Thursday, September 29, 2011

How to Land Poker Players? Try Blockbuster & Twitter

Not long after the Department Of Justice started shutting down poker sites in the US, it was surmised on some blogs and chat boards that plan of action from racing to land poker players should be front and center, and expected swiftly. Since that time we have heard very little from racing on how they might try to put in place such a plan, or even if they are thinking about it. Without a league office, money and some will, I guess no one is overly surprised.

I was struck with just how different it is in other businesses and we received a nice example of that this past week.

Netflix (the online streaming company, and former IPO darling) raised prices last month, much to the dismay of their customers, and they suffered mightily. Their stock dropped from about $220 since last month, closing today at about $113.

Like we see all too often however: One man's crisis is another man's opportunity.

Enter Netflix competitor Blockbuster and their new owner.

Sensing an opening last week - not in a month, or after they formed a committee - they got rolling.

"The decision by Netflix to raise prices on its DVD and video streaming rental packages did more than kick off the company’s slide in terms of customer happiness (and share price). It gave rival Blockbuster a rare opportunity to strike back, Twitter-style."

On September 19th, the day Netflix was getting clobbered for the first time:
  • Blockbuster started a new Twitter contest, promising a free year of service for the four best Netflix breakup stories.
  • In some cases Blockbuster has used direct messages—DM in Twitter parlance—to entice users—preferably those with a large Twitter followings–to promote Blockbuster offers in return for free subscriptions.
  • Blockbuster sponsored the word “Qwikster” on Twitter. When users searched Twitter for Qwikster, Blockbuster messaging would be the first to pop up in the search category. (Netflix hastily started a new arm for DVD rentals called "Qwikster", but failed to land the twitter account)
  • The team has also directly interacted with 150 thousand people in its #helloBlockbuster campaign.
As the WSJ article notes (the article is a good read) - they did not do everything right. But they did something.

Customers do not fall in your lap, they have to be earned through hard work. In today's world of streaming movies and DVD's the response is swift - almost immediate. Poker was shut down in April, and we're still waiting for racings response.

Wednesday, September 28, 2011

Raw Talent, What about the Playa & Some Depressing Odds

Jim Takter updated everyone on the health of See You At Peelers via Trot radio. It appears she had a hard to detect lung infection, but is "still not right" according to Takter. He trained her in 51, with a heart monitor.

How can a horse train in 51 and be not right? Because she's a superstar and there are good 51's and bad 51's when you are dealing with horses like that. I would have loved to seen her in the Jug if she was right; she would've had a good chance against that group, in my opinion.

There is a large carryover tonight at Balmoral Park and it is sure to be a record pool. HANA has some links to selections and a pdf of tonight's program. 

A couple of years ago New York raised takeout on some exotics to pay for the New York City OTB's. The OTB's are now gone, the takeout hike is still there, and slots are online with over $30 million going to purses at Aqueduct next meet. Where's the player in all this? You guessed it, nowhere. When handle is down several years from now I am pretty sure someone will say "with all these great purses, I wonder why we aren't doing better?"

The Ontario Racing Commission, who presided over the same mechanism with slots in this province had to do a shifty change of course after ten or so years of handle losses (they too - along with the rest of the industry up here - thought big purses would result in rising handles). They developed a new plan on race dates and what horses can enter where (at times the best horses would be going to tracks with zero handles, and jogging at 1-9). So far it is a moderate success.

While all the cash goes to purses - like everywhere else in slotsville - non-skill gambling games seem to flourish. How they do it, I have no firm idea, but then again:
  • In a 2006 survey, 30 percent of people without a high school degree said that playing the lottery was a wealth-building strategy. 
That might explain it.

Hitting a superfecta into a 26% rake - over time - will probably make you go broke. But for the lotto player, it tends to be even faster. Check this simulation and see how you do. Man, that is depressing.

Monday, September 26, 2011

Google Begins to Allow Some Gambling Ads

Starting tomorrow, September 27th, Google will allow some gambling ads for those who have opted into Adsense. This is a sea-change for the search giant, despite loosening of some rules previously.

In general:

"Google is allowing advertising of online scratch games run by state, national or Indian reservations and national or state lotteries. It also will allow the advertising of “bricks and mortar” gambling locations and fantasy sports contests."

For racing, let's look at the good. It appears that companies like Churchill Downs, Woodbine and others can create campaigns and have their ads appear if they so wish. As well, since campaigns can be geo-targeted, they might be able to target potential on-track customers (e.g. Churchill After Dark will be able to run a campaign targeted to the greater Louisville area).

However (here comes the bad), there are very few racing websites when we compare it to the number of casino and card playing sites. As well, the casino industry (and the state) has no trouble spending money digitally and otherwise on marketing (casino's can spend upwards of 20% of revenues on marketing, while racing spends 1.7%). Fantasy sports companies are equally tech-savvy. So one might surmise, when we add up the good and the bad, we're behind the curve.

Sunday, September 25, 2011

"Moneyball" - Not Just for Baseball

Michael Lewis has written many good books and articles, but arguably his best work is Moneyball about the Oakland A's rise to prominence due to "Sabermetrics". The best seller was made into a movie starring Brad Pitt, and by many accounts, it is sure to be a hit.

