Society's Off-Income Gains, Racing's Opportunity Lost

We read a lot about income inequality in the web world in 2020, and much of what we read is correct. But, as we often see in the web world, looking a little deeper we can learn a few important things.

From the late 70's to today, real wages for the lower rung of workers has stagnated in real terms (it's almost flat), but what's not taken into account is prosperity. Today we receive things above wages we did not receive 40 years ago - benefits like group health and life insurance plans, child care, transportation benefits, moving costs paid leave, profit sharing, employee discounts and more - totalling up to 40% of our salary.

In addition, virtually everything we buy today costs less. In terms of hours worked, household goods are 81% cheaper than in 1960.

What this means is that in the aggregate we're better off today, because these benefits are real. We can live better lives than you and I did if we grew up in the 60's or 70's.

In horse racing, let's look at the purse growth since 1988. It's up close to a double, but with inflation, about a double since '88, like wages, it's flat.

But, like total wages, total purses only tell part of the story.

Horse racing has also received tremendous benefits, off book. They don't have to inject capital into earning dollars because billions have been given from slot machines. Racetracks don't have to fight for a customer in New York or Toronto because it was afforded a carve out to offer their product track by track, across state and country lines. In 2006 it was given a monopoly on online wagering.

In addition, while the number of racetracks and race dates dropped, total variable costs to run the business also fell. New capital didn't come from selling stock or issuing debentures, but from the retained earnings from slots.

These are elements that any business or individual would kill for. 

While many live better lives because of profit sharing, pensions, cheap stoves or dishwashers and a hundred other things our parents were not afforded, no one can say racing is living a better life. In fact, we read a racingisdead-racingisnotdead hashtag fight on the twitter extolling just that.

Humanity has progressed with stagnating wages because it evolved, and although you and I aren't Bill Gates, we embraced the advantages given to us. Racing, in my view, has not evolved; it has not embraced what it's been given. I believe it's the single biggest failing of the business.

Have a nice Tuesday everyone.



Wagering Horses, Like Oil Markets

I got a note on Friday from a friend, detailing his view of the general credit markets and, in his first paragraph, oil.

He doesn't wager, he trades, yet his mantra of making sure someone else is on the wrong side teaches us bettors' a lesson we all, deep-down know.

Last Monday, the consensus on oil was to be short. The entire world was running out of stockpile capacity, and supply was up thanks to the Saudis doing bad things. Because of this, especially in inland basins, the consensus view was for negative prices.

Then, next-level replaced first-level. Diplomatic pressure on the bad actors, from primarily U.S. but backed by most others, cracked the narrative. Oil prices rallied 40%, and the consensus view lost a pile of money, scrambling to cover.

He wrote, "it's a reminder there is usually no way to make money with a consensus view".

Those words involve billions of dollars a day, but they're exactly what we have to do with our $48 pick 4. We get paid when we're against a consensus view, and we get paid in multiples when that view clicks.

This process is hard for you and me, and it's hard for traders as well. Navigating implied versus realized volatility is not easy when trading oil, or making a pick 6 ticket.

But as a discipline there is no way around it; it's something we absolutely have to embrace. With 20% takeout, it's as impossible to make money with consensus as it is for people trading oil off a consensus twitter trend last Monday. "That horse can't lose" is not too dissimilar to "there's no way oil can rise this week" more often than not.


Have a nice Sunday.

Snuffed Out

Yesterday, many of you were readying for the Cal Expo racing card, only to learn shortly before post time racing bit the bullet. As reported, the Country Director of Health instructed the track to shut down a few hours before post time.

This, to me at least (and from what I read, many of you), sounded illogical. Cal Expo raced yesterday (after applying to change their dates to Tuesday and Wednesday a week or so ago). They were not racing - at the conclusion of the Wednesday card - until next week.

Why, with two shakes of a lamb's tail; with horses warming up or already trucking to race; with track employees, judges and the betting network fired up; with everyone almost behind a starting car, would this get so abruptly cancelled when they could just cancel it on Thursday? It had to be something, right, because even in the world of government this didn't really make any sense.

It appears (and in this day and age of doctored news etc I am hesitant to believe a lot on Social Media) an animal rights activist and a county civil servant served up the snuff out:


If this email is correct, someone named "Aquawoman" - no, not a joke - seems to hold a lot of sway.

We learned pretty early on around this big wide world recently that viruses move faster than bureaucracies. In this case however, an activist sure made a bureaucrat work fast.

Enjoy your day everyone.

h/t to @gocashking for the screenshot


Horse Racing's Value Prop

Hello people. I hope you're all managing your lives and loved ones in this crazy time we're living in.

With more time at home, it means more blogging, which six or seven of you probably care about, so here goes.

I read a book by Jonah Berger, a marketing professor, recently called The Catalyst. If you're interested in business, marketing or perhaps politics, it's a pretty decent read. (Warning - if you're right of center you might not like some of the analogy, but the principles can be politically flipped and they're strong arguments either way.)

I caught a podcast of his, and he talked about one part of his book - primarily a problem many have in the gig or creative economy: If you are doing great work and providing value, won't you eventually get noticed; noticed because people (i.e. the market) are always attracted to value?

He, as an academic, learned he could produce great work with tons of value, but that work would get lost in a sea of other academic work. It was never broadcast.

His examples on the other end of the sphere talked about fake news. Was it great to learn (wrongly) DJT's famous words that the coffers are brimming with Chinese money because tariffs are "tremendous"? That a reporter told you the MLK bust was removed from the White House? Nope, the value people get from it is through bias, and trying to strengthen their arguments (right or wrong) but certainly not providing value. This lack of value has not stopped fake news being broadcast, each and every day on our twitter feeds.

What's interesting to me is that with just about anything - a start up, a music release, a new self-published book, art or photography, he's totally right. It's an uphill struggle no matter how valuable you are. We, if we're a writer or new business, have to have a great product that provides great value, but it's more than that. It needs a push, through marketing and otherwise.

That may fly in the face of what you read on the blog here about many of our views of wagering on horse racing. We often type or twitter - provide value to bettors and racing will grow.

Are we all wet? He's the marketing prof and I'm a nobody after all.

I think we're talking about two different things, because wagering is a different beast.

