It's Bowl season and tomorrow and Friday are special days, stacked to the hilt. In fact, pretty much every day is stacked with Bowl, after Bowl after Bowl.
Bowl season has always been big business, although it looks a little different than the old days.
I remember being a wee lad in the 1970's, and growing up in a small northern place, it was tough to watch Bowl games. We had two channels; one was English and one was French, and I could not speak a word of French, so we had one channel. Interestingly enough, the French channel was the only channel that ever showed NFL games - for years I thought the NFL was "Le LNF". And also rather interesting (to me anyway), they constantly showed Minnesota Vikings games. The Purple People Eaters were less imposing when they were "Violette" things that ate running backs. Anyway, I digress. The only channel showed Bowl games, did it one day only: New Years Day. I could watch the Cotton Bowl and the Rose Bowl, and I think the Orange Bowl. Rose didn't fit, because it was not a commodity, but as a kid I didn't know the difference. They were three great games and a staple of life on New Year's Day.
Fast forwarding to tomorrow and Friday, there are a gazillion bowls. They are stacking grade 3's and making them grade 1's and promoting the heck out of them. I personally am super-stoked for the Taxslayer Bowl, and nothing says Christmas like the AdvoCare V100 Texas Bowl. I think last week there was a Popeye's Bowl. We have a couple of those in Toronto of all places. The one I have been to strangely at the top end of Chinatown, at Spadina and College. For those who have not been there, Popeye's is deep friend chicken, shrimp and other things, served with deep fried french fries. I think they deep fry the coke too, in the meal deal. Anyhow, it's gotten so bad that at least twenty Bowls are now named after places of business I have never heard of, or places that serve deep fried food.
I guess it works, but it doesn't make it better. I'll probably watch the big two games, and nothing else. Over the past week, seeing the San Diego County Credit Union Poinsettia Bowl does not make me want to join a bank in California, and I don't even know what the Raycom Media Camellia Bowl is.
One of the more bizarre decisions I thought made in 2014 was the stacking of stakes races. Some might make sense, like trying to make Pennsylvania Derby day a big day to get people to play into 30% rakes with a smile. Even stacking a Travers Day makes some sense to me. Big days are important, but stacking the Belmont Stakes day? They got lucky there was a Triple Crown on the line, because I believe it made a toy company executive who runs a racing jurisdiction (that sounds funny, I know), look pretty good.
With more grade I, II and III races, and more of them on top of each other (some racing at the same time, even!), racing has its current version of Bowl mania. Some people love it, and more power to them, but I can't get stoked for five horse fields going for big money in place after place, dressed up like the big time, just like I can't get too excited for the Godaddy Bowl, brought to you by, well, Godaddy.You can squeeze more money from an event, but people are too smart to not realize what they're watching is a poor product. Sooner or later that'll bite you in the rear.
Thanks for reading the blog this year everyone. I appreciate it. To you and yours, may you have and enjoy a very Happy New Year.
Wednesday, December 31, 2014
Thursday, December 25, 2014
Merry Christmas Vegas Horseplayers
Vegas racebook patrons (what's left of them) will likely be unable to wager on New York racetracks in the upcoming days or weeks.
The knee-jerk reaction from many in the sport is "good, they should pay more," but that's way too simplistic. Nevada racebooks and others are part of a distribution network that takes a racetrack like Belmont and allows a customer base to bet. It's no different than a car dealership, Amazon.com or a million other distribution points that allow a business to sell their product. NYRA can go and purchase a casino in Vegas if they'd like and take all the money from the signal, but that's not feasible, so others sell their product for them.
Casino's, like ADW's and others, are not charities. Floor space for a racebook could be used for another gambling game, so the profit that a racebook makes has to exceed the opportunity cost of doing something else. NYRA - as is the case with this new management team, led by a former toy company executive - wants more from the casino's, and about everyone else, without investing through a forward linkage.
This has been going on for awhile now, and has been occurring in dozens of other industry's, especially as the web has taken hold. Examples from the book industry are prevalent, when it comes to middlemen, marketing, and reselling. That business is in flux, like we see with Amazon.com and ebooks. Authors receive only about 7% of all sales on Amazon when they have a traditional book (the middleman - the publisher - takes a great deal of it, as does Amazon), whereby with self-published ebooks, authors receive about 65% of the revenues (lower with back end marketing support, or help from Amazon).
It's nice to feel all Oprah-warm-and-fuzzy-like and say "NYRA deserves 80% or 90% of the revenue in the win place show pools because it's their product" but that is not realistic. Margins - probably well over half - have to be set aside to keep the reselling distribution network, its marketing, its customer cultivation,lower takeout to price sensitive patrons, and other growth oriented characteristics to ensure the health of the entire market. I feel this salient point is being lost on Monarch, CDI and NYRA, and it should be paid attention to, or they will wake up with many more customers lost in the ensuing years.
- NYRA, which showed a profit for the first time in 13 years, reportedly is asking to almost double the fee for its signal, which would mean between 10 to 12 percent that Nevada would have to pay.
Casino's, like ADW's and others, are not charities. Floor space for a racebook could be used for another gambling game, so the profit that a racebook makes has to exceed the opportunity cost of doing something else. NYRA - as is the case with this new management team, led by a former toy company executive - wants more from the casino's, and about everyone else, without investing through a forward linkage.
This has been going on for awhile now, and has been occurring in dozens of other industry's, especially as the web has taken hold. Examples from the book industry are prevalent, when it comes to middlemen, marketing, and reselling. That business is in flux, like we see with Amazon.com and ebooks. Authors receive only about 7% of all sales on Amazon when they have a traditional book (the middleman - the publisher - takes a great deal of it, as does Amazon), whereby with self-published ebooks, authors receive about 65% of the revenues (lower with back end marketing support, or help from Amazon).
It's nice to feel all Oprah-warm-and-fuzzy-like and say "NYRA deserves 80% or 90% of the revenue in the win place show pools because it's their product" but that is not realistic. Margins - probably well over half - have to be set aside to keep the reselling distribution network, its marketing, its customer cultivation,lower takeout to price sensitive patrons, and other growth oriented characteristics to ensure the health of the entire market. I feel this salient point is being lost on Monarch, CDI and NYRA, and it should be paid attention to, or they will wake up with many more customers lost in the ensuing years.
Monday, December 22, 2014
ITP & Sid Are Both Right
Two of my pals - Sid Fernando and Inside the Pylons - were having a twitter chat today. It began with some chatter about Hong Kong, the way things are done there, versus here across the pond. Sid stated racing in Hong Kong can do many of the right things because it is a stand-alone entity with government as a strong partner. ITP stated that racing could've been like that here, but it hijacked itself. In the end, I suspect they both agree with each other.
In Hong Kong, racing and governments have a symbiotic, linked relationship. When racing does well, they do well, because revenues are taxed at the back end. This is likely why, when they had to fight the Macau casino's in 2006 and were losing customers, the Vice President of Wagering (they have one of those) reacted quickly with a rebate program. It was done to protect wagering, revenues etc, for the long term. There was no horsemen group, no state, nothing standing in their way. They just got it done.
When that happens here it is not like that at all. It's so bad, governments partially own casino's, so they don't much care what happens to whatever tax or wagering slice they get from racing. It's meaningless to them. It's a different world here.
Sid is right. It's been the opposite for like forever. And there is no comparison.
ITP's point is more nuanced and I think it's strong.
What if racing and government's had fostered a similar relationship long ago? In that case, NYRA would be a gambling mecca where like in Hong Kong, it would've led as a distribution point for other wagering. It would be a part (as operator, for example) of casino's. It would be a part of virtually everything when it came to gambling. Cuomo would not be fighting it, that's for sure.
In about 1930, a government (for example, New York's) came to racing and asked for 5% to be added to takeout. Racing said yes, because they could add another 2.5% for themselves. That began the process of bleeding the sport dry. That strategy never changed, and it's like that to this day.
Doing that, racing lost power; they were not partners, they were "a split". Racing lost any edge it may have had to partner in a new gambling enterprise. It was not able to lead slots or casino deals as operator in chief, it was relegated to asking for a form of rent from slot machines, where that rent could be extinguished at anytime.
In North America, entities - from 100 years or more ago to today - were focused on splitting it up the pie. In contrast, Hong Kong worries to this day (and always has) about growing a pie and splitting it up later. As partners.
To see just how ingrained that system is in North America, look no further than 1996. In Ontario, the Harris government had a revitalization plan for horse racing. In addition to allowing slots at racetracks, they immediately stopped taxing takeout by 7% as a growth mechanism for the sport. Did racing immediately slash takeouts to 6% on the win end and 15% on the exotics end, like any business would? No, they left rakes the same, and kept the 7% for themselves to split up to line their pockets.
