and broadcast it on the track feed.
We'll spend $145,000 a year for a Vice President of Wagering, with a bonus based on handle growth. In fact, when handle grows it's a profit sharing plan right into everyone's paychecks, from purses, to the person cleaning the toilets. Handle is PTP Downs' number one key performance indicator.
Floppy hat day is fine, as long as we run a handicapping contest live money day, too. Our contest won't have a 30% takeout, because we want to cultivate the game, not send people away. After all, we've got $248 million in slot revenue to play with.
PTP Downs is open for business giving you the best in gambletainment. That's what ends up paying the bills when the slots money dries up.
I don't for a second begrudge Dubai and the Dubai World Cup for their luring of Janet Jackson with mega bucks. The DWC is an event that depends solely on oil money, not betting. It's what they do.
In North America, with the same black gold flowing by way of spinning cherries, charging 27% exotic takeout on the DWC card, while trying to think of ways to use that dwindling revenue on concerts or hat day, strikes me as giving up. Don't give up. This is the greatest gambling game ever invented. Embrace that fact and let's roll.
Have a nice afternoon everyone.
I noticed that the head prince of Dubai, or someone like him, announced that Janet Jackson (Miss Jackson if you're nasty) will be playing, or dancing, or singing ,or what have you, after the Dubai World Cup card.
Janet Jackson said: “I am excited to perform for the global audience at this year's Dubai World Cup. The entire Unbreakable company is looking forward to traveling with me to Dubai and being part of one of the world's most prestigious events.”With a ten million dollar purse, and Janet, I can only conclude that the recent reduction in price of Brent Crude is not overly affecting that part of the world.
This announcement is fresh off the heels of Daughtry being added to the Belmont Stakes day card, which too seems to have a little cash from the slot machines to pay some acts.
At PTP Downs we might have slots like they do below in Pennsylvania, but the cash used from them will not go to concerts - well, maybe we'd set aside a few bucks for a Nickelback cover band - I think they'd go into the product. And I don't mean every last dime into purses.
At PTP Downs we'll have a slush fund for instant carryovers. Our broadcasting money will not be spent on concerts, but on dedicated time on a racing channel, with a vibrant betting menu to own a night or day. We'll have some juice that makes sense, not what someone says it should be, based on an arbitrary price-setting mechanism when the only gambling one did was in the back of a pool hall or the racetrack.
Our races will go off at the off time. We'll sell our signal for a blended takeout rate fee, not in the archaic way they are sold now. When a favorite loses by racing poorly, we'll use that slot money for an on-course reporter that asks the loser why, in the same verve he or she chases the winner for a quote. We'll spend $129 for a set of cameras with sound in the stewards room when on-track infractions are being discussed, and broadcast it on the track feed.
We'll spend $145,000 a year for a Vice President of Wagering, with a bonus based on handle growth. In fact, when handle grows it's a profit sharing plan right into everyone's paychecks, from purses, to the person cleaning the toilets. Handle is PTP Downs' number one key performance indicator.
Floppy hat day is fine, as long as we run a handicapping contest live money day, too. Our contest won't have a 30% takeout, because we want to cultivate the game, not send people away. After all, we've got $248 million in slot revenue to play with.
PTP Downs is open for business giving you the best in gambletainment. That's what ends up paying the bills when the slots money dries up.
I don't for a second begrudge Dubai and the Dubai World Cup for their luring of Janet Jackson with mega bucks. The DWC is an event that depends solely on oil money, not betting. It's what they do.
In North America, with the same black gold flowing by way of spinning cherries, charging 27% exotic takeout on the DWC card, while trying to think of ways to use that dwindling revenue on concerts or hat day, strikes me as giving up. Don't give up. This is the greatest gambling game ever invented. Embrace that fact and let's roll.
Have a nice afternoon everyone.
Tuesday, February 23, 2016
"Ok, But What Are They Going to Think?"; Facebook, Others Try. Racing Needs to
Good day race fans!
Yesterday's pop quiz generated a little bit of discussion; mainly regarding the Gulfstream Park Super High 5 which did not have a winner - because only four horses finished and it was impossible to have a winner - that carried over to the next race.
There was the customer point of view (it's silly and unfair), versus the racetrack/insiders point of view (it's a rule!).
The point being made with the quiz, and in other facets of this blog, is that the relevant part of these things is that someone, somewhere makes a policy, or creates a rule, that never asks "what are our customers going to think about this?", before implementing it.
This is not only a racing phenomenon, it's seen in a lot of places.
Here's a machine for a multi-million dollar laser, used in heavy manufacturing (courtesy, this is broken, a TED talk).
For anyone who ever worked in a plant or mill, this is a common sight. The buttons that are used all day are smudged, and there are dozens of unused buttons. The person who designed this machine is probably a very smart engineer with good intentions, but he or she never used this machine. If they did, the smudged buttons would've been bigger, and/or half the buttons eliminated.
Companies often do not have a proper buffer, or second set of eyes, which is end-user or customer related.
In racing this problem is enhanced because the business is about horse lovers, and investment in farms and hay trucks, and bloodstock prices and just about everything else. The people making betting policy are (in large part) from a different, non-end demand area of the sport.
"Yeah, but what is a customer going to think?" They just don't know, because they aren't every day customers.
Many companies counter this strategically, in design, end use, product testing and other ways. It's a vital part of a firm's growth.
Facebook is doing fairly well, of course, but to grow they are going to need to get more people in emerging markets to join their platform. The issue, is that unlike in Canada and the US where broadband and wireless speeds are lightning fast, in many parts of the world they are not.
Enter 2G Tuesday's. Each Tuesday for an hour or so, Facebook engineers and employees will create profiles, upload pictures and be a general user of the platform they work with each day, all in molasses 2G.
It's not up to customers in low-speed countries to dial up Mark Zuckerberg and tell him their platform is too data rich. It's a part of Facebook's structure to figure out what the concerns are before they launch.
When Woodbine is negotiating deals with governments and horsemen for a share of takeout to go to purses, they have to ask "what will this do to our customers when we have to payout lower prices on some tracks?" Let's think about this for a moment and come up with a better way.
Gulfstream has to ask, "what will our customers feel if we have a bet with five horses needed and only four finish?" Let's analyze this for a second here.
When racing starts asking themselves those questions before implementing policy, customer retention will be in a much better place.
Yesterday's pop quiz generated a little bit of discussion; mainly regarding the Gulfstream Park Super High 5 which did not have a winner - because only four horses finished and it was impossible to have a winner - that carried over to the next race.
There was the customer point of view (it's silly and unfair), versus the racetrack/insiders point of view (it's a rule!).
The point being made with the quiz, and in other facets of this blog, is that the relevant part of these things is that someone, somewhere makes a policy, or creates a rule, that never asks "what are our customers going to think about this?", before implementing it.
This is not only a racing phenomenon, it's seen in a lot of places.
Here's a machine for a multi-million dollar laser, used in heavy manufacturing (courtesy, this is broken, a TED talk).
For anyone who ever worked in a plant or mill, this is a common sight. The buttons that are used all day are smudged, and there are dozens of unused buttons. The person who designed this machine is probably a very smart engineer with good intentions, but he or she never used this machine. If they did, the smudged buttons would've been bigger, and/or half the buttons eliminated.
Companies often do not have a proper buffer, or second set of eyes, which is end-user or customer related.
In racing this problem is enhanced because the business is about horse lovers, and investment in farms and hay trucks, and bloodstock prices and just about everything else. The people making betting policy are (in large part) from a different, non-end demand area of the sport.
"Yeah, but what is a customer going to think?" They just don't know, because they aren't every day customers.
Many companies counter this strategically, in design, end use, product testing and other ways. It's a vital part of a firm's growth.
Facebook is doing fairly well, of course, but to grow they are going to need to get more people in emerging markets to join their platform. The issue, is that unlike in Canada and the US where broadband and wireless speeds are lightning fast, in many parts of the world they are not.
Enter 2G Tuesday's. Each Tuesday for an hour or so, Facebook engineers and employees will create profiles, upload pictures and be a general user of the platform they work with each day, all in molasses 2G.