Sabermetrics is pretty simple, despite the scary-math name. Via Wikipedia:

"Sabermetrics is the analysis of baseball through objective, empirical evidence, especially baseball statistics that measure in-game activity".

This was a new way of looking at a ball player - through unpublished and proprietary statistics - which many believe can give a ball club an edge in evaluating talent. As we all know, the historical way to judge a player was by scouting, or evaluating published stats, like ERA's, slugging percentage and batting average.

As the movie and book shows, this new way of analyzing player strength was a hit. Oakland won 102 games that first season, with a tiny bankroll.

On Friday the Wall Street Journal published an article that looked back at the 2002 A's and how they changed the game. One of its several conclusions, was now that statistical measurement is commonplace, it's value is diminished. If a baseball player has a good "WOR", everyone knows he has a good "WOR" including their agents, and he will be drafted high, or traded for fair (or even over-fair) value.

The caveat with that, however, is that there still can be some value - if you are using a statistical measure that others have not figured out yet. Then you have a huge edge, and with that edge it pays to keep your mouth shut.

Are you thinking about handicapping as I am?

In 2008 I took a trip to Vegas and stopped by my favorite haunt - the Gamblers Book Shop. I bought a book that had 'all the top angles'. I took it home and studiously ran it through my database. Time after time, angle after angle, the ROI was under $0.85.

Recently I had a chat with a successful player and he said "it is becoming harder and harder to find value". I think that's true. You can work your butt off to find an edge, but there is a good chance that there are 100 or a 1000 other horseplayers doing exactly the same thing.
  • I saw a horse break bad, make up ground against a bias, and finish okay with it not in the charts
  • There is a sneaky good trainer change on the three horse in the fifth
  • The six horse in the 5th worked out/qualified better than it looks, because I was there
In 1990, these three horses might be 6-1, 4-1 and 11-1 respectively. Now we can watch that replay on youtube with a gaggle of others and get bias in less than 15 seconds with HTR or Jcapper. We don't have to collect old programs and use graph paper to chart trainer stats; they are at the bottom of the form and in countless software programs. Clocker reports are about as easy to get as a Starbucks coffee.

Those three horses are probably half those 1990 odds, and likely ROI negative bets.

Add to the fact that the main determinants of betting value - takeout and field size - are being raised, and decimated respectively, dumb money has been leaving the pools for slots, and pool sizes are shrinking. That leaves about an exciting a proposition as getting a root canal.

It's pretty tempting to throw up our arms and say there is little we can do to scrounge for value, but I think that's premature. There are people making money at this game on pure handicapping. It's just that a good many of them are doing things a little bit different. They are handicapping the horse yes, but they are fading obvious positives by being a contrarian, and are trying to find angles that no one is looking for.

Some examples that I know of:
  • Someone is betting supers, with a rebate, by throwing out chalk in the top two positions and concentrating on ticket construction only
  • Someone is fading every positive jockey/driver change because many are overbet
  • Someone is evaluating a "new pace" that every historical textbook says is probably wrong
  • Someone is charting bike changes in harness racing, because they are not listed in the program
  • Someone is crunching numbers, a la Sabermetrics, and coming up with profitable ROI where you look at the choices on paper and say "those horses look ugly"
  • Someone is creating models by eliminating every morning line favorite - throwing out 30% or so of the winners - as a starting point to making a play
From 2002 to 2004, some baseball general managers were paying up for players with high Sabermetric ratings. In 2005 and beyond, the value was pretty much gone. For years upon years in racing, we have bet commonplace angles and tried to get some winners. If we were good enough we might have even made some money with them. In the future, I believe the handicapping world will belong to those who buck convention, because they'll be the ones exploiting the only tote board value left.

Saturday, September 24, 2011

Risky Business

A reality show about entrepreneurs risking some capital for a one month investment. What's better than buying a racehorse?

Nick Boyd (@ralphie9 on twitter and one of our stable's trainers) took a shot recently asking to be on the show, and was approved. He bought a horse with the show's founder Brett Wilson, the philanthropist and business tycoon, and the relationship has continued.

For a recap, and to watch the episode, you can get it all here.


More 'Risky Business' in dysfunctional California? Is it any wonder handle is off by about 50% in real dollars since 2000 in the state?

Friday, September 23, 2011

Jugs, Economy, and Best Practices

The Little Brown Jug is in the books. Big Bad John made a few left turns and won fairly easily over the top rated colt in the country, Roll With Joe. The race, unlike many LBJ Finals was fairly interesting because Jody Jamieson took a shot with North America Cup champ Up the Credit. This allowed for fairly honest fractions, and gave Pierce a chance at daylight with Roll With Joe.

The Jug handle (I read from Pacing Guy) was $1.2 million, with an attendance of almost 50,000. The Jug is like Industry Day up at Grand River. Lotsa folks, lotsa insiders, and lotsa fun, but not much betting. Thank goodness for slots; and thank goodness for the Jug.

