Old time racing should love this article to change the Interstate Horse Racing Act. In essence, it states the mantra that the producers of the product should get upwards of 90% of the revenue. The resellers should get a few scraps. In effect they want two things: 1) Reverse the rules of 500 years of capitalism and 2) Do the opposite of what successful gambling businesses do.
But I guarantee racing will love this. It gives them more money, in a pot they think is static, like we are an electrical utility.
This of course will not result in more money. Handles would more than likely be off 40% or so if we took money away from the sellers. When these folks learn that handle is not constant it will be a fine, fine day.
There are virtually dozens of things in this article that make little sense in the gambling economy, or frankly in any economy. A few parallels?
* A songwriter gets about 10% and has to pay a packaging fee for a song. They get about 7% of sales.
* An author writes a book and gets about 7% of revenue from it.
* If I am selling a bookshelf at Wal-Mart, I sell it to them for $10, they sell it for $100.
Now do what racing wants to do. Try selling a song to a reseller for 90% of the revenue. Try going into Jeff Bezos' office at Amazon and sell a book retailing for $20, for $19 to them. Try going into a retailer and selling your product for 90% of the shelf price.
Your sales of songs, books and bookshelves would be off by probably 95%. But somehow, like this writer says, we are supposed to believe that handle would stay the same. In fact he even says so.
At a time when everything in racing and breeding is heading south, correcting the IHA would see $1 Billion going to the host tracks in the first year. Half, $500 million, would go into racehorse owners’ purses at the host tracks. For breeders it should be noted, that $500 million in racehorse owners’ purses is more than all yearling sales in 2008, and it is reasonable to expect racehorse owners would reinvest that purse money into new racing prospects.
Yep, completely change the model, taking money away from customers and resellers and everything stays the same - we still have that (like magic) $1.5 billion dollars!
Articles like this tell us that we have a long way to go to change the face of the game in North America, and get people to lose the monopoly mindset that has been an albatross around our necks.
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