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Showing posts from 2017

Waiting for Godot

I was scanning this week and saw a few posts from players doing a little griping - some about Keeneland's juice hike, others about everyday things customers tend to gripe about. Let's face it, griping is a cottage industry in the sport, so it's not like it was anything new.

But looking back and scanning a few posts it reminded me of something.

Back in 2003 or 2004, the Southern Cal signals were big at Pace. Everyone loved watching the races from Santa Anita, and a lot of the handicapping done on the site was west coast focused. Over time, though, you'd see griping. And it had to do with field size. As I am sure many of you remember, Santa Anita - all Cal tracks really - was the King of the 5 horse field.

"I can't play this, I can't even find a bet in this six horse field"

"Why don't they have horses, I am about to quit"

You'd see these thoughts weekly from all sorts of customers. But when you looked at the handle, b…

** Exclusive ** Cub Reporter Releases the Secret Keeneland Tapes

My phone rang - rare in this day and age - and lo and behold it was Cub Reporter, the racing insider.

"I saw that horse sex guy on twitter mention me. Does he know something?"

He was referring to Sid Fernando, the pedigree guru.

"I don't think so, he just wondered what you were up to." I replied.

After getting some relief he was not exposed, he began to tell me a story.

"I'm undercover at Keeneland as a junior data analyst," he said. "Don't tell anyone, but I've got a tape that should blow the doors off the place! It's their emergency board meeting. I'll share it with you, but you can't tell anyone."

He gave me the tape, and I present it, transcribed, here for you.


Keeneland Exec 1: "Call to order board meeting 41. Let's turn to our data analyst for a handle update. How are things looking?"

Cub Reporter Posing as Data Analyst: "Things do not look good. Desp…

Expected Value & Getting Paid

I, like the vast majority of you, really concentrate on carryover pools. Carryover pools are unique in this high takeout sport, because money is  added to a pool that can be many times over the takeout for the pool. This results in what gamblers call positive expected value - it's a roulette table with 30 landing spots that pays 35-1, it's a game of coin toss, where every 5th toss you get to play for free.

This, on the surface, might not sound like much to a casual player. They, often times, simply want to hit a ticket and cash a bet, regardless of the takeout, and see profit if they hit. They will - even if takeout is 50% - see a profit most times. You need to hit a ticket to cash.

But like everything in gambling, the devil is in the details.

Yes, winning on a given day is fun, but it's not the battle on that day that counts, it's the long, protracted war. The war is where we make the choice. It's where we as horseplayers can let takeout kill us, or define us.

I w…

Racing's Circling of the Wagons

Recently, figure maker (and someone you no doubt know if you're a horseplayer) Craig Milkowski shared some information on timing, as he has done many times before. And just like many times before, the tracks (and their minions) circled the wagons.
I'm always flabbergasted that when I point out bad race times, response is always to circle the wagons and assume I'm the one that is wrong. — Craig Milkowski (@TimeformUSfigs) October 10, 2017 Here's someone who cares about accurate timing (like the tracks do, I imagine), shares when he sees mistakes, or missteps that he encounters as a figure maker (like the tracks would want him to, I imagine), and when he does, he gets told to keep quiet.

If he posts about it again, he'll get tweeted to or commented on like he is somehow the enemy. Which is wild, because the only thing he is the enemy of is bad times; something you'd think the whole industry is against.

If this were an isolated case, like for example there is a F…

When Customers Tell You There's a Fly in the Soup, There's a Fly in the Soup

Yesterday on twitter there was a conversation about why some people are withholding money from Keeneland this meet. A simple question, with a simple answer ("they raised prices and I don't think that's good for me, or for horse racing") gets twisted and mulched and argued. It's suddenly turned into Swahili.

Then the goalposts get moved around, and no one listens to something that's really not hard to understand in the first place.

It's not like this in other businesses. If you found a fly in your soup at Pete's, and moved your business over to Sue's across the street, the conversation is pretty simple.

"Why did you move your business?"