The initiative is designed to help employees empathize with users in booming markets like India, Thailand, and much of Latin America, but also to help them work out what they could improve about the app to make it more usable on slower connections. "They're going to see the places that we need to improve our product," Alison said
 |
| This sign maker never had a roadside emergency |
When Woodbine is negotiating deals with governments and horsemen for a share of takeout to go to purses, they have to ask "what will this do to our customers when we have to payout lower prices on some tracks?" Let's think about this for a moment and come up with a better way.
Gulfstream has to ask, "what will our customers feel if we have a bet with five horses needed and only four finish?" Let's analyze this for a second here.
When racing starts asking themselves those questions before implementing policy, customer retention will be in a much better place.
Monday, February 22, 2016
A Pop Quiz & Monday Notes
Good day racefans!
Gun Runner won the Risen Star as the most logical play and win of the weekend. I get trying Airoforce on dirt early in the season, but I don't get 6-5 odds. Anyhoo, Airoforce is back to the green, and those who threw him out had a positive expectation bet.
Immediately after the race, as per usual, quotes from the winning connections flood the feeds. That's fine, they won. But it is a gambling game and I personally want to hear from the well bet losers. How was the horse traveling? Did he scope sick? Was his spinning his wheels, does he look to have come up sore? That almost never happens here.
In Australia, where it is more of a gambling game, it's commonplace for most races.
The Meadowlands, as you all know, often uses their trainer notes feature to discuss sub-par efforts. They are enlightening and informative most times.
#RIPMackLobell
Do millennials want dancing and booze? Sure, but when it comes to gambling, they want betting value, too. Why is this hard to understand?
The Meadowlands topped $3M in handle, both nights, again this weekend. The fields are not great, and the racing isn't top-notch-racing-of-old either, but the pool size and prices are still the best in the sport, and it's not really close. They're making chicken out of, well, you know.
Steve Allday talked to Byk about the glaucine positives in harness racing. Yes, I realize that's a Thoroughbred show, but if you can show me where in the harness media this is being spoken about, I would point to it instead. It's the first segment.
Upon me saying 'if one of Allday's theories are correct and this was willful, they need to go away for a long time', trainer Travis Alexander shared a tidbit:
Customers don't think racing likes them very much. Is it being too self-absorbed? Is it a disease that only inflicts customers? Is it real, or is it black smoke on Lost, alien pregnancies on the X-Files and the entire two and a half hours of 12 Monkeys (a movie I still can't figure out)?
Let's find out because...........
a) A race with a super-high five was raced, but only four horses finished. Instead of refunding the super high five money (after all, it was impossible to hit..... like really impossible, not difficult impossible) a track kept it and carried it over to the next race to help their handle.
b) A slots-rich jurisdiction who needs handle for their races - especially over the internet - decided taxing internet wagerers 6%, stifling competition, and hiking takeout on in-state players was a wise idea.
c) The Woodbine Entertainment Group charged more takeout than US tracks, on US tracks, so Canadian bettors (without any choice) have to play racing at a disadvantage.
If you picked "a", you are right. Gulfstream raced a race where four horses completed the race and didn't give a refund. There's no word that if no horses win a race they will keep all money.
If you picked "b", you are right, too. Indiana - their tracks already under the CDI umbrella which stifles bettors choice - will have a 6% tax imposed on their internet wagers.
If you picked "c", well you are technically right, but silly goose, that's been going on for a long time. The government - yes, the government that is supposed to hold tracks in Canada accountable for anti-customer policies (while giving them $100 million a year) - let's it go on. Ho hum. Old news.
So, yes good ship horse racing, when customers think you don't like them much, maybe they are a little whiny or self-absorbed, but, hell, you keep proving them right.
Have a nice Monday everyone!
Gun Runner won the Risen Star as the most logical play and win of the weekend. I get trying Airoforce on dirt early in the season, but I don't get 6-5 odds. Anyhoo, Airoforce is back to the green, and those who threw him out had a positive expectation bet.
Immediately after the race, as per usual, quotes from the winning connections flood the feeds. That's fine, they won. But it is a gambling game and I personally want to hear from the well bet losers. How was the horse traveling? Did he scope sick? Was his spinning his wheels, does he look to have come up sore? That almost never happens here.
In Australia, where it is more of a gambling game, it's commonplace for most races.
#RIPMackLobell
Crowds at @SaratogaCasino when #MackLobell broke Nevele's Pride's world record. 1988. RIP boy. pic.twitter.com/DBfIoFYur4
— Breeders Crown (@Breeders_Crown) February 22, 2016
Do millennials want dancing and booze? Sure, but when it comes to gambling, they want betting value, too. Why is this hard to understand?
The Meadowlands topped $3M in handle, both nights, again this weekend. The fields are not great, and the racing isn't top-notch-racing-of-old either, but the pool size and prices are still the best in the sport, and it's not really close. They're making chicken out of, well, you know.
Steve Allday talked to Byk about the glaucine positives in harness racing. Yes, I realize that's a Thoroughbred show, but if you can show me where in the harness media this is being spoken about, I would point to it instead. It's the first segment.
Upon me saying 'if one of Allday's theories are correct and this was willful, they need to go away for a long time', trainer Travis Alexander shared a tidbit:
Customers don't think racing likes them very much. Is it being too self-absorbed? Is it a disease that only inflicts customers? Is it real, or is it black smoke on Lost, alien pregnancies on the X-Files and the entire two and a half hours of 12 Monkeys (a movie I still can't figure out)?
Let's find out because...........
It's time for Monday's Pop Quiz ®
What happened this past weekend?
a) A race with a super-high five was raced, but only four horses finished. Instead of refunding the super high five money (after all, it was impossible to hit..... like really impossible, not difficult impossible) a track kept it and carried it over to the next race to help their handle.
b) A slots-rich jurisdiction who needs handle for their races - especially over the internet - decided taxing internet wagerers 6%, stifling competition, and hiking takeout on in-state players was a wise idea.
c) The Woodbine Entertainment Group charged more takeout than US tracks, on US tracks, so Canadian bettors (without any choice) have to play racing at a disadvantage.
If you picked "a", you are right. Gulfstream raced a race where four horses completed the race and didn't give a refund. There's no word that if no horses win a race they will keep all money.
If you picked "b", you are right, too. Indiana - their tracks already under the CDI umbrella which stifles bettors choice - will have a 6% tax imposed on their internet wagers.
If you picked "c", well you are technically right, but silly goose, that's been going on for a long time. The government - yes, the government that is supposed to hold tracks in Canada accountable for anti-customer policies (while giving them $100 million a year) - let's it go on. Ho hum. Old news.
So, yes good ship horse racing, when customers think you don't like them much, maybe they are a little whiny or self-absorbed, but, hell, you keep proving them right.
Have a nice Monday everyone!
Friday, February 19, 2016
If You Don't Screw it Up, Handle Can Explode
I remember back many years ago when the Paulick Report was in its infancy; an article was written from the horseman's perspective about internet wagering and ADW's. It was the usual - they don't pay enough, there should only be one ADW controlled by horsemen, etc - and it spawned a response from horseplayers.
Paulick, never shy from using some interesting imagery, displayed a ram fighting another ram with the headline, "Horseplayers Lock Horns With Horsemen Groups", and printed the response from horseplayers .
The article talked about a few things, many of which you have seen typed here since 2008. Mainly, monopoly markets for internet wagering will not work, and high ADW taxes won't work. They inhibit competition, which stifles innovation, reduces player rewards, reduces advertising and customer growth spend, and sends players offshore.
That article didn't do much to sway opinion, of course. Racing in North America has Virginia ADW taxes and fees (ironically done in 2009 to save live racing, which there isn't any longer in Virginia), Pennsylvania and New York ADW taxes and fees, and, of course, no exchanges, source market fees and all the rest. A lot of the big tracks refuse to sell their signals to smaller, customer-centric ADW's, too (one of the more under reported problems in this business)
These policies go on today, with impunity. You can barely go a month without seeing that exact same article from a horsemen's perspective written about somewhere.
In some other parts of the world these same polices are tried, but with a central organization that's held accountable, it's a whole lot different. Things aren't swept under the rug.
The PMU in France, in 2010, imposed high fees, turnover taxes, and didn't allow any firm to offer gross takeout lower than 15%. While participants cheered, the customers and business didn't.
The results were what we might expect:
Advertising in the marketplace dropped 58%. Most of it by dropping player rewards.
Handle in year one was down by 24%.
Competitors, unable to turn a profit, left the marketplace.