Racing and Trades

Bill Shanklin has a nice piece about playing the markets and playing the races.  One item explains nicely the stumbling block to gaining market share in horse racing:
  • Stock broker commissions can eat away at profits if you trade frequently, although the advent of online trading has greatly diminished trading costs. On the other hand, the relatively high takeout percentages on horse-race bets (as opposed to other gambling games of skill) have generally not diminished in the Internet era—which is why wagering on horse races can be an entertaining diversion but is an unattractive way for making money. Unless you bet enough to demand sizeable rebates, you are almost certain to lose over a sustained period of time.
I was reading a trading book recently and the author hit the same points Bill did in the piece. It is amazing how similar stock trading and horse betting is in terms of best practices. The parallel is a little clearer with betfair I guess, because you can trade out positions at a low rake. We, pari-mutuelly, are bringing an exacto knife to a bazooka fight.

It's not the Economy Stupid

Every time handle goes down in racing all we hear is "it's the economy". H/t to Caroline for a link to a graph of Personal Consumption Expenditures. Notice where we are now as compared to 2008? People are not playing racing ...... because they are not playing racing. In fact, GDP in 2011 is higher than 2010.

I wonder why the argument ever took hold in the first place, and that people swallowed it. When the economy from 2002-2007 grew at 4% per year and casino's and everything else was smokin', handles shrunk about 30%.

It is the Economy Stupid

I know the Keeneland sale went well, but how will the sales be from here on out if the S&P takes another haircut, and Europe implodes in a debt crisis? Massive liquidation of stocks (and everything but treasury's) was the MO for the week. It's been a tough market to make money in, even if you were a bear, because it's been crazy.

The Waples Kid

Randy Waples hit the $100 million mark. I can remember being a punk upstairs at Greenwood with the some of the regulars calling him a young driver with no skills. They called him that when they lost anyway.

Mountaineer Calling

I've been busy and have not gotten into one of my favorite thoroughbred tracks to play - Mountaineer - for awhile. I am watching tonight and realize how much I like track announcer Peter Berry. I could listen to that dude all day.

Have a good weekend everyone.

Thursday, September 22, 2011

Little Brown Jug Day

Today is Little Brown Jug day. The unique annual event pits some of the best 3YO pacers in the land against each other in a two heat affair.

This year's edition seems a little sparse on major-league talent, but like the Kentucky Derby, a superstar is never a factor on a watch, don't watch decision. For a free program, you can get it here (The Jug is in "program 2"

In elim one, we have two fairly fresh horses that I'll be watching: Big Bad John and Foreclosure. In the second elim you have the top colt in the land - Roll With Joe. He got an absolutely brutal trip last time (the inside horses finished one, two, three in the Cane) and still raced well. Up the Credit was absolutely awesome in the Simcoe, and I expect him to show up today.

Good luck if you are playing the card today.

Tuesday, September 20, 2011

(Late) Tuesday Notes

I've been busy as a bee, but I found time to type out some drivel this evening.....

...... The Canadian Trotting Classic (covered beautifully on the Score Network) was as feel good as it gets. The homebred, Daylon Magician made a move to the front, and it was over. He is a very nice colt, and even if the Hambo Champ was on his game, I think the result would have been similar. I think Brennan would've been nuts to hang him.

...... Man of Many Missions got caught unsound (or wonky) once again in a big one.

.......  How sharp are horseplayers? I have not spoken to any who thought See You At Peelers would've won her start Monday; they are sure she is a mess right now. Takter's right hand man trained her Thursday coming home in a cheap 57 flat and he scratched her.

..... Does the Peelers situation remind anyone of her peer Rachel Alexandra? Everyone and their brother was sure something was nagging her early in the year - she was just not the same horse - and they pulled the plug. Will Peelers be the same? Time will tell. I am 50/50. A rest can do a horse wonders.

..... Did anyone catch Risky Business this week with trainer Nick Boyd (@ralphie9 on twitter)? I thought the kid did a good job. For those who are not aware, the horse bought by Brett was in last week at Kawartha and he raced well in his comeback race.

....... The Jug is Thursday. Who you do you like? I have a feeling Foreclosure N is going to race well, and be odds. I think he might be the freshest horse of the bunch.

....... What a difference a sick horse makes. With Peelers not there for the Jug or Jugette, it became less interesting.

........ The markets represent a good case study for bettors. It is thought in some circles that tomorrow's Fed 'twist' move is priced in the market . This is not unlike a driver or jockey change being priced in the odds, which is why the obvious ones are horrible bets. If you are long the markets and this chap is correct, you will need something flashy for it to make a new up move.

...... Online poker is a ponzi scheme (at Full Tilt). Hilarious stuff. What will the Feds think of next? Just for a lark, everyone under the age of 65 should ask the Feds for all their retirement money, just to see what happens.

....... Interesting promo at Colonial Downs.

..... and another one there; this one is really interesting. 

....... Tuesday's story: I'm hanging out at the cottage this past weekend. It's dark and the dog needs to go out. I pop out on the deck with my dog and am met immediately by what I think is a small deer. Alas, it is a massive dog - a Rhodesian Ridgeback. He's the sweetest dude around, and he is totally lost. He has no collar, it's pitch black, there is no one in sight and I was pretty sure he came from far away.