"I found a fly in my soup"


The fact that Sue's soup is 50 cents more a bowl, or they play Fox News instead of CNN, or the waiter's ties are bland isn't a concern.

Keeneland put a fly in the soup and some people don't like it so they're eating someone else's…

Go Phishing

We're a few days into the newly minted higher takeout Keeneland meet, and we're seeing some data that may suggest handle has suffered due to the increase in pricing.

Three days does not make a trend, and looking at Wednesday's card - which is much better than last year's first Wednesday card - handle could rebound that day. Or not.

Regardless, it's early, either way.

One thing that strikes me, however, during this (and other, see Canterbury Park's takeout changes), is the level of misinformation when it comes to reporting horse racing results. It's been like this for a long time. It's not just in horse racing of course, but it's always been there.

We have to remember - when the information is being fed by people in power who make a policy - it's probably best to look elsewhere.

Heeding that advice, let's look at some numbers from someone who is not making policy, but who analyzes it:

This quick analysis in 140 characters (he should have 28…

Zee Corporation

Good morning peeps!

Yesterday, Keeneland's handle was about flat from last year for their opener. That, as we postulated yesterday on the blog, doesn't mean much either way, but it was interesting, and the corporate types (strangely enough, some of them in the real world hate corporations) were pretty happy.

With my back of the napkin look at results (and help from Crunk posts that show racing outside Keeneland yesterday was up 18%), I surmise that those of you who played Keeneland last year, who did not play this year, totalled perhaps $300,000 in handle. We'll see how it goes the rest of the meet.

Another interesting discussion yesterday was about rebating. Rebating, something that I've been for on the blog since 2008 - mainly because it's the only equitable way to change the racing system and get handle to grow if done correctly - has certainly been bastardized.

Back when the corporations were out of dictating terms, there was an ample degree of both fairness mi…

Shining Lights & Forwarding Customer Education is Never a Bad Thing

There's a lot of tweets on my timeline about the bettor "Boycott" of Keeneland. It's good to see so many talking about important issues with regards to the long term health of the game.

There's probably a lot of people waiting to say "I told you so", either from the customer side, or the corporate side. Generally, however, what happens is a bit of a sideshow.

If it rains the next month, if it's sunny, if field size is down or up, if Keeneland gets antsy and sells a signal fee for less than they wanted to, and myriad other things happen, the data will be completely muddy. It's one of the reasons racing has made absolutely awful wagering decisions the last 40 years or more. On the Wikipedia entry for "muddy data" there's a picture of a smiling track executive, because he (it's probably a he) knows he won't be held accountable for anything he does.

What this chatter and the resulting boycott do, in my view, is shine a light …

Keeneland Rake Hike Time: Your Guide to the Horseplaying Tribes

I had a chuckle a few weeks ago on the ever increasingly tribal twitter. A CNN contributor posted this, about a political movement, trying to convince others to join theirs.
You're irredeemable, fellow Americans, & you shall have no respite in life from hearing how gross we think you are. Join us! Vote for us! — Mary Katharine Ham (@mkhammer) September 24, 2017 I see this sometime in racing, as well. If you don't do "X" you're the dumbest human being alive and you need your head examined, but please come join me and my tribe!

It sure is an interesting recruiting tool, seeing that it kind of throws the idiom that we catch flies with honey out the window.

This Friday, Keeneland opens with higher takeout rates. For the uninitiated about rake, this simply means that the payouts you see on your screen - for win, place, show; supers or tris - will be lower than they were last year. When you hit something - if you choose to play Keeneland - you won't get back …

The NFL Takes a Branding Hit, But You Might Want to Check the Narrative at the Door

Morning Consult put out a poll result today on NFL branding.

Via their tracking, "NFL's Brand Favorability Drops To Lowest Point Since Morning Consult Started Tracking: The NFL's net favorability has dropped from 30% on September 21 to 17% on September 28."

I have zero doubt their data is correct; however before everyone picks their favorite narrative, it's important for us, in my view, to understand branding.