Since 2011, despite realizing some of their failures in this policy and trying to correct them, the PMU has lost turnover for three consecutive years in a row.
This is much different than other parts of the world.
Around 2007. Australia opened up their market to give consumers choice; better odds, lower takeout, new ways to bet and better rewards. They, like the horseplayers on the Paulick Report, locked horns with the status-quo, too, but a different result occurred.
Since 2008, players playing offshore (where they do not contribute to purses) have moved more money onshore; hundreds of millions of dollars. Handle on racing in traditional areas is up 4.8% per year, while internet betting has soared by double digits.
Total handle in 2015 for Thoroughbred racing reached an all time high (15.9B versus $8.9B in 2000).
This all occurred while ushering in new competition in the form of sports betting. Handle on sports has grown from virtually nothing 15 years ago, to upwards of $6B today.
All is not perfect and there have been mistakes made (mostly trying to go back and tax turnover more, which also failed) but they have made some progress in modernizing their betting system, while increasing purses.
Several years ago, and to this day, the North American horsemen, owners groups and some tracks are fearful of changing the market. Exchanges, player rewards, lower takeout, more competition in the betting landscape, are all something to be blocked. They're all something to be feared.
This fear paralyzes racing from moving forward. Bettors leave, funds move offshore, new money does not come into the system to replace it. The world is different today and the sport of horse racing realizes it, but it clings to the past because the past is its safety blanket. The past is all it knows.
I mentioned on twitter yesterday that I thought racing could do $50B in yearly handle in a decade if it's done right. I know that sounds silly and many told me just how silly. But it's policies like the above that occur as a matter of course in horse racing and are never corrected. I truly feel North American horse racing is leaving billions and billions of dollars a year of handle on the table.
Have a nice weekend everyone.
The article talked about a few things, many of which you have seen typed here since 2008. Mainly, monopoly markets for internet wagering will not work, and high ADW taxes won't work. They inhibit competition, which stifles innovation, reduces player rewards, reduces advertising and customer growth spend, and sends players offshore.
That article didn't do much to sway opinion, of course. Racing in North America has Virginia ADW taxes and fees (ironically done in 2009 to save live racing, which there isn't any longer in Virginia), Pennsylvania and New York ADW taxes and fees, and, of course, no exchanges, source market fees and all the rest. A lot of the big tracks refuse to sell their signals to smaller, customer-centric ADW's, too (one of the more under reported problems in this business)
These policies go on today, with impunity. You can barely go a month without seeing that exact same article from a horsemen's perspective written about somewhere.
In some other parts of the world these same polices are tried, but with a central organization that's held accountable, it's a whole lot different. Things aren't swept under the rug. The PMU in France, in 2010, imposed high fees, turnover taxes, and didn't allow any firm to offer gross takeout lower than 15%. While participants cheered, the customers and business didn't.
The results were what we might expect:
Advertising in the marketplace dropped 58%. Most of it by dropping player rewards.
Handle in year one was down by 24%.
Competitors, unable to turn a profit, left the marketplace.
This is much different than other parts of the world.
Around 2007. Australia opened up their market to give consumers choice; better odds, lower takeout, new ways to bet and better rewards. They, like the horseplayers on the Paulick Report, locked horns with the status-quo, too, but a different result occurred.
Total handle in 2015 for Thoroughbred racing reached an all time high (15.9B versus $8.9B in 2000).
This all occurred while ushering in new competition in the form of sports betting. Handle on sports has grown from virtually nothing 15 years ago, to upwards of $6B today.
All is not perfect and there have been mistakes made (mostly trying to go back and tax turnover more, which also failed) but they have made some progress in modernizing their betting system, while increasing purses.
Several years ago, and to this day, the North American horsemen, owners groups and some tracks are fearful of changing the market. Exchanges, player rewards, lower takeout, more competition in the betting landscape, are all something to be blocked. They're all something to be feared.
This fear paralyzes racing from moving forward. Bettors leave, funds move offshore, new money does not come into the system to replace it. The world is different today and the sport of horse racing realizes it, but it clings to the past because the past is its safety blanket. The past is all it knows.
I mentioned on twitter yesterday that I thought racing could do $50B in yearly handle in a decade if it's done right. I know that sounds silly and many told me just how silly. But it's policies like the above that occur as a matter of course in horse racing and are never corrected. I truly feel North American horse racing is leaving billions and billions of dollars a year of handle on the table.
Have a nice weekend everyone.
Thursday, February 18, 2016
The Dollar Flow Gives Industry Betting Narratives the Middle Finger
The system of capitalism seems to take a lot of hits in this social media world of late.
No matter what you think about it, it's been a system that has worked better than all others for a few reasons. It brings buyers and sellers together, sets prices and allows for a maximum number of transactions. People wanting to give you money helps you learn markets and pricing, allows you to serve that market and expand it worldwide better than any other company or industry can. The market doesn't have a degree from Wharton Business School, but it's smarter than any professor whose ever taught there.
David Purdon wrote an article at ESPN yesterday about "why do people hate DFS". It's a great article that talks about the New York Times, politicians and lawyers, activists and others telling you, a consumer, how stupid you are to play into it. It was twitter-shaming times ten.
A funny thing happened. The market gave them all the middle finger. DFS handle grew at an almost exponential rate in 2015. Why? Because users found value in the system, were having fun, and didn't believe any of the horror stories forwarded by an overzealous press and political class. Game, set and match to the market.
If you are running a business that provides some sort of value, the system employed will encourage people to give you their money. It's the way things work.
Yesterday, Gabe posted this on the twitter box:
Why does this work, because, like with DFS and just about everything else in our transaction way of life, money finds value. That 12% takeout rate, with a carryover, with expected pool size, hits players with bankrolls right between the eyes. If you add in their rebate, you have to be a complete moron not to want to play .
In racing, the braintrust wants you to believe takeout doesn't matter; that value in pools is a mystical thing that happens sometimes and seems good for whatever reason; that "look, my track lowered juice 3 points and lost money"; that expected pool value is trumped by floppy hats and Daughtry concerts, by high purses and race quality.
On a Wednesday evening at Pompano - and what we see time and time again, over and over again - price sensitive, bankrolled players are telling them they could not be more wrong.
When value is offered, and racing is built the right way to capitalize on it, the sky is the limit for this sport as a gambling game.
No matter what you think about it, it's been a system that has worked better than all others for a few reasons. It brings buyers and sellers together, sets prices and allows for a maximum number of transactions. People wanting to give you money helps you learn markets and pricing, allows you to serve that market and expand it worldwide better than any other company or industry can. The market doesn't have a degree from Wharton Business School, but it's smarter than any professor whose ever taught there.
David Purdon wrote an article at ESPN yesterday about "why do people hate DFS". It's a great article that talks about the New York Times, politicians and lawyers, activists and others telling you, a consumer, how stupid you are to play into it. It was twitter-shaming times ten.
A funny thing happened. The market gave them all the middle finger. DFS handle grew at an almost exponential rate in 2015. Why? Because users found value in the system, were having fun, and didn't believe any of the horror stories forwarded by an overzealous press and political class. Game, set and match to the market.
If you are running a business that provides some sort of value, the system employed will encourage people to give you their money. It's the way things work.
Yesterday, Gabe posted this on the twitter box:
Gabe's right. There were no ads on TVG, this was not Santa Anita before a big race where eyeballs were on the product; $46K of new money is about 20% of this tracks' entire nightly handle a year ago. This was huge money at a small handle harness track with a 12% take, on a Wednesday evening, with ten minutes to spare.My mind is still blown on how a $5k carryover can generate $46k new money with a 10 minute notice on a Wed night at 10:40 p.m.— Gabe Prewitt (@gabe_prewitt) February 18, 2016
Why does this work, because, like with DFS and just about everything else in our transaction way of life, money finds value. That 12% takeout rate, with a carryover, with expected pool size, hits players with bankrolls right between the eyes. If you add in their rebate, you have to be a complete moron not to want to play .
In racing, the braintrust wants you to believe takeout doesn't matter; that value in pools is a mystical thing that happens sometimes and seems good for whatever reason; that "look, my track lowered juice 3 points and lost money"; that expected pool value is trumped by floppy hats and Daughtry concerts, by high purses and race quality.
On a Wednesday evening at Pompano - and what we see time and time again, over and over again - price sensitive, bankrolled players are telling them they could not be more wrong.
