Sunday, February 10, 2008

Sports Betting to Jersey?

In a recent legislative session the state assembly passed a bill to bring sports gambling to New Jersey. Most believe that the bill (if it passes the Senate) faces an uphill climb, though, as in New Jersey there is a federal ban on the practice.

If passed and made law, this gives Atlantic City casinos an edge on states which now have the one-armed bandits, like New York. The casino lobby is obviously very powerful.

So what’s in it for racing? Well, it appears the usual, a piece of the pie to help purses:

Assembly Gaming Committee chairman and bill sponsor Assemblyman John Burzichelli, D-Cumberland, said he would seek amendments in the Senate version of the bill to allow for racetracks to host sports betting.

I’m pretty sure some people are cheering at that. Hey, why not. It is another form of revenue that racetracks can have to place back into purses. As you know New Jersey is looking for more subsidies, or slots, to help them compete.

Let’s have a closer look at this. How does sports betting, if allowed at racetracks, grow our sport and attack what we need attacked, that is fan growth and handle growth? In my opinion, it does the opposite.

Sports betting with a ten cent money line, possesses a takeout of 4.5%. To break even you have to hit 52.38% winners, or just over one in two (remember there are only two outcomes of most sporting events, like football). Why would someone want to bet racing instead of a sports bet, when racing takes out almost 20%? Our prices are too high to compete with even more gambling.

The Meadowlands might have a sports betting room. Racing fans can now pop in, maybe play a race or two, but it allows them to have $250 on the Knicks-Celtics game instead. It’s a whole lot easier to sit there with your friends with a few dollars in your pocket watching a game, than sitting there grinding away at the ponies. This takes even more handle away from racing. These things simply cannibalize.

It is amazing to me how some politicians and others think that discretionary income for gambling is infinite. If we offer lotteries, and slots, and sports betting and god knows what else, that there will be enough left for all of them to spilt and live comfortably. It does not work that way. It never has, and it never will.

As a fan of racing I hope that sports betting never sees the light of day in New Jersey, nor anywhere else. I would for once like to see someone in racing lobby for real change to our sport; change which can grow handles, not borrow off other gambling games for life support. Instead of looking at sports betting or slots betting for help, how about this for a concept: Let's grow horse betting.

Note: The Road to the Kentucky Derby is beginning. Pyro captured the Risen Star Stakes in fine fashion with an explosive drive to the wire on Saturday. Worth watching!


Anonymous said...

I'm trying to think of a racing version of 'can't see the forest through the trees'
Remember the Simpson's episode when Homer realizes his life long dream is to eat so much that he has to go on workers comp- And it works and he does and gets replaced by a paper weight!! It feels to me that slots have become that accepted 'padding' that prevents the industry from repositioning and actually offering itself as a competing gaming alternative. Why strip down down to bare essentials when there is a subsidy? I have only ever defined subsidies as something that is in business that really shouldn't be. And it scares me to know end.

Anonymous said...

i dont think it's such a huge issue.... IF! Racing drops the huge rake and becomes competitive. Then a racetrack with sports gambling becomes a haven for thinking gamblers.

Pull the Pocket said...

Hi Hobbes and A,

Yes sir. I think you are right. I alluded to this in my post below entitled Rock Bottom

I think right now, the business will not change unless it is forced to by revenue hitting zip, or slots revenue being cut in half.

I've hoped we could get our act together before this (imo) eventual reality is upon us. If we do, we make the rules to fix the biz, not the government.

A, yes I agree, for that to happen we have to be able to compete first.


Anonymous said...

Betfair offers sports betting as well. Sports betting is a compliment to horse betting. In fact, if I had my way, there would be a North American betting exchange, where tracks would get the bulk of the patrons monies in their immediate area...and the betting exchanges would include sports as well as horse race of course a Betfair like takeout.

Pull the Pocket said...

That's a good point. If there was a central area for bettors, with sports etc, it would and could be a boon for racing. I think Ian Meyer's partner at Premier Turf Club has brought that up to the industry a few times, and was quoted on bloodhorse a few times.

It is inevitible that we have a North American betting exchange, imo. I just wonder how long it takes? The casino lobby would hate it; and a whole pile of people will try to block it - probably including horse racing.

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