Arkansas Derby - Off With Their Pirate Heads!

Yesterday's Arkansas Derby (ies) is in the books and Shades won both splits rather handsomely. If you have a Derby type colt, or last year's Derby colt, or any horse really, Baffert is your man. The superlatives are in plain sight this morning, so no need waxing poetic on those performances. They were good.

We'll talk about this:

According to @Equibase, handle today at @OaklawnRacing on 14-race program was $100,750 on-track & $40,906,451 off-track (via advance deposit wagering). Going into 2020 meet, Oaklawn media guide says previous single-day wagering mark was $16,221,639 on 2019 11-race Rebel day card

— Ray Paulick (@raypaulick) May 3, 2020

Yep, that was a $42 million handle.

For last year's Arkansas Derby card, total handle was $11.8 million, with an estimated attendance of 45,000, who bet $2.33 million, or about $5 per person. Yes, this year's handle was quadruple!

Yesterday's card happened during the COVID crisis, of course, but looking at just the demand side, here are some COVID barriers to this year's handle:

• There weren't 45,000 fans, there were zero. 
• There weren't a hundred tracks running, where people could bet the card from. 
• OTB's - thousands points of sale - were all shut down.

About $41 million was bet over the internet or phone, at distribution outlets (ADW's) only.

This was allowed to happen because these distribution outlets make margin. With the margin, they have invested in carriage fees and TV networks (that showed the race yesterday on NBCSN), call centers, wagering platforms, and marketing and investing in the customer through rebates.

Racing, as so often is the case, gets stuck on something - usually an anachronistic point, or a wish - rather than dealing with the reality of a situation, or the practical.We see it almost every single day with distribution outlets, or partnerships that need to be used to sell racing's product. "The splits are horrible, these ADW's are pirates, off with their heads!"..... you can recite them by heart.

In my view these have been impractical points all along. People delivering your product - into people's homes, on their phones or tablets - in new and exciting ways was never done by the sport itself. And you can't turn back time.

Racing gets stuck, year after year, with the same silly questions. After the 2019 Arkansas Derby the sport asked, "yes, but what slice of that $11 million do I get?". After this year's it's, "yes, but what slice of the $41 million do I get".

The question that needs to be asked, and has needed to be asked since forever, in my view, is: "How do we turn that $41 million into a hundred million"? It's the only way to ensure everyone makes more money.

Have a great Sunday everyone.