If we provide betting value to customers - deep fields, attractive bets, great takeout - it's pretty much all we need to do, because value is the giving away of money to smart people who are searching for it. What they seek, they will eventually find. Every bettor, in any game, is searching for a chance at profit. It's their 100% focus.

There's some value left in online poker (not much, but with more "fish" during the COVID outbreak some) and that has suddenly attracted more volume.

There's some value in DFS, and League of Legends is attracting a $300k tournament this weekend. Our old pal Multiracewagers sent me a note that he was diving into learning League of Legends to play these tournaments. Seriously.

Horse racing possesses a value mechanism already. It's called the betting pools.

If racing makes the wagering better, more affordable, easy to use and lower cost, we won't need multi-million dollar marketing plans; Triple Crown winners, hit movies or to be on cereal boxes; fake news or real news or news from Mars. Unlike so many other businesses, we just need to turn the value machine on, and people will come.



Questions Questions

The past couple of months have been pretty tough. I hope y'all are working through this, and that you and yours are staying safe, and doing your civic duty the best you can.

I've been chatting a lot about the changes we're seeing - more long term, not short, mainly in the business world. One area most interesting to me (leaving aside the gloom and doom which is very real), is that people are currently doing new things in new ways, because the old ways aren't available to us.

I've had someone tell me they ordered online groceries, who would not order online if you gave her a $1,000 free food coupon. She loved it and she said she can't wait to use it again.

I had to call an ISP today, and with the help center shut down, the call was routed to someone's home. He provided excellent tech support, and I wondered, if you owned this business would you want to pay overhead for a center after it's all done? ZOOM, DOCU and ADBE stocks are all up because of home work, but do they have to come down if business strategy changes?

Dining out is huge and has been growing massively in the service economy for years, and people are proxying with home delivery services. Dining in is not quite as huge, but home food delivery services like Hello Fresh allow you to cook fresh food at home.  From what I hear these services are in high demand.

Online doctor visits, deregulating occupational licensing across provincial and state lines are happening as we speak. I know many people over the age of 60 who would never think of something like an online doctor consult, and now they appear to be.

There are some fascinating things happening, right before our eyes, in my opinion. Some of them will be cost effective, they could move society forward in a good way. There is, or will be, some optimism in some businesses.


Now, onto our beloved sport, horse racing.

When I look at a path forward, unlike above, I am not finding any good vibes with the questions I have.

Will some of the smaller tracks who have closed even come back with meets?

Will slot money, with super-cash strapped governments, return just like it always has, filling the coffers for purses?

Will people like Stephanie ever work in racing again?

With the stock market tanked, and maybe not seeing a recovery for some time, does the foal crop get crushed so bad it can't recover for many years?

I realize these are tough times for everyone, and perhaps horse racing should take a back seat. But this is a horse racing blog, and those questions all worry me. Do we bounce back, or like so many other businesses or sectors, is business as usual over forever?


The Racing Hiatus

It's Friday - the weekend! - where the tracks are ready to fire-up some serious betting entertainment.

As we know, that's primarily not the case, and just last evening Woodbine announced they're closing up shop for the time being. They've been a staple, and as much as I am critical of their betting policy towards customers, I praise their corporate governance in keeping the track open so many people can keep the lights on.

I am not one to be critical of politicians and policy makers when there are so many unknown variables in the beginning of a crisis not of their making. And that goes for politicians I - like some of you - am not overly fond of in North America right now. Everyone's a genius looking backwards, especially in the banality of a twitter mob. So, looking forward, I think the current question being asked, "how can we close things", will need to be replaced with "how can we keep things open".  That, I believe, is inevitable critical thinking.

Racetracks are something - under current federal guidelines in Canada and the US - which can safely be open, if not now, most likely very soon. Let's hope it can be accomplished sooner rather than later, because how can we stay closed is yesterday's question, not tomorrow's.

Cangamble started the morning off with a funny today.
If ITP was here he'd do the Tony Soprano Bingo Gif. We know that during the hiatus this won't happen. This is priority 2,540, like it always has been. And I think we all know that racing will come back under the exact same policy before this all happened. But I love his optimism wishful thinking.

What are you doing as tracks die down, and a good lot of you horse racing gamblers are home?

I heard from one friend who is working up his database for DFS. Another - an old friend who professionally gambles that can't right now but still knows a thing or two about horse racing - is playing the races (at the tracks we have left). I am planning - if work slows - to database some of the trainer results since "Servis-Navarro Gate" to see if someone's horses are being raced cold. I'm also looking at my (so far not very good) ROI numbers for 2020. What am I screwing up?

This sure was all pretty unexpected. A few months ago in the US there were 7 million jobs offered, and 5 million unemployed. My professional gambing friends were gambling, my professional horse racing betting friends (all two of you) were betting the horses. People were hotwalking and jogging, training and entering. A few, after the indictments, were looking forward to a level playing field, at least for a little while. Boy, how fast things can change.

Have a great weekend everyone.

Fleeting Racing Wagering Opportunities

I was having a quick chat with an ADW dude on the twitter today. We were speaking about the lack of advertising of ADW's, and horse betting in general. I'm too lazy to check, but I am sure there are a hundred blog posts here on that topic. It's certainly real - it's difficult to advertise horse wagering in a number of places.

However, despite these roadblocks (and lobbying to break down the regulation should have been done), the fact remains - for racing and its online wagering, the critical mass is just not there, advertising or not.


The graph above shows (click it to enlarge) total searches for betting horse racing, month by month. Other than the Derby month, the number of people wanting to learn about betting horse racing online is a very small pool. In some months there are barely a thousand searches for "horse racing betting" and associated matches (if you look at exact, bet horse racing, the numbers are much smaller).

For a comparison, here's a snapshot of one game (daily fantasy) and one sport (the NBA).


Daily fantasy basketball has only existed for a brief time, and brand searches are higher than many broad match horse racing betting queries.

I believe this is a pox on racing's house. While initiatives like America's Best Racing have been funded for lifestyle dynamics (and this was recent), horse racing and their monopoly on online wagering didn't do the work. The monopolist's mindset (and general average cost equals price inefficiency) has ruled the day, in my view.

