Monday, May 12, 2008

Only in Racing

I got to catching up on a bit of reading tonight. We have spoken and discussed many times that racing is one bizarre business. Being fortunate enough to be able to work with many companies in many businesses in a consulting role, I can't help but be amazed at the disconnect in our sport with virtually every business known to man.

So, thinking out loud, here goes some Monday thoughts on the bizarre and crazy in this industry:

We go on strike for more racedates at places where no one watches us race.

In 2007 we made it a felony to bet a race over the Internet from Arizona.

We have home market areas that are 10 hour drives from a racetrack.

We expect customers to open seven different betting accounts to play our sport.

We get a report from a respected University telling us that an ideal takeout rate to maximize our revenue is 7%, but charge 20%.

We charge people for racing data and past performances. Like McDonald's charging $2 to look at their menu.

We can't decide if racetrack is one word or two.

We think rebated players stick their rebates in a sock.

We settle a positive test that happened in 2006, in 2008, and expect no one to notice.

When anyone mentions the thought of the sport hiring a commissioner it is met with unbridled laughter.

We watch some trainers regularly drop 4 seconds off a horse in a week and expect the public to believe it is the shoeing.

We pay for a gambling expert to give us guidance, he writes a 100 page detailed report, and we ignore all his recommendations.

We see that advance deposit wagering is the only growth segment in racing and immediately try and take more of the revenue; which would result in destroying the only growth segment in racing.

We retire our sports stars at the age of 3 so they can have sex, and expect the sport's fan base to grow.

We think that lowering a price will result in less revenue.

We give slap on the wrist penalties to rule breakers, then wonder why good people don't want to invest in racing.

We do little to help retired racehorses, then get mad at the public when they don't want to support horseracing after they see a news report on a former Kentucky Derby winner being slaughtered.

We have rules that say you can't kick a horse or whip him where the sun don't shine, but we never enforce them.

We call our customers "disgruntled gamblers".

And with all of the above, after the business goes downhill, we go cap in hand to government looking for money, blaming it on offshore competition, or lotteries.

Only in racing. It is one bizarre business.


Anonymous said...

Very good post. I was thinking about the same stuff this weekend. I have a premier turf club account and there were, I believe 16 or so tracks available to me. Right now I have a line on free programs, which I have no idea how long will last..... for video I signed up for's video service. I actually didn't mind paying for it because it is such a great service, having the ability to have 4 screens playing at once. And the replays option was good too. So I managed to wager about 1000 this weekend off a 50 dollar deposit on 15 different harness tracks... and I'm only a small bettor. I did this because I mangaged to tediously make myself a very good setup. I will continue to do this for as long as I can. The video I will pay for, I like free video, but only so many tracks have it and a one time $160 investment is well worth it, to even avoid going to 10 different webpages, trying to get to each track in time. The one thing that will stop me from wagering on the product (high takeouts aside) is the lack of a free program. I like betting alot of tracks, sometimes only 2 or so races from certian tracks. I'm simply not paying for pdf files. At the most I'd pay an unlimited $25-$50 yearly fee. At the most....... but really, it's a pdf file, I can't stand paying for it. Otherwise, I had a great weekend betting the races, despite all the opsticles put in my way by the racing industry, I managed to bet a grand. It was very entertaining and will do it for as long as the industry allows....

Anonymous said...

Excellent post. I may have to steal it.

Pull the Pocket said...

Very nice Caper, continued good luck. Keep grinding with good bet sizing (I say as I bet 8% on some horse I think is a "sure thing")

Of note, Andrew Cohen linked to my piece and liked the "McDonald's" line. That is a great line, and I wish I could take credit for it, but I can't.

A poster at used to lament racing and how charging for a program, so we could give the sport 20% of our betting dollar, was akin to a restaurant charging for a menu. Full disclosure, Alpha from Quebec is the man with a quick wit and a sharp brain, not me :)

That line has stuck with me for years, however, as I watch betfair grow by giving out free data and information to encourage their patrons to play, while we still charge a buck for data, or more for programs clinging to a data model written in the 1960's.

Pull the Pocket said...

Just a quick story from the wagering conference on the home market area stuff:

A big bettor was on a panel and was asked about what they can do to attract him to bet harness racing and open an HPI account. His answer was comical, especially because of some of the reaction in the room.

He said "I tried to open an HPI account years ago. I was living in Thunder Bay and I called to open one, but was told I was not allowed since I lived in Sudbury's home market. Sudbury is a 7 and a half hour drive."

A guy who might bet $2M or more a year in an HPI account is told we don't want his money.

Only in racing, eh?

Anonymous said...

Regarding your comments that charging people for past performances is similar to McDonald's charging $2 to look at their menu......hear is my little tale.

I have been a WEG "vip" for several consecutive years,meaning that I have bet over $250,000 in each of those years, and thus entitled to free programs among other things. Last year, however, my betting slipped to about $220,000, meaning I was below WEG's threshold for "vip" status.

So for 2008 WEG removed me from the "free program" list and hence I would no longer be entitled to free programs. After my protests, WEG has relented and offered me free programs till June 30, but after that date, only if my wagering levels rise to the level required by their policy.

The morale of my story, If WEG cannot offer free programs to a $220,000/yr bettor, what is the expectation they will offer them free to the occassional bettor.

Anonymous said...

Thanks for the note sir.

With larger organizations there are hard-and-fast rules that generally can't be changed without management override. We see that in a lot of businesses. Unfortunately, you get caught in that.

For me, if it was a small ADW, I assume you would be able to have some one on one interaction where you would get a one year grace period as a full VIP. It costs them so little to give away a free buffet, or programs in terms of the big picture.

A $220k bettor gives us $33,000 of cold revenue. Not to mention he helps up pool size. I would think they would do everything they could to make you a 250K + bettor this year and beyond. That seems to be good business, imo.

Anyhow, thanks again for the note.


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