Racing sometimes makes me shake my head. Or as the kids with their fancy phones say, smh.
Yesterday in the TDN the HBPA's Eric Hamelback spoke about the biggest challenges and solutions for horse racing.
"A critical step is ensuring that owners are fairly compensated for their
property and their horses’ images and statistical records being used
for wagering in this tech era by entities that benefit without
contributing toward the care and upkeep of our horses"
This was similar to what was said way back in 2010.
Looking at the logic of the statement is a little difficult, because, well, it's difficult to decipher in the real world.
A reseller gives you approximately 50% of what they generate from handle revenue, for purses and for tracks to put on the races. Some of these resellers are the racetracks themselves. They use statistics and images of horses to generate revenue, because without them both you and they get nothing. It's a factor of production that's already being compensated for through simulcast agreements.
More broadly, maybe the point is that the Jockey Club makes money from selling data, and they are not directly putting it into purses. But even then, with over $1 billion in purses per year, the net profit from the Jockey Club from this data revenue is a tiny percentage of that.
More importantly, however, is the simple fact that 'horses images' et al, don't drive any revenue. If it did, Frank Stronach would not be having to pay NBC to show the $12 million Pegasus Cup, NBC would be paying Frank.
We're back to the beginning in this strange, circular argument. It's - for it seems the umpteenth time - some faction in racing wants money, from a place that generates no money.
In the racing press when someone yells for more money, it's often presented like it's some grave injustice being righted, and the stalls will be soon laden with 14 carat gold straw. It's a fantasy. Revenue will grow - for the HBPA, purses, and others - when racing grows gross revenue. This nitpicking that someone gets more or less of a percentage of almost nothing, means exactly that -- almost nothing. It's a complete waste of time.
Horse Racing Winners and Losers of 2016
As (yet another) tumultuous year comes to a close in horse racing land, I thought we'd look at a few winners and losers from 2016, from my perspective.
Winner - The Big Tracks (minus California)
Handle and market share at the big tracks got bigger in 2016, as this trend from mid-year finished out the year strong. Florida tracks especially garnered more betting dollars, but NYRA tracks (despite no Triple Crown try this season) certainly held their own. The downside is (as handle will show in a couple of weeks) the pie didn't really grow much. But for those who've been asking for the big signals to be front and center, you're a winner.
Loser - By Corollary, the Small Tracks
There's no two ways about it, many small tracks in 2016 were crushed. Fewer dates, fewer races were followed by smaller handles. It's tougher and tougher for smaller tracks to get noticed.
Winner - Jackpot Bets
Overall handle didn't move much, but there was a "rise of the jackpots" in 2016. These bets attract newbie money, and when the newbies are broke chasing them, the whales swoop in to take over positive expected value mandatory pools. If racing was Daily Fantasy Sports, the New York Times would probably do a story. Although these bets probably do more harm than good for the customer ecosystem, track execs love them for the short-term bumps.
Loser - Fantasy Sites
Racing, in its never-ending quest to grab revenue from other people who think of cool stuff they didn't, came down hard on the fantasy sites in 2016. From reading the headlines, you'd think these trickles of revenue were shaking the foundations of racing. But, in my view, this is low hanging fruit and it doesn't take much heavy lifting.
Winner - Frank Stronach
While Churchill Downs, NYRA and California racing overall all have questions surrounding them public relations-wise, old Frank is teflon. Everyone knows Frank loves horse racing. Everyone knows Frank wants to create more interest in the sport (no matter how crazy some of his ideas are). The Pegasus World Cup - his latest foray into changing the sport - is slated to go this month. Adding to the Frank-zeal, is the handle and market share performance of Gulfstream and Laurel. They both had big years.
Loser - Long Term Racetrack Economics
Canterbury Park lowered the juice this year and bucked the 2016 small-track downward handle trend pretty good, with a decent enough handle spike. You'd never have known it. Despite field size being down, more rain in the region since 1890, and just about everything else, the story was "the percentage of decrease in takeout resulted in a net decrease in revenues". Nevermind the 100+ years of takeout hikes that didn't destroy the betting handle immediately, pay no heed that Amazon.com was incorporated in 1994 and incurred losses until 2004. Don't worry that when tracks have slots, they can use them as a buffer to experiment with proper pricing mechanisms. Short-term revenue was down, so this was a loser.