Why do the work when you're technically the only game in town? You do the work because you want people searching for what you're offering to increase over time. We do the work to increase pull demand with push demand. The sport never really embraced that, and even in times like this where marketing should increase to capture new markets, it does so in a bit of a vacuum.

Have a great Thursday everyone.


Flipping a Switch and Betting the Horses, Other Notes

Last weekend we saw a lot of tweets and posts from those promoting racing, hopeful that with no sports and little other gambling competition, new signups would occur and handle would see a bump. As Crunk points out, the data is noisy year over year, so conclusions are difficult.

But, regardless, should we ever expect such a thing?

We've spoken about racing's funnel, or lead capture to final customer process, before. And it's not exactly conducive to such things. Each step of the funnel, from signing up, to funding, to getting a past performance and learning a new UI (not to mention learning how to wager) is cumbersome and daunting.There's one way to consume this sport. It is what it is.

Meanwhile, over at Draftkings, where there is virtually nothing to bet, interest in MMA - almost the only game in town - was up bigly. On Sunday, they got creative with a Democratic Debate game which drew 60,000 for a free $10,000 top prize. They're trying Turkish soccer of all things, and their funnel is sound.

These folks can be nimble. If there's a game, they can try and exploit it, make a few headlines and try and grow the customer base. 

“We’re really forcing ourselves to think outside the box,’’ Robins said. “Our customers like to interact with their content. They don’t want to passively consume it.They want to have some kind of prediction or skin in the game and that can be sports, that can be politics, anything that they’re consuming that involves any kind of prediction.’’

Pivoting quickly in a super fast world is kind of important.

With racing's funnel not fine, it's incumbent to be even more aggressive with planning, in my view.

If racing wanted to be nimble we might see cross promotion of Derby Wars games, or a seeded pool tournaments with free signups, or a marketing plan of some sort, perhaps involving seeding betting pools. Even using existing jackpot money sounds like a possible marketing edge - each day one pool at one track is a mandatory. But it's just not the way the sport seems to operate.  

If you live in the US or Canada and your name is Trudeau or Trump you're getting taken out behind the woodshed as a response to your response. Warranted or not, criticism comes with the territory. But this whole COVID thing is a Black Swan event.

Like with politicians, it's easy to be critical of racing's structure and intransigence. But, capturing customers is not a Black Swan event, it is a part of daily business. Racing's response to try and capture new markets has always focused on hope, and hope is not a strategy.

Notes/Ramblings:

It appears racing will be going on for the immediate future, and from a common sense and cost benefit analysis, I think that's probably just fine. The horses need to be fed, and exercised and vetted and shod, and jogged or galloped, and backstretch workers can use a paycheck, even if the world turns into a scene from the Walking Dead. Adding a few racing officials, gate crew and judges to the venue doesn't seem to be sub-optimal. With that, we'll get to see some statistics regarding handle and interest. Maybe the worm will turn in the short-term.

In Canada, Race Night on the Score was a televised show on a Canadian sports network, run each Monday. Woodbine ponied up the dough from the slots cash, and although the ratings weren't great, it was on (until the slots cash went away, and the show went poof with it). With a dearth of sports content on all these major networks, is there an opportunity to restart it for awhile?

The dominoes have fallen in the sport, and the trainers indicted will have their day in court. On his twitter feed Sid Fernando shares a possible outcome - no jail time for some or all who have been charged with the 5 year maximums. If that does happen I am sure twitter will lose their minds, but if their cooperation helps clean up the game, and they're never allowed to touch a horse again (if this is a plea deal admitting guilt) is that such a bad result?

During this uncertain time, let me again wish your and your family my best. And I appreciate you taking the time, all these years, to read the blog and interact with me on the twitter. Have a great Tuesday.



Betting Horses & Rolling with the Punches

I listened to a pretty good betting podcast with ITP last night, linked here.

As many of you know, ITP has been betting horses for his supper for many years. And during those years there have been many betting shocks - rebates, no rebates, exchanges, high signal fees, higher takeouts, larger fields, and shorter fields. 

It probably won't surprise you that each of those shocks changes betting behaviour, which ITP lists in the pod.
  • Higher rebates made him bet more, in massively large multiples. This is like marginal cost equals price point in business - produce as much as you can until profit approaches zero. 
  • Exchanges were the string cheese of the betting market - a new way to consume a product, and when these are offered (at a fair price) total betting volume increases (as it did with him). 
  • Higher signal fees are borne by the player.  He bets less now. 
  • Shorter fields = less variance. Less variance means fewer possible outcomes, which means lower handle for him. 
If you don't roll with all of those punches, and you bet professionally, you have to adapt to stay in the game. But if you listen to the podcast, you'll hear how hard that is for many to do. In fact, at one point ITP noted that succinctly, when he said you go where there is some edge, and if things are too hard, you do something else.

When those of us who do gamble talk about (incessantly sometimes, I know) much of the above, it's because it works exactly as prescribed. When we read in the Bloodhorse that increases in signal fees are great for racing, we cringe. When we see a CHRB meeting where a takeout increase is applauded, we're confused. When we see racing step on some form of new way to bet, we wonder what in the hell they're doing. Do they want us to bet less?

ITP's pod touched on several other issues that might be interesting to players, so if you have the time (and we might with more and more isolation being asked for) I found it a pretty good listen.

Have a good Monday folks!





Sure, Clean it Up With Triple Cherries

If you want to learn something during the nascent stages of the #racingvirus, who better to turn to than POTUS.

Racing subsidies, under fire in places like Pennsylvania, are formidable in this sport totalling - last I checked - hundreds of millions of dollars. And that's recurring, not one-time revenue. There's certainly no need to go cap in hand if you're looking for revenue to "better the sport" is there?

These funds are under contract, but it doesn't mean the money can't be shuffled around. And, talk about putting governments on defence when you frame the argument to change the agreements about protecting animals.

For 25 years the sport has clung to slot money like a two year old to a teddy bear. Do you want to use some for marketing? For takeout reductions? For television exposure? No, we need it for purses is always the answer.

Well, here's another good way to use some of that triple cherry cash. It might actually work.

Have a great Wednesday everyone.

"This is Going to Get Ugly"

Day two of the big racing news is upon us, and we have some reporting from the DRF's Matt Hegarty to consume. I thought it was a really good piece that I encourage you to read, if you're interested.