In actuality, a brand does not get crushed by one, or even two missteps. United, or Coke, or hundreds of others snap back quickly from bad news. Bad branding, and resulting revenue losses are more of a boulder rolling down a hill, than an avalanche. It's why (old school) marketing firms estimate changing (or repairing) a brand can cost upwards of $50 million and take over 5 years.

The NFL has suffered from a lot of bad branding the last several years. They've had stars retire, they've saturated the airwaves and watered down the product, the gam…

Unintended Consequences

I had a scan of yesterday's news that was filtering social media channels about the Saudi 'government' allowing women to drive. It was expected, no doubt, by those who passed the new law that people would think more positively about that country. In terms of public relations, it was supposed to be a good thing. But, things like this don't do exactly what they're supposed to.

When you highlight something like this, it becomes news. And many consumers of the news learn something they didn't know about a topic before; in this case, the fact that women could not drive in a modern, rich country. The policy was supposed to improve outsiders thoughts towards the regime, but it can do the opposite. I bet if you took a poll today about freedom in Saudi Arabia, it would score worse than it did last week.

This phenomenon, highlighted by marketers and economists like Peters and Berger, was also seen with the War on Drugs. Upon the policy's inception, drug use actually…

"Give Us the Free Market!"

"They can't tell us what to do with our horses. Get out of my business, because it's my business", is an often heard complaint from horse owners, and horsepeople.

Whether it's about out of competition testing, suspending the horse for positive tests, house rules, commission rules, jail time rules, federal oversight, or whipping rules, the drumbeat is pretty constant. "Don't tread on me."

Being a free market type (don't hate, twitter!) who believes when Adam Smith's invisible hand becomes visible we're a whole lot worse off, I get it. I truly do. But for horse racing, I think the arguments screaming for a "free market" are not only futile, but dangerous.

If you're asking for that free market, you're asking for a few things you might not like much.

A free market means the $40,000 purse at the track you're racing at will immediately fall to $5,000 or less because in a free market slot machine revenue doesn't go i…

Canterbury Park's Cautionary Handle Tale

Canterbury Park - the small Minnesota track that lowered takeout last year, only to raise it this season - concluded their meet recently. The numbers, year over year, are in: Thoroughbred handle was up 2.6%, and handle per betting interest was down 1.8%.

Last year, with the takeout decrease, handle was up 5%, and handle per betting interest was up 10%. 

Racetrack handle analysis (which tends to be pretty rudimentary) will conclude what it wants to conclude regarding the above. And, quite honestly, since reported racetrack handle numbers are where lines of best fit go to die (and people use cognitive bias to analyze these numbers), I completely understand that. But, we'll try and take a deeper dive.

Using some comparative analysis, regional tracks had a very good year. This season, Prairie Meadows was up 21.2% and Arlington up 11.3% per entry. Last year the weather in the midwest made it hard to race on the turf at two of the three regionals, and barns were nowhere near as plentifu…

So is Keeneland Now a Mini-Death Star?

It's been an interesting summer in Kentucky horse racing.

The big news, of course, was Keeneland completely doing a 180 from their strong historical branding to hike takeout rates. It was speculated at the time that this probably wasn't their idea, they were simply following a lead from Churchill Downs Inc, who did the same thing a few years earlier.  If there's one thing we know in this world -- accountants talk to each other.

In previous years it was speculated that these two tracks were in cahoots to stop Kentucky Downs from getting more days. As most know, Churchill wrestled the September dates from Turfway, and is very happy with those extra days and the smaller live handle. If Kentucky Downs wants more dates, good luck.

Now, boom.

Keeneland and Churchill announced this morning that they, "plan to partner on the construction of
two new facilities in Kentucky with live racing and slot machine-like devices near the border with Tennessee."