After an hour or so of walking this small horse around (he could have used a 50 inch hopple), a lady pulls up to me in her car on the road while I am with the lug. It was an interesting conversation:

Blonde Lady: "Hello, I am looking for a dog, have you seen one?" (she says this to me, as I have a dog on the leash).

Me: " I have a dog here"

Blonde Lady: "Oh, so you have not seen a dog"

Me: "Yes, I have a dog right here. Are you looking for one?"

Blonde Lady: "Yes I am"

Me (thinking since she is looking at this dog and me, she can't be looking for this one): "Well, what's the dog you are looking for look like?"

Blonde Lady: "He's big and he's brown"

Me: "Like this one (pointing)?"

Blonde Lady: "Yes, that's him!!!!" My friend lost him at the beach!"

It really shouldn't have taken that long. I think she must have been drinking.

I walked the dog to the owner about a half mile from where I was (he was too big for her car) and he was a happy dude. And I only missed three races!

Have a good Tuesday everyone.

Friday, September 16, 2011

That Was an Interesting Day!

Alert - other than in the notes section, this post has little to do with horse racing.......

I had a bit of an interesting day yesterday. It was not exciting - it was nothing really, like a Seinfeld episode without anything funny - just a little eventful, for a dude who spent most of it working.

I figured that any story that has Chuck Yeager in it has to be worth writing. For reading? Well may God bless you if you even try to get through this.

After a full day of work I decided to bar-b-que a steak so I opened it up and brought the dripping wrapper into the garbage out on the deck. A dog I am currently fostering (I volunteer for a dog rescue) is a little nuts at times, and he is pretty much an escape artist. Being a beagle - someone once told me if you dropped one at Belmont, he'd follow his nose and make it to Monmouth by sundown - when he goes, he goes. Well, he caught sight of something, and bolted right behind me. I proceeded to dive for him, landing on my now-getting-older bones (why is it when you fell on a basketball court or baseball field at 17 is it different at 40?). I skinned my leg, cut my knee, and knew I was gonna feel it the next day. I missed him, and off he went, nose to the ground at a hundred miles an hour. My other dog we adopted, who barely has two good legs (we think he was hit by a car a long time ago and he was never treated for it), was out after him, hobbling away.

I darted and dashed (again, I can't dart and dash like I used to), but there was no way I was catching this beagle. I followed him down to the beach, across rocks the size of Zenyatta, up hills, in the bush (where I saw a few foxes and thought my beagle might be "lunch"). He just looked at me, and I am pretty sure he was laughing. Every time I got close - bolt.

After an hour or so he went behind a lighthouse and I lost sight of him. I gave up and came back for a drink and to make a new plan of attack. I was sure I had lost him.

After ten minutes, back out I went. For another hour I had zero luck - not even catching a glimpse or sound of him. I came back to the house to check messages, and to see if anyone was around to help. As I rounded the corner, there he was, sitting at my screen door, tongue on the floor of the deck. He got tired and needed a drink, so somehow he found his way back home. For a dog that has not been here long, I was really surprised. Even though he bolted each time he saw me, he knew where home was.

He drank about a gallon of water, and immediately passed out. Then, battered and bruised I relaxed for a bit. He wouldn't let me do that though - each twenty minutes he wanted out to relieve himself. A gallon of water in a 35 pound body does that I guess. I had to take him out - on a titanium leash this time - five times over a two or three hour period, which was the last thing I wanted to do after a long day.

After Niagara Falls was drained several times, I finally had some time to check on work and read a few twitter posts. The previous evening, Caroline (@socaltbrescue) and I were speaking about a garage sale she is having. She noted she had a used helicopter flying manual (!) and that most of her stuff was not worth much. I jokingly told her that she should put out some feelers that maybe the manual was once Chuck Yeager's (the first man to break the sound barrier in an aircraft) and that would juice the price!

Lo and behold I checked my twitter mentions after the doggie debacle, and General Chuck Yeager replies to the flying manual tweet.

The man has a sense of humour!

Later that evening I head to bed - finally, because I am sore and feel like I got hit by a truck. At about 1:30AM, a piercing alarm goes off. It was the fire alarm and it's loud. After about three minutes and me hitting the button (and checking for fire of course), it stops. Thank goodness.

About an hour later - it goes off again. The dogs go nuts (I could not find the one with two good legs because he was hiding he was so scared). I head over to the alarm and try to make it stop, but it won't; I was thinking of naming it "Christine". I take it off and try and take out the battery, like i have all my life with these things. But there is no battery. The powers that be (I am finding that not only do my bones crack at this age, I am becoming more liberal/libertarian and am getting annoyed at the powers that be who do these things) have decided that to pass inspection all new construction's need a new-fangled smoke alarm system. It's wired on AC power, and all smoke detectors need to be wired together, so if one goes off, they all do. I have to - with a sound louder than a Who concert in my ears - dismantle this one, then find the other one to dismantle. I get tools and get the job done, but I cannot find the other one. The sound is muffled, but it's there. I think it's in the basement, which is a crawl space I need to move a carcass of everything to get to. Thankfully, after 15 minutes of ringing (just before I start clearing a pathway to the basement), it stops.

About 4AM (with an 8:30AM conference call on tap that I have to prepare for to boot), I get to bed.