Winner - Exchange Wagering
Betfair's exchange started for New Jersey residents this year. Yep, the volume is lower than expected (with them operating with half the Internet tied behind their backs), but it's there. There is no doubt about it, this is a huge win.
Loser - Rabbits
This year's Sword Dancer brought the practice out in an in-your-face way, and the fans didn't seem to like it much. For those who support rabbits, many used the "it's the way it's done in Europe for a hundred years" defense. But, with Brexit and Trump in 2016, that whole pro-Europe-globalization argument seemed to go over about as well as an Ebola epidemic.
From the comments from the high foreheads at NYRA after Sworddancergate, it seems we'll be seeing a different handling of the rabbit thing if it crops up again. So that, by definition, means it's a loser.
Winner - Big Days
Unless we've been living under a rock (I go there sometimes on twitter when my touts run badly) we all see Big Days keep getting bigger. More marketing is being placed into Big Days, and they seem to be growing with population growth and inflation, aka, like other businesses grow. Even Hong Kong has been getting into the act to juice up their big days. It's been a huge winner.
Loser - The Horseplayer
If you're a guy or gal betting $40k a year and treading water with 0.95 ROI or so, your chances of reaching the mountain top are growing thinner, because it's more difficult to find better pricing. Small ADW's who offer you better pricing are shut off from some top signals. The top signal guys have created their own ADW's where only $1M+ players get good pricing. ADW's are being shut out of California as we speak. In 2016 it's been harder and harder for racing customers in the mushy middle.
Winner - Kentucky Downs
2016's meet was another huge one for the little track that could. At KD, alternative gaming money is placed into both purses and lower takeout, making for a compelling exacta for horsemen, bettors and fans. The sky is the limit for this small, soon to be bigger, signal.
Loser - Medication Reform
This feels stalled to me, and it was in 2016, when the brakes were applied. I am not sure why, or how it happened, but at the end of 2016 here we are talking about steroids - something supposedly purged from racing a long time ago - not real reform.
It's hard for me to find blame in this. It just seems racing - where getting people together for a common goal is tantamount to finding fifty random people who all like Nickelback - is in its usual spot, stuck in the horse latitudes.
That's my list. I am sure I have forgotten many items (I did the post at lunch, off the top of the head) so feel free to share yours on the social media machine, or in the comments section.
Have a great Thursday.
Winner - The Big Tracks (minus California)
Handle and market share at the big tracks got bigger in 2016, as this trend from mid-year finished out the year strong. Florida tracks especially garnered more betting dollars, but NYRA tracks (despite no Triple Crown try this season) certainly held their own. The downside is (as handle will show in a couple of weeks) the pie didn't really grow much. But for those who've been asking for the big signals to be front and center, you're a winner.
Loser - By Corollary, the Small Tracks
There's no two ways about it, many small tracks in 2016 were crushed. Fewer dates, fewer races were followed by smaller handles. It's tougher and tougher for smaller tracks to get noticed.
Winner - Jackpot Bets
Overall handle didn't move much, but there was a "rise of the jackpots" in 2016. These bets attract newbie money, and when the newbies are broke chasing them, the whales swoop in to take over positive expected value mandatory pools. If racing was Daily Fantasy Sports, the New York Times would probably do a story. Although these bets probably do more harm than good for the customer ecosystem, track execs love them for the short-term bumps.
Loser - Fantasy Sites
Racing, in its never-ending quest to grab revenue from other people who think of cool stuff they didn't, came down hard on the fantasy sites in 2016. From reading the headlines, you'd think these trickles of revenue were shaking the foundations of racing. But, in my view, this is low hanging fruit and it doesn't take much heavy lifting.
Winner - Frank Stronach
While Churchill Downs, NYRA and California racing overall all have questions surrounding them public relations-wise, old Frank is teflon. Everyone knows Frank loves horse racing. Everyone knows Frank wants to create more interest in the sport (no matter how crazy some of his ideas are). The Pegasus World Cup - his latest foray into changing the sport - is slated to go this month. Adding to the Frank-zeal, is the handle and market share performance of Gulfstream and Laurel. They both had big years.