Margaret Thatcher's line, “The problem with socialism is that you eventually run out of other people's money.” is pretty sharp when it comes to horse racing in North America, in my opinion. The problem with horse racing is that by constantly taking cash off the top it too runs out of money. When there is little money left to take, governments leave you out in the cold. When what's left is peanuts you are peanuts,and you go to the back of the bus. When the government in Ontario killed the slots deal two years ago, it was done because racing was meaningless to them. There was no money left.
ITP wonders what would have happened if horse racing had leadership and foresight to say no to the cronyist, backscratching deals they made many years ago, with those after slices off the top. Sid believes that comparing Hong Kong to here is pure folly and wishing otherwise is silly - it will never change because it can't change.
Both of them, I think, are completely right and it will be a strong reason why horse racing handles will be below $9 billion per year within 24 months.
In Hong Kong, racing and governments have a symbiotic, linked relationship. When racing does well, they do well, because revenues are taxed at the back end. This is likely why, when they had to fight the Macau casino's in 2006 and were losing customers, the Vice President of Wagering (they have one of those) reacted quickly with a rebate program. It was done to protect wagering, revenues etc, for the long term. There was no horsemen group, no state, nothing standing in their way. They just got it done.
When that happens here it is not like that at all. It's so bad, governments partially own casino's, so they don't much care what happens to whatever tax or wagering slice they get from racing. It's meaningless to them. It's a different world here.
Sid is right. It's been the opposite for like forever. And there is no comparison.
ITP's point is more nuanced and I think it's strong.
What if racing and government's had fostered a similar relationship long ago? In that case, NYRA would be a gambling mecca where like in Hong Kong, it would've led as a distribution point for other wagering. It would be a part (as operator, for example) of casino's. It would be a part of virtually everything when it came to gambling. Cuomo would not be fighting it, that's for sure.
In about 1930, a government (for example, New York's) came to racing and asked for 5% to be added to takeout. Racing said yes, because they could add another 2.5% for themselves. That began the process of bleeding the sport dry. That strategy never changed, and it's like that to this day.
Doing that, racing lost power; they were not partners, they were "a split". Racing lost any edge it may have had to partner in a new gambling enterprise. It was not able to lead slots or casino deals as operator in chief, it was relegated to asking for a form of rent from slot machines, where that rent could be extinguished at anytime.
In North America, entities - from 100 years or more ago to today - were focused on splitting it up the pie. In contrast, Hong Kong worries to this day (and always has) about growing a pie and splitting it up later. As partners.
To see just how ingrained that system is in North America, look no further than 1996. In Ontario, the Harris government had a revitalization plan for horse racing. In addition to allowing slots at racetracks, they immediately stopped taxing takeout by 7% as a growth mechanism for the sport. Did racing immediately slash takeouts to 6% on the win end and 15% on the exotics end, like any business would? No, they left rakes the same, and kept the 7% for themselves to split up to line their pockets.
Margaret Thatcher's line, “The problem with socialism is that you eventually run out of other people's money.” is pretty sharp when it comes to horse racing in North America, in my opinion. The problem with horse racing is that by constantly taking cash off the top it too runs out of money. When there is little money left to take, governments leave you out in the cold. When what's left is peanuts you are peanuts,and you go to the back of the bus. When the government in Ontario killed the slots deal two years ago, it was done because racing was meaningless to them. There was no money left.
ITP wonders what would have happened if horse racing had leadership and foresight to say no to the cronyist, backscratching deals they made many years ago, with those after slices off the top. Sid believes that comparing Hong Kong to here is pure folly and wishing otherwise is silly - it will never change because it can't change.
Both of them, I think, are completely right and it will be a strong reason why horse racing handles will be below $9 billion per year within 24 months.
First Time Gelding's a Microcosm of Racing's Big Issues
A horse gets gelded, a horse wins first time gelded. At times - probably a lot of the time - we have no idea the true timing of such. That's been going on forever.
In Hong Kong (oh Pocket, here you go again with the Honk Kong thing), a horse gets gelded and wins first time gelded. We know exactly the timing of such, because vet work is documented, and a vet and trainer who didn't report it would be on the next plane to Ulan Bator.
Hong Kong has a tight system that can enforce proper reporting, and procedure, so their betting customers can feel 100% confident in the data. North American racing does not have that.
What if the industry here really wanted to ensure that when a horse is gelded, the date and time is accurate, and the reporting is accurate through the system? Well, it would be pretty much impossible the way a horse is structured wouldn't it?
For something accurate and real to be implemented here, you'd need big penalties for not reporting this properly. Track vets would have to be sanctioned for not reporting it. Trainers would have to be sanctioned for not reporting it. You'd need to build a set of protocols so that when a tattoo number is checked (just like is done at every harness track by the gal or guy with a clipboard), a horse is checked to ensure a colt is a colt and a gelding is a gelding. This data would need to be kept in a database.
Sounds easy enough, if it was one jurisdiction. Just pass a new fine, disseminate it to the masses, let people know, and build the protocol. Then ensure your data provider is on board. Done.
Unfortunately, this process would have to be uniform. At Assiniboia Downs in Winnipeg, Manitoba, to the Ils S'ont Partie tracks where the Duck Dynasty dudes reside, to New York, to Florida, to California, where seemingly the simplest policy changes go to die through infighting.
Horse racing was never built for uniform change; whether that be for legislation regarding uniform whip rules, withdraw times, lasix, bute, drug levels, or a hundred other things. That's why something you and I might find very simple - whether a horse doesn't have testicles today, where he had them yesterday - seems to get mired into a bizarre reporting and fiefdom Chinese finger puzzle.
It's not that this industry does not want it, and it certainly does not mean trainers are trying to pull one over on us. It's just seemingly impossible.
I was recently looking at a horse I used to own. He's listed as a colt, even though he was gelded three years ago. I doubt this is going to change any time soon.
In Hong Kong (oh Pocket, here you go again with the Honk Kong thing), a horse gets gelded and wins first time gelded. We know exactly the timing of such, because vet work is documented, and a vet and trainer who didn't report it would be on the next plane to Ulan Bator.
Hong Kong has a tight system that can enforce proper reporting, and procedure, so their betting customers can feel 100% confident in the data. North American racing does not have that.
What if the industry here really wanted to ensure that when a horse is gelded, the date and time is accurate, and the reporting is accurate through the system? Well, it would be pretty much impossible the way a horse is structured wouldn't it?
For something accurate and real to be implemented here, you'd need big penalties for not reporting this properly. Track vets would have to be sanctioned for not reporting it. Trainers would have to be sanctioned for not reporting it. You'd need to build a set of protocols so that when a tattoo number is checked (just like is done at every harness track by the gal or guy with a clipboard), a horse is checked to ensure a colt is a colt and a gelding is a gelding. This data would need to be kept in a database.
Sounds easy enough, if it was one jurisdiction. Just pass a new fine, disseminate it to the masses, let people know, and build the protocol. Then ensure your data provider is on board. Done.
Unfortunately, this process would have to be uniform. At Assiniboia Downs in Winnipeg, Manitoba, to the Ils S'ont Partie tracks where the Duck Dynasty dudes reside, to New York, to Florida, to California, where seemingly the simplest policy changes go to die through infighting.
Horse racing was never built for uniform change; whether that be for legislation regarding uniform whip rules, withdraw times, lasix, bute, drug levels, or a hundred other things. That's why something you and I might find very simple - whether a horse doesn't have testicles today, where he had them yesterday - seems to get mired into a bizarre reporting and fiefdom Chinese finger puzzle.
It's not that this industry does not want it, and it certainly does not mean trainers are trying to pull one over on us. It's just seemingly impossible.
I was recently looking at a horse I used to own. He's listed as a colt, even though he was gelded three years ago. I doubt this is going to change any time soon.
Thursday, December 18, 2014
Horse of Year Voting Hijacked By Team America World Police?
When Jenn Biongorno, accompanied by the lovely, tiny, Justin Horowitz, announced the winner, most didn't quite know what to think.
You see, harness racing is a sport with trotters and pacers. One move their legs slightly different than the other. That's really all you need to know about that. But there's only two. Trotter of the Year was announced, and it was a three year old filly named Shake It Cerry. A case could be made she deserves it, because although she did not win the Hambo Oaks, she was pretty good. Not long after, Sweet Lou was announced pacer of the year. Lou had quite the year, and he too deserved it.
All that was left was the announcement for Horse of the Year. Was it going to be Sweet Lou - the pacer of the year - or was it going to be Shake it Cerry - the trotter of the year.
Drum roll...........
The winner is: Another horse!
Joe over at the View blog can explain how this could happen, so I will leave it to him to add the details.