When value is offered, and racing is built the right way to capitalize on it, the sky is the limit for this sport as a gambling game.
Wednesday, February 17, 2016
Wednesday Notes, and Some Good Things in Interweb Racing Land
Hello racing folks. I hope everyone's day is treating them well.
Old-time racing has a lot of trouble understanding carryovers and their driving of handle. It's like it's one of life's great mysteries. I emailed the dude who plays Castle on Castle and he set me straight.
"Dean, carryovers excel for a few main reasons. First, and most obvious, price sensitive players with big bankrolls play them because they offer a takeout reduction. Some carryover pools are actually positive expectation bets, where more money is paid out than taken in. This is the holy grail for these players - in fact any gambler worth his or her salt - and these players will bet 400, 500 or 1000% more than usual. This is why "last flashes" on carryover pools are so amazingly huge. Second, with bigger pools there is at least a chance at a big payoff. Third, in the internet age, racing channels, twitter feeds and others have reported on them more and more, and players have caught the bug."
Just now, in the second race at Gulfstream, a $50k carry resulted in a pool of $562,000. I want to thank TV detective Castle for helping us understand this phenomenon.
Sid Fernando is a good pedigree dude and knows his stuff. He has been writing a bit more, for free, at his newly designed blog. This post on Nyquist's pedigree re: stamina is insightful.
Speaking of Nyquist, I thought the talk that he can't "get 8.5 furlongs" before the BC was kind of weak. If he's a good, precocious miler or 7 furlong horse he can stroll his last sixteenth and still run a good number to beat those handily. However, the leap to being a very strong ten furlong horse does seems weak. He looks to me like the Factor and Goldencents. Great talent, and he could sprint and stagger to a decent 10 furlong number, but he's not built to go long under any pressure. We'll see soon enough.
Dana, another internet racing patriot, has been doing more good things at Hello Race Fans and Raceday360, including a visualization of paths to the Derby since 1990 (really cool) and "Tout Wire".
It looks like the racing plug has been pulled at Northlands Park.
I had a ton of hits and a lot of comments (primarily on twitter) regarding yesterday's post drag post. The comments from insiders had one common thread.
"When I hang zero minutes to post for six minutes my handle is up 25%. When I stopped doing it, handle went down 25%."
Yes, I understand and I mentioned it in the piece. It works the same way a sale works on a busy street - keep the "buy now" sale going for six minutes longer and you'll sell more - or the countdown clock on the home shopping network. We've all been to simulcast outlets where bettors see "0" and run and bet ahead of a track that has "4" flashing. The more eyeballs on zero, the more people choose you first. Common sense.
Saying "we tried to change for X weeks and we lost handle" is a little like the "low takeout didn't work because handle didn't go up for the one week at Laurel in 2006," though.
A sport, especially a gambling sport, thrives on post time being post time - for TV (as the most recent comment on yesterday's piece) and for real bettors. Real bettors need to know the off time to see near post time odds, structure tickets based on the odds board and make their plays. If an off time is questionable it is a disservice to those who gamble. The sport needs to attract gamblers of all stripes to survive, not depend solely on people who gravitate to betting zero's on a TV screen. It has a lot of work to do.
Have a nice day everyone.
"Dean, carryovers excel for a few main reasons. First, and most obvious, price sensitive players with big bankrolls play them because they offer a takeout reduction. Some carryover pools are actually positive expectation bets, where more money is paid out than taken in. This is the holy grail for these players - in fact any gambler worth his or her salt - and these players will bet 400, 500 or 1000% more than usual. This is why "last flashes" on carryover pools are so amazingly huge. Second, with bigger pools there is at least a chance at a big payoff. Third, in the internet age, racing channels, twitter feeds and others have reported on them more and more, and players have caught the bug."
Just now, in the second race at Gulfstream, a $50k carry resulted in a pool of $562,000. I want to thank TV detective Castle for helping us understand this phenomenon.
Speaking of Nyquist, I thought the talk that he can't "get 8.5 furlongs" before the BC was kind of weak. If he's a good, precocious miler or 7 furlong horse he can stroll his last sixteenth and still run a good number to beat those handily. However, the leap to being a very strong ten furlong horse does seems weak. He looks to me like the Factor and Goldencents. Great talent, and he could sprint and stagger to a decent 10 furlong number, but he's not built to go long under any pressure. We'll see soon enough.
Dana, another internet racing patriot, has been doing more good things at Hello Race Fans and Raceday360, including a visualization of paths to the Derby since 1990 (really cool) and "Tout Wire".
It looks like the racing plug has been pulled at Northlands Park.
I had a ton of hits and a lot of comments (primarily on twitter) regarding yesterday's post drag post. The comments from insiders had one common thread.
"When I hang zero minutes to post for six minutes my handle is up 25%. When I stopped doing it, handle went down 25%."
Yes, I understand and I mentioned it in the piece. It works the same way a sale works on a busy street - keep the "buy now" sale going for six minutes longer and you'll sell more - or the countdown clock on the home shopping network. We've all been to simulcast outlets where bettors see "0" and run and bet ahead of a track that has "4" flashing. The more eyeballs on zero, the more people choose you first. Common sense.
Saying "we tried to change for X weeks and we lost handle" is a little like the "low takeout didn't work because handle didn't go up for the one week at Laurel in 2006," though.
A sport, especially a gambling sport, thrives on post time being post time - for TV (as the most recent comment on yesterday's piece) and for real bettors. Real bettors need to know the off time to see near post time odds, structure tickets based on the odds board and make their plays. If an off time is questionable it is a disservice to those who gamble. The sport needs to attract gamblers of all stripes to survive, not depend solely on people who gravitate to betting zero's on a TV screen. It has a lot of work to do.
Have a nice day everyone.
Tuesday, February 16, 2016
Racing's Short-Term Post-Drag Thinking, is Long-Term Deadly
Horse racing as a whole - and this isn't a surprise to anyone - possesses some short-term thinking when it comes to business strategy. We've seen it countless times, whether it be a short-term bump with takeout hikes chosen over the longer term gain of market share, slot deals written where almost all the revenue is transferred to track owners and purses, where a short-term bump in asset prices rules the day. It's just the way the industry thinks, and has for some time. This isn't anything new.
Unfortunately, the thinking permeates much deeper than that.
When businesses (in this case, tracks, especially smaller ones) are in a state of decline, desperation plays a role.
Harvard Business Review:
"Perhaps the worst kind of waning-industry environment occurs when one or more weakened companies ...... with significant corporate resources are committed to stay in the business. Their weakness forces them to use desperate actions........ their staying power forces other companies to respond likewise."
Strategies are tried that weaken the industry as a whole, exacerbating everyone's decline.
There are many examples of the above in the macro that occurs in racing, but let's look at one little slice of the micro for an example: Post dragging.
Post dragging occurs because a track, somewhere, someplace, realized that flashing a "0" on their screens hoodwinked people to think that time is running out to bet, so get your bet down now. The longer you flash the zero, the more eyeballs see the zero and the more people run to the windows. It's silly, yes, but it works. A track that flashes that zero for a half hour will have, on balance, more handle than a track who flashes zero for five minutes.
The problem with the above, as the Harvard Business Review article notes, is that these desperate tracks "force others to respond likewise". Soon, several tracks all flash zeroes in a strange competition of 'fool your customer'. The pitfalls of this strategy are obvious:
i) You are simply rearranging the deck chairs. There is no value driven from this strategy because it does not grow the pie. Bettors bankrolls are not going up, urging them to bet more, they are just betting your track at X plus and another at X, or X minus. Handle doesn't go up and neither does revenue. With 90% of money bet off track, the host venue doesn't care what track you're betting, for the most part.
ii) It eliminates the possibility of scheduled post times. One of the biggest bettor and industry complaints has always been tracks running on top of each other. With draggers, it's almost impossible to even know when they are going to post (Hawthorne's Jim Miller - someone who tries his hardest not to run on top of other signals - shows his frustration with this on twitter often).
iii) It eliminates promotion of the signal. We have TVG who wants to show live racing at regular intervals to maximize total reach - according to Thalheimer, the number of races have an elasticity of -0.6 and are important to racing as a whole - and they can't. We have people wanting to create a live racing harness racing channel to make racing seamless at three or four tracks in an evening as a brand builder. We have NHC contests and Derby Wars, all trying to schedule proper games at proper intervals. This inhibits the whole ecosystem.
iv) Negative branding. Post drags inconvenience customers. I'll type it again, post drags inconvenience customers. It makes giving tracks your money an exercise in frustration.
v) Things reach a tipping point. NFL games can gain more revenue tomorrow by making games five hours long. It would work for awhile, and then comes the tipping point. People get frustrated with the product, leave, find something else to do, and long-term revenue is hurt. Bettors are even worse. When a horse gambler leaves, he or she gets out of the habit and are increasingly hard to get back as customers.