Loser - Long Term Racetrack Economics
Canterbury Park lowered the juice this year and bucked the 2016 small-track downward handle trend pretty good, with a decent enough handle spike. You'd never have known it. Despite field size being down, more rain in the region since 1890, and just about everything else, the story was "the percentage of decrease in takeout resulted in a net decrease in revenues". Nevermind the 100+ years of takeout hikes that didn't destroy the betting handle immediately, pay no heed that Amazon.com was incorporated in 1994 and incurred losses until 2004. Don't worry that when tracks have slots, they can use them as a buffer to experiment with proper pricing mechanisms. Short-term revenue was down, so this was a loser.
Winner - Exchange Wagering
Betfair's exchange started for New Jersey residents this year. Yep, the volume is lower than expected (with them operating with half the Internet tied behind their backs), but it's there. There is no doubt about it, this is a huge win.
Loser - Rabbits
This year's Sword Dancer brought the practice out in an in-your-face way, and the fans didn't seem to like it much. For those who support rabbits, many used the "it's the way it's done in Europe for a hundred years" defense. But, with Brexit and Trump in 2016, that whole pro-Europe-globalization argument seemed to go over about as well as an Ebola epidemic.
From the comments from the high foreheads at NYRA after Sworddancergate, it seems we'll be seeing a different handling of the rabbit thing if it crops up again. So that, by definition, means it's a loser.
Winner - Big Days
Unless we've been living under a rock (I go there sometimes on twitter when my touts run badly) we all see Big Days keep getting bigger. More marketing is being placed into Big Days, and they seem to be growing with population growth and inflation, aka, like other businesses grow. Even Hong Kong has been getting into the act to juice up their big days. It's been a huge winner.
Loser - The Horseplayer
If you're a guy or gal betting $40k a year and treading water with 0.95 ROI or so, your chances of reaching the mountain top are growing thinner, because it's more difficult to find better pricing. Small ADW's who offer you better pricing are shut off from some top signals. The top signal guys have created their own ADW's where only $1M+ players get good pricing. ADW's are being shut out of California as we speak. In 2016 it's been harder and harder for racing customers in the mushy middle.
Winner - Kentucky Downs
2016's meet was another huge one for the little track that could. At KD, alternative gaming money is placed into both purses and lower takeout, making for a compelling exacta for horsemen, bettors and fans. The sky is the limit for this small, soon to be bigger, signal.
Loser - Medication Reform
This feels stalled to me, and it was in 2016, when the brakes were applied. I am not sure why, or how it happened, but at the end of 2016 here we are talking about steroids - something supposedly purged from racing a long time ago - not real reform.
It's hard for me to find blame in this. It just seems racing - where getting people together for a common goal is tantamount to finding fifty random people who all like Nickelback - is in its usual spot, stuck in the horse latitudes.
That's my list. I am sure I have forgotten many items (I did the post at lunch, off the top of the head) so feel free to share yours on the social media machine, or in the comments section.
Have a great Thursday.
** Exclusive ** : A Christmas Chat With Cub Reporter
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| Cub Reporter, File Photo |
For those who read the blog - especially those who enjoy breaking news - you've certainly come to know "Cub Reporter". Cub (not his real name) has graciously offered me stories to publish here that he cannot publish anywhere else; those that will get him kicked out of the turf club, or banished to covering one of those tracks in Chile where the horses all race like six miles. He knows very few people read my blog. I offer a cloak of safety.
I often let Cub know (through secret backchannels) that he has a following. People are interested in him. Finally, this Holiday season, he agreed to a sit down. I share this exclusive interview with you now.
PTP: I guess the big question on everyone's mind this week was the positive and brouhaha surrounding the Ellis test for the Breeders' Cup. Why haven't you touched this story?
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| Leading charity fundraiser, loves dogs |
PTP: Why didn't we see it?
CR: I submitted it for review but no one wanted it. One editor told me the press were saying picograms were no big deal and the trainer in question loves baby kittens. Keeping the industry narrative and editing out everything else made my article only 200 words, so I buried it. Plus, I have no idea if he likes or dislikes baby kittens.