In effect, the voters who voted for Horse of the Year could choose either their choice for pacer of the year, or trotter of the year, for Horse of the Year. As it shook out, some people who chose Sweet Lou for POY, moved to Shake it Cerry for HOY. Most who chose JK She'salady for pacer of the year stuck with her. People who may have chosen California Chrome were in the wrong sport.
Anyhow, here is the ballot:
Got all that?
Anyway, I was disappointed because harness racing does not vote two year old fillies horse of the year, like ever. It was a fall back, or default position I know, but if JK She'salady was boxed in, or had a cough or got run into by someone and lost a race, she would not be considered for Horse of the Year. If that happened to a horse like Lou, he still would have been Horse of the Year. The vagaries of being undefeated should not make a filly the first ever horse of the year in harness racing. As someone pointed out on twitter:
.@Pullthepocket Also the fact that she's not even the best 2YO filly
— Inside The Pylons (@InsideThePylons) December 18, 2014
He's right. Mission Brief was.In a way, perhaps it makes perfect sense that North Korea hacked this vote. Maybe it makes perfect sense Bieber is popular; no, it really doesn't. But whatever the case, this was the strangest, most bizarre Dan Patch result in this sports' history.
Rake, Blah Blah Blah, Rake
Those business buzz-words like synergy or accretive make me think of classes way back when, when profs told us how business works. But, in reality, they are how business works.
I was reading this today regarding some of the deals being made by major sports leagues and DFS sites, like FanDuel:
I was reading this today regarding some of the deals being made by major sports leagues and DFS sites, like FanDuel:
"The appeal of daily fantasy sports to sports leagues isn't hard to understand. Nigel
Eccles, CEO of FanDuel, told ESPN.com that his company's research
showed that fans' weekly TV sports viewing jumped from 17.5 hours to 24
hours when they start playing DFS. Consider what
that means for TV ratings, and TV ratings translate to more money for
rights fees, cable subscription fees and advertising rates."
So that's like seven hours more a week. Many might say pfft, so what, no big deal.
Consider how much more a TV network can earn with an extra seven hours a week.
Consider that the average Netflix watcher watches 10.5 hours a week of Netflix and it's worth $20 billion.
It is a big deal. It's a very big deal. By giving people an avenue to consume your product intensively, like daily fantasy sports is, it becomes "accretive" and "synergies" take hold.
Racing on the other hand, spends a whack of money and time to get you, the user, to watch it.
There's giveaways, red carpets, people singing songs we don't know, a dude who was married to Heather Locklear playing the star spangled banner, America's Best Racing, Derby parties, Ils sont parties, Kegasus, Bo Derek, Richard Grunder, Go Baby Go, handicapping contests, the DRF, Mike Battaglia, Ray Paulick, urinal runs, TwinspiresTV, Ed DeRosa, Sid Fernando twitter feeds, the dude who looks like Ed Helms on TVG, @itsthejho, jockey fights, ABR buses, Horse Racing Now apps, Zenyatta, Churchill Downs stock options, Mike Maloney, Derby Wars, Man o' War, Seabiscuit movies, Secretariat movies, Richard Dreyfuss movies, and a 1980's rock band playing at Hollywood Park. OK, scratch that last one.
In no way belittling that list (some are good ideas and my best peeps on the twitter and elsewhere), does that translate to 7 more hours a week, each week?
Horse racing is a gambling game, and what makes people play more horse racing, and invest in PP's, touts, open Twinspires accounts, search for rebates, read work reports, watch video, watch on TV, go to the track, and spend more than one hour a week to handicap one Grade I race, is winning money betting. When the game is priced in such a fashion where that is almost impossible, it becomes an albatross around the sports' neck.
Better pricing will not solve all of horse racing's problems, but it truly is the biggest issue stopping people from consuming more of the horse racing product. When 98% of your customers lose every year, and have for generations, you can't dress it up and sell it to them. People know when they're up against it, and when they have a chance, and by their patronage, they've been telling the sport that for decades.
Tuesday, December 16, 2014
Commissioner Gural
Jeff Gural made news again today. Over the past couple of years, the practice of "kicking" or whatever apologists want to call it, has been in the headlines. Many of the alphabets, on air talent, or insiders were either frozen regarding what to do about it, defending it, or were just hoping it would go away. After driver David Miller's interview with harnesslink.com, where he brazenly stuck his finger in the face of the rules by saying, "“I realize that people are really down on this idea of kicking” but it was worth every bit of the $750 fine", once again, Gural didn't run and hide from it.
It was announced today that Gural's three tracks have created a zero tolerance policy on kicking.
- “We have a responsibility to our horses and to the public that we are putting forth the most integrity-driven and safest product possible,” said Meadowlands Chairman Jeff Gural. “Regardless of the debate that has been ongoing related to this issue, as far as we are concerned, perception is reality and it looks terrible, therefore we will not tolerate it. I hope our having to take action on this issue will not be required to demonstrate how serious we are about this subject.”
That did not happen by accident. Several years ago the sport lamented the loss of the sports' stars at three, but threw up their hands because there was nothing they could do about it. Gural, through his stakes, along with the Hambletonian Society and Woodbine, backed the venture that three year olds can be retired yes, but their foals would not be eligible for a handful of big money stakes. The world changed.
The bottom line is clear: Jeff Gural is as close to a commissioner that harness racing has ever seen. Those who are against him - and there are many - can either fall into line behind him, or step up to plate and lead themselves. Thus far, those choosing the latter are few and far between.
ABR Lives In an Industry with No Clue Who It Is
A story on the Paulick Report about "America's Best Racing" popped up yesterday. The article, generally, focused on the ABR insiders and they tooted their horn a little (a couple of times with incredulous numbers). In the comments section (and in some places on the twitter) the project tended to get skewered.
I understand why people get up in arms about the whole ABR project (some are very good friends whom I respect). I get it. Where I diverge from that thought is based more on organizational behavior, not the nuts and bolts (i.e. the criticism of the job they are doing and tactics used).
Racing is odd, fractured, does not really have any idea who the customer is. It taxes based on slices not profits for revenue. Its best friend is a lobby group who wants slots. Racing is a gambling game so it has stalwarts like DRF.com in print and online. No, hold it, it's not a gambling game, so it has breeding heavy industry news at the Bloodhorse. But it is not only a breeding game, and it's much more than that, so it has the Paulick Report and Horse Racing Nation and a half dozen other outlets.
Racing is "The Best is Yet to Come" sung by a lady most of us don't know. It has Gene Simmons on a red carpet, while Gene from Brooklyn wonders what all the fuss is about. It has a faction of people going crazy on social media because a jockey is pregnant, while others are just wondering who is going to replace her tomorrow on the seven in the fourth. It's Kegasus and the Kentucky Derby infield, intertwined with people who would rather eat bees than be anywhere near Kegasus and the Kentucky Derby infield .
Why is racing all those things? Because racing's revenue stream and mandate is so polluted and fractured, there is no way any one website, or organization can do anything in any macro type way. Its an industry that has no clue what it is, so it throws everything against a wall, hoping it sticks.
One of my favorite organizations is Major League Soccer. They're new and they work very hard in a tough space. They've done some great work on social media and have an excellent flagship website. Through that site you can buy tickets, watch games through their platform, buy gear, play fantasy games and myriad other things. Customer enters funnel, customer can go through many funnels to get what they want. You've seen similar at other industry or sport portals, like MLB.com or NFL.com
For a 'racing.com', such a site cannot exist.
Sell tickets to the Derby? CDI owns that.
Show racing? Stronach says no (you can't even embed their videos on a blog), CDI says no (they won't even let some sites use their live odds feed).
Give free past performances? Ummm, no.
Fantasy games? If they tried to be Derby Wars there would likely be some sort of revolt by every horsemen group known to man.
API's, free stats, database searches? Not on your life.
Bet? Heavens no. There are like 50 ADW's, some don't have all the content, and aren't even available in your state. That's hands off.
So, go build a website about racing that can't do or say much about racing. Oh joy.
What's left?
Well, pump grade I racing; Pump the experience. Pump the jocks. Pump the Queen's Plate. Pump Wise Dan. Pump hats and food trucks. Pump the on-track, live racing venue. Do so, and hope these people look into racing again, watch it on TV, or maybe make a bet a few times a year.
America's Best Racing is not the problem. Their problem is trying to exist and thrive in a eco-system that is fraught with problems. Looking at the slice they address, in the corner they're put into, they, in my opinion, aren't doing a poor job. They're probably doing about what many of us should expect.
I understand why people get up in arms about the whole ABR project (some are very good friends whom I respect). I get it. Where I diverge from that thought is based more on organizational behavior, not the nuts and bolts (i.e. the criticism of the job they are doing and tactics used).
