The Disconnect, Jockey Club Style

I was reading more about the McKinsey Report commissioned by the Jockey Club this evening. I came across what I think is something that is a little bit disconnecting.

Keep in mind I am just a dumb horseplayer, so I expect I am probably missing something.

The report calls for an increase in spend for TV coverage, to try and drive eyeballs to our sport. That's cool. Revenue can come from eyeballs over time by cultivating them - even with interruption marketing. It's a mass market strategy, and that's fine.

However, on takeout, it appears that strategy is completely turned on its head.

"I think we heard a lot from our most important customers that the pricing of the product is a little bit too high. But, in general, we thought a better way to deal with it - because of the regulatory environment - was to give targeted rebates to our best customers as opposed to a general reduction in takeout."

Instead of mass marketing to bettors - who supplies us with about nine out of every ten dollars of non-slot revenue - they have decided to target market.

So, if you want to watch on television, turn it on. If you want to fund the sport and get what your everyday slot machine gives you in value, you have to find an ADW that might or might not be legal in your state, learn the game, bet over $10,000 a month, call the owner of the ADW, and negotiate a rebate.

Like I said, I'm just a dumb bettor, but can anyone tell me why we'd want to spend millions mass marketing to people who will not give us revenue, but spend nothing target marketing to those who might?


That Blog Guy said...

Oh, so basically what they do today? The everyday shlub who goes to the track pays retail while those who bet via an ADW get rebates.

Anonymous said...

Hey PTP,

I think by mass marketing the sport and focusing on the non-bettors, they're trying to generate altenate areas of revenue such as racehorse ownership. With syndicates taking up most of the advertising on all HPiTV programs, the sport wants people who are not so savvy with betting, (but still enjoy trying, like me) welcomed into the industry via alternate routes.

I don't think they're implying that bettors are no longer important in the long-term plan, but I believe they realize that there will always be gambling and that now is the time to attract all walks of life.

They're trying to diversify the product to become attractive to the 'everyday housewife', the 'doctor', the 'truckdriver', etc. Syndicates lay claim to the fact that you don't need a tonne of money or time to enjoy racehorse ownership and become 'part' of the industry.

However, I do believe that the sport does rely heavily on chaps such as yourself to generate revenue, and programs should be implemented in the long-term plan to educate people in this particular area of the business.



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