PTP: In general, what do you think the state of racing journalism is?
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| Frank |
PTP: Do people in this industry like you, or because you are writing hard-hitting stories, you are shunned?
CR: Good question. Sometimes I am liked, sometimes not. I wrote a story awhile back on a CHRB meeting and it was - I thought - fair and incisive, but maybe not everyone thought so. I got home one evening, showered, and was getting ready for some shut eye. I drew the covers and found a Bob Baffert bobblehead in my bed. I have no evidence who sent it, but even if there's a small chance the CHRB went Godfather Part I on me, it shakes you.
PTP: Frightening. And signs you are liked?
CR: Well, last week I received a nice Christmas card from horse sex expert Sid Fernando. It was a form-card that he sends out to everyone, but to me it showed he likes my stuff, and I appreciated him sending it. I sent a note back telling him I felt for him when he lost all of his Kentucky twitter followers during the recent federal election.
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| Richard Dutrow - racingfallguys.com |
PTP: So, you have no trouble getting sources?
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| Churchill Downs CEO- Artist Likeness |
PTP:You don't twitter. How about a New Year's resolution that you'll join the twitter? There are lots of journalists there.
CR: I am on twitter, but I keep my account quiet and have never tweeted. I guess you could call me a lurker, like that PETA person who exposed Scott Blasi for swearing a lot. I follow a lot of people and keep track of what they're eating, who is on the ABR Party Bus, and who won a Beemie Award. I follow my DRF friends like Hersh, Hogan, other H people. Some of the horse accounts crack me up. Remember Palace Malice? Whoa, tighten that tongue tie pardner.
PTP: Do you follow any horseplayers?
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| Julien Leparoux (l) Meets Adam Hickman (r) for the first time |
PTP: Have you received any horse-themed Christmas gifts in the past? Anything horse-related you send to your friends in the industry?
CR: Last week I received a "bet a hundred get a hundred" deal from TVG for Christmas, which was personalized in an email to me. It's gotten a lot better for customers, because when I covered a TOC meeting in California many years ago as Junior Cub Reporter, they were debating offering a 'bet a hundred thousand get a toaster' promotion. I actually think that one is still running for California residents who use Xpressbet.
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| TVG's Todd Schrupp |
On the giving side, I'll probably re-gift that Baffert bobblehead I found in my bed. Maybe I'll give it to Sid Fernando since he sent me that nice card.
PTP: Any parting thoughts this Holiday season?
CR: Horse racing is a wonderful game, and even more so during the holiday season. I am lucky to write about it, follow it, bet it, and read about it. We're all very lucky, despite all the problems.
PTP: Merry Christmas Cub.
CR: Merry Christmas Pull.
________________________________________________________________________________
For those of you celebrating, from my family to yours, have a very Merry Christmas.
Horse Racing (Somewhere Else) Quietly Invests Millions -- in the Customer
If you say the words 'more investment' to racing folks it usually means one thing -- increasing a purse. CHRB meetings, horsemen meetings, committee A, R and R42, are generally about finding ways to increase a purse. In some cases, like at the CHRB meeting last week with ADW margins, or the takeout hike in 2010, the money comes directly from the customer.
That's the broad definition of "investment" to the industry in North America. And we're not telling any tales out of school.
On this blog (and some other places) we often speak about investing in the customer. We do this for a few reasons:
i) Purses come (for the most part) from customers' betting of the races.
ii) Horse racing's gambling competitors are investing in customers. Some over 20% of revenues, or in hard times, like Atlantic City casinos, up to 40% of revenues (pdf).
iii) UI's, product offerings, betting instruments and delivery are all rapidly changing in a rapidly changing world.
Interestingly enough, other racing jurisdictions agree.
The New Zealand Racing Board's strategy is something that's eye-opening. They have the same problems as anywhere - fewer customers, falling purses, a bad calendar/scheduling of racing for consumption, etc - but to fix them here is the plan for 2017-2019:
This is a $60-$75M investment in customer initiatives, because, "quite simply, in order to grow Net Profit, we need to drive even greater customer growth. The onus is on us to remain relevant with our customers in a rapidly changing, highly competitive international market.".
