This applies to sports, but it applies to gambling, too.
Smart people like Caroline Betts or Dan Ariely can explain it via a textbook, but we all know we live it in our (hopeful) common sense lives.
Winning is fun, losing, well not so much fun.
Casino's operate with this in mind. Sure the craps table is a bad long term bet, but the pass is only a 1.41% juice, and that 1.41% is a loser tax that is offset. You can sometimes (a lot of the times) win, which makes you feel good. It keeps you coming back. If you lose, the casino attacks that "bad" feeling at the same time with the action and fun of the table, and a free meal, free drinks or room comp. "I lost $100, but I drank about seven free Coronas". That makes you feel like you won.
Trading the stock market is not dissimilar. Back in the late 1990's when the tech boom was going on, we all made money. I remember being at a friend's house and she asked me "how to do it". She knew nothing of the markets, but she heard everyone was "winning". She needed to be a part of it. This helped E*Trade more than any talking baby did, or ever will. Winning is everything.
What about lotteries, you might say? Lotteries are not about winning, and they never have been. No one expects to win the $300 million power ball. The winning with a lottery is the endorphin rush from imagining what it would be like to win, linked inexorably with a tiny opportunity cost. It costs $1 and a trip to the convenience store; where you are going anyway because you are short of milk. All for a chance to own my own island? Winning!
This is why it is so silly when some insiders will say "The lottery has high takeout, and people play it." Ask a lotto player to drive 40 minutes to the Belmont lotto center, pay to get in, study lotto manuals that you've gained from a lifetime of learning, and see how popular the lottery is. We really need to stop mentioning the lottery or lotto players when talking about racing. From now on: Twenty lashes with a wet noodle.
At a racetrack winning is everything, too. The industry knows this. I ran into an industry insider who monitors player behavior (he shall remain nameless) several years ago and he said:
"It is absolutely amazing how much people bet when they're on a roll"
They bet more because they are winning. ADW's knew this early on. They would offer daily rebates. If you lost, well, here's $100 back. You won, come take another shot.
Winning is everything.
What separates racing and craps is that the entertainment is not there for racing (I am sorry to offend anyone who thinks watching a 5 claimer at Mountaineer is akin to watching the Dodgers and the Giants, but it's true), and it can't offer free room comps to a stall on the backstretch. A racecard is five hours, too, and to play racing it takes skill and a lot of know-how. This is why every handicapper you and I know have a stack full of books on his or her bookshelf.
It's a whole different ball of wax.
At the present time, the only arrow in the quiver that racing has to help with winning is using the rake. I wish there were others, but there aren't. They can't make you pick the right horse, or do a heck of a lot to make the game more entertaining where the masses will drive to the track or OTB, scour programs, bet money and be a student of the game.
Tom LaMarra on Twitter said this yesterday:
Spa harness opens Mar. 1 with 5% cash-back for on-track players who use cash-card account wagering. ... Great promo @saratogacasino.
— Tom LaMarra (@JerseyTom) February 28, 2013
On track player reward cards with real money back, not a toaster or gym bag, is something we've pushed here and at wagering conferences for years and years. This is a good thing for Saratoga to do.
Why? Because when you give people cash back through a rake reduction they have a chance to feel they're winning. Winning is the best marketing program on the face of the earth.