Matt interviewed an unnamed racing insider, who said:

"This is going to get ugly, it really will"

This is in reference to the inference that the investigation is ongoing, and plea bargain agreements are yet to come. In other words, according to this insider, there are probably a whole lot of people not sleeping very well.

Anyone who has been around the game may know the term "brown bottle medications", which are exactly what you'd think - meds that are sold cheaply on backstretches, that are unlabelled or mislabelled. If - this is conjecture on my part - there are records (or testimony) from some who are indicted, the chances of finding out the who's and when's (according to the insider) could be upon us soon. This might end up being very far reaching.

If my speculation is correct, and the mislabelled and unlabelled gets cleared up and the users purged, it could represent a pretty huge culture change for the sport. There's been somewhat, I feel, of a wink-wink-nudge-nudge aura to the brown bottle stuff, and this changes everything. Potentially being thrown into a jail cell tends to do that.

Some I have spoken to who would like the game to be cleaner are wary that the sport will look at the top-line (the two main trainers in question) as some sort of final fix, and that it will be business as usual next week or next month.  From what we read from Matt, we might reasonably conclude that's not the case. Perhaps this is the beginning of something much larger; something most in the business would say is long overdue.

Have a nice Tuesday everyone.

Notes:

Pat Cummings transcribed Andy Beyer's thoughts on this matter today. As a horseplayer who too models and bets these incredible form reversals, it's nice to read. We're often discounted, and years later when some of these people get nabbed there's a "who could've known" vibe. Well, serious horseplayers know, that's who.

Jessica, as per usual, has a neat round-up of the news and opinion on this story via her pinboard. If you want to keep up to date, it's a good place to be.

Allow me a quick vent. Because harness racing connections are implicated, we see the Thoroughbred-Standardbred shuffle in some of the racing press ("those dirty harness guys!"). It maddens me to no end (as mad as I get, which is not very) because of two simple facts: Horses of each breed share the same DNA, and the money in both sports is green.


Racing's Coronavirus

No doubt you've heard the big news.

We'll leave aside much of the smaller picture of this development for people above my pay grade, but for the big picture, I'll take a cut at the ball.

What Buck describes is the most under-reported part of this, in my view.

Trainers who cheat cause ripples throughout the entire business.

They take horses from these small time trainers - in it for the love of the horse, to scrape by a make a buck; to try and get that one home run horse - and they improve them rapidly and almost overnight.

This acts just like slander does - it tells everyone that the previous trainer was a dummy, that he or she didn't know what they were doing. It's a big red flag, signalling anyone with investment capital that they should not give horses to that man or woman's business.

It's like the public being told a restaurant owner serves arsenic in his meatballs; this certain builder cuts corners... when in fact the meatballs are made with the finest ingredients and the builder builds to code. 

What happens is these men and women - those doing it the right way - lose owners and leave. And the ones doing it the wrong way get more horses. It's completely perverse.

Cheating as alleged in the story linked above is like a virus. It starts as someone cashing a bet with "the juice" and spreads throughout the entire business - chasing away good people, investment capital, and endangering horses and the overall business.

Enjoy your day everyone.


The Horse Racing Profit Motive

I was flipping through an Ontario standardbred program recently and noticed a horse had been claimed five times in a row, with all races in the same class. This is nothing too new - for years claiming a horse and not moving it up in class was the norm, but back about a decade ago things changed.

At that time, the powers that be made a an owner move up a horse when claimed. This was done for the protection of the health and welfare of the horse, and the associations were clear on that. Expelling the "rent a horse" phenomenon was viewed as a step forward, and the powers were proud of it.

Then it all changed. Horsepeople groups and others complained - not being able to jam a horse hurt the profit of the claiming game, for the claiming trainer, so they said. Because slots were nixed, and making money was harder than it was, the regulators caved and changed back the rule.

This type of policy is something we've seen at times - maybe too often - in racing. Do something, or propose something that may help, then see it reversed, or shelved.

Keeneland trumpeted a new surface to help the health and welfare of the horse; sang the positive results....... then Keeneland changed the surface to a less-safe one, because of profit concerns. Horse retirement is talked about often and whimsically, until the bill comes.

I, like most of you, are not anti-profit, because in the real world the profit motive is pretty damn impressive. When it first took hold around 1800, its effects were mind-boggling. Economic historians will talk about it for thousands of years.

And this system has floated the boats of even the most vulnerable in equally impressive ways - 90% (standardized measures) of the world lived in poverty in 1800; in 2020, less than 10% do.

In horse racing, this motive surely works as it is designed in my stable or yours, but for the most vulnerable - the horses - maybe not so much. For them, the profit motive enabled by weak-kneed regulators and participants with little foresight doesn't seem to be working well at all.

Have a nice day everyone.

The Bet/No Bet Decisions Can Be Humdingers

If you ask anyone who gambles they'll share stories about a score, or a time in the recent or not-so-recent past.

Often this score or story will be of an angle, or barn change; a tactic on an exchange, or betting the chalk in certain situations at hockey or football.

The story usually ends with, "that doesn't work anymore".

If there's something we need to do in gambling, it's roll with the punches, because being too late on leaving an angle or power rating, or horse, or trip or replay or bias note, can pretty much kill a bankroll.

I thought about this again this past Monday, not wholly in the above context, just to illustrate a point (one which may or may not be valid).

At Woodbine, where the pick 5 is generally a decent bet, the late edition was relatively boring to my eyes. However, Ryan on the twitter - a venerable, very good Woodbine pick 5 player - tended to like the sequence. He was focused on two horses - trotters in race 7 and 9.

Both trotters were, to me as well, live winners. But the reason, in my view, was obvious. Both fired home well, replay watchers certainly would be on them and if you follow the races fairly religiously, they looked like slam dunk pick 5 plays.

But really, they weren't heavy chalk, and neither was a morning line favorite (one was 6 or 10-1 I think). Technically they should be decent pick 5 plays. And most certainly, twenty years ago, when the pools were fuller, and dead money more prevalent, they'd be top notch bets.

But my nagging brain on being different - having to have something bettors would not see in virtually any sequence - led me to stay off the bet.

My question to you (as similar every day gamblers) - We know we have to be different to make money, but do we take the wish to be different too far sometimes? Are we leaving money on the table, just to be different?