NZ Racing brings in $150M per year. This investment represents 17% of total industry revenue. This is tantamount to racing in California announcing at a CHRB meeting that they're investing $331 million over three years in customers (2015 figures). Cue the oooh's and ahhh's.
Today, New Zealand has begun implement one plank today, with the announcement of a new fixed odd betting platform.
Cost/benefit analysis shows that NZHR hopes to recoup the investment within four years, which is a fair to good payback rate for capital investment, and seems more likely than not.
"Multiple reports, some going back decades, have identified the systemic issues in the industry. Long-term under-investment, both in NZRB and the wider industry, has been a key cause of these challenges. We are now faced with systems and infrastructure so outdated, and sometimes even redundant, that our ability to operate in a competitive, vibrant industry is severely hamstrung," the report says.
Racing has the same issues here (think Equibase's lack of modernization for a changing customer base for one example), but it would rather up a purse from $30,000 to $32,000 for a short-term band-aid than investing in fixing them. It's probably the biggest strategic problem horse racing faces in North America, and I don't see it shifting anytime soon.
That's the broad definition of "investment" to the industry in North America. And we're not telling any tales out of school.
On this blog (and some other places) we often speak about investing in the customer. We do this for a few reasons:
i) Purses come (for the most part) from customers' betting of the races.
ii) Horse racing's gambling competitors are investing in customers. Some over 20% of revenues, or in hard times, like Atlantic City casinos, up to 40% of revenues (pdf).
iii) UI's, product offerings, betting instruments and delivery are all rapidly changing in a rapidly changing world.
Interestingly enough, other racing jurisdictions agree.
The New Zealand Racing Board's strategy is something that's eye-opening. They have the same problems as anywhere - fewer customers, falling purses, a bad calendar/scheduling of racing for consumption, etc - but to fix them here is the plan for 2017-2019:
This is a $60-$75M investment in customer initiatives, because, "quite simply, in order to grow Net Profit, we need to drive even greater customer growth. The onus is on us to remain relevant with our customers in a rapidly changing, highly competitive international market.".
NZ Racing brings in $150M per year. This investment represents 17% of total industry revenue. This is tantamount to racing in California announcing at a CHRB meeting that they're investing $331 million over three years in customers (2015 figures). Cue the oooh's and ahhh's.
Today, New Zealand has begun implement one plank today, with the announcement of a new fixed odd betting platform.
Cost/benefit analysis shows that NZHR hopes to recoup the investment within four years, which is a fair to good payback rate for capital investment, and seems more likely than not.
"Multiple reports, some going back decades, have identified the systemic issues in the industry. Long-term under-investment, both in NZRB and the wider industry, has been a key cause of these challenges. We are now faced with systems and infrastructure so outdated, and sometimes even redundant, that our ability to operate in a competitive, vibrant industry is severely hamstrung," the report says.
Racing has the same issues here (think Equibase's lack of modernization for a changing customer base for one example), but it would rather up a purse from $30,000 to $32,000 for a short-term band-aid than investing in fixing them. It's probably the biggest strategic problem horse racing faces in North America, and I don't see it shifting anytime soon.
The Law of the Vital Few; the Wants of the Many
I scanned a UK study (pdf) commissioned by the gambling industry a couple of years ago. I didn't learn a whole lot (other than what I already did - modelling modern gambling demand and supply, etc, is hard), but once again this little gem popped up:
This is racing, of course.
The first group is betting a lot of money, contributing to pools, and frequent rebate sites. They take advantage of every carryover, every promotion, buy workout reports, subscribe to all the services; everything that can give them even a tiny edge. They abhor Twinspires and TVG, bet peanuts at Santa Anita in 5 horse fields, and couldn't care less about a jockey or trainer colony, or what on-track promotions there are today. Outside of racing, these are the 'line shoppers' who search for -210 versus a -200 line, because it can mean the difference between winning and losing over 500 plays.
The second group is the target for Twinspires and TVG. They respond to free PP's if they make a bet. They want good video, for free, and want to bet races with higher quality horses, jockeys and trainers. They like to visit the track when they can, as much as they can.
Racing's (like online gambling's) goal is often about capturing new customers (customer B). This is done with promotions (bet $100 get $100) and advertising. The second part of the goal is to keep a customer (free PP's, ongoing promotions).