The key phrasing …

Kentucky Downs is a (Glorious) Struggle

If there's something we learned about Kentucky Downs - other than the miraculous handle growth - is that comments from people like Rob are very common.
Nice to have someone on here who is engaging and takes all the body blows for KD like @ceejayjohnsen does. Not gonna lie, I've struggled — Rob (@Smarty3385) September 11, 2017 From what I see, Rob is a fine handicapper. Him struggling is no reflection on his skill, no doubt. We all struggle at Kentucky Downs - don't let anyone fool you on that. It's simple math and circumstance.

Kentucky Downs' races are not a six horse field at Santa Anita where you can like a Baffert maiden at 9-5, as the clockers extol her virtues. It's not a Saratoga race where you can have a strong opinion based only on who Chad Brown or Todd Pletcher is training.

When you put 13 horses - coming from all over, on a weirdly configured turf course, with a high breadth training colony - it takes a different mindset...... and some luck. This…

Horse Racing's Managing Director's Retiring Pot Shot Speaks Volumes

Racing is now a quasi-government entity in a lot of places, but perhaps nowhere more so in North America than Ontario. Yesterday, the Managing Director and Special Advisor to the Minister in charge of the sport in the government sent a letter to the industry upon his resignation. One part of it turned some heads (emphasis mine).
Beware of WEG’s dominant position. In the proposed structures of administration not only are they a player, they are the scorekeeper and referee. They are becoming too big to challenge and yet it must be recognized their success depends in large part on the significant partnership with the Ontario government and its ongoing funding support. With so much of tax payers monies invested in this company, there needs to be careful scrutiny and accountability. As we've often spoke about here, regulatory capture - in effect, the industry directing policy rather than having it dictated - has served racing pretty well.  But, this bureaucrat sees Woodbine's po…

Tuesday Horse Racing Musings on Gun Runner, DQ's and Handle

I hope everyone had a good long weekend.

Opinions make horse races, and, well, this is one I disagree with; not on HOY (I don't follow that race) but on the most likely angle.
Moved Arrogate back up to #1 on my @NTRA poll. I think he's a more likely winner of the @BreedersCup Classic & thus a more likely HotY — Ed DeRosa (@EJXD2) September 5, 2017 Gun Runner ran a 142 TFUS figure in his explosive Woodward. Even if we add an eighth of a mile and he runs a slower 138 for that distance, it's faster than Arrogate has been since Dubai, or before that, at Gulfstream. Right now he's simply the faster horse.

Arrogate can surely return to peak form and again be faster than Gun Runner. But hoping for something to happen is not for favorites.

As an aside, it feels like a lifetime ago Gun Runner dodged the Classic because he was simply "a decent miler."

Someone on twitter (CJ or maybe Isolated Tops) said that it sure is fun to watch a horse develop, when they don&#…

Ken Ramsey & Purse Red Herrings

Yesterday, big time horse owner and breeder Ken Ramsey made some major waves with his comments on Keenelend (35 minute mark and on). Quips like "they make Benedict Arnold look like a patriot", and a call for players (and the industry) to boycott the track through withholding their wagering got the most play, and deservedly so.

But he also touched on the so called reason for the takeout hike - to increase purses. Ramsey believes that it's a red herring because Keeneland gets so much of its revenue from alternate means - gaming, sales and the like. He's probably correct.

But the reason itself is suspect. Sure it's arguable that raising takeout even increases purses; in the long run it likely doesn't. However, I suspect Ramsey knows what everyone else does. Even if purses are raised, they are not optimally distributing revenue to the business, and the proposed net benefit - more horses purchased, more horse owners getting into the game - is simply not there.


If Racing Wants to Make Big Wagering Decisions, At Least Study the Numbers

For a long while, we've often wrung our hands at how the business of horse racing (publicly at least) studies their facts and figures when it comes to wagering.

What should be a deep dive - something that looks at things with a microscope with statistical significance attached - is often fishing in a pond; a pond stocked with whatever fish you're looking for to boost your argument.

I read this line in a few places, regarding the Keeneland takeout increase, and it's been passed around some as a justification for raising rates.