Today I am tired, sore and a little cranky. But when I look back at it positively, I got some exercise, I will sleep well tonight, my dog is alive, and I got to chat with Chuck Yeager.

Life's good.


See You at Peelers career might be in trouble. After a training session Thursday where she could only muster a 57 back half (in a training session she should be able to fire home in 26 if they want off easy fractions), she is scratched for Monday. I know a lot of you were probably skeptical she was even entered, but Takter or any other trainer can't speak horse. They can only get her checked out, and if something is amiss you fix it. If something is not, you enter her. The training session told the story and we are not sure we are even going to see her again.

This weekend, get ready for the Woodbine Mile, and the Canadian Trotting Classic. Say what you want about Woodbine from a customers perspective, but they drive cash back into the purses, and create and promote some wonderful events.

The Jugette only drew 11 this year. So much for figuring more fillies would take a shot with Peelers out.

The Jug this year has some guaranteed pools. The pick 4 will be worth a shot, in my opinion.

Enjoy your weekend everyone!

Thursday, September 15, 2011

Guest Post on the Ontario Sires Stakes System

Harness twinkie @GregReinhart, a good friend of mine posed this question to the world of twitter tonight. As we bantered our thoughts back in forth on the matter my mind raced from one place to another. First to a hot topic on harness racing chat boards regarding yearling sales, then to @Pullthepocket’s blog from a day ago “Being Disruptive”.

The first theory that seems blatanly obvious would be the “superhorse”.  The likes of Somebeachsomewhere, Western Silk, Shacked Up, Peaceful Way, et al. were all very dominant in their respective years and the list could be added to easily.  As a result, the trickle down effect begins where fringe horses move down to the “easier” Grassroots dollars for a bigger slice of the pie.  This, in turn forces many owners of the Grassroots calibre horses to a decision, which further pushes them out.

This is where “Being Disruptive” is necessary.  All major sports have numerous review committees that meet on an annual basis. A prominent one would be the NHL General Managers meetings where they discuss, alter and adopt new rules for improvement. What the racing industry as a whole fails to ever do is “review” what needs improving. The OSS committee fails on this front as well. Why are there not an ample amount of horses racing in the Gold Series? What must we do to change and encourage more horses to enter them? Then there is the issue of  the Grassroots division costing a $500 starting fee. Have we forgotten the definition of grassroots and the reason we created this program in the first place?

What surprises me more is the fact Breeders have failed to approach the OSS program about this. Breeders have been crying foul about dwindling sales prices for years but can you blame any prospective owner? Hitting a homerun with a yearling is a one in a million shot, but buying a useful/profitable one should be obtainable. The average Joe can merely afford to pay basic training bills with the hopes the horse is able to pay for itself.  When they must further dish out thousands on starting fees for a “grassroots” program the break even point moves that much further away. This COULD be a good reason why the rich pay for the high-end yearlings and the rest sell for mediocre prices.

Harness racing continues to function at status quo circa 1940 yet no one in power seems to want to change that. Even sub organizations within racing keep going down this path. All facets of harness racing could use factions of them “Being Disruptive” on a yearly basis. Maybe then we will keep up with what the customer of today wants and what the participants in it need.

Nick Boyd - @ralphie9 on twitter - is an Ontario based trainer and driver.

Wednesday, September 14, 2011

Create Products That Open Your Markets

There was a time we were unable to invest or partake in different markets, but that day is long gone. High commissions and protective rules are no longer something that markets need to deal with - they have been shot down - because the money from people who might be looking for you, is everything.

In the case of gold and other precious metals - the current hedge against paper risk - the floodgates that opened were welcomed by investors.

ETF's, or exchange traded funds, have been around for some time. No longer do you have to own a warehouse, and hire a security team to store and own the bricks. And it's worldwide.
  • Physical metal-backed exchange-traded funds sparked a "sea change" in platinum and palladium markets by bringing in investors who otherwise wouldn't have bought the metal. Physical platinum, palladium ETFs remove investment barriers for Europe- based buyers.
The market has taken off.

Conversely, what we see in horse racing has been the exact opposite. We have tracks protecting a signal from offshore's like it's platinum. We have tracks trying to operate their own ADWs under arcane rules and little marketing - like somehow people will flock to open an account and bet our sport with both fists.

Here is a popular ADW and what strangeholds them in trying to do business. It's their residency requirement.

You can buy an ounce of platinum, that was mined in northern Russia, stored in the south of France, all while sitting behind a computer screen in your pajama's in Arizona. But if you want to make a horse bet, you have to jump through a hoop that a dolphin looking for a fish would. And even then you'd be likely not be able to, for some strange reason.

Unless racing opens its markets, and creates products and a delivery system that welcomes customers - and doesn't discourage them - the rest of the world will continue to leave us in their wake.

Tuesday, September 13, 2011

Being Disruptive

When I (and probably a lot of you) went to school, I had to budget cash for tuition, residence, food - and textbooks. The latter seemed to be something that confused me most because I could never quite figure out why a book could cost so much. This especially considering I would only use it for a year, and then hopefully sell it for 15% of the list price.