Racing is odd, fractured, does not really have any idea who the customer is. It taxes based on slices not profits for revenue. Its best friend is a lobby group who wants slots. Racing is a gambling game so it has stalwarts like DRF.com in print and online. No, hold it, it's not a gambling game, so it has breeding heavy industry news at the Bloodhorse. But it is not only a breeding game, and it's much more than that, so it has the Paulick Report and Horse Racing Nation and a half dozen other outlets.
Racing is "The Best is Yet to Come" sung by a lady most of us don't know. It has Gene Simmons on a red carpet, while Gene from Brooklyn wonders what all the fuss is about. It has a faction of people going crazy on social media because a jockey is pregnant, while others are just wondering who is going to replace her tomorrow on the seven in the fourth. It's Kegasus and the Kentucky Derby infield, intertwined with people who would rather eat bees than be anywhere near Kegasus and the Kentucky Derby infield .
Why is racing all those things? Because racing's revenue stream and mandate is so polluted and fractured, there is no way any one website, or organization can do anything in any macro type way. Its an industry that has no clue what it is, so it throws everything against a wall, hoping it sticks.
One of my favorite organizations is Major League Soccer. They're new and they work very hard in a tough space. They've done some great work on social media and have an excellent flagship website. Through that site you can buy tickets, watch games through their platform, buy gear, play fantasy games and myriad other things. Customer enters funnel, customer can go through many funnels to get what they want. You've seen similar at other industry or sport portals, like MLB.com or NFL.com
For a 'racing.com', such a site cannot exist.
Sell tickets to the Derby? CDI owns that.
Show racing? Stronach says no (you can't even embed their videos on a blog), CDI says no (they won't even let some sites use their live odds feed).
Give free past performances? Ummm, no.
Fantasy games? If they tried to be Derby Wars there would likely be some sort of revolt by every horsemen group known to man.
API's, free stats, database searches? Not on your life.
Bet? Heavens no. There are like 50 ADW's, some don't have all the content, and aren't even available in your state. That's hands off.
So, go build a website about racing that can't do or say much about racing. Oh joy.
What's left?
Well, pump grade I racing; Pump the experience. Pump the jocks. Pump the Queen's Plate. Pump Wise Dan. Pump hats and food trucks. Pump the on-track, live racing venue. Do so, and hope these people look into racing again, watch it on TV, or maybe make a bet a few times a year.
America's Best Racing is not the problem. Their problem is trying to exist and thrive in a eco-system that is fraught with problems. Looking at the slice they address, in the corner they're put into, they, in my opinion, aren't doing a poor job. They're probably doing about what many of us should expect.
Friday, December 12, 2014
Notes for a Friday
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Anyhow....
Yesterday we spoke quite a bit about fantasy sports and racing's rather perplexing belief that somehow it can work for this sport. Scanning the twitter I see some asking if it can work in any way at all. I guess it could, but one has to realize that horse racing already has a fantasy league at the pari-mutuel windows. We bet a horse to win a race in the win pool, bet them to win in a set of races in a pick 4 pool, and bet them to win and run in a certain order. Daily fantasy games provide the casual fan a chance to wager on something that was previously not bettable. If someone wants to wager on racing, head to the track.
Mike Dorr had a look at what Fantasy Horse Racing might look like if done right in Horseplayer Monthly.
Kudos to Bill Finley for skewering Miller's (and the sport) reaction to the kicking fine he received for his actions on McWicked. Harness racing truly feels beyond any hope.
Handle at Turfway continues to be very good. Watch the bias there if you choose to play. It can sometimes result in some nice bombs.
Ryan Goldberg's lovely long form article on Japan racing is well worth a read. We have to be careful when we compare handles from Japan and here, however, because it's a trap. Japan has a regulated betting market and its a culture that bets on speed boat racing.
Lots of chatter about tying purses to field size. Something that should've been done long ago, I feel. California horsemen will explode if that happens. The culture there likes to race every seven weeks in five horse fields. They feel that's the weighted average that horse racing needs. Go figure.
Lenny had a few suggestions about how to improve racing in 2015. He predictably got skewered in the comments from insiders.
I'm off to study the program for awhile. Whatever you choose to do this weekend, please have a good one.
Thursday, December 11, 2014
The Daily Fantasy and Racing Juggernaut
There was a panel this morning at the RTIP about Daily Fantasy Sports, its growth and possible benefits to racing (through crossover). You read that right, some are looking at an industry that no one heard of in 2010 (Fanduel had fewer than 1,000 players in 2010, according to the WSJ), that has had exponential growth rates, to somehow help racing.
I am sure Matt Hegarty will have a story on the panel later, so check his feed for that.
The DFS industry is in no way helping racing, and I doubt it ever will.Why? Because it's taking people who are betting racing, converting them to their platform, not the other way around.
This year there will be 800,000 to 1,000,000 DFS players, up from 1,000 in 2010. Like Ebay in 1995, which experienced 70% monthly growth rates, these firms attract investment money. For Fanduel, these investments are from organizations like NBC/Comcast and other heavy-hitters. Because of that, an eco-system is produced, which encourages growth.
Like any startup, they have a high "burn rate", which simply is a new way of saying negative cash flow. Negative cash flow does not matter to these companies, just like they don't or didn't matter to Ebay, Facebook, Amazon or dozens of other companies you and I use daily. The negative cash flow occurs because they use the bulk of their revenues to attract new users, through advertising, lower rake, bonuses etc. Although advertising figures are not available (these companies are private and do not have, nor do they want to reveal what the ad budgets are), they are more than 100% of revenues. Conversely, racing spends (according to a study in Canada that I am too lazy to link), about 2% of revenues on advertising; bingo spends upwards of 20% for comparison.
These firms need critical mass and spend as much as they do, because each eyeball, or potential customer provides it with "Life Time Customer Value". Lifetime value for the restaurant down the street is meaningful, yes, but lifetime value for a gambling site (or Ebay, or poker site, or Etrade) is everything. These people repeat visit, and spend more than one visit that can yield revenue. Not to mention, it's no fun to play a DFS against three people (just like it's no fun to bet into a small racing pool).
When these companies reach some sort of critical mass the growth rate slows (this will likely peak, drop off, then slow) and they monetize more, becoming a regular business.
So let's recap: Racing, with high prices, that does no advertising, that offers an inferior betting product, that has little synergy, has no burn rate and has been around with ostensibly the same pari-mutuel system since 1907, is somehow supposed to go get these DFS customers?
Are you kidding?
There are (according to the Fantasy Sports Trade Assn), 43 million Fantasy sports players in the US and Canada. According to the DFS sites (in the WSJ story), over 90% of them have never played a cash game. Be ready for more and more advertising, more and more chatter, more and more means to get to you - the guy or gal who plays an office pool or has a team that runs the season.
This is only the beginning. They're coming for you and they're coming for horseplayers.
Racing cannot gain, nor will they in the immediate future do nothing but lose some of their market to these sites. Those are the cold hard facts.
The DFS industry is in no way helping racing, and I doubt it ever will.Why? Because it's taking people who are betting racing, converting them to their platform, not the other way around.
This year there will be 800,000 to 1,000,000 DFS players, up from 1,000 in 2010. Like Ebay in 1995, which experienced 70% monthly growth rates, these firms attract investment money. For Fanduel, these investments are from organizations like NBC/Comcast and other heavy-hitters. Because of that, an eco-system is produced, which encourages growth.
Like any startup, they have a high "burn rate", which simply is a new way of saying negative cash flow. Negative cash flow does not matter to these companies, just like they don't or didn't matter to Ebay, Facebook, Amazon or dozens of other companies you and I use daily. The negative cash flow occurs because they use the bulk of their revenues to attract new users, through advertising, lower rake, bonuses etc. Although advertising figures are not available (these companies are private and do not have, nor do they want to reveal what the ad budgets are), they are more than 100% of revenues. Conversely, racing spends (according to a study in Canada that I am too lazy to link), about 2% of revenues on advertising; bingo spends upwards of 20% for comparison.
These firms need critical mass and spend as much as they do, because each eyeball, or potential customer provides it with "Life Time Customer Value". Lifetime value for the restaurant down the street is meaningful, yes, but lifetime value for a gambling site (or Ebay, or poker site, or Etrade) is everything. These people repeat visit, and spend more than one visit that can yield revenue. Not to mention, it's no fun to play a DFS against three people (just like it's no fun to bet into a small racing pool).
When these companies reach some sort of critical mass the growth rate slows (this will likely peak, drop off, then slow) and they monetize more, becoming a regular business.
So let's recap: Racing, with high prices, that does no advertising, that offers an inferior betting product, that has little synergy, has no burn rate and has been around with ostensibly the same pari-mutuel system since 1907, is somehow supposed to go get these DFS customers?