Last, and most importantly, it does almost nothing positive, even for your track. The money gained on a post drag is priced at 3% or 4% for most very small tracks. A $5,000 handle bump at a small track for a flashing zero for five minutes gains tiny revenue. The sad part is that some of these tracks have millions for purses and profits from slot machines. This revenue is a drop in the bucket.
Racing as a whole needs to look deeply into this issue, because when it allows tracks (especially smaller ones) to exacerbate industry wide problems as an act of desperation, the entire business - in the long term - will lose. This business has been on the losing end too much this past decade married to short-sighted, short-term policy. There's no need to make it worse.
Unfortunately, the thinking permeates much deeper than that.
When businesses (in this case, tracks, especially smaller ones) are in a state of decline, desperation plays a role.
Harvard Business Review:
"Perhaps the worst kind of waning-industry environment occurs when one or more weakened companies ...... with significant corporate resources are committed to stay in the business. Their weakness forces them to use desperate actions........ their staying power forces other companies to respond likewise."
Strategies are tried that weaken the industry as a whole, exacerbating everyone's decline.
There are many examples of the above in the macro that occurs in racing, but let's look at one little slice of the micro for an example: Post dragging.
Post dragging occurs because a track, somewhere, someplace, realized that flashing a "0" on their screens hoodwinked people to think that time is running out to bet, so get your bet down now. The longer you flash the zero, the more eyeballs see the zero and the more people run to the windows. It's silly, yes, but it works. A track that flashes that zero for a half hour will have, on balance, more handle than a track who flashes zero for five minutes.
The problem with the above, as the Harvard Business Review article notes, is that these desperate tracks "force others to respond likewise". Soon, several tracks all flash zeroes in a strange competition of 'fool your customer'. The pitfalls of this strategy are obvious:
i) You are simply rearranging the deck chairs. There is no value driven from this strategy because it does not grow the pie. Bettors bankrolls are not going up, urging them to bet more, they are just betting your track at X plus and another at X, or X minus. Handle doesn't go up and neither does revenue. With 90% of money bet off track, the host venue doesn't care what track you're betting, for the most part.
ii) It eliminates the possibility of scheduled post times. One of the biggest bettor and industry complaints has always been tracks running on top of each other. With draggers, it's almost impossible to even know when they are going to post (Hawthorne's Jim Miller - someone who tries his hardest not to run on top of other signals - shows his frustration with this on twitter often).
iii) It eliminates promotion of the signal. We have TVG who wants to show live racing at regular intervals to maximize total reach - according to Thalheimer, the number of races have an elasticity of -0.6 and are important to racing as a whole - and they can't. We have people wanting to create a live racing harness racing channel to make racing seamless at three or four tracks in an evening as a brand builder. We have NHC contests and Derby Wars, all trying to schedule proper games at proper intervals. This inhibits the whole ecosystem.
iv) Negative branding. Post drags inconvenience customers. I'll type it again, post drags inconvenience customers. It makes giving tracks your money an exercise in frustration.
v) Things reach a tipping point. NFL games can gain more revenue tomorrow by making games five hours long. It would work for awhile, and then comes the tipping point. People get frustrated with the product, leave, find something else to do, and long-term revenue is hurt. Bettors are even worse. When a horse gambler leaves, he or she gets out of the habit and are increasingly hard to get back as customers.
Last, and most importantly, it does almost nothing positive, even for your track. The money gained on a post drag is priced at 3% or 4% for most very small tracks. A $5,000 handle bump at a small track for a flashing zero for five minutes gains tiny revenue. The sad part is that some of these tracks have millions for purses and profits from slot machines. This revenue is a drop in the bucket.
Racing as a whole needs to look deeply into this issue, because when it allows tracks (especially smaller ones) to exacerbate industry wide problems as an act of desperation, the entire business - in the long term - will lose. This business has been on the losing end too much this past decade married to short-sighted, short-term policy. There's no need to make it worse.
Friday, February 12, 2016
Positive Tests for Dummies
By now you've heard that trainers Ron Burke and Julie Miller (and apparently others who have not been named) have been slapped with positive tests for a class 2 drug called Glaucine.
Glaucine - a medication that supposedly helps with breathing and/or bleeding - is reported by Harnesslink as a drug that New York authorities recently developed a test for, but there were positives in North America for the drug in 2012, so this is a little unclear.
At this point there's been nothing "official" from the New York authorities, and both trainers will be allowed to race.
Generally when these things come up we get the "innocent until proven guilty crowd", riding in on a high horse draped in an American flag, but that's misguided. Positive tests are not an episode of Perry Mason, they simply show something was in a horse that should not be. It's tantamount to a driving under the influence ticket. You might've been slipped a mickey, you might've been poisoned by a Russian agent, but booze was in your blood, you drove, and you are held responsible. It's up to you to prove otherwise.
That - proving otherwise - is where these things go with positives next. And a big part of such a case are the levels of the drug in the system.
If the testing shows trace elements, then the trainers will be in good shape, because that indicates a lack of intent to cheat. With a 6 to 8 hour half life, this drug given in pill form will probably show high levels; if it shows low levels, it likely got into the horses system in some strange way - like through feed, or bedding or what have you.
Although "guilty until proven innocent" occurs in horse racing - like with a drunk driving charge, or a positive test at the Olympics - the adjudication and penalty process allows for these questions to be examined and works fairly well.
Trainers are held responsible for what goes into their horses because the public pays for purses, elected officials vote on legislation like slots, and testing, appeals and the like are very expensive. By holding this standard high, it encourages trainers and owners to be vigilant and double and triple check everything that goes into their horse. It keeps people out of court all day. Hong Kong's system is draconian on trainer responsibility, and how many therapeutic or timing positives do you see there? It's super-important.
It is equally important to have commissions wary of intent, as we will likely see with this case. Mistakes, or things completely out of a trainers control should never threaten someone's livelihood.
The above process for Mrs. Miller and Mr. Burke (and any other trainers) is working like it's supposed to. It's never easy or clean, and it's certainly not perfect, but more often than not, truth and fairness usually comes out at the end.
Glaucine - a medication that supposedly helps with breathing and/or bleeding - is reported by Harnesslink as a drug that New York authorities recently developed a test for, but there were positives in North America for the drug in 2012, so this is a little unclear.
At this point there's been nothing "official" from the New York authorities, and both trainers will be allowed to race.
Generally when these things come up we get the "innocent until proven guilty crowd", riding in on a high horse draped in an American flag, but that's misguided. Positive tests are not an episode of Perry Mason, they simply show something was in a horse that should not be. It's tantamount to a driving under the influence ticket. You might've been slipped a mickey, you might've been poisoned by a Russian agent, but booze was in your blood, you drove, and you are held responsible. It's up to you to prove otherwise.
That - proving otherwise - is where these things go with positives next. And a big part of such a case are the levels of the drug in the system.
If the testing shows trace elements, then the trainers will be in good shape, because that indicates a lack of intent to cheat. With a 6 to 8 hour half life, this drug given in pill form will probably show high levels; if it shows low levels, it likely got into the horses system in some strange way - like through feed, or bedding or what have you.
Although "guilty until proven innocent" occurs in horse racing - like with a drunk driving charge, or a positive test at the Olympics - the adjudication and penalty process allows for these questions to be examined and works fairly well.
Trainers are held responsible for what goes into their horses because the public pays for purses, elected officials vote on legislation like slots, and testing, appeals and the like are very expensive. By holding this standard high, it encourages trainers and owners to be vigilant and double and triple check everything that goes into their horse. It keeps people out of court all day. Hong Kong's system is draconian on trainer responsibility, and how many therapeutic or timing positives do you see there? It's super-important.
It is equally important to have commissions wary of intent, as we will likely see with this case. Mistakes, or things completely out of a trainers control should never threaten someone's livelihood.