"Churchill Downs boosted its rates to the same thresholds in 2014, and records indicate that despite horseplayer backlash handle has continued to increase slightly over the past several years, from $501.3 million in 2014 to $511.8 million in 2015 and $516.9 million last year."

There are many problems with this 'fact', and this is very common in the horse racing business when racetracks offer out new policy.

The numbers include Derby…

Anger at Keeneland is Different Because It's an Old Friend

When a takeout increase is announced there's usually some grumbling. Let's face it, no one in their right mind is happy with a price hike; even a smaller but dedicated player who bets $1,000 in a meet and made $50 will find herself now losing money. No one likes to spend hours and hours at a craft, to lose when they used to win.

This time though, it feels much different. The breadth of the complaints are wider - horseplayers yes, but it's also industry watchers, some horsemen and some in the press. There's a sense of deflation from so many quarters. I think this makes some sense.

Over the years Keeneland has always been the track we've leaned on; the track we'd say to non-fans, "go to Keeneland, it's horse racing and they care." It's the track that when you walked in the door you felt catered to, important; whether you were betting $2, or bidding $2 million on a horse, it did not matter. It's the track where it seemed Nick Nicholson woul…

Horse Racing's Bill Murray Wagering Model

There are plenty of internet rumors that low-takeout, value stalwart Keeneland is looking at raising their takeout rates on selected bets. This, for your average horseplayer who has more and more trouble finding churn, is certainly disconcerting. However, in my view it's part of an overarching trend in horse racing, and it's been going on for some time.

Twenty years ago horse racing was in a pretty decent spot -- slots were churning, supply was up, and purses were fairly solid. The wagering numbers, however, were pretty much flat.

About the same time a new way to play horses was emerging, though, through rebating. Price sensitive punters could find - if you looked, at times pretty hard - deals on wagering that lowered their takeout and increased their churn.

The reaction from racing was, well, to put it mildly, not very welcoming. You heard a lot about how it would be the death of racing (because, the thinking said, charging 22% was the only way to stay afloat), and that the …

The 'Helping Players Win' Mindset

I caught an email from Draft Kings today:
I can dig it @DraftKings. — Dan Gaspar (@MrTuttle05) August 1, 2017 This is a response to the phenomenon of larger players playing into small tournaments, and scaring away smaller customers. Draft Kings, as well as other DFS sites, have the same issue all other pari-mutuel type skill games have: Sharks trying to scoop money from the fish, and the fish leaving to swim in other waters.

Draft Kings believes that without new players they will probably, over time, fail.

This interested me because a DFS site like this (and before them, places like have to answer to one person for their success or failure: The Customer.  It's pretty basic.

As time goes on, or if the structure of the business is dependent on more than a customer, that's when things can possibly go off the rails; for example, if the regulatory environment is leaky, if they have to pay high fees to racetracks, if they have to answer to sh…

There's Big Day Racing & Really Big Day Racing

I noticed the Haskell card checked in yesterday with over $12M in handle, up around 7%. That's a pretty good number, and the race was excellent.

That $12M in handle, though, represents only a sliver of total handle for the Monmouth meet. It's that way with most big events in North America, outside the Derby I suppose. 

Down in Australia, I noticed a figure or two which I found eye opening.

The Cox Plate, Melbourne Cup and Caulfield Cup races attracted over $1B in total handle last year, representing 44% of total handle for the entire meet.

The overall spring meet is good for betting customers - a field size of 10.9 with good pool size, as well as plenty of ways to play, like fixed odds and exchanges. But to have near half of the volume on the three big events is formidable.

I've often believed that mature gambling markets are a leading indicator for North American racing. Big days have been big in these markets for a long time. The US and Canada are catching up, but maybe…

DRF Purchasers Look at the Blue Sky

After what was rumored to be a great deal of time, the DRF finally sold. Details of the deal were not announced, but speculating, it was likely for less than the (again) rumored $100M asking price.