That's where I feel racing does fairly well (infinitely better from a dozen years ago, when offering promotions was considered killing "our profits"). Twinspires, TVG, BetAmerica are all doing great work in this regard, in my opinion. (note -- this retention and investment spend is a reason ADW's need at least decent margins, no matter what the braintrust in California tells you).
Where racing does very, very poorly, in my view, is funneling the second customer to the first. This is a function of two things: not understanding the gambler and specious industry regulation with regards to pricing - e.g. the in-state retention cap in California.
If racing works harder and invests in understanding how to move players from point B to point A, it would be in much better shape. The ADW's know more than anyone in this regard, yet oftentimes they're handcuffed by an industry devoid of such knowledge.
The first group is betting a lot of money, contributing to pools, and frequent rebate sites. They take advantage of every carryover, every promotion, buy workout reports, subscribe to all the services; everything that can give them even a tiny edge. They abhor Twinspires and TVG, bet peanuts at Santa Anita in 5 horse fields, and couldn't care less about a jockey or trainer colony, or what on-track promotions there are today. Outside of racing, these are the 'line shoppers' who search for -210 versus a -200 line, because it can mean the difference between winning and losing over 500 plays.
The second group is the target for Twinspires and TVG. They respond to free PP's if they make a bet. They want good video, for free, and want to bet races with higher quality horses, jockeys and trainers. They like to visit the track when they can, as much as they can.
Racing's (like online gambling's) goal is often about capturing new customers (customer B). This is done with promotions (bet $100 get $100) and advertising. The second part of the goal is to keep a customer (free PP's, ongoing promotions).
That's where I feel racing does fairly well (infinitely better from a dozen years ago, when offering promotions was considered killing "our profits"). Twinspires, TVG, BetAmerica are all doing great work in this regard, in my opinion. (note -- this retention and investment spend is a reason ADW's need at least decent margins, no matter what the braintrust in California tells you).
Where racing does very, very poorly, in my view, is funneling the second customer to the first. This is a function of two things: not understanding the gambler and specious industry regulation with regards to pricing - e.g. the in-state retention cap in California.
If racing works harder and invests in understanding how to move players from point B to point A, it would be in much better shape. The ADW's know more than anyone in this regard, yet oftentimes they're handcuffed by an industry devoid of such knowledge.
California Racing at its Short-Sighted Best
The Bloodhorse had a summary story up on yesterday's CHRB meeting regarding advance deposit wagering. If you are a wagering and gambling aficionado, read it at your own risk. It's extremely difficult to get through.
"There are concerns—with respect to charities, with respect to the board, with respect to other aspects of the industry—what are the ADWs prepared to (do)?" CHRB chairman Chuck Winner said at the Wednesday meeting. "Rather than us dictate what we think you ought to do within your licenses, it would be better if you made some recommendations to us, without telling us why you can't do those things."
It's essentially the same story from way back in 2010 when takeout was raised -- we need a bigger slice to survive, because we have costs. In a nutshell, in its simplest terms - this time they're after the ADW's for more money.
Many of the items that are being talked about today -- revenue for charity, etc -- are taken directly from takeout; that is, these things receive money directly from margin, and the revenue is solely based on how much is wagered (the handle). This is backwards from almost every business (revenue is maximized, profits are maximized and then the money is spent).
Many industry watchers in 2010 cautioned at that time, as wagering fell from a takeout hike, there would be less money for all these nooks and crannies from the margin. And that California would be back, cap in hand, looking for more money from somewhere to make up for it.
They are doing exactly that. And this time they are after the ADW's for more money.
The problem is, as accurately and eloquently stated by Twinspires and BetAmerica -- margins for them are already tight in California. So much so that taking a bet is almost revenue neutral for them.
"California puts (ADWs) at a disadvantage by strapping us with so many costs and not enough money to really do what we're able to do. ... If we were just operating in California, we could not justify that cost. California benefits from the costs we're incurring and we're having to make that up in other places," Blackwell said.
California racing has truly reached its zenith when it comes to grabbing what they can out of the shrinking pie. Bettors have now had more taken from them that they ever have (20.84% blended takeout); source market fees are high, TV fees and other fees have the resellers on razor thin margins.