I often wondered if I should have been majoring in textbook writing instead of business. It seemed pretty darn lucrative.

Today, one of the oldest businesses in the land - textbooks - has been disrupted. No longer do you have to shell out $175 for a science text, it costs a fraction of it - and it is much better than the original. It's an interactive textbook.
  • Nature Publishing Group, which publishes several highly regarded scientific journals and textbooks, was founded in England in 1869, eight years before electric lights illuminated the streets of London. Now, 140 years later, with the help of Harvard Classics scholar Vikram Savkar, the company is beginning to disrupt the traditional textbook model that it helped to create. This month at California State University, the company released Principles of Biology, an interactive, constantly updating biology textbook that retails for less than $50. 
The old guard is not very enthralled with this disruption (who wouldn't like selling virtually the same book each year for a couple of hund a pop), but the company asked itself a couple of questions, and decided it needed to be done:
  • We don't accept received wisdom. We always ask "What does the market need?" and at the same time "What do we believe that we're in a position to provide the market?"
 Clearly there is a parallel here for racing, and it is not a flattering one. Yes, we in racing tend to accept received wisdom, and we rarely seem to ask what the market needs.

Ten years ago Betfair asked themselves those two questions. The market needed a low takeout, interesting platform to bet on via the net. By developing their technology, they found themselves in a position to provide to that market and fill that need. The rest is history.

Does this mean for racing we can not come up with a disruptive technology of our own? Sure we can, in my opinion. But as an instructive first step, we have to stop 'accepting the received wisdom'. I think we can all agree: That's gotten us nowhere.

Notes: There is quite a dust up on about Pastor Stephen. He is out with a coffin bone after Saturday's break stride. Most saw the post parade, including several of us on twitter.

The question being asked on the chat board is: "Where were the vets?" I once spoke with one who said it's the toughest part of his job. Considering the trainer is one of the top names in the sport, no track vet wants to put the hammer down. It's one of those tough calls in our sport, because the participants have a ton of power. There is an answer to this issue, but I am not smart enough to figure it out, that's for sure.

Dan over at throtrends has a great article up on racing demographics. Of note, Dan hosts a weekly racing chat about the sport on Twitter Tuesday at 9PM ET. Just search for #trbchat

This week: The $1M Canadian Trotting Classic. Next Thursday, Little Brown Jug.

Barry Meadow Leaves One Tough Game

Awhile back in USA Today, horseplayer MIke Maloney said there are "about 10,000 factors" that go into handicapping a horse race. I think we all agree that's about right. Analyzing these factors, beating a crazy rake, losing photos, losing streaks and the general hard work that goes into it can take a toll. One of the people - Barry Meadow - who lived and breathed that type of existence for 23 years has called it quits.

Via an email, posted at Pace:

I am retiring effective immediately.

Partly I am retiring for health reasons, to withdraw from the daily stresses of long hours, deadline pressures, and millimeter $8,000 photos. These pressures, I reluctantly admit, have taken some toll on my body. My doctors tell me that I’ll be better off not to be spending late nights reviewing the final turn of a Hollywood Park turf race several times to see exactly who was wide (and how wide), or agonizing over whether a horse should be a 14 or a 15, or pounding my desk when I’ve just lost a photo at Santa Anita. 

Barry is pretty much an icon in horseplayer circles. Many horseplayers on chat boards, on TV giving out picks, or writing how to handicap, have never been able to do what Barry did. That is, make a living at betting horse racing. It probably is the most singular toughest pursuit to excel at in the skill game gambling genre, and very few in this world can do it. Barry was one of the best.

Everyone deserves a retirement, whether you work for years at a mine, or a mill, behind a desk, or betting the fifth at Santa Anita. I wish Barry well.

Sunday, September 11, 2011

Handicapping the Bounce - When it Fits Your World View

O_Crunk on twitter recently linked to a piece about our pre-conceived notions that guide us in many ways. If we see something that fits our world view, it cements our world view. If we see something that challenges our view, sometimes we forget about it, or chalk it up to statistical noise.

In handicapping this works in myriad ways. Many handicappers for example, will look at a driver or jockey change to one of their favorites that works and say "see, I told you so". Conversely, when a driver or jockey change happens and the result is not as we expect, we seem to never say "hmmm, I wonder if I should run some numbers to see if I was wrong?"

Recently on's harness section there was plenty of chatter from 'cappers about the "bounce". This, as we all know, has been written about continually in thoroughbred racing, but in harness there is not very much literature on it. This is probably because our horses race nearly every week, and are fairly consistent. If a harness horse gets "hot", he or she tends to stay hot for awhile. As well, with modern vet work, an increase in bills and supplements between starts etc, our trainers tend to be able to keep the charges sharp.

Still, there is a school of thought out there who believe harness horse's bounce fairly regularly. The latest example of that (although summarily this was proven wrong) was See You at Peelers. She had a taxing race where she was completely off her game at the Meadows, and came back a week later to be (probably) even worse. Some believed "she bounced", and hung with this theory, even when trainer Takter said there is something wrong with her, that they are trying to pin-point.