Are you kidding?
There are (according to the Fantasy Sports Trade Assn), 43 million Fantasy sports players in the US and Canada. According to the DFS sites (in the WSJ story), over 90% of them have never played a cash game. Be ready for more and more advertising, more and more chatter, more and more means to get to you - the guy or gal who plays an office pool or has a team that runs the season.
This is only the beginning. They're coming for you and they're coming for horseplayers.
Racing cannot gain, nor will they in the immediate future do nothing but lose some of their market to these sites. Those are the cold hard facts.
Wednesday, December 10, 2014
Seeing the Writing on the Wall & Changing the Culture
With the Arizona Symposium going on, it struck me how much they talk about change, almost each year. These ideas are generally a lot about inside baseball - which is not a bad thing - but they rarely look at the big picture.
We talk a lot about changing things up here on the blog when it comes to horse racing; things like higher field size, better pricing, exchanges, etc have been talked about since 2008. But, many of the changes we advocate, on the surface, seem much ado about nothing. I fully agree that whipping changes, or stopping kicking does not mean much in terms of handle. Changing medication rules to those that are fair and effective is not something that will make people come to the racetrack, or buy horses starting tomorrow.
These changes (and others) are cultural in nature, and in the long term, when the culture changes from "it's just a horse" to "it's a horse" things can begin to set the table for improvement. Statements changing to "even people who don't watch us control the purse strings, so how the sport is presented is important" from "we got slots" is not something small. Getting the power brokers in the game to realize that the sport is not a protected monopoly and that increasing a takeout rate by 2% means less money, not more, seems an impossible task. That's ingrained in this sports' culture.
At the same time, if you go on twitter you will hear bellyaching about the game of NFL Football. You can no longer hit quarterbacks like you could ten years ago. You can't head hunt a guy coming over the middle without looking at you. You can't lead with a helmet. The players and some fans are up in arms about it. "That's not football", they say.
In the past three years, the long term health of the athletes with regards to career ending injury and concussions has been forefront. This was not done to help the older generation (that's over), and it was not done to correct the wrongs of the past or anything particularly in the here and now. Really, why would they change? The NFL is at the zenith of its popularity. Why change anything in the rules? Just provide some PR and off you go.
The NFL sees the writing on the wall. They're not doing it to speak to this generation of fans, they're doing it to change the culture for the next generation; to change the way football is taught to 10 year olds; to keep the sales funnel for professional football players, leagues, fans and people who spend money, vibrant.
Today Bloomberg released a survey: "Half of American's Don't Want Their Sons to Play Football"
The NFL knows this. They see in a crystal ball statehouses outlawing a "dangerous" game. They see fewer sales, fewer players; they see a possible world that you and I can not even fathom: I day when Sunday's are spent doing something different.
Flipping over to the sport of racing, this is tantamount to changes being made, not today, but in 1970.
It will be very interesting to see if the NFL succeeds with the next generation, but even if they don't, they didn't go down without a fight. For horse racing it's clearly another matter. Reading the headlines, and looking at the chatter at the RTIP in Arizona this week, the sport has not reached any sort of tipping point when it comes to the big cultural picture, it's still dealing with band aids.
We talk a lot about changing things up here on the blog when it comes to horse racing; things like higher field size, better pricing, exchanges, etc have been talked about since 2008. But, many of the changes we advocate, on the surface, seem much ado about nothing. I fully agree that whipping changes, or stopping kicking does not mean much in terms of handle. Changing medication rules to those that are fair and effective is not something that will make people come to the racetrack, or buy horses starting tomorrow.
These changes (and others) are cultural in nature, and in the long term, when the culture changes from "it's just a horse" to "it's a horse" things can begin to set the table for improvement. Statements changing to "even people who don't watch us control the purse strings, so how the sport is presented is important" from "we got slots" is not something small. Getting the power brokers in the game to realize that the sport is not a protected monopoly and that increasing a takeout rate by 2% means less money, not more, seems an impossible task. That's ingrained in this sports' culture.
At the same time, if you go on twitter you will hear bellyaching about the game of NFL Football. You can no longer hit quarterbacks like you could ten years ago. You can't head hunt a guy coming over the middle without looking at you. You can't lead with a helmet. The players and some fans are up in arms about it. "That's not football", they say.
In the past three years, the long term health of the athletes with regards to career ending injury and concussions has been forefront. This was not done to help the older generation (that's over), and it was not done to correct the wrongs of the past or anything particularly in the here and now. Really, why would they change? The NFL is at the zenith of its popularity. Why change anything in the rules? Just provide some PR and off you go.
The NFL sees the writing on the wall. They're not doing it to speak to this generation of fans, they're doing it to change the culture for the next generation; to change the way football is taught to 10 year olds; to keep the sales funnel for professional football players, leagues, fans and people who spend money, vibrant.
Today Bloomberg released a survey: "Half of American's Don't Want Their Sons to Play Football"
- The finding suggest that, over the course of time, football could go the way of boxing, a marquee American sport in the early part of the 20th century that declined amid a similar set of dynamics....
- The poll also showed a generational divide, with 56 percent of those under age 35 saying they'd want their son to play.
The NFL knows this. They see in a crystal ball statehouses outlawing a "dangerous" game. They see fewer sales, fewer players; they see a possible world that you and I can not even fathom: I day when Sunday's are spent doing something different.
Flipping over to the sport of racing, this is tantamount to changes being made, not today, but in 1970.
- Lotteries are becoming prevalent, how do we hold onto market share?
- Vegas is becoming more and more popular. They're dropping slots takeout and people are betting those silly machines, what can we do to compete while we are charging 15% takeouts?
- The world is changing, the animal is becoming something that's held in higher regard. What can we do to ensure the public that we take care of the equine athletes? These people will be holding more and more power over the purse strings for our industry.
- People are investing more in the stock market and find racing too corrupt and difficult as an investment. What can we do to make it more attractive?
It will be very interesting to see if the NFL succeeds with the next generation, but even if they don't, they didn't go down without a fight. For horse racing it's clearly another matter. Reading the headlines, and looking at the chatter at the RTIP in Arizona this week, the sport has not reached any sort of tipping point when it comes to the big cultural picture, it's still dealing with band aids.
Tuesday, December 9, 2014
Das Boots, Chapter 52
Doug had a look at driver David Miller's reaction to being fined $750 for booting McWicked in a stakes race on Sunday.
“I realize that people are really down on this idea of “kicking” but it was worth every bit of the $750 fine"
That's a fancy way of saying, screw the rules for a gambling sport, they're not for me.
We've gone through this before, and it's frankly pretty silly to be even talking about it any longer. The sport is paralyzed to do even the simplest of things like placing a horse when a driver cheats on it by kicking. It's had a leadership chasm forever.
But this little thing - a driver outside cheating, beats a driver inside who doesn't cheat sometimes taking betting money and another owner's money down with it - cuts right to the heart of the game. It makes people think this:
Enjoy your Tuesday everyone.
“I realize that people are really down on this idea of “kicking” but it was worth every bit of the $750 fine"
That's a fancy way of saying, screw the rules for a gambling sport, they're not for me.
We've gone through this before, and it's frankly pretty silly to be even talking about it any longer. The sport is paralyzed to do even the simplest of things like placing a horse when a driver cheats on it by kicking. It's had a leadership chasm forever.
But this little thing - a driver outside cheating, beats a driver inside who doesn't cheat sometimes taking betting money and another owner's money down with it - cuts right to the heart of the game. It makes people think this:
Sometimes I wonder why a lot of people don't take harness racing seriously. Then people say this and I'm reminded why pic.twitter.com/euqQKx6swl
— Doug McPherson (@LDMcPherson) December 9, 2014
I know the sport's power structure is harvesting purse money until the slots run out; that's the sports' long term strategy and that's obvious. But it has to bother anyone who still cares about the game that people like David Miller can thumb his nose at it in such a cavalier fashion.Enjoy your Tuesday everyone.
Monday, December 8, 2014
Who Cares? It's Just a Betting Fee
I've been reading the twitter and a lot of chatter about Monarch signal fees, takeout, NYRA ADW taxes and the like are filling it. Some seem to think none of this is really a big deal because bettors will play no matter what.
Back in 2009, New Hampshire added a tax on winning wagers at horse and dog simulcast centers. It was really "no big deal", according to many - it was not even as bad as a takeout hike, it was only on winning wagers of over $600.
It was a big deal:
"In the 2010 calendar year alone, the amount of money bet on simulcast Thoroughbred races at Rockingham Park, The Lodge, and Yankee Greyhound Park dropped by a combined $19,438,111. The overall handle at the three tracks, which no longer conduct live racing of any breed but also simulcast harness and greyhound racing, was off a total of $24,064,567"
"While Paul Kelley, the executive director of the state’s charitable gaming and racing commission, said it is difficult to ascribe a hard number to how much business was lost, handle figures that are public record prove the damage to be in the tens of millions of dollars."
