Monday, January 3, 2011

Some Large Bettors Say No To Santa Anita

I received an email Saturday night around 10. It was from an acquaintance on the left coast who is more than likely one of the largest individual bettors in North America (one never knows for sure because they are notoriously quiet) asking me to ring him. I had not spoken to him for over six months, so we had plenty to chat about. The conversation at one point was about the California takeout hike and the loss of betting handles there since the meet began. I called him today and asked if I could write up some of our conversation, and he said yes.

"They really have no clue the damage they have done to the gambling customer there, do they?" was the immediate response.

This bettor told me that he has not played a cent into the track this meet.

"I have not even watched a race - actually no, I have watched two races because friends owned the horses in them but that is it."

He went on to relay that people in his craft (he has been betting for a living since he was 18 years old and other than owning horses, makes all his money from the races) are equally annoyed with the sports direction in the golden state. As you might not know, larger bettors tend to know each other, are friendly, and (a good book on people who bet for a living and their relationships is here if interested) share views.

"Out of the guys who I have told you about before, two are just dabbling nickels and dimes at Santa Anita, one is betting much less, I have stopped cold turkey along with another. The last guy is looking for a new circuit to bet and tells me he has been studying for that. It's unlikely he'll come back, unless something changes there. The ones who are still betting obviously operate on very thin margins so if they see their day to day results dropping [e.g. with the higher takeout], I'm sure they'll quit and just go for carryover pools and I'm pretty confident that will be the end result."

It is always difficult to estimate what's a "nickel and a dime" to large bettors like this, and it is not proper etiquette to ask, but from knowing the culture for many years, I would submit it is somewhere around $2000 to $4000 per day. Estimating the yearly betting volume from these individual bettors is also hard to guesstimate, but somewhere from $4M per annum to $10M or $12M each is probably a good guess. It is extremely stressful to bet any more than that as an individual bettor and stay on top of things.

As for him, racing not only in California is bothering him - although he calls the takeout hike enacted by the CHRB there "pure insanity" and it is the reason he is not betting - it is the whole industry structure. He believes when a track exec here speaks, they don't speak his language; they might as well be talking to him in Swahili.

"There are some circuits I bet, certainly, but more and more I wonder what to do. Hong Kong is something I am looking into. Big pools, nice horses and proper takeout where I might be able to make 2 or 3 points if I work hard. They [management] seem to know what they are doing there, but it is a lifestyle change as I would have to live there, and it might take me six months of studying to prepare, so I don't know."

You can tell a lot about the health of a gambling game by looking at how many pros there are. In poker there are hundreds of thousands and they promote that game for them. In sports betting there are many thousands. At those gambling games, takeout hikes do not, nor ever have existed. Your neighborhood bookie in 1920 knew when juice goes up, players do not play because you tap them out, so at the grassroots level (minus any fancy degrees, just pocketbook smarts) they have maximized revenue by maximizing customer satisfaction and turnover. The rake on sports betting is the same (or lower) today than it was a hundred years ago. In horse betting there are very few pros (some estimates say "250" full time players who have stuck with it, not just done it for a year or two, or "think" they are winners), and that says a lot. As time goes on, the number seems to be shrinking, and that is no good for anyone.

Whatever the case, it seems that the early results at Santa Anita are not a mirage, or an aberration, or just due to "whiny $2 bettors". They reflect a systemic problem that needs to be addressed. A change to 4 days a week at SA where year over year comparisons might look better, double carryover days like today making things look not as horrible (carryovers are takeout reductions, which is maddeningly ironic), or headlines saying everything is fine might make us feel good, but feeling good doesn't pay the bills.


Anonymous said...

Thanks for doing the post on something we rarely get to see or read. In poker I know who the people are,in horse racing we don't.

roger said...

Yes. it is somethng we usually just read in books. Horse bettors are very quiet most times and they leave. It's nice to hear some input from the "other side of the fence"


Anonymous said...

Isn't a nickel $500 and a dime $1,000 in gambling lingo??

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