Last evening, we had evidence of a direct challenge to the bounce dogma - in effect, the "anti-bounce". Shelliscape, who got absolutely brutalized in the Shes a Great Lady last week, would be a perfect a bounce candidate if you ever saw one. She came back to race awesome last evening, from a terrible post (click to enlarge).

Also, another 2YO filly, Big McDeal got totally burned in a 26 quarter and 54 half last week, but she came back, went right to the front, made two left turns and won in a stakes record. She paid over $50.

This happens time and time again in our sport but very rarely will you see a topic about it, from the same people who prescribe to the bounce theory.

When I have ran my own numbers overall (trying to find some sort of actionable evidence of this theory), I do not see it at work in the aggregate, only on the anecdotal.

At times I have found the shoe fits, where it might be profitable: For example, if a horse who is sore (check the pp's for that) runs a big one and comes back too quickly, he can run poorly. Or if a trotter scorches in a fast time, he or she can be a little tweaked and go off (Pastor Stephen last night might be a good example of that). This is not, in my opinion, a complete "bounce"; it is a horse who is probably not sound in the first place. And you can not use a theory to find that out, you have to use your eyes.

In my experience, successful stock traders, businessmen, poker players or handicappers will constantly go contrarian in their world views, and never relent. They try and prove themselves wrong, not right.

I think if we look at the "bounce" theory in harness racing, it has much more bark than bite.

I wonder what you think? Have you run any numbers, have you delved into this theory? Is the harness racing bounce theory a bunch of hooey, or does it have merit?

Saturday, September 10, 2011

The Straight Dope

Have you seen the RCI's recent push to change the narrative on drugs and racing? The story they tell is accurate, and has been for some time. However, it is super-difficult to change a narrative, when the public believes a different one that has been passed down, generation to generation. Find me a movie about a racetrack, and I am pretty sure the storyline will include a drugged horse.

Conversely, if you ask the general public if baseball players "were all juicers" ten or twelve years ago, or even today for that matter, the answer would probably be no, despite the headlines. Ted Williams, Willie Mays and Hank Aaron were on cereal boxes, and baseball was lily-white. That was the narrative. Today, after steroid scandals in that sport, people believe the testing is good, they are on top of it, and players are playing clean. It's something the general public wants to believe about their beloved sport. So believe they do.

Yes, 0.015% of tests come back bad in racing, whereas back in 2005 for these sports:

WADA-accredited laboratories reported 482 positive samples for cyclists in 2005. Baseball was second with 390 positives, while soccer was third with 343. Track and field - the most tested sport - was fourth with 342.

Cycling also had the highest percentage of positive tests, with 3.78 per cent out of 12,751 samples, followed by baseball (3.69 per cent out of 10,580) and boxing (3.41 per cent of 2,433) and triathlon (3.41 per cent of 2,170). Track and field had 1.67 per cent positives out of 20,464 samples.

Recently, with several high profile riders getting nabbed for blood doping (or eating bad meat according to some), cycling's perception is probably approaching racings. They have some work to do.

What should racing do to change the perception? According to marketing experts we should be doing exactly what the RCI is doing - spreading the word the best we can about testing procedures. In tandem, I think making sure new undetectable drugs, and those who use them (the real scourge, because these people win races and get more and more horses from Sgt. Schultz  horse owners), are expunged from racing as soon as possible is another good angle.

One major note of caution, and people like Seth Godin have spoken about it: It can take a generation or more to change an ingrained perception. So no matter how hard we work, don't expect things to change overnight.

Friday, September 9, 2011

Taking it to the Next Level

On Wednesday a horse's owners decide to take it up a notch, and today a racetrack decided the same thing.

Daylon Magician, a David Lemon owned and trained homebred, has entered the $1M Canadian Trotting Classic. Relegated to sires stakes action so far, the talented colt is taking on the big boys Saturday, including Hambo champ Broad Bahn.

This happens at times in our sport, because many of our good horses are owned by trainer/owner's, or reclamation projects, like San Pail. I don't blame them a bit for not staking a colt, or sticking close to home and having some fun. But this horse deserves a shot. I think he might be the best colt in North America. Good luck to the fine people who own him.

Second up is Charles Town Racecourse. This past year the slots-fuelled track has been making some changes - they changed their schedule around, carded some nice races, and are a fixture one night a week on TVG. Handle has been doing quite well.  Not to rest on that, they have lowered takeout appreciably, and announced it today.

Successful people, or businesses, worldwide never rest on their laurels, they try and take it to the next level. I hope it goes well for both of them.

Tuesday, September 6, 2011

With See You at Peelers, Disclosure is Not that Difficult

Early in the year, the talk of disclosure when it comes to the health of a horse was a hot topic, mainly because of the Uncle Mo situation. On twitter, via various blogs, and on chat boards, most fans thought that they deserved the right to know what was happening with their favorite horses. Adding to the chorus were some industry watchers who believed that transparency, especially in the social media age, is something we as an industry should embrace. On the flipside, many owners and trainers towed the company line that has permeated thoroughbred racing for a century or more; namely, it's my horse and it's none of your business.

