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Showing posts from December, 2016

Arguing for Slices of Revenue, Episode 61

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'…

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&quo…

** Exclusive ** : A Christmas Chat With Cub Reporter

Y'know, a day doesn't go by when someone doesn't ask me, "Pocket, can we see more posts about betting economics Cub Reporter on your blog? We want to know who he is, where he came from, what he likes to eat, or watch on television; what tracks he enjoys. We want to know where Maria Borell is hiding, and who the drunk guy who runs the photo finish camera at Santa Anita is."

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…

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.


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. The…

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 …

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 …