Sometimes I wonder. Because we're unconscious competent at certain meets that we play religiously, do we (wrongly) believe something is more obvious than it really is, and we're pitching horses, or deciding not to wager horses we should be?

Have a great day everyone.

The Decision Makers in Racing Ain't Much Help

Tonight at Woodbine/Mohawk a horse without a charted line since January 10th roared off the wings and won in a lifetime best, paying $124.10.

Some of you may ask how a horse off that much time without qualifying was allowed to race, and that's an honest question. They changed the Qualifying layoff time from 30 to 45 days awhile back. For harness horses, this is a big change, as we all know. These horses need to race week to week, so any stale dated line is a red flag.

The rules were changed - as they often are - not for bettors, but for participants. They have to ship to qualify, and shipping costs money. This same exact rule was changed in the US, as well, for this reason.

When I brought up the implications of this to some in the sport, I was dismissed. Something I am certainly used to.

But the reason I brought it up was precisely this:

The pick 5 - something Woodbine wants everyone to play - included this stale dated horse. It attracted $63,000 in money.

The pick 4 also included the horse, and that pool was $52,000.

The race itself had a handle of about $110,000.

All the pick 5's were four of five - something I've never seen before at this pool size. Everyone was blindsided.

That's real money, bet by real customers, who had no idea what said horse would do off 40 days off. How could they know, she didn't even have a charted line.

As bettors we're conditioned to this. We play and it's "part of the game". But what kind of game is it, when likely two or three people out of the hundreds of thousands of dollars bet know the horse is on go off the stale date?

I remember my first job in the mining industry. I was assistant to the Corporate Secretary who wrote the press releases. One day there was big news at the office - our drilling hit 50 feet or so of gold, at 0.5 ounces per ton. The stock was going to fly.

And..... the cone of silence went up. If we got caught even whispering to someone - hey I am sure I had a buddy who could make a quick couple of thousand - we'd be strung up by our ears by the authorities. It has to be that way, because the investing public needs to be protected, or there won't be an investing public.

In racing, with changing qualifier rules (and a hundred other things) not only do authorities not protect the bettor, they pass policies like this that make it worse.

This is nothing to be fixed; it's shouting in a vacuum. The horse was a longshot even with a line; it is what it is; life goes on. It's racing.

But for once, just once, I'd love to see the business ask, "how does this change influence the customer"? And when the bettor does share his or her opinion, they at least pause for a moment before doing the opposite they ask.

Have a great night everyone.

Cheerleading's a Symptom of Inherent Weakness

This past weekend, golf fans lamented the coverage of the L. A. Open at Riviera on CBS. Shots were not shown, many shown on tape, and some of the leaders were not even telecast while they were in contention. In addition, more ads were shown per hour. It felt, to many, different.

Today, Geoff Shackelford referenced a podcast with newly-fired (and the very-excellent, in my view) CBS on-course commentator Peter Kostis.

Some hot takes:
  • "It was the tour that told CBS to get younger, I think the Tour had an issue with me not being a cheerleader"
  • “The Tour wants more control over what’s being said. I think they want more cheerleaders on the telecasts. More people that are going to “promote the Tour’s product,” you know which, we’re bridging into the stuff that people are really upset about: the quality of the telecast. 
  • ”They are interested in the marketing of the product, not the quality of the product.”
  • The PGA Tour doesn't give a rat's ass about the quality of the telecast, they don't care about the quality of the viewer experience.
The PGA Tour gets much-money from TV, and is currently negotiating a new TV deal. As well, they get money from FedEx to push the end of year FedEx Cup, which many it appears, including myself, don't care much about. 

It again appears, according to this interview, the younger demos, perhaps gambling, and promoting companies during telecasts is what the PGA thinks is their future. 

What seems most apparent, is what they don't think is their future - the golf. 

Horse racing seems to have gone through this exact same thing. 

The sport is about promotion, and marketing, and hats and drinks and buses. It seems to be everything except gambling. And if you aren't cheerleading the first statement, you'll find yourself blocked on twitter or called a name that rhymes with rope. 

I wish the PGA tons of luck with this new strategy. From our experience in horse racing, I think they're gonna need it. 

Have a nice Wednesday everyone. 



@multiracewagers Checks Out & Assorted Takes

Good Wednesday everyone.

If you've been following some of the NHC chatter on twitter (opinion that primarily was about the value, or lack of, in playing the tournament, or satellites) you've probably noticed a little tension; tension that included a type of "misanthrope" moment from some in the industry this week.

One person who never minces words, especially when it comes to the treatment of players (and was near the center of it), is was Multiracewagers. He sent a note today that I share below:

"In June 2011, I started on Twitter and created Multiracewagers given my passion for all things horse racing. It was the greatest puzzle that was out there to be solved on a day to day basis. However, at this point I’ve realized that day has passed and is never coming back. Small fields, crooked trainers, jackpot bets, and the absurdly poor treatment of customers is the reason I want absolutely zero to do with the sport including this twitter handle. Sure, I may dabble in a BCBC, but in terms of knowing what is going on w/ the sport on a day to day basis, I couldn't care less.

 I am thankful for the people I have become friends with and the stories we shared, but it’s time to say enough is enough. The NHC and people defending a 65% takeout on online Q’s was the most egregious example of idiocy, that unfortunately, I have learned to expect in this industry. Yes, I have called out a lot of the bad actors in the industry. However, I have always tried to help players understand the game and improve the weaknesses in their game. At the end of the day, I hope you have enjoyed my unfiltered takes on the industry as it barrels headfirst into the abyss with unfounded arrogance.

Thankfully, I have found DFS to be more compelling and lucrative. I am fortunate to have found my lifeboat to get off the sinking ship. Good luck finding your lifeboat, the time you will need it is quickly approaching.

Garett Skiba/Multiracewagers"

I won't share a detailed opinion on tournaments because they are simply not my bailiwick, but I can't help but sense a pattern. It seems virtually everything the sport does somehow involves a degradation of end-user value.