The above process for Mrs. Miller and Mr. Burke (and any other trainers) is working like it's supposed to. It's never easy or clean, and it's certainly not perfect, but more often than not, truth and fairness usually comes out at the end.
Wednesday, February 10, 2016
Jersey Exchange Thoughts
In HRU this weekend, Bill Finley had some information on exchange wagering in Jersey, due out sometime this spring.
A few items:
It looks like it will start with in-running betting only. Curious move, but that's the plan.
There's no word from Finley on what tracks will be offered, or if it will be commingled with current tracks trading on betfair. The latter is obviously preferred.
The takeout is reported to be 12%.
The last point kinda sticks in the craw. I remember writing a white paper for exchange wagering in Canada back in '08 and one line was "as long as you do not try to price it at 10%, it has a good chance to help horse racing long-term." 10% leaves money on the table; 12% leaves even more.
I guess they didn't like my white paper.
The 12% want is, of course, linked to the current 15%+ takeout in win pools. If the takeout is too low on the excahnge, then people might leave the win pools, so the story goes.
Racing's obsession with not wanting to cannibalize the wagering pools borders on the absurd. No one thinks like this.
Kraft execs:
Corp Dev: "We want to sell sliced, processed cheese"
Old dude: "What will that do to the sales of our one quarter pound block cheese?"
Corp Dev: "It could go down 5% or 10%, but we hope to make up the sales by selling more cheese overall. People love grilled cheese sandwiches and we are not offering them anything they want, so this could sell well"
Old dude: "Too risky, we can't jeopardize our block cheese sales."
This is why, today,there's only one kind of cheese.
Products have features and benefits. The number one benefit of an exchange is it allows a high takeout game a chance to appeal to price-sensitive customers it has lost, or new ones it hopes to attract. So, what does racing do? It destroys its main selling benefit before it leaves the station.
This isn't Betfair's doing. As I wrote last week, when Australia tried to price up exchanges, volume took a bath and Victorian racing had to acquiesce; prices went lower again. This is old hat. This is just North American racing leaning back onto what it always leans on - protecting a made-up price, and the status-quo. It knows no other way.
It will be interesting to see where this goes from here, but right now, I am not confident an exchange will do anything at all to help New Jersey horse racing.
A few items:
It looks like it will start with in-running betting only. Curious move, but that's the plan.
There's no word from Finley on what tracks will be offered, or if it will be commingled with current tracks trading on betfair. The latter is obviously preferred.
The takeout is reported to be 12%.
The last point kinda sticks in the craw. I remember writing a white paper for exchange wagering in Canada back in '08 and one line was "as long as you do not try to price it at 10%, it has a good chance to help horse racing long-term." 10% leaves money on the table; 12% leaves even more.
I guess they didn't like my white paper.
The 12% want is, of course, linked to the current 15%+ takeout in win pools. If the takeout is too low on the excahnge, then people might leave the win pools, so the story goes.
Racing's obsession with not wanting to cannibalize the wagering pools borders on the absurd. No one thinks like this.
Kraft execs:
Corp Dev: "We want to sell sliced, processed cheese"
Old dude: "What will that do to the sales of our one quarter pound block cheese?"
Corp Dev: "It could go down 5% or 10%, but we hope to make up the sales by selling more cheese overall. People love grilled cheese sandwiches and we are not offering them anything they want, so this could sell well"
Old dude: "Too risky, we can't jeopardize our block cheese sales."
This is why, today,
Products have features and benefits. The number one benefit of an exchange is it allows a high takeout game a chance to appeal to price-sensitive customers it has lost, or new ones it hopes to attract. So, what does racing do? It destroys its main selling benefit before it leaves the station.
This isn't Betfair's doing. As I wrote last week, when Australia tried to price up exchanges, volume took a bath and Victorian racing had to acquiesce; prices went lower again. This is old hat. This is just North American racing leaning back onto what it always leans on - protecting a made-up price, and the status-quo. It knows no other way.
It will be interesting to see where this goes from here, but right now, I am not confident an exchange will do anything at all to help New Jersey horse racing.
Tuesday, February 9, 2016
"Secret Cultures" Are a No-No For Any Sports' Growth
The Guardian takes a big swipe today at the International Tennis Federation in a story, "How a Culture of Secrecy Aids Corruption"
"Tennis authorities can have no excuses for an opaque process that only serves to protect the sport's image rather than its integrity"
Further, "The idea that investigations should be conducted in the dark, shrouded in secrecy and accompanied by an air of paranoia and unease, can only add to the impression that the ITF is more concerned about the image of the sport than being seen to root out corruption without fear or favour."
This is a systemic strategy we've seen in horse racing from time to time. "Accentuate the positive", "nothing to see here, move along", the Sgt. Shultz method. It hasn't worked, and it won't work. It can never work; for three main reasons.
i) internal investigations, not releasing negative news, or spinning it in a positive, Pravda way, allows bad decisions to be unaccountable. Unaccountable decisions that are poor, are never corrected, inhibits the sport from moving forward.
ii) The easiest folks to get back into the sport are those who once owned or bet, and left because of such issues. There's money on the table and the sport doesn't look to grab this low hanging fruit, they step on it.
iii) in an internet age, customers (horse owners, bettors) are more educated than ever before, and when they see "foot dragging" they pushback themselves, and this is unhealthy. As the Guardian notes: "Fans have gone from feeling uneasy about those who run their sports to outright hostility and scepticism."
Jeff Gural, someone who is trying to change the culture, shows just how tough this is. In the DRF yesterday, he was responding to a criticism of his tactics to ban people with bad tests from his racetracks (in this case EPO) that he catches.
"Just so you know, no race track owner in the area or Commission member has ever contacted me to ask why someone is not allowed to race at our racetracks. You probably saw the press release from Yonkers extolling the virtues of Rene Allard, who is the leading trainer and who is someone we caught drugging horses multiple times. The reality is no one really cares."
No one cares, or are we just "accentuating the positive?" A strong case can be made they're synonymous.
Horse racing needs sound decision making, it needs to address why bettors and horse owners have left the game and get some of them back; it needs to change the way people think about racing. This is not done in the shadows, following some sophomoric Baghdad Bob public relations playbook. Wishing Jeff Gural would shut the hell up won't help. It's done with leadership, sound ethics and a respect for those who patronize both the horse sales and betting windows. That will take a culture change, just like the one tennis is going through.
"Tennis authorities can have no excuses for an opaque process that only serves to protect the sport's image rather than its integrity"
Further, "The idea that investigations should be conducted in the dark, shrouded in secrecy and accompanied by an air of paranoia and unease, can only add to the impression that the ITF is more concerned about the image of the sport than being seen to root out corruption without fear or favour."
This is a systemic strategy we've seen in horse racing from time to time. "Accentuate the positive", "nothing to see here, move along", the Sgt. Shultz method. It hasn't worked, and it won't work. It can never work; for three main reasons.
i) internal investigations, not releasing negative news, or spinning it in a positive, Pravda way, allows bad decisions to be unaccountable. Unaccountable decisions that are poor, are never corrected, inhibits the sport from moving forward.
ii) The easiest folks to get back into the sport are those who once owned or bet, and left because of such issues. There's money on the table and the sport doesn't look to grab this low hanging fruit, they step on it.
iii) in an internet age, customers (horse owners, bettors) are more educated than ever before, and when they see "foot dragging" they pushback themselves, and this is unhealthy. As the Guardian notes: "Fans have gone from feeling uneasy about those who run their sports to outright hostility and scepticism."
Jeff Gural, someone who is trying to change the culture, shows just how tough this is. In the DRF yesterday, he was responding to a criticism of his tactics to ban people with bad tests from his racetracks (in this case EPO) that he catches.
"Just so you know, no race track owner in the area or Commission member has ever contacted me to ask why someone is not allowed to race at our racetracks. You probably saw the press release from Yonkers extolling the virtues of Rene Allard, who is the leading trainer and who is someone we caught drugging horses multiple times. The reality is no one really cares."
No one cares, or are we just "accentuating the positive?" A strong case can be made they're synonymous.
Horse racing needs sound decision making, it needs to address why bettors and horse owners have left the game and get some of them back; it needs to change the way people think about racing. This is not done in the shadows, following some sophomoric Baghdad Bob public relations playbook. Wishing Jeff Gural would shut the hell up won't help. It's done with leadership, sound ethics and a respect for those who patronize both the horse sales and betting windows. That will take a culture change, just like the one tennis is going through.
