Friday, March 21, 2008

Premier Turf Club & Betfair = 21st Century Growth

In a bloodhorse story today, the announcement that Premier Turf Club has signed up to offer Keeneland races was official. Of particular interest was the growth of this little start-up, who offers conditional wagering (a stop-loss bet), dutching, rebates and an interface for the 21st century.

Premier Turf Club has added Keeneland content to its list of track offerings, building on a business model that has allowed the North Dakota-based advance deposit wagering entity to realize four-fold growth in handle in the last few months.

The Keeneland signal, which will begin with the start of the spring meet April 4, brings the total number of tracks Premier Turf Club offers to 101, including 38 Thoroughbred tracks. Premier Turf Club, which offers cash rewards to customers utilizing its Internet and call-center wagering platforms, has been fully operational for less than a year.

“This is a milestone for us, and it’s only the beginning,” said Premier Turf Club senior partner Joe Riddell, who is also a Lexington-based liaison for horsemen’s relations. “We have been able to grow a company despite missing many premium signals, and that speaks volumes about what we are trying to accomplish.”

Yep, we read that right: 400% growth, despite getting constant roadblocks put up from people in racing that don't realize, or are just too damn stubborn to know, that price matters.

And yes, this money goes into pools, instead of going to an offshore bookmaker.

“The theory that I am operating under is that Premier Turf Club players contribute into (wagering) pools that they are comfortable with – the certainty that the pricing is in the pools,” Riddell said. “And that the maximum amount gets back to the bricks and mortar – the racetracks – and the horsemen.”

In other news in this vein, Betfair announced it was expanding their Tasmanian operations. For those who don't know, Tasmania a couple of years ago licensed betfair for their racing, much to the dismay of the 19th century thinkers. They were vilified. Well, Tasmania does not seem to mind now. More jobs, and increases in churn. In this latest story, Tasmanian racing is opened up to the UK bettors.

Betfair Australia's chief executive officer Anthony Klok says UK customers are already betting on Australian racing.

Mr Klok says Betfair will need to add to the 85 employees it already has in Tasmania.

"I think we're going to have bigger operations in Hobart through all of our natural growth," Mr Klok said.

"We've been looking at the numbers and we have 85 people in Tasmania at the moment I would think, if we're going to do some servicing of the UK we'd probably put on another 20 people in the next six months, so there's a good growth story there," he said.

We are watching the future right before our eyes, and for me - as I work in the internet - it is something I love watching.

The question remains however, will the old time thinkers join the party? Will places like Premier Turf Club and Betfair continue to be the monopolist's whipping boys? Will tracks like Woodbine and NYRA and Southern Cal racing join in the growth by allowing incentive wagering providers to offer their product, or will they stick to their high-priced guns and not offer price-sensitive customers low cost alternatives?

I guess we'll see. If they don't want to join the revolution, well so be it. There is a whole wide-world out there to gamble in. We don't need them.


Anonymous said...

I don't think there is another local customer unfriendly business like horse racing.
If you are a loyal local customer with WEG, you get their average 23% track takeout, but if you are another track, you get to buy their product and save 18% or so.
It would be like a small town Canadian Tire selling to their local customers at full price, but if someone from another province or state puts in an order, they only have to pay 25% of the retail price.
You and I both know WEGs position on Betfair and PTC: they want them to go away, and the last thing they will do is compete with them, instead they will push for legislation to force bettors who want to play horse racing to, only do business with WEG.

Pull the Pocket said...

Hi CG,

This is a massive sea-change of thought - competing with people in a business that never had to. Horseman's agreements, for example, are written so they get say half of this massive takeout. If WEG or other tracks want to offer lower rakes they are bound to those agreements. So I understand their predicament and others in this area.

We have to change the entire business model to compete. And it has to be all tracks.

With slots, and other forms of revenue, there seems to be very little want to change.

But places like Premier Turf club, as low cost resellers, there for the player, are something that CAN be used here and now. Wil Cummings in his industry report stated that they are essential to horse racing because they scoop up customers that would leave racing for other games. To me not using places like them are a huge mistake and it only pushes more and more people to other games.

The only growth we see in racing is in these segments. That has to tell us something.

It's difficult, I know, with all the in-fighting and all the rest in racing, but we have to do something.

Anonymous said...

I understand that the horsemen are a hurdle, but only so much that they see lower takeouts as lower purses. They are collectively dumber than the track execs in this area.
But if takeouts were halved or 60% or what they are now, my contention, and yours too, is that they would be making more money because they would not only have their regulars churning whatever they could, but they would be attracting many other players as well, some who have left for other games or Betfair, and some new people who would be attracted to the new Buzz that the game might be beatable.

Anonymous said...

Great work.

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