Over the past several years:
  • Raise Takeout, Check
  • Short Fields, Check
  • Jackpot Bets, Check
  • Overtax Exchanges in Jersey, Check
  • Add Takeout to Existing U.S. Takeouts at Woodbine putting an entire country at a disadvantage, Check
  • Destroy Rebates for the Smaller Player, Check
  • Destroy Competition Through Signal Fee Policy, Check
  • And now, as it appears, Tax Tournies at a Usurious Rate, Check
Without malice or bias, let me ask you a question. 

If McKinsey was hired by the sport and asked "What can racing do to eliminate handle and customer growth?", would they not come back with this exact list?

I'm sure our sport wants to grow. The industry people calling Garett and others mistanthropes surely wants it to. But don't they realize they're doing this wrong?

Have a nice day everyone. 


Looking Down at Racing's Customers Is in the Sports' DNA

Rider Lane Luzzi made a pretty big splash on the twitter for a tweet (deleted and now apologized for) that was less than deferential to the gambling customer. We see and read these thoughts from time to time from people in racing's various cohorts or fiefdoms; it's nothing new.

What strikes many of us from time to time, though, is the pattern this represents. We'll often hear complaints about how no business treats its customers with such disrespect, or have them so low on the totem pole compared to others, like racing does. These people are not wrong.

Why is that?

A portion of one of Seth Godin's books talked about a business (or industry) and six audiences.
  • The sales force 
  • the stock market 
  • potential new customers 
  • existing customers 
  • employees
  • regulators
If you and I ran a candy store at the corner, we worry about customers. Period. Horse racing should really be like a candy store. Revenue comes primarily from handle (sales of candy). 

But it's not really that simple. From the piece:
  • Every organization chooses its own audience, and that choice is based on the architecture of the industry, the mindset of the boss and the history of how you got here. But don't doubt that it changes everything you do.
Racing's choice is not customers and never really has been. It's about regulators (TSG in California right now) and the stock market (CDI) and 'employees' (TOC and other groups). And yes, that lack of one focus "changes everything you do". If you don't focus on customers, how can you possibly have more of them? How can you possibly grow handle?

Many companies juggle different cohorts as a matter of course. One regulatory change can kill a car company, one strike can hurt revenues, and they sure do pay attention to a stock market. If you watched the Super Bowl and saw many millions of car ads, you wouldn't say they aren't customer focused.  

The next time you hear racing really doesn't need to pay attention to the gamblers, in my view, we should just shrug. It's a part of the sports' DNA. And falling relevance and revenue over the last two decades hasn't budged it one bit. 

Have a nice Monday everyone. 

Fixed Odds in Jersey?

It looks like fixed odds wagering for horse racing will make its debut in New Jersey, hopefully by the Monmouth meet. It appears this will be done via a deal with one specific company:

"The 10-year agreement will allow the Australian company, BetMakers, to offer fixed-odds bets on races at Monmouth in New Jersey and market fixed-odds betting on the Monmouth signal to other jurisdictions in the U.S. and worldwide."

I guess this should not be too much of a surprise as Monmouth had offered some props via the sportsbook last year, and shows less reluctance to try new things than some.

Looking forward, I surmise the lines for win wagers will be pretty high takeout - probably near board odds. In effect, I suspect they're using this to offer out the Monmouth signal (in a way) in a sportsbook, hopefully to entice bettors to give them a look. It feels like this won't be something for me, you, or serious bettors, but more of a marketing play.

Frankly, I half-expected to see something different in this vein from the Garden State.

With an already working exchange, and Fanduel/Betfair firmly cemented in the State with the infrastructure and marketing pipeline set up, I think a fixed odds system is most optimal using their technology, state wide. As many of you know, a fixed odds system with an exchange, where bets can be laid off, and priced out using the Betfair Starting Price can be pretty vibrant. The market, in my view, could do some serious volume, enticing both existing players, players overseas and new bettors to give them a look.

Reading between the lines, and the tea leaves, this feels more like a dip in the water salvo, rather than a long term play. We see this in the sport quite often - "we want to try it, but we have to protect what we have."

Interestingly enough, this is what many of us thought the strategy with sports betting would've been - high takeout lines, tied to doing something, but not priced to optimally grow revenue in a low margin high volume vertical. Sports betting went all in, and it's a reason why it'll do (nationwide) $15B or so this year.

Have a nice Wednesday everyone.

The Pennsylvania Slots Polka

The latest threat to horse racing is in the Keystone State where (first reported by Bill Finley), $200M from the horse racing fund is planned to be diverted to tuition subsidies.

“Let’s bet on our kids instead of bankrolling race horse owners and ensure the viability of the Pennsylvania State System of Higher Education,” said the Governor.

As most know, this is similar to the province of Ontario back in 2013, where much of the $400M plus slotted for horse racing was killed unceremoniously by the cash-strapped government. Although at the time, the money was not earmarked to go into anything else.

Like Ontario, one might expect this salvo to look much different when the ink is dry. Generally governments do not cut something off cold turkey, because it's bad optics and bad optics are antithesis to their DNA. Horse owners et al can certainly hope that's the case. But it does bring a ton of uncertainty as it works through. Hey, at least it's not sales season.

It's somewhat ironic that they're diverting money into tuition, which has increased by 468% since the 80's, well above the rate of inflation. Most economists agree that this inflation has been in large part due to subsidy and the free flow of student loans. So, it appears they've moved from propping up purses artificially to propping up tuition artificially, with neither $200M to the schools or $200M to horse racing fixing an underlying supply and demand, negative return on investment problem.

We've spoken on the little blog for some time (I know you're bored by now) about political risk for horse racing. Whether it be from breakdowns at Santa Anita or slot money in government budgets, the effects can be savage. It's not a drip, drip where losses are smooth and revenue changes are gradual; it's a tsunami.

Over the next several months we'll see how Pennsylvania racing tackles this prescient political problem. They're not the first to deal with it, and they likely won't be the last.






Thread the Needle Parlays v $100 Exactas

I saw this tweet pop up today on the twitter box.
Now, some of it is a conditional probability - Henry under, Cory Davis over, Chiefs receivers under, could group hit based on game flow. But I dare anyone to look at that parlay from top to bottom and say it doesn't look like threading a really small needle with a big piece of thread.

But when we - conditioned as horseplayers - look at the price he or she got for threading that needle (only 50-1), most of us would say "wow, it feels like a 100-1 wager".