There's no one left with any money in their pockets to shake down.
I realize they're desperate, but what they are doing (and have done, over and over) doesn't work. It can never work. The only thing that will work, in my view, is more handle. What they are doing doesn't promote that, it does the opposite.
That's why, in 2016, California handle - which just seven short years ago was the highest of any state in the nation - will fall to 3rd, behind New York and Florida.
I am not here to offer a solution, because I don't have one. But I am sure of one thing: Shaking down ADW's (your needed resellers in a connected world) will not help the situation. In fact, it will cause that blue line above to continue to fall. And as history has proven again and again, that doesn't do anyone any good.
"There are concerns—with respect to charities, with respect to the board, with respect to other aspects of the industry—what are the ADWs prepared to (do)?" CHRB chairman Chuck Winner said at the Wednesday meeting. "Rather than us dictate what we think you ought to do within your licenses, it would be better if you made some recommendations to us, without telling us why you can't do those things."
It's essentially the same story from way back in 2010 when takeout was raised -- we need a bigger slice to survive, because we have costs. In a nutshell, in its simplest terms - this time they're after the ADW's for more money.
Many industry watchers in 2010 cautioned at that time, as wagering fell from a takeout hike, there would be less money for all these nooks and crannies from the margin. And that California would be back, cap in hand, looking for more money from somewhere to make up for it.
They are doing exactly that. And this time they are after the ADW's for more money.
The problem is, as accurately and eloquently stated by Twinspires and BetAmerica -- margins for them are already tight in California. So much so that taking a bet is almost revenue neutral for them.
"California puts (ADWs) at a disadvantage by strapping us with so many costs and not enough money to really do what we're able to do. ... If we were just operating in California, we could not justify that cost. California benefits from the costs we're incurring and we're having to make that up in other places," Blackwell said.
California racing has truly reached its zenith when it comes to grabbing what they can out of the shrinking pie. Bettors have now had more taken from them that they ever have (20.84% blended takeout); source market fees are high, TV fees and other fees have the resellers on razor thin margins.
There's no one left with any money in their pockets to shake down.
I realize they're desperate, but what they are doing (and have done, over and over) doesn't work. It can never work. The only thing that will work, in my view, is more handle. What they are doing doesn't promote that, it does the opposite.
That's why, in 2016, California handle - which just seven short years ago was the highest of any state in the nation - will fall to 3rd, behind New York and Florida.
I am not here to offer a solution, because I don't have one. But I am sure of one thing: Shaking down ADW's (your needed resellers in a connected world) will not help the situation. In fact, it will cause that blue line above to continue to fall. And as history has proven again and again, that doesn't do anyone any good.
Some New Stakes Sponsorships Are Head Scratchers
Turfway's Spiral Stakes gets a new name, blasts a DRF headline yesterday. The Spiral's name was changed to the Horseshoe Cincinnati Casino Stakes awhile back, and now it's being called the Jack Cincinnati Casino Stakes.
Thank goodness for that, because people leaving the Spiral might've headed to the wrong casino on the way home.
This represents a trend in horse racing, and as revenues from betting fall, we at the PTP Blog expect to see more and more of it. Racetracks need more money, and this is a way to do it, and it is not going to change.
What might we expect to happen to stakes race names in the coming years?
"We will see some name changes that defy logic," Cub Reporter tells the PTP blog. "I've heard from several insiders and have a list that I can share with you, but only if you don't post it on your blog," s/he added.
I post them for you below.
"The Belmont will be named the Andrew M. Cuomo Stakes," notes Cub. "NYRA braintrust realizes that even if he gets voted out, he'll still hold sway over the organization. This move is purely political."
"Yum brands has been outbid so the Kentucky Derby will be renamed the Kim Jong Un Kentucky Derby North Korean Classic," says Cub.
"Churchill thought about the bad PR of this move, but the dude gave them a big check so they said 'welcome to the Derby Mr. Kim!'"
"When this is released and the stock goes up it's 'mission accomplished', my source told me".