For my part I have always believed transparency is a good thing for our sport, so I am biased in that regard. However, in copious discussions with my twitter friends and elsewhere, I brought up that harness racing does not shy away from disclosing information on our star horses virtually at any time. In harness, whether it is a potential (and probable) multi-million dollar stud like Big Jim (his ankle issues were disclosed, with almost a willingness to show the press the Xrays), or your average every day horse, not only does it happen, it is considered commonplace.

Adding her name to the list is See You At Peelers, the superstar mare.

As most know, she lost her first race ever at the Meadows a few weeks ago, in what many thought was a sub par effort. She simply had no fight after three panels, and stopped like she was shot. Undaunted, and figuring it was the trip or the pilot, her trainer decided to give her one more try. Against horses she is literally a dozen lengths better than, she was life and death to hold them off.

Today, we heard why via, and there was no funny business:

"Takter said See You At Peelers has been displaying a higher-than-normal heart rate, and that concerns him.

“Her heart rate is high and she’s not urinating normal,” he said. “Her heart rate 12 minutes after a race is never over 90, and she was 129 at The Meadows, but I thought it was because she had a tough race. This time (after the NYSS) it was 118 and that’s not her.

“They’ve already confirmed her blood work has come back good, but they are doing a stress test on her on a treadmill,” he added. “Something isn’t quite right with her so hopefully they can pinpoint what’s bothering her. She’s just not the same horse.”

The above is how it should be done. The public has followed the mare, and they want to know how she is doing and that she's being treated well. It's not that hard to say what's going on with your horse, and if we want to be treated like a true sport, it should be expected of us all. Selfishly, it can be used as an opportunity to show our sports' detractors just how loved our horses are, too.

If you have a nice horse that the public knows and he had a surgery, or if his heart rate is wonky like Peelers' is, share it. The world won't end.

See You At Peelers photo op -- Jimmy Takter from USTA on Vimeo.

Sunday, September 4, 2011

Weekend Notes

See You at Peelers lost again this evening. She was DQ'd in an NYSS, but was life and death to hold on regardless. Virtually every handicapper I spoke with last week thought there was something wrong with her and were surprised she was entered this week. She was 1-9 tonight and I do not know one person who would have, or did, bet her. I wonder where the cash came from. It looks like trainer Jim Takter agrees, as he announced she is now off the Jug trail, and one would expect we will not be seeing her for awhile. Great horses tell you when something is wrong, and last week it appears she was doing just that. This week just confirmed it.

The Metro is in the books and the regally bred Simply Business has now written his stud ticket. This year's 2YO crop has been enigmatic but this colt has always seemed to be the one who looked fairly solid. He put it together last night, when it counted. Rock n Roll Hanover did similar several years ago in this very race, and it catapulted him to an awesome career. He was not overly impressive before the Metro.

I have always wondered why harness racing is not more popular, simply because our older horses race more and are very competitive. If we look at the Woodward, for example, there is no comparison. Last evening's Canadian Pacing Derby could have probably been snatched by any one of the ten entered. The horse who got the best trip won - We Will See. Speaking of him, when are we going to stop the 4YO's can't beat older claptrap? Every year there seems to be a good 4YO, and this occurs when the best of the three year old crop retires to go to stud. It's a small pond to fish from, yet one usually pops up.

I find that Dick Powell is pretty sharp. I totally agree with him on the Factor.

Wagering was butchered again in August. This time there is very little talk about the economy being the culprit and that's a good thing.

Handle on Saturday at Mohawk was a respectable $2.5M.

I expected to see some heavier speed in the two year old finals Saturday, but it didn't really happen. I wonder if these colts and fillies are starting to slow down already.

Peelers out, Big Jim out. Now the Jug picture looks pretty darn chalky.

Bettor Sweet closed from Chicago in the Pacing Derby and looked darn good. I thought about betting him, but I have bet Sears a few times in stakes finals in similar situations and he has been very far back.

I hope everyone is enjoying their long weekend! The weather has been good here and I have only watched about ten races. That in itself amazes me. I don't think I have watched less than ten races in a weekend since I was six.

Thursday, September 1, 2011

Going After the Dumb Money

About 2PM today, the S&P turned downwards, with traders worried about an overbought market on light volume, especially with the jobs news due out in the morning.

CNBC spoke during the day about what to expect, and analysts relayed to the viewing public options, ETF's and other conduits to play the news. Traders, fund managers, investors big and small - from a guy with $1M in his account, to a mother from Iowa with $10k in her self-directed retirement account - were watching, planning a move.

What's a VIX? What's a stochastic? What's a LIBOR rate? How do I write a naked put?

There are many people who know this form of "gambling" like the back of their hand. And a lot of them have never set foot into Wharton.

Just how big are the markets? Here are the top few stocks on my ticker:

Google traded over a billion dollars today alone.

We always hear about scratch tickets or slots taking away our racing patrons, and there is truth in that. But why do we try and out-do a lottery with 18% takeout head to head bets and other poor-value ideas, when there are savvy people who are our target demo, playing the markets each day?

We'd all like dumb money in racing, but the dumb money likes to pull a lever; and we don't have levers. We have an intricate puzzle that needs to be unwrapped and unravelled, tantamount to the morning tomorrow when people are deciding to short or go long the QQQ's (or myriad other options) after the jobs number comes out.

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