We horseplayers hit $50 $1 exactas as a matter of course. The turf is playing to speed and we sneak two price horses in the merry go round, we might box two closers at decent prices, we take the aggressive driver on the longshot to fill a two hole behind a 5-2 horse; myriad things.

Doping out a 50-1 exacta doesn't feel anything like threading the needle does it?

Horseplaying - at its core, in the spirit intended - is a great game. We can get a pretty big bang for the buck if we play a race right. If the powers that be fixed the game to make these 50-1 scores a better wager for us, I think this game would be a lot better off than it is.

Have a nice Monday everyone.

Things to Do Tonight Other Than Watch the #BeemieAwards

Jason Beem
As y'all know, tonight is the 37th Annual Beemie Awards. Congrats and best wishes to Carly and those who make it go.

It's usually a raucous time on horse twitter, and year after year some twitterites want something to do besides watch that boneheaded awards show.

I'm here for you. Here are my top X (I am using X because I am doing this off the top of my head, unlike most of my supremely researched and grammarlied blog pieces) things to do to pass the time:



  • Post the Cal-Expo pick 4 ticket you just took and ask Inside the Pylons what he thinks of your ticket construction 
  • Tweet, "I started playing more California races since they changed the whip rule" to @racetrackandy
  • Tweet "I hate the Beemie Awards". Do this from a burner account. 
  • Ask @o_crunk to list his favorite Phish concerts in descending order from 100. 
  • Tweet "Why don't you sponsor the Beemie Awards?" to the Runhappy twitter feed over and over again until the horse answers. 
  • If the #BeemieAwards trends, tweet about it, if it doesn't, blame the Trump rally where he's riffing about canned ham.  
  • Tweet your new research paper "The New Stronach Group Graphics and Tetris, A Case Study" and ask for comments
  • Go over to @superterrific's house and watch Law and Order
  • Start a buzzer cheating conversation that doesn't involve a jockey. 
  • Keep refreshing that Sham I Am dude's twitter feed, hoping he's going to post a Beemie Awards Bingo board. 
  • Misspell #Beemie #Bernie and tweet that you like Liz Warren. 
  • Tweet to Clark Brewster asking why he isn't on the Trump legal team after his success in freeing Steve Asmussen from the damning clutches of PETA. 
  • Tweet out your Derby Top Ten List
  • Ask Marcus Hersh what he likes best about NFL Football. 
  • Tweet pictures of Alex Ovechkin holding the Cup to @gregreinhart
  • Tweet the Churchill Downs historical share price chart and plot the price movements with racetracks they've crushed. Ask horse twitter to share their thoughts
  • Read the new paper: "The Gulfstream Non-Championship Meet vs. the Gulfstream Championship Meet - Core Differences"
  • Tell everyone you're not watching the Beemies because you have to wash your dog
Have a good time tonight if you're watching, and if you aren't, well there are a few things you can do instead. 

Have a nice weekend, and as Marcus Hersh would say, "enjoy the football on Sunday!"

* Many years ago, a friend asked a girl out on a date, she clearly did not want to go, so she said she had to stay in and wash her dog. Some things stick with you all these years. It's my favorite excuse of all time. 



If You're Going to Cheat Bettors, Cheat Consistently

The completely unconfirmed report that buzzers were used to signal Astros hitters like Jose Altuve and Alex Bregman have set MLB on fire today. The repercussions from this, if true, for the game and the games' integrity is formidable.

If you read much of the press you'll hear and read some talk about the integrity of the game framed with wagering. I agree it's not great, but only to a point.

Let's say these hitters were using buzzers as a matter of course. If so, the edge they had was already incorporated into their batting averages and assorted analytics - the things we all use to wager. It's nothing, because a fake baseline is still a baseline.

Like in horse racing, a trainer that has some sort of rocket fuel and is winning at a 37% clip, with turnarounds galore, is doing so consistently. It's all built into the price.

To be clear, the issues with these examples - whether it be an Astro or a Supertrainer - are real and important in terms of the game, and the businesses themselves.

Fans don't plunk down all this money to watch their teams wondering if they're cheating. A supertrainer using something illegal upsets an entire ecosystem - they take horses from honest horsepeople, they take purse money away that was someone else's, they cause investment into horseflesh to fall. It's bad.

If an NBA referee is throwing *some* games, or signals are used only *sometimes* or a super trainer only uses rocket fuel on *some* horses, we as bettors have a big problem, right, and yes, the betting side of the game will be affected.

But, and perhaps this is a sad commentary, I think if you cheat, most of us will wager, as long as you cheat consistently.

The Jeopardy GOAT Provides a Great Betting Lesson

Spoilers for the west coasters are revealed in this post, but really, since no one reads this blog other than Russian bots who hacked the result months ago, I'm probably safe.

Ken Jennings won the Jeopardy GOAT Tournament tonight with a pretty amazing display of knowledge. I don't think anyone who watched it could conclude it was anything but deserved.

However, as per usual, we'll focus on one slice of that beatdown.

The betting.

James went on a storied run last year and used great knowledge yes, but mostly scored by using optimal game play. The man, without question, knew how to bet. When this tournament rolled around he had to lean more on knowledge because Ken - while watching James' run - learned how to bet, too.

Ken sought out the daily doubles, because he knew the edge in finding them. Ken, when landing on a daily double, bet more than he ever has because he knew he needed to score. When Ken's gameplay changed, James' chance of winning got walloped big time. He lost his edge, and had to compete with a smarter player. It got so frustrating at one point that James remarked, "I want royalties on this" when Ken found a daily double before James and bet a bundle.

For Ken to beat James, he didn't have to study more; to read more books, or pop culture; to pore over Encyclopedia's or reread Greek Mythology. That would take more time than there are minutes in a day.

For James to beat Ken, on the other hand, he had to do exactly that. He had to become smarter.

For us as bettors, this is tantamount to a decision we all tend to make: We want to be better handicappers. We want to spend all of our time learning more about speed or pace, downloading software, building databases, and God knows what else. We want to become smarter.

What in fact most with a modicum of handicapping ability should be doing is spending our time learning exactly what Ken did: How to extract more money from the pools using our current knowledge base.

Why do we put so much time on the former, and so little on the latter? In some cases, I think it's a big reason why we lose.

Sports Betting Growth : Plenty of Room Left, Right?