Sunday, February 7, 2016
The Donn, Songbird, Big Margin Beyer Anger ®, Sports Betting and What Racing Can Learn From It
Hello racing friends!
Yesterday's Donn card was successful from a handle standpoint - around $20 million - and I thought it was deserved. It was a good deep card with a lot of interesting races. The public took a bath with the Pizza Man and Keen Ice both missing the board. The former I thought was flat again, the latter raced well, but was up against it. Both horses on paper were overbet, allowing regular players to find value, which is the name of the game.
As for Keen Ice, to me he feels like a really solid ten furlong horse, which is rare in the sport nowadays. I have always respected him and I hope he has a good year.
Songbird grabbed an easy lead, and strolled home against a suspect field at 1-9. Races like that - especially early season ones - often result in a fun horse racing phenomenon.
When we see a horse who should win easy, win by a large margin, most go giddy at the margin, and the dominance. Then - oh oh - the Beyer comes out weak. At that point we generally see an apoplectic public question Andy Beyer's sanity.
Horse racing is a super-fun game. It's a great sport for watching horses run; comparing them to others; wondering if we're seeing a great, or only a good horse. Early in the year it's much better to take a breath. Songbird is a nice filly who dominated a BC field with a 99 Beyer and came back in a stroll winning by a huge margin for her first start off a break. She could be a good filly or a great filly, but yesterday's race (and arguably the BC, too) sheds no light on which. January comeback efforts at 1-9 rarely do.
She looks sound and happy though, and we see so many hot stars at two look nothing like that early in the 3 year old year, so she passed the first hurdle with flying colors.
The power of football:
"I won't watch the Derby because I hate horse racing, but I'll watch the tweets and my bet is on Mister Frisky.", will never be heard. In Australia for Melbourne Cup day, it probably is heard at times. That race is part of the culture there.
Sports betting is growing rapidly, with handles at Vegas casinos up 8.4% last year alone. Over double the cash will be bet on the Super Bowl this year, than was in 2003, and (illegally) about $4B alone is expected to be bet on today's Big Game.
Today in HRU, sports betting was looked at, in the lens of daily fantasy sports, and horse racing. What's going right for sports betting, and what can horse racing learn from it is explored:
"Racing must come to grips with the fact that people are not falling all over themselves any longer to bet into 25 per cent takeouts in a pari-mutuel system that was invented in 1905. Like with DFS and sports betting, there are complimentary ways to grow market share. The sooner racing looks towards new avenues and mediums for partnerships, rather than looking at them as adversaries, the better. "
The more I dive into the Super Bowl statistics, the more I don't think this game sets up for the Broncos, but I feel Carolina is overbet, much like Keen Ice or the Pizza Man. Horse racing betting and football betting is still just betting. I think I will wait to see if the Denver front five gets some pressure on Cam Newton, where he struggles and go long in-running. The way the OL has been playing since the Atlanta game it probably won't happen, though. Enjoy the game.
Also in HRU this weekend, Finley wrote an article on exchange wagering. It appears the takeout will be 12%. Yes, 12%. I'll have more on that this week.
Have a nice day everyone.
Yesterday's Donn card was successful from a handle standpoint - around $20 million - and I thought it was deserved. It was a good deep card with a lot of interesting races. The public took a bath with the Pizza Man and Keen Ice both missing the board. The former I thought was flat again, the latter raced well, but was up against it. Both horses on paper were overbet, allowing regular players to find value, which is the name of the game.
As for Keen Ice, to me he feels like a really solid ten furlong horse, which is rare in the sport nowadays. I have always respected him and I hope he has a good year.
Songbird grabbed an easy lead, and strolled home against a suspect field at 1-9. Races like that - especially early season ones - often result in a fun horse racing phenomenon.
When we see a horse who should win easy, win by a large margin, most go giddy at the margin, and the dominance. Then - oh oh - the Beyer comes out weak. At that point we generally see an apoplectic public question Andy Beyer's sanity.
She looks sound and happy though, and we see so many hot stars at two look nothing like that early in the 3 year old year, so she passed the first hurdle with flying colors.
The power of football:
"I won't watch the Derby because I hate horse racing, but I'll watch the tweets and my bet is on Mister Frisky.", will never be heard. In Australia for Melbourne Cup day, it probably is heard at times. That race is part of the culture there.
Sports betting is growing rapidly, with handles at Vegas casinos up 8.4% last year alone. Over double the cash will be bet on the Super Bowl this year, than was in 2003, and (illegally) about $4B alone is expected to be bet on today's Big Game.
Today in HRU, sports betting was looked at, in the lens of daily fantasy sports, and horse racing. What's going right for sports betting, and what can horse racing learn from it is explored:"Racing must come to grips with the fact that people are not falling all over themselves any longer to bet into 25 per cent takeouts in a pari-mutuel system that was invented in 1905. Like with DFS and sports betting, there are complimentary ways to grow market share. The sooner racing looks towards new avenues and mediums for partnerships, rather than looking at them as adversaries, the better. "
The more I dive into the Super Bowl statistics, the more I don't think this game sets up for the Broncos, but I feel Carolina is overbet, much like Keen Ice or the Pizza Man. Horse racing betting and football betting is still just betting. I think I will wait to see if the Denver front five gets some pressure on Cam Newton, where he struggles and go long in-running. The way the OL has been playing since the Atlanta game it probably won't happen, though. Enjoy the game.
Also in HRU this weekend, Finley wrote an article on exchange wagering. It appears the takeout will be 12%. Yes, 12%. I'll have more on that this week.
Have a nice day everyone.
Wednesday, February 3, 2016
For Intermediary Change, Racing Needs a Civil War
The want for change is big in horse racing and it is probably talked about sometimes far too often (guilty as charged). But it is emblematic of an industry presently losing on both the demand (customers) and supply (horse owners) side. When a business is doing swimmingly there's no need for change, when it isn't, everyone wants it. Such is life.
If you aren't printing money - and horse racing is not - the kind of change, and how an industry needs to change is the most important variable to consider.
Professor Anita McGahan's Four Trajectories of Industry Change - Radical Change, Intermediary Change, Creative Change and Progressive Change - can help.
I would suspect most would say horse racing is in a radical change state, but it is not land lines, or hula hoops. What fits more for the sport is intermediary change.
Intermediary change is needed for industries that are in a state of flux; the core product or service is being threatened, but the assets and infrastructure have value, especially if used in new ways. An example the author notes is the traditional auction house who have had their market disrupted by Ebay, but have offered their services for online appraisals, and still own the high end.
The main issue with horse racing, compared to say an auction house, is pretty big. And it throws a big red dart into intermediary change. Horse racing deals with suppliers (horses, owners and purses) and end demand customers (those who make bets to supply money for owners to race for).
As Professor McGahan notes, when it's like the above, without a fundamental structure, it can be a house of cards, prone for failure:
What does she suggest organizations need to have, to allow intermediary change to flourish? Something racing doesn't.
"Strong, central leadership is required to deal with the problem effectively."
That doesn't mean individual organizations in this sport have to throw up their hands and use that as an excuse. I know there are a lot of you in the business who understand betting, handle and customer concerns. My challenge to you is: Stand up and be heard. You need to, when presented with yet another supply side argument say, "what does this mean for our end user?" You need to be a part of that Civil War; be that force for the demand side, be the catalyst for discussion from all facets of the business, not just one. It's the first step for your organization to forward much-needed intermediary change. Without you, change will never happen.
If you aren't printing money - and horse racing is not - the kind of change, and how an industry needs to change is the most important variable to consider.
Professor Anita McGahan's Four Trajectories of Industry Change - Radical Change, Intermediary Change, Creative Change and Progressive Change - can help.
I would suspect most would say horse racing is in a radical change state, but it is not land lines, or hula hoops. What fits more for the sport is intermediary change.
Intermediary change is needed for industries that are in a state of flux; the core product or service is being threatened, but the assets and infrastructure have value, especially if used in new ways. An example the author notes is the traditional auction house who have had their market disrupted by Ebay, but have offered their services for online appraisals, and still own the high end.
The main issue with horse racing, compared to say an auction house, is pretty big. And it throws a big red dart into intermediary change. Horse racing deals with suppliers (horses, owners and purses) and end demand customers (those who make bets to supply money for owners to race for).
