Thursday, March 6, 2008

Hand Wringing versus Opportunity

A story from the National Post and linked to by websites like the Harness Edge and Standardbred Canada tells the tale of the Great Canadian Gaming CEO lamenting about a native online casino, located in Quebec.

"These offshore operations just poach horse-racing and no one can do anything about it. They're parasites on the butt of Canada," said Ross McLeod, chief executive of Great Canadian Gaming, which owns four tracks in Canada.

The track owners have also suggested that governments force Internet service providers to block the sites from Canadian bandwidth. "I expect the government to do the right thing and protect our country's interests," Mr. McLeod said.

Do these places offer bets on tracks and don’t pay to purses? Sure they do. But once again, we completely miss the boat on this issue by yelling and screaming and not looking deeper, or dare I say outside the monopoly. One person who has his barrel set in the right direction is Michael Lipton, a lawyer from Toronto:

…… Lipton, a Toronto lawyer who specializes in gaming law. He said the horse-racing industry has had a monopoly on gambling in Canada for years, with Woodbine Entertainment currently holding a lock on government-sanctioned online horse betting.
"I guess if I had a monopoly, I wouldn't want anyone to compete against me either," Mr. Lipton said.

Rather than attempting prohibition, Mr. Lipton said the government should bring the Kahnawake sites into the system and regulate them. He said this would protect the vulnerable, guard against money laundering, bring in tax revenue and provide a competitive edge in the gaming software market in terms of international trade.

He is more than right. We have to stop protecting a monopoly that DOES NOT exist any longer, and look at the massive opportunity this might afford us, with some 21st century thinking.

Here is my plan:

1) Ottawa is looking for a political way out of this mess. They do not want to anger a voting block, in a volatile part of the Country.

2) We go to the government and instead of saying “shut them down”, we say “let us compete”

3) We ask for a few things: Ability to use this internet betting hub as a port for Canadian racing. They pay a fee, just like a regular ADW does. This expands Canadian racing to a world-wide audience and brings in revenue. We offer them free video and free programs to the world-wide audience and expand our game, while allowing them to sell it for us.

4) We then ask for some tit for tat. We want to be able to compete by setting up our own site in the racing industry; as a free enterprise. That is, we begin to open up gaming markets for ourselves. This could be done for example, by a setting up a betting exchange, run by us, linked into betfair where we allow worldwide customers to bet our product and we own the rights to our product. Linking in with betfair provides us with instant liquidity.

5) When the US racing community sees this, they might begin to lobby to be a part of it. The technology and liquidity is there, because we have already set it up. The US tracks could simply join our service, or be an affiliate when the laws are changed a few years down the road.

In the end we might have set a plan in motion for Canadian racing to become a world wide leader in racing distribution, betting platforms and change racing for the good for generations to come.

Instead? We wring our hands and try to shut people down to protect our dwindling monopoly - something that is not even a monopoly anymore in the first place. Not to mention, these places are NOT going away. It is the future. We can be part of the future, or be the road-kill of the past. It's our choice.

Will this work? I don’t know. But when I see something like this I look at it as opportunity instead of a threat. I wish the racing industry would think the same way. I think we'd be a hell of a lot better off.

Note: Cangamble has updated his blog with new news, including a Toronto Star link, with commentary. He brings up some interesting points.


Anonymous said...

Read your blog daily, but to-day's blog shows tremendous vision.

In fact, it should be mandatory for all WEG executives to become students in your class.

Your blog, (and CanGamble's blog) are to be congratulated, for stating the realities of the game.

Anonymous said...

There is absolutely no reason for the racing organizations and the government to get together and offer the same exact thing Betfair offers at the same rates as Betfair.
Not only will they get back most of the Canadian dollars going offshore, but they will also get dollars from other patrons in other countries if they compete fairly.

Johnny Canuck only has so much money he can lose a year gambling, why not keep it here, and tax the company that profits from it?

But Johnny Canuck will bet less if he isn't getting the same deal he gets offshore. Take it away and gambling will remain stagnant.

Look at the US, they took away internet gambling, and the horse racing industry was licking their chops.
Betting on ponies went down as we know now.

Betting on horse racing is a dying sport and it all has to do with outrageously high takeouts.

Pull the Pocket said...

We lost ALL of those price sensitive bettors to poker (small rakes), sports betting (small rakes) and betting exchanges, or offshore rebate shops (smaller rakes).

They are gone! As you say we will not get them back by shutting them down. The US proved that.

So why not go after them? If WEG doesnt want to do it through offering their signal to lower rake places like PTC, then get together and start something that can get them back!

I know WEG would love to run a betting exchange. Frankly that scares me, because I could see the rakes - I bet they would stink. Imo, we'd need a racing organization from sea to sea run it, and let's see where that brings us. They would have to piggy back on Ehorse X, or betfair. To me that is a no-brainer. Canucks would not be able to have liquidity in the exchange without linking to another.

Anyway, in the end we might have recaptured a massive price-sensitive market that was thought to have left us forever.

Anonymous said...

The betting exchange would have to have the same rates as Betfair, or it wouldn't fly.
And I do think the racetracks should run them and be the biggest benefactors as long as the horsemen got their fair cut of the profits.
There is also a great chance that they will attract even more money from other countries.
No one really wants to play with a Caribbean Island if given a real choice.

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