In 2011, common sense and some hard work prevailed. They repealed the fee and hoped to get the lost handle back (that has not happened yet, because when players leave, they tend to leave for good at a fair to high propensity).
New Hampshire is a state without live racing, and one with barely more than one million people.Imagine what these type policies North American wide do.
When you make it harder to consume a betting product - whether it be raising a signal fee, adding an ADW tax, banning internet wagering or shutting off signals - players leave, and handle is lost. Some of it never to return.
Back in 2009, New Hampshire added a tax on winning wagers at horse and dog simulcast centers. It was really "no big deal", according to many - it was not even as bad as a takeout hike, it was only on winning wagers of over $600.
It was a big deal:
"In the 2010 calendar year alone, the amount of money bet on simulcast Thoroughbred races at Rockingham Park, The Lodge, and Yankee Greyhound Park dropped by a combined $19,438,111. The overall handle at the three tracks, which no longer conduct live racing of any breed but also simulcast harness and greyhound racing, was off a total of $24,064,567"
"While Paul Kelley, the executive director of the state’s charitable gaming and racing commission, said it is difficult to ascribe a hard number to how much business was lost, handle figures that are public record prove the damage to be in the tens of millions of dollars."
In 2011, common sense and some hard work prevailed. They repealed the fee and hoped to get the lost handle back (that has not happened yet, because when players leave, they tend to leave for good at a fair to high propensity).
New Hampshire is a state without live racing, and one with barely more than one million people.Imagine what these type policies North American wide do.
When you make it harder to consume a betting product - whether it be raising a signal fee, adding an ADW tax, banning internet wagering or shutting off signals - players leave, and handle is lost. Some of it never to return.
Chickens
Selling chickens is a really complex thing.
Long ago, in Florida, there was a distributor who sold the highest quality chickens. They wanted more people to consume their high quality chickens, so they contacted a group of chicken farmers in New York. They wanted them to sell their chickens at their Friday, Saturday and Sunday chicken fairs, which were all the rage because they were invested in for years. It was a ready made market of chicken sellers, matched with chicken buyers and they wanted in.
The local chicken sellers were wary, because their chickens were not the highest quality. With new high quality chickens entering the market, their local chicken sales would go down. Not to worry, though, because these high quality chickens were selling for $10 and the Florida people only wanted $3. The $7 in profit would be added to the overall chicken revenue pie. Sure the Northern chicken farmers would not sell as many chickens with this new entrant in the market, but they'd still have money. This money was used to market chickens, for chicken seed, trucks, trailers and other means of production.
They had to contact the state, and they said, sure you can import these chickens, but you must give us $3 of the $7 you make. then we'll let it happen. The chicken farmers agreed, and away things went.
Things went along well. The local chicken farmers were selling fewer of their chickens, but with more of the others being bought, gross chicken sales were humming along. This was important, because chickens were fighting for market share from the big hamburger guys. They were going all out - promoting big greasy burgers with flashy commercials and low prices. They were coming after the chickens.
The Florida chicken makers were happy too, because the world was being promoted with their chickens. They were selling more chickens than they could have in the New York market.
One day, someone in Florida had a new idea, though. He thought "our chickens are more popular than their chickens, so we should charge $7 a chicken and let them keep $3 a chicken." The chicken farmers in the Sunshine State all agreed. Who doesn't want more money. Let's go get it.
Meanwhile up north, Chicken farmers began to realize this was why they were wary in the first place. If they don't pay they stifle customer choice and more people will go to the hamburger fairs, but if they do pay, they won't have as much money to support the local chicken supply chain and sales will go down too. Whatever they choose, layoffs will happen, chicken seed men will go out of business, fewer trucks and trailers will be bought. The state will still want their $3 a chicken, the costs for the local chicken fairs each weekend were high. It won't be worth it to sell chickens any longer.
Also, they've been promoting and servicing chicken customers with choice and good pricing. Because they were paying $3 a chicken and had good margin, they could have two for one chicken sales, and other promotions to encourage chicken eating. Now those would have to go away. People would run to the hamburger farmers. This was big stuff.
What should the chicken world do? Support Florida where fewer chickens are sold at higher prices and higher margins on paper allowing for more revenue? Or compete with the hamburger market by taking less off each chicken, and having a multi-facted distribution network, earning more and more chicken loving customers at a lower margin?
That's the question horse racing continues to face with the signal wars and pricing in general. It will probably not end up with a good resolution, for local horsemen, or customers.
Long ago, in Florida, there was a distributor who sold the highest quality chickens. They wanted more people to consume their high quality chickens, so they contacted a group of chicken farmers in New York. They wanted them to sell their chickens at their Friday, Saturday and Sunday chicken fairs, which were all the rage because they were invested in for years. It was a ready made market of chicken sellers, matched with chicken buyers and they wanted in.
The local chicken sellers were wary, because their chickens were not the highest quality. With new high quality chickens entering the market, their local chicken sales would go down. Not to worry, though, because these high quality chickens were selling for $10 and the Florida people only wanted $3. The $7 in profit would be added to the overall chicken revenue pie. Sure the Northern chicken farmers would not sell as many chickens with this new entrant in the market, but they'd still have money. This money was used to market chickens, for chicken seed, trucks, trailers and other means of production.
They had to contact the state, and they said, sure you can import these chickens, but you must give us $3 of the $7 you make. then we'll let it happen. The chicken farmers agreed, and away things went.
Things went along well. The local chicken farmers were selling fewer of their chickens, but with more of the others being bought, gross chicken sales were humming along. This was important, because chickens were fighting for market share from the big hamburger guys. They were going all out - promoting big greasy burgers with flashy commercials and low prices. They were coming after the chickens.
The Florida chicken makers were happy too, because the world was being promoted with their chickens. They were selling more chickens than they could have in the New York market.
One day, someone in Florida had a new idea, though. He thought "our chickens are more popular than their chickens, so we should charge $7 a chicken and let them keep $3 a chicken." The chicken farmers in the Sunshine State all agreed. Who doesn't want more money. Let's go get it.
Meanwhile up north, Chicken farmers began to realize this was why they were wary in the first place. If they don't pay they stifle customer choice and more people will go to the hamburger fairs, but if they do pay, they won't have as much money to support the local chicken supply chain and sales will go down too. Whatever they choose, layoffs will happen, chicken seed men will go out of business, fewer trucks and trailers will be bought. The state will still want their $3 a chicken, the costs for the local chicken fairs each weekend were high. It won't be worth it to sell chickens any longer.
Also, they've been promoting and servicing chicken customers with choice and good pricing. Because they were paying $3 a chicken and had good margin, they could have two for one chicken sales, and other promotions to encourage chicken eating. Now those would have to go away. People would run to the hamburger farmers. This was big stuff.
What should the chicken world do? Support Florida where fewer chickens are sold at higher prices and higher margins on paper allowing for more revenue? Or compete with the hamburger market by taking less off each chicken, and having a multi-facted distribution network, earning more and more chicken loving customers at a lower margin?
That's the question horse racing continues to face with the signal wars and pricing in general. It will probably not end up with a good resolution, for local horsemen, or customers.
Sunday, December 7, 2014
The Smaller Horsemen are the Next Target
Reading Charlie Hayward's commentary today, "Good News in American Racing This Fall", there was this comment Charlie highlighted:
"Now the content provider gets 3-5% depending on the track while the simulcast site gets 15-17%, the blended takeout being 20%. Why shouldn’t it be 10-10%. In fact if a site doesn’t provide live racing why not 15-5% to the content side. The fact is the larger tracks have been subsidizing the smaller tracks by this split of the simulcast money"
Many of these tracks - small thoroughbred and small harness tracks - depend on simulcast dollars for their purses. If their track is racing live at 20% rake, then offer a new signal from a popular track like Gulfstream, they lose live handle at 20%, so they need some sort of comparable split to realize revenue.
A likely response from local horsemen is to kill the signal all together. What that does is hurt customers.
There is only one pie. More money for Stronach's slice means less money for local horsemen at some tracks.
Yes, the business wants lasix removed and it does make some sense, but that won't effect the big guys as much as the little guys. Yes, despite resellers making the bulk of revenues in other businesses, racing wants to change it up. The big guys want more, but make no mistake, the little guy will pay. The horse racing business is nationwide with hundreds of racetracks, supporting thousands of feed men, farriers, tack shops, vets and everything else. There's more to horse racing than five or six big tracks with with $30 million statues, or chandeliers. When the pie gets shuffled to the conglomerates, there are losers on the other side.