"I have it on strong authority that the Breeders' Cup Classic is to be renamed "The Breeders' Cup Day Prep for the Kegasus at Gulfstream brought to you by Frank Stronach," says Cub. "It's not catchy, but it gets the point across."
"Stars and Stripes Day will be renamed Chris Kay Day," says Cub. "They feel they need to honor Chris, because he has the finger on the pulse of everything racing," says Cub's source. "Dignitaries like Daughtry will be on hand to sign stuff for fans," added Cub.
"The Zenyatta Stakes will be changed to the Thoroughbred Owners of California Stakes", notes Cub. "The TOC wants recognition for taking a larger piece of a shrinking betting pie for purses. Without them raising prices - my source tells me - California racing would be broke."
"The Arlington Million's name will be changed to the Arlington
Quarter Million brought to you by Pete's Tire and Radiator," Cub says.
"Arlington purses have fallen on hard times, so the purse is reduced,
and this Pete guy contributed $20k, as the highest bidder."
"The Toyota Blue Grass Stakes will be changed to The Chrysler Blue Grass Stakes," says Cub. "My source tells me that since rural Kentucky went something like 98.2% for Trump they don't want to be associated with one of them foreign car company things."
"The Sword Dancer is now brought to you by Juddmonte," notes Cub. "This is on condition they don't run another rabbit. Strategic play by Kay," added the intrepid reporter.
"Although there will be no official name changes, my source tells me that all stakes at Parx in 2017 and beyond will be now sponsored by Clenbuterol," says Cub.
"The Sunshine Millions at Calder will be now named Sunshine Millions Girls Girls Girls Exxxotic Stakes," said Cub. When I told him that's already the case, he said sorry, he did not know that.
Have a nice Thursday everyone!
Thank goodness for that, because people leaving the Spiral might've headed to the wrong casino on the way home.
This represents a trend in horse racing, and as revenues from betting fall, we at the PTP Blog expect to see more and more of it. Racetracks need more money, and this is a way to do it, and it is not going to change.
What might we expect to happen to stakes race names in the coming years?
"We will see some name changes that defy logic," Cub Reporter tells the PTP blog. "I've heard from several insiders and have a list that I can share with you, but only if you don't post it on your blog," s/he added.
I post them for you below.
"The Belmont will be named the Andrew M. Cuomo Stakes," notes Cub. "NYRA braintrust realizes that even if he gets voted out, he'll still hold sway over the organization. This move is purely political."
"Yum brands has been outbid so the Kentucky Derby will be renamed the Kim Jong Un Kentucky Derby North Korean Classic," says Cub."Churchill thought about the bad PR of this move, but the dude gave them a big check so they said 'welcome to the Derby Mr. Kim!'"
"When this is released and the stock goes up it's 'mission accomplished', my source told me".
"I have it on strong authority that the Breeders' Cup Classic is to be renamed "The Breeders' Cup Day Prep for the Kegasus at Gulfstream brought to you by Frank Stronach," says Cub. "It's not catchy, but it gets the point across."
"Stars and Stripes Day will be renamed Chris Kay Day," says Cub. "They feel they need to honor Chris, because he has the finger on the pulse of everything racing," says Cub's source. "Dignitaries like Daughtry will be on hand to sign stuff for fans," added Cub.
"The Zenyatta Stakes will be changed to the Thoroughbred Owners of California Stakes", notes Cub. "The TOC wants recognition for taking a larger piece of a shrinking betting pie for purses. Without them raising prices - my source tells me - California racing would be broke."
"The Toyota Blue Grass Stakes will be changed to The Chrysler Blue Grass Stakes," says Cub. "My source tells me that since rural Kentucky went something like 98.2% for Trump they don't want to be associated with one of them foreign car company things."
"The Sword Dancer is now brought to you by Juddmonte," notes Cub. "This is on condition they don't run another rabbit. Strategic play by Kay," added the intrepid reporter.
"Although there will be no official name changes, my source tells me that all stakes at Parx in 2017 and beyond will be now sponsored by Clenbuterol," says Cub.
"The Sunshine Millions at Calder will be now named Sunshine Millions Girls Girls Girls Exxxotic Stakes," said Cub. When I told him that's already the case, he said sorry, he did not know that.
Have a nice Thursday everyone!
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