As Professor McGahan notes, when it's like the above, without a fundamental structure, it can be a house of cards, prone for failure:
Under radical and intermediating change, it is also important to interpret conflict within your organization in a new way. “Civil wars” can emerge within an organization as divisions with exposure to different segments of the business develop opposing views about the nature and pace of change. It is uncanny how frequently this happens.In horse racing it's even worse, because it never is a Civil War. Keeneland didn't change their track back to dirt because of handle. Listen to a CHRB meeting, in the four or six hours count how many times you hear the word "customer". When a takeout hike is proposed, how many projections do you ever see of lost handle? Insiders are supply and foal crop driven, and those on the other side are either silent, or not invited to the party.
What does she suggest organizations need to have, to allow intermediary change to flourish? Something racing doesn't.
"Strong, central leadership is required to deal with the problem effectively."
That doesn't mean individual organizations in this sport have to throw up their hands and use that as an excuse. I know there are a lot of you in the business who understand betting, handle and customer concerns. My challenge to you is: Stand up and be heard. You need to, when presented with yet another supply side argument say, "what does this mean for our end user?" You need to be a part of that Civil War; be that force for the demand side, be the catalyst for discussion from all facets of the business, not just one. It's the first step for your organization to forward much-needed intermediary change. Without you, change will never happen.
Tuesday, February 2, 2016
A Little Buzz, Wet Blankets & Other Worldly Betting Volume
I think this was the year the NHC got it right.
I have watched, or wanted to watch and follow the National Handicapping Championship over the years and I found it was not easy. There were some (taped) interviews, the odd leader board and general data and coverage, but it was not in the least bit engaging. When compared to a trip to Hong Kong racing for some local tweeters, a horse racing 'event' with everyone's headwear on full display, and feature video on a stable pony who likes beer, it really was no comparison.
This year it was different. With some marketing money, a push to share the event via social media, and all hands on deck at racetracks where mandatory races were being raced, it was easy to follow. Dare I say, me and a lot of you were "engaged"?
Considering racing gets most of its revenue from betting, and trying to draw eyeballs to betting is important, this should not come as a surprise, but to me it did. It was well done. It showed that someone cared to get this event moving outside the confines of a Vegas casino.
Now the question remains, what more can be done to promote this National Championship? I am sure they can do better and with the apparent success they had this year, they'd be wise to try and build on it.
I watched Mohaymen this weekend. I am probably the first person to look for chinks in the armor of a horse, and do it often when I think it's warranted, but after his win in the Holy Bull, the wet blanket police were out in full force and I was not one of them. I get it - he didn't seem to beat much and wasn't tested - but otherwise, no, I don't get it.
This is not a Pletcher speedball with one nice Florida score. Mohaymen has sparkling efforts at other racetracks.
It was off a mini-layoff, where if a horse does not fire in his 3YO debut, the excuses come out. There are no excuses needed when you win like that.
He was pinned down on the inside for a spell, split horses in tight quarters at the half and showed seasoning and moxy.
He sprinted home in six without being asked, like a push button horse does. Others in there could not come home in six and they went slower fractions.
He was straight as an arrow in the lane, showing no signs of soreness. He galloped out like a sound horse and returned to the winners circle like he wanted to race again.
I learned a lot from that race.
I understand when a horse wins by more than two lengths twitter goes overboard and it can be annoying, but any criticism seems reaching. It, in my view, was a fantastic three year old debut from what looks like a really nice horse.
I've been doing a little reading about Australia racing the past week or so. A few snips.
When handle changes are brought up, they are all qualified with the rate of inflation. If the inflation rate is 3% and handle is up 3%, the next statement is usually, "we're stagnating and we have to make changes" In North America, if handle is up 2%, the industry calls it growth.
In 2014, $26B (about $US18B that year) was bet on racing and sports (the vast majority - $22B - on horse racing). That's $1,200 for every man, woman and child. The average bet size is $43. In North America, we can see 40,000 at a race, where for the whole day only $40 is bet per capita.
Australia's GDP is about the size of Texas's. So, if the environment was the same, that would be like Texas betting US$10B or so on horse racing alone. Of course, it's not the same. ADW's are banned in Texas.
90% of bets are $50 and under. The smaller folk - say the nice hat crew at the Melbourne Cup - still come to play.
Out of that $26B, about $2B is held. Last year for California horse racing, 21.2% was held.
Digital growth is paramount, at 45% in 2014 for bets placed at TAB, the main horse racing pari-mutuel outlet. This is interesting from the North American perspective, because ADW taxes hurting online wagering growth, getting more people on track to bet, and trying to get a bigger share of any new wagering is the policy of the day.
For horse racing, close to half of all wagers are made in the WPS. This is not considered glass half empty - or should not be - because that means your customers are grinding and churning. In North America it would be glass half empty. "Get those people into the Rainbow Six, stat."
I hope y'all have a nice day and thanks for reading.
I have watched, or wanted to watch and follow the National Handicapping Championship over the years and I found it was not easy. There were some (taped) interviews, the odd leader board and general data and coverage, but it was not in the least bit engaging. When compared to a trip to Hong Kong racing for some local tweeters, a horse racing 'event' with everyone's headwear on full display, and feature video on a stable pony who likes beer, it really was no comparison.
This year it was different. With some marketing money, a push to share the event via social media, and all hands on deck at racetracks where mandatory races were being raced, it was easy to follow. Dare I say, me and a lot of you were "engaged"?
Considering racing gets most of its revenue from betting, and trying to draw eyeballs to betting is important, this should not come as a surprise, but to me it did. It was well done. It showed that someone cared to get this event moving outside the confines of a Vegas casino.
Now the question remains, what more can be done to promote this National Championship? I am sure they can do better and with the apparent success they had this year, they'd be wise to try and build on it.
I watched Mohaymen this weekend. I am probably the first person to look for chinks in the armor of a horse, and do it often when I think it's warranted, but after his win in the Holy Bull, the wet blanket police were out in full force and I was not one of them. I get it - he didn't seem to beat much and wasn't tested - but otherwise, no, I don't get it.
This is not a Pletcher speedball with one nice Florida score. Mohaymen has sparkling efforts at other racetracks.
It was off a mini-layoff, where if a horse does not fire in his 3YO debut, the excuses come out. There are no excuses needed when you win like that.
He was pinned down on the inside for a spell, split horses in tight quarters at the half and showed seasoning and moxy.
He sprinted home in six without being asked, like a push button horse does. Others in there could not come home in six and they went slower fractions.
He was straight as an arrow in the lane, showing no signs of soreness. He galloped out like a sound horse and returned to the winners circle like he wanted to race again.
I learned a lot from that race.
I understand when a horse wins by more than two lengths twitter goes overboard and it can be annoying, but any criticism seems reaching. It, in my view, was a fantastic three year old debut from what looks like a really nice horse.
I've been doing a little reading about Australia racing the past week or so. A few snips.
When handle changes are brought up, they are all qualified with the rate of inflation. If the inflation rate is 3% and handle is up 3%, the next statement is usually, "we're stagnating and we have to make changes" In North America, if handle is up 2%, the industry calls it growth.
In 2014, $26B (about $US18B that year) was bet on racing and sports (the vast majority - $22B - on horse racing). That's $1,200 for every man, woman and child. The average bet size is $43. In North America, we can see 40,000 at a race, where for the whole day only $40 is bet per capita.
Australia's GDP is about the size of Texas's. So, if the environment was the same, that would be like Texas betting US$10B or so on horse racing alone. Of course, it's not the same. ADW's are banned in Texas.
90% of bets are $50 and under. The smaller folk - say the nice hat crew at the Melbourne Cup - still come to play.
Out of that $26B, about $2B is held. Last year for California horse racing, 21.2% was held.
Digital growth is paramount, at 45% in 2014 for bets placed at TAB, the main horse racing pari-mutuel outlet. This is interesting from the North American perspective, because ADW taxes hurting online wagering growth, getting more people on track to bet, and trying to get a bigger share of any new wagering is the policy of the day.
For horse racing, close to half of all wagers are made in the WPS. This is not considered glass half empty - or should not be - because that means your customers are grinding and churning. In North America it would be glass half empty. "Get those people into the Rainbow Six, stat."
I hope y'all have a nice day and thanks for reading.
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