I saw this tweet today RT'd on my timeline:


As you may remember, there was a time the headlines screamed, "Vegas might do $5 billion in sports betting handle one of these years". New Jersey is near that figure only one year after inception.

Here is some of how they've accomplished this -

Holds are around 5%, and bettors are able to reload with alacrity

Mobile betting is fairly seamless. Want to get a bet down, you get a bet down

The market is pretty wide open, with decent tax rates. Barriers to entry are not overly prohibitive.

Dozens of companies are pushing the product, because they can make margin with the product, resulting in more gross product

Here is what they have not done -

Wiener Dog Racing

A Bus Filled with Kids Partying

Jackpot Bets

Charging for stats

Lifestyle marketing (e.g. @buckswope sitting in his underwear in his basement betting games in running while firing at the Pomp)

Scott Daruty being mad at someone for selling the product

Asking patrons at the sportsbook to watch the games behind a paywall

I kid, but only a bit.

Sports betting has done, so far, much better than I imagined it would. For one, I expected massive tax rates, taxes on volume, and as a result, terrible lines that no one would want to bet. They surprised me to the upside.

When you offer a good betting product, people bet; as smarter people than me have told you, "today the product is your marketing."

For sports betting in Jersey, I congratulate them for not messing these simple gambling truisms up.

Have a nice Tuesday everyone.




Business of Racing : Pairing Metrics & Profit Motives

Andy Grove, the late CEO of Intel, used to speak quite a bit about metrics and decision making. Although he believed (like just about everyone) you needed sound measures, according to him it wasn't near enough. You had to measure the effects of something, but you also had to measure the counter-effects (consequences) and model the two together.

Most businesses today achieve paired and even multi-variate metrics because data is easier to access and mine and model, and of course: because of the profit motive. If you're not getting better you're losing market share and getting worse.

Where Grove's single metric malaise is most often noticed is where the profit motive doesn't really exist. As an example, Marc Andreessen talks about setting time to service targets for EMS drivers and measuring only that (something commonly done); of course the drivers stick close to urban centers and the numbers are hit, but service suffers.

In horse racing - not an EMS or government business but one we'd think should work on profit motives - we see the lack of paired metrics often, do we not?
  • That Jackpot pool is huge right now - but what about the long term effects as bankrolls are kept out of play?
  • Lowering minimums can give us a short term handle bump, sure, but what happens to payoffs and long-term gross handle?
  • It's great to attract that power barn to your track with tons of stock, but what's the effect on *other* entries and field depth as trainers avoid competing against 25% win drop and pops?
It might be easy to argue horse racing has dropped the ball big time on this, and there certainly is some validity in that, in my view. However, the bigger question to me: Is horse racing a real business; is it driven by a profit motive?

For a hundred years it was a monopoly. It was built on government partnership in a sheltered industry. Since then, the metrics managed to have not changed much. In fact, just this week the Meadowlands announced their gross handle metrics in the lens of more horses and foals, because it's what they need to do to show the subsidy is still working. California isn't looking at handle, it's looking at political survival. We can go right on down the list. 

For those of us who adhere to the Grove principles in business we find racing is lacking. But, perhaps it never had a shot in the first place. 

Have a great Thursday everyone. 

Exclusive: "Three Host" Eclipse Awards Was Last Second Move

By now you've seen the announcement that not one, not two, but three will host the Eclipse Awards in Florida on January 23rd, but in an EXCLUSIVE, we have the skinny.

"This was a late change, just decided today. Perhaps due to that big Awards show with the stars last weekend," Cub Reporter told me.

"The back story - TVG was trying to get the ratings up so they could sell commercials to big Pharma and the My Pillow Guy so they hired Twitter's Inside the Pylons to host. But, they received his monologue this weekend. It was Africa hot," Cub relayed.

As most know, ITP is warm and cuddly, but he does share a barb or two on the twitter, and it can cross the line.

"What was too hot to handle?" I asked Cub.

"The dude had some seriously sharp bits. On condition of anonymity, an NTRA organizer sent me the Cliff's notes. I'll share them with you, but for gosh sake, do not post them on that silly blog of yours, even if no one reads it."

So, below are anonymous's notes:

  • For ITP's opening monologue he wanted to invite dozens of horseplayers into the room. They'd sit beside each attendee and consume 25% of their Foie Gras while he recited Parx takeout rates. 
  • He wanted the Reporter of the Year Eclipse to be presented by Jeremy Balan.
  • He had a joke about it being the last year for the Eclipse Awards due to the rule change that a horse had to make 8 starts to qualify for an award.  
  • He wrote a bit about the America's Best Racing team going on vacation and asking Serling to manage their twitter feed and when they got back their 18,347 followers were blocked. 
  • He wanted the in-memoriam segment to be presented by the CHRB. 
  • He had a joke that if you wanted a pdf of all award winners you'd have to go to Equibase.com, log in, and pay $14.99.
  • There were liability issues. He wanted to hire a Pat Cummings lookalike and have him run through the hall knocking everyone over while screaming "no foul, category one!"
  • He wrote a joke about the only thing a trainer fearing more than a Bob Baffert chalk in a Grade I is a backstretch worker with an accountant. 
  • He wanted the Ortiz brothers to play Trump and Putin in a collusion skit. 
  • His bit with a chart illustrating "purses per country per human rights violation" was a complete non-starter. 
  • He talked about a new sitcom he created for late night on TVG. It'd be a spinoff of the Brady Bunch where Marcia tries to get her dad Rob committed and take his architecture business for herself. We weren't sure what he was getting at, but it felt too hot. 
  • He wanted to present the Innovation Eclipse to a ghost. 
  • He had a bit where he showed pictures of the nation's former great racetracks as shopping malls. If that wasn't bad enough, he wanted it to be sponsored by CDI. 
  • He made a joke that in 2019 handle was down but purses were up. We nixed it because before he said a punch line it might draw applause and make us look out of touch.
If I may add some personal commentary: I'm as tough on racing as many, but I think they were right to keep ITP floating on his floaty in his pool, playing Delta Downs on his iPad next Thursday. Some things are too hot, and right now, ITP is way too hot. 

Have a nice Tuesday everyone, and enjoy the ITP-less Eclipse Awards. 


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