Being a private company, it's very difficult for us to value the DRF based on discounted cash flow. What we do know about their cash flow, however, is that it relies primarily on PP sales, advertising and a margin on each dollar bet. All three of those things are not high growth. In fact, a probable argument can be made that at least two of three are in or approaching a negative growth phase.

What appears to interest this new group are a couple of characteristics that could be blue sky:
“The big opportunity for us is to digitize the print side of the business, which the former owners started to do—it's expensive and there is still a way to go to make it fully function, and then the online gaming offering,” said Z Capital Group CEO James Zenni On the surface it looks like the plan…

Forget Phelps Versus Shark.....

Proving man versus shark racing ain't dead, I, like many of you were watching Discovery's made for TV match race between Michael Phelps and a Great White Shark on Sunday. Although some people were clearly disappointed Michael Phelps did not race an actual man eating fish in the open ocean, the rest of us were pretty satisfied with the spectacle.

Discovery Network clearly used the event to push "Shark Week" on its network, and feels it's good for ratings.

That got me thinking, in horse racing, actual horses race actual horses thousands of times a year. Even though wiener dog races are the bomb, I feel the sport can do better to promote the sport.

One way, in my view, is to offer some match races of our own. Here are a few of my ideas. I hope you like them.

Match Race : Andy Serling against Someone He Blocked on Twitter

This race might help attendance, and we all know how much Chris Kay likes butts in the seats. This would not be a one-off race, because Andy has blo…

The Numbers are Great! No, They're Bad. They're Great!

Del Mar's attendance was reported down about 20% yesterday for their opener. Handle was down as well.

The sky is falling. But at least no horses died.

"A safely run racing day more than offset a downward spike in on-track attendance on opening day."

Other things that more than offset a loss of attendance:

A North Korean rocket didn't hit the San Diego Naval Yard.

E-Coli was not discovered in the Del Mar drinking fountains.

There were no (reported, at least) floppy hat injuries.

I kid. But often this represents analysis in horse racing.

Attendance could've been down for a hundred reasons - a Wednesday with something else going on, people waiting to see Arrogate on Saturday (attendance will then be up and everyone can stop hand wringing), or a big sale at Jim's Jumbo Burger. Who knows.

Horse racing's use of statistics, are in my view, so rudimentary and knee-jerk, it's no surprise we learn nothing from them.

I think that probably will have to change, es…

Racing's Forever Shifting Goal Posts

When I wrote "Why Lowering Takeout Increases Handle 100 out of 100 Times" recently, I did so because talking about injecting betting capital into a system that needs it (to spur end-user demand) is a conversation worth having. I must confess, I did it for another reason - to see, from those who are pro-status quo and don't like to talk about racing's high juice, where the goal posts would shift to.

What I saw, I must also confess, surprised me a little. I knew some shift would occur, because being 'anti-handle growth' in a game we love is not a warm place to be publicly or intellectually. But I did not expect the posts to move so forcefully into the argument that, yes, handle will go up, but not up enough to make more money.

I see it more and more as times goes on. It's not about increasing short term end-user demand anymore. It's about increasing short term handle, and making more short term profit.

Why did these goal posts shift so much the last few…

Racing's Legacy Business & a Closed Mind

About 30 years ago now I worked summer vacation in a meat plant. My Saturday job was, generally, to be a garbage man - clean up the plant and and make trip after trip, dumping whatever I was cleaning into the incinerator. The plant was not 24/7, and on weekends I was all alone. To make the time pass, and since I had no one to talk to all day, I - under the hard hat and parka - had my ear buds in and I'd listen to music.

One day, the union rep came in for something and flagged me down. He saw the ear buds. He shook his head and said, "kids today."

Fast-forwarding 30 years, I was out last week on the lawn tractor cutting the neighbor's lawn. He was in an accident at work and hurt his ribs, so I figured it'd be a nice thing to do. Dutifully I grabbed my blackberry (hey, don't judge) and ear buds and while mowing streamed music.

An older person in his 70's walked by and saw me. He told me later, "You kids today. Electronics on a lawn mower ....."