tag:blogger.com,1999:blog-8560898823512627114.post5292241088497730312..comments2024-02-01T00:37:24.768-05:00Comments on PTP: More Narrative BustingPull the Pockethttp://www.blogger.com/profile/05082676049275768769noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8560898823512627114.post-39067431002444783652017-06-21T15:40:26.015-04:002017-06-21T15:40:26.015-04:00I don't think that concept plays very well, be...I don't think that concept plays very well, because ADW's would simply say (and they're correct), they pay you 8% or 12% of each dollar they take, which (when fees and operating costs are added) has them on thin margins. <br /><br />As for small tracks there is an issue, because their wagering subsidizes the big tracks. They, as you know, are rebated more. Small tracks are, and probably always will be at a disadvantage. I have ideas on that, but that's for another day. <br /><br />The ideal scenario is difficult to model off the back of a napkin, imo. But, in the UK about 0.9% of each dollar bet goes into purses. In Australia it's about 2.5%. In the US it's over 6%. That surprises most people because of how often we hear about pirates, ADW's and not enough going to the supply side. In fact, the US takes the most out of betting for purses in the entire world. Well, maybe Turkey takes more. <br /><br />I think a strong argument can be made that 6% of X is not optimal, because if it was 3%, X would be a much bigger number. That is an argument that gets you in trouble, because this myopic industry sees 6% becoming 4% and thinks they'll automatically lose money. It's an industry that doesn't look at numerators and denominators, and never has. <br /><br />Regardless, the industry robs Peter to pay Paul. It's just the way it works. <br /><br />PTPAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8560898823512627114.post-62963349291564052372017-06-21T13:02:47.284-04:002017-06-21T13:02:47.284-04:00Thanks as always for a thought-provoking post and ...Thanks as always for a thought-provoking post and response. I sincerely believe you provide a great service to the industry with your writings, and I appreciate the time you put into it.<br /><br />Yes, I agree that ADWs fill a void in the market; they are essentially a wholesaler that accumulates signals and wagering menus in one convenient place with sophisticated UI, and possibly even add value with some analytics. Their competitive advantage over an OTB or track simulcasting lounge is that you can do it from home. On those points, I think you are absolutely right that ADWs provide a superior product and that tracks missed the boat on that.<br /><br />The flip side, though, is the money drain from the industry. Perhaps (big) customers can pressure ADWs into reinvesting some on the supply side of the equation, which is clearly struggling. It would need to be sttategic, though, as mindlessly dumping money into purses isn't the answer as you and others have pointed out.<br /><br />What this industry really needs is a holistic discussion of how to revitalize racing, and not just a gathering of myopic viewpoints that we so often see on both the supply and demand sides. There are bright spots (e.g., regular crowds at Arlington, Oaklawn, Canterbury, Fonner, etc.); we just need to figure out how to replicate that all over.<br /><br />CecilJonesSchmittnoreply@blogger.comtag:blogger.com,1999:blog-8560898823512627114.post-50261202282376463302017-06-21T09:01:50.241-04:002017-06-21T09:01:50.241-04:00Hi Cecil,
Why do ADW's exist, and what value-...Hi Cecil,<br /><br />Why do ADW's exist, and what value-added do they add? I guess the somewhat glib answer is in the form of a question: Why does Apple Music or Amazon or Barnes and Noble or a 1,000 other web distributors exist?<br /><br />Because they do a better job as an affiliate. <br /><br />Music and books and a hundred other things have tried to sell direct to the public and have failed miserably. <br /><br />In racing, the UK tote is run by racing, has had a monopoly for years. It's 3% of total UK handle. Its takeout rates are 20%, it's a mess and customers don't want it. <br /><br />Over here, Betfair's NJ exchange flounders. Racing has its fingers in the mix and created a monster. Not a good monster, but a money eating 12% juice monster that kills the exchange's edge before it starts. <br /><br />Why is Woodbine's national ADW such a mess like I pointed out yesterday? The examples of racing messing this up are more numerous than Warner music trying to run a download site. <br /><br />In horse racing, as in the above post, California has the most margin and the most control over every site, and have started their own in many cases. It's a mess. <br /><br />Where does things many of us use daily, like conditional wagering, come from? It was created by an ADW, not by a racetrack or horsemen group. <br /><br />ADW's exist for one main reason -- because horse racing has never been able to run an ADW the way it needs to be run to achieve maximum handles. <br /><br /><br />Racing - like many businesses who need a modern UI and ecosystem to compete on the internet - will not survive without affiliates. That should be very clear by now. What sounds good in theory has not worked in practice. And because of the many cooks in the kitchen in racing who are incentivized to grab their piece, and not worry about the end-user's, it probably never will. <br /><br />Thanks for the comment, <br /><br />PTPPull the Pockethttps://www.blogger.com/profile/05082676049275768769noreply@blogger.comtag:blogger.com,1999:blog-8560898823512627114.post-1401937679606795162017-06-21T08:34:36.076-04:002017-06-21T08:34:36.076-04:00I can't speak for CA's motivations, but a ...I can't speak for CA's motivations, but a couple weeks ago I showed here how ADWs not only siphon money from a low-signal fee track, but actually lower total handle at an individual track through loss of churn. And ADWs do nothing to grow the industry, build facilities, support local communities, or any of the things that would draw new customers into the sport. There are very legitimate reasons why many tracks hate them and why customers should too. <br /><br />Honest question: what do they contribute besides rebates to the biggest customers?CecilJonesSchmittnoreply@blogger.com