It was announced earlier this week that handle at Golden Gate Fields was down 21% overall, and 16% per race when compared to last year.
At the same time, a teeny meet at Stockton had a handle boost this season, primarily due to a free admission policy.
Two different meets, two different kinds of racing customers.
The Pareto Principle, which loosely states that 80% of all events, sales etc, are driven by 20% of an item, customer or what have you, has been changed to mean many things. We've all heard them: The top 5% of taxpayers pay 70% of the taxes, the top 20% of criminals produce 80% of the crime, etc. In horse racing we have a similar 'truism': The estimation is that the top 5% of players, probably play 60% of the volume.
In California the top 5% of players have not been playing that product this season. The other 95%, had a fun time at the Stockton Fair, and bet their admission.
Racing is at a crossroads, as we all know. It is (or should be) a battle between catering to the 95% of the people who make up 40% of the handle, while at the same time trying to maximize the 5% who make up the other 60% of our revenues. California, through giveaways, decent on-track promotions and other friendly things seem to be able to attract the casual player, but the everyday one is saying no thanks.
High signal fees and takeout increases are an ROI leak for an everyday player which causes them to bet less, or change their betting behavior. It should not surprise anyone that California racing's handle has been hurt badly. Unfortunately, reading the headlines it does not look like they have learned too much from the past six months when it comes to betfair. Because racing cannot seem to separate the two segments at the highest levels of decision making, I expect Betfair will have a very tough time getting approved in California. Even if they do, the decision makers will be wanting to shoehorn a price sensitive potential betfair customer into a different pigeon hole (by charging 10% or more win takes). Racing must learn, you can't shove a square peg into a round hole, because if you do, the everyday player (or a poker player looking for something new to try) will take their money elsewhere. Most businesses use the Pareto Principle to their advantage, but we seem to carry it like an albatross.
Bill Finley gives some props to See You at Peelers in his latest ESPN column. Often times, comparing a horse - any horse - to a winner like Zenyatta is out of bounds. But not this time. She is clearly a special horse, who has the ability to dominate her female foes.
It was inevitable I guess, but racing has screwed up the Internet. ADW wagering was down in Q1 in the Oregon hub, where all the major players play. I had a meeting last week with an online auctioneer. "We offer price breaks and convenience" she said. No kidding, it's the Internet edge. Racing on the other hand charges the same price, and makes it extremely difficult to be a customer and sign up.
Jim Takter does not like elim winners not being able to pick posts. He has a point, but our stakes races have, for the most part, become coronations rather than betting affairs.
Why do I love undefeated horses? Because they are not machines and they have bad days. Big Bad John was indeed off his form, and his feed for last weeks North America Cup, although I guess that is not a huge surprise to handicappers. A 55.2 half should have resulted in a 54 back half and a victory, under little stress, for a colt like that.
Have a good Thursday everyone.
Thursday, June 23, 2011
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