"Now the content provider gets 3-5% depending on the track while the simulcast site gets 15-17%, the blended takeout being 20%. Why shouldn’t it be 10-10%. In fact if a site doesn’t provide live racing why not 15-5% to the content side. The fact is the larger tracks have been subsidizing the smaller tracks by this split of the simulcast money"
Many of these tracks - small thoroughbred and small harness tracks - depend on simulcast dollars for their purses. If their track is racing live at 20% rake, then offer a new signal from a popular track like Gulfstream, they lose live handle at 20%, so they need some sort of comparable split to realize revenue.
A likely response from local horsemen is to kill the signal all together. What that does is hurt customers.
There is only one pie. More money for Stronach's slice means less money for local horsemen at some tracks.
Yes, the business wants lasix removed and it does make some sense, but that won't effect the big guys as much as the little guys. Yes, despite resellers making the bulk of revenues in other businesses, racing wants to change it up. The big guys want more, but make no mistake, the little guy will pay. The horse racing business is nationwide with hundreds of racetracks, supporting thousands of feed men, farriers, tack shops, vets and everything else. There's more to horse racing than five or six big tracks with with $30 million statues, or chandeliers. When the pie gets shuffled to the conglomerates, there are losers on the other side.
Friday, December 5, 2014
The Topsy Turvy World of Betting & Betting Business
If you are a bit of a betting and business of betting geek, the past twelve months have been pretty interesting.
In racing, we've heard from every nook and cranny in the landscape what's been going wrong.
Early in the year, handle losses, at say Churchill Downs, were due to falling foal crops. Then we heard a lot about polytrack from the usual suspects; i.e. when they get rid of the plastic, the roads will be paved with handle-flowing lollipops. Then we heard a little about those dastardly college football playoffs causing a ruckus in the betting landscape.
First off, I'm a guy who had to ask on twitter where Murray State was (I know the 50 states, and I am sure Murray is not one of them), thought the hashtag #BBN was in reference to the Backstreet Boy Nation, and watched some of the last Tennessee game only because I really like that mascot dog they have. His name is "Smokey". Anyhoo, I am certain my handle has not dropped 60% this year because of that. So let's extinguish that one.
Oh those falling foal crops. Well, handle is up at some tracks, down at others. I'm pretty sure there are not more horses having horse sex in Franklin, Kentucky (Kentucky Downs was up), than there are in Louisville (Churchill was killed). There may be a horse sex Maginot line, but I haven't heard about it and I suspect if there is one, it does not bisect Kentucky. Help me out in the comments section if I missed it.
That dreaded Poly! The evil plastic. Oh goodness, we've been telling you people this for years: You might not like polytrack; that's fine, to each their own. But the handle numbers prove someone likes it. In fact, tracks this fall that did well were 1) Woodbine 2) Del Mar and last evening 3) Turfway Park, aided by large poly fields, was up over 41% year over year. Meanwhile, Keeneland, who turned their meet into Churchill Downs dirt-east after removing polytrack, was down mightily. Please stop.
Horse racing's flowchart is an odd duck.
Handle Down > Look for strange excuses > Do more of the same without figuring out what has gone wrong and hope no one in the turf press notices
It's clear that the quality of racing (no I don't mean "Grade I's" silly goose's, but bettable racing, that allows us a chance to beat the juice) has been a real issue.
It's clear the mantra of CDI/Troutnet/Stronach/Tracknet/Monarch, or whatever such moniker that's being used now to describe a high rake, competition-stifling consortium, has not helped, but hurt gross handles.
It's clear those goofy ADW taxes in New York and Pennsylvania (and soon to come in Florida and probably three other states because horse racing likes to follow bad policy when the leaders do it) have done nothing but harm to bettors.
It's clear that states like Michigan, and Texas and Virginia, (and maybe even Murray) which have not liked the whole "internet wagering" thing and blocked it in some form, are causing a handle problem. No word if they are blocking iPhones to protect rotary dial, but it might be coming.
Meanwhile back at the ranch, other entities and businesses are taking advantage of the betting landscape the best way they know how. In fact, it is the only way to do it: They are competing for customers. (unless you live in Cuba; there if you know someone in power, and throw good parties, your business can succeed and you can crush the little people).
The NBA has a ticket revenue problem, and its been going on for awhile. If you travel and want to go see an NHL or an NBA game, you know what that article is talking about. Adam Silver, NBA head honcho, knows it and is beginning to explore new ways to increase the NBA's popularity. He's taking a big chance with something that other leagues do not want to touch: gambling. Not only has he come out for gambling on NBA games, state by state, he has signed deals with "Daily Fantasy Sports" sites to encourage such pursuits. The thinking clearly being, if money is bet on a game, interest in a game goes up. He sees the writing on the wall and has to do something.
In micro-terms, these DFS (daily fantasy sports) sites are using the UIGEA carve out to their advantage, and they are acting like real businesses act. A new entrant into the space, "Fantasy Up" is offering no rake until April 1, 2015, and $300 signup bonuses. Think about that for a second: That's like TVG offering no rake and a free $300 to bet. Hell, my handle would be up 10,000% if that ever occurred.
The sports entertainment world is dog eat dog and survival of the fittest. The companies who earn a living off such, in myriad ways, are under the same marginal cost, burn the marketing budget, earn your business method of business operation as any good company is under in a capitalistic ecosystem. There's no talk about what's handcuffing them, no consortium's protecting slices, no talk about college football or poly or foal crops. It's about noticing a problem and trying to fix the problem.
In racing, we've heard from every nook and cranny in the landscape what's been going wrong.
Early in the year, handle losses, at say Churchill Downs, were due to falling foal crops. Then we heard a lot about polytrack from the usual suspects; i.e. when they get rid of the plastic, the roads will be paved with handle-flowing lollipops. Then we heard a little about those dastardly college football playoffs causing a ruckus in the betting landscape.
Oh those falling foal crops. Well, handle is up at some tracks, down at others. I'm pretty sure there are not more horses having horse sex in Franklin, Kentucky (Kentucky Downs was up), than there are in Louisville (Churchill was killed). There may be a horse sex Maginot line, but I haven't heard about it and I suspect if there is one, it does not bisect Kentucky. Help me out in the comments section if I missed it.
That dreaded Poly! The evil plastic. Oh goodness, we've been telling you people this for years: You might not like polytrack; that's fine, to each their own. But the handle numbers prove someone likes it. In fact, tracks this fall that did well were 1) Woodbine 2) Del Mar and last evening 3) Turfway Park, aided by large poly fields, was up over 41% year over year. Meanwhile, Keeneland, who turned their meet into Churchill Downs dirt-east after removing polytrack, was down mightily. Please stop.
Handle Down > Look for strange excuses > Do more of the same without figuring out what has gone wrong and hope no one in the turf press notices
It's clear that the quality of racing (no I don't mean "Grade I's" silly goose's, but bettable racing, that allows us a chance to beat the juice) has been a real issue.
It's clear the mantra of CDI/Troutnet/Stronach/Tracknet/Monarch, or whatever such moniker that's being used now to describe a high rake, competition-stifling consortium, has not helped, but hurt gross handles.
It's clear those goofy ADW taxes in New York and Pennsylvania (and soon to come in Florida and probably three other states because horse racing likes to follow bad policy when the leaders do it) have done nothing but harm to bettors.
It's clear that states like Michigan, and Texas and Virginia, (and maybe even Murray) which have not liked the whole "internet wagering" thing and blocked it in some form, are causing a handle problem. No word if they are blocking iPhones to protect rotary dial, but it might be coming.
Meanwhile back at the ranch, other entities and businesses are taking advantage of the betting landscape the best way they know how. In fact, it is the only way to do it: They are competing for customers. (unless you live in Cuba; there if you know someone in power, and throw good parties, your business can succeed and you can crush the little people).
The NBA has a ticket revenue problem, and its been going on for awhile. If you travel and want to go see an NHL or an NBA game, you know what that article is talking about. Adam Silver, NBA head honcho, knows it and is beginning to explore new ways to increase the NBA's popularity. He's taking a big chance with something that other leagues do not want to touch: gambling. Not only has he come out for gambling on NBA games, state by state, he has signed deals with "Daily Fantasy Sports" sites to encourage such pursuits. The thinking clearly being, if money is bet on a game, interest in a game goes up. He sees the writing on the wall and has to do something. In micro-terms, these DFS (daily fantasy sports) sites are using the UIGEA carve out to their advantage, and they are acting like real businesses act. A new entrant into the space, "Fantasy Up" is offering no rake until April 1, 2015, and $300 signup bonuses. Think about that for a second: That's like TVG offering no rake and a free $300 to bet. Hell, my handle would be up 10,000% if that ever occurred.
The sports entertainment world is dog eat dog and survival of the fittest. The companies who earn a living off such, in myriad ways, are under the same marginal cost, burn the marketing budget, earn your business method of business operation as any good company is under in a capitalistic ecosystem. There's no talk about what's handcuffing them, no consortium's protecting slices, no talk about college football or poly or foal crops. It's about noticing a problem and trying to fix the problem.
The $.50 pick-5 returns $26.62. The $.50 pick-4 returns $4.75 at Big A
— David Grening (@DRFGrening) December 5, 2014
That's one big reason why they're winning and horse racing is losing. And with the headlines in racing that we've seen the last month, they're going to keep right on winning.Thursday, December 4, 2014
The Economy Has Grown Since CSI Miami Has Been Cancelled
If you want to get one of the global warming people upset, mention the weather in Duluth this week and say "oh ya, what global warming".
If you want to get one of the anti-global warming people upset, post a link to some guy who is getting millions in grants blaming your high thermostat on wind/drought/hurricanes or no hurricanes/no wind/lots of rain, all in the same week.
If you want to get a horseplayer upset, blame some of the $26.1 million in handle losses at a track on the new interest in the college football playoff format.
Whatever the case, this is not the first time this has happened. Blaming handle losses on the Olympics, economy and a hundred other things have been the norm since handle started dropping. It's become fairly common.
But it just makes people who care about growing handle shake their heads. They wonder, if a person in charge of a $2 billion a year handle market thinks this way, is there any hope at all?
If you want to get one of the anti-global warming people upset, post a link to some guy who is getting millions in grants blaming your high thermostat on wind/drought/hurricanes or no hurricanes/no wind/lots of rain, all in the same week.
If you want to get a horseplayer upset, blame some of the $26.1 million in handle losses at a track on the new interest in the college football playoff format.
- In addition to weather and field size, Kay mentioned the closing of four Atlantic City casinos and heightened interest in college football due to the new playoff format could have played roles in the handle decline.
Whatever the case, this is not the first time this has happened. Blaming handle losses on the Olympics, economy and a hundred other things have been the norm since handle started dropping. It's become fairly common.
But it just makes people who care about growing handle shake their heads. They wonder, if a person in charge of a $2 billion a year handle market thinks this way, is there any hope at all?
Tuesday, December 2, 2014
Puppies!
NYRA announced more signal fee hikes (even planning for a 3% reduction in handle; how's that for ya), Monarch - the Stronach betting arm - is fighting for more money from us, and racetracks. CDI raised the juice and that worked out really well for them, didn't it. Handle will be down in 2014 and will probably be down in 2015 if the above headlines are any indication.
I've just about had it.
So, rather than wax on about these issues from a customer perspective (hint, they're really bad for thegrowth of horse racing), this post will be about puppies.
Puppies.
I went through my twitter feed looking for something for a column (I was searching @chare889 's feed actually), and saw so many puppies. They made me feel good, so here are a few from the past few months.
Puppies.
Ok, not a puppy, but no twitter mash-up on any topic is complete without Weed Pope....
Have a great day everyone.
I've just about had it.
So, rather than wax on about these issues from a customer perspective (hint, they're really bad for the
Puppies.
I went through my twitter feed looking for something for a column (I was searching @chare889 's feed actually), and saw so many puppies. They made me feel good, so here are a few from the past few months.
Puppies.
"He is saying I did not do it daddy" https://t.co/ZqK3uU9uZX pic.twitter.com/dfV2cvNjkg
— Animal Life (@fabulousanimals) November 18, 2014
Respect. “@eonline: The last surviving 9/11 rescue dog returns to visit the memorial site. http://t.co/a8TIAFbqkF pic.twitter.com/6Bv9jHgYvh”
— Jim Roberts (@nycjim) September 12, 2014
Wont you guide my sleigh tonight & a few others, now that I know what I'm doing? Take care @francesjkaron pic.twitter.com/RPrWH3N3pi
— Drew Roberts (@DrewRoberts63) November 19, 2014
Beagle off leash. He actually listens. Getting better. Don't go off cliff pic.twitter.com/Z2F6n0787H
— Pullthepocket (@Pullthepocket) November 11, 2014
The pup's first snow fall! #playingwithbigbrother pic.twitter.com/rJjDh8kZGg
— Lori Ferguson (@AprilFuel) November 17, 2014
Hi it's @Emmet_Kennedy Meet #arthurthedog the stray who went on a 430-mile trek around Ecuador http://t.co/FI88YbdGWs pic.twitter.com/MzMRFQDflD
— Cork's 96FM (@Corks96FM) November 24, 2014
#Tennessee's mascot Smokey was cold during the #Kentucky game --> http://t.co/R2k7oLobBK pic.twitter.com/AZXQ8QoDQ6
— Yahoo Sports (@YahooSports) November 16, 2014
He might scare puppies.....
Well now I gotta check under my bed every night for Shaun Bridgmohan. #KYDerby. pic.twitter.com/iJhV0R9H6c
— Derek Brown (@NJDerek) May 3, 2014
I think this is hilarious. Local dog day care has birthday parties for their dogs. This is an old foster dog pic.twitter.com/duogrbVWZi
— Pullthepocket (@Pullthepocket) November 7, 2014
Ok, not a puppy, but no twitter mash-up on any topic is complete without Weed Pope....
When I say 'most confused fan at the World Cup', I obviously mean after Columbian Nazi Weed Pope. Obviously. pic.twitter.com/TXPVYcvHyo
— Nooruddean (@BeardedGenius) June 22, 2014
@Pullthepocket Its a photo finish, too tight to call. But wait, stewards inquiry. Hold all tickets pic.twitter.com/yrJLTgl5uD
— Scott Ramnarine (@ScottRamnarine) October 30, 2014
Could be a puppy, because that's super cute....
That's a lovely goat. RT @milkmaid58: More #goat love! #agchat pic.twitter.com/CyVr0OfFSl
— Pullthepocket (@Pullthepocket) November 10, 2014
Somebody is very chilly. pic.twitter.com/wGhstkfiSI
— Tom LaMarra (@JerseyTom) November 19, 2014
The backstretch beagle squad @LittleBrownJug #BecauseItsTheJug @Pullthepocket pic.twitter.com/qyQhelNiLm
— righthind (@righthind) September 18, 2014
Hold it, that's not a puppy....
Baby's first climb pic.twitter.com/qjVDrWXlan
— Animal Life (@fabulousanimals) November 25, 2014
oh deer pic.twitter.com/JbaLUsgaTt
— Baby Animals (@BabyAnimalPics) April 8, 2014
The little man played with his big brother today! #JackRussell #AustralianCattleDog pic.twitter.com/3ckrpbWPia
— Lori Ferguson (@AprilFuel) April 13, 2014
Over a year now, but sure miss the old handicapping dog. pic.twitter.com/vXxlN0d4Hr
— Pullthepocket (@Pullthepocket) November 19, 2014
Have a great day everyone.
Monday, December 1, 2014
Changing the Track Allocation Mix Has Not Helped Gross Handles
Handle in US Thoroughbred racing will be down about $50 million, or 6% in November. When looking at October and November together (to standardize the Breeders' Cup handle, which was up slightly, year over year), it's down about 2%. Down 2% is about the mean monthly handle losses in 2014.
The story is much deeper than that, however. The allocations of racedates, by track, are different in 2014 than they were in 2013 over that period.
In Canada, where there were 17 tracks in Ontario, the track numbers were culled, mainly due to the loss of slots. Out of the 17 tracks, only eight or nine did proper handle, the rest were an afterthought with bettors. The thought was, if racedates were taken from the small handle tracks and given to higher handle tracks - those with better racing, more of a following and better signal distribution - it should result in more handle. That occurred. In 2013, racedates were off close to 20%, per race handle was up greater than 20%, and overall handle was up. For the harness racing tracks in 2014, this has continued, with an increase of 12.4% handle per race, and a 3.13% overall handle rise.
In US Thoroughbred racing a similar thing occurred this fall in two main jurisdictions.
Moving dates from Hollywood to Del Mar one might expect a big bump, and that did occur. In November of 2014, abut $116 million was bet at Del Mar over 132 races. Over the same period in 2013 - with even more races, at 140 - Hollywood Park chipped in with only $103 million. It was a double digit bump, and even higher per race.
Moving dates from Calder's signal to "Gulfstream Park West" should've seen a tremendous rise as well. Gulfstream's brand and signal distribution is good, and their Rainbow Six carried on. I don't have dates distribution, but from a database (thanks CR), this year's GPW handle in October and November was $29 million, versus only $13 million over that same period last year at Calder. Another win, and another perfectly expected result.
That jump, along with the jump in handle in the Breeders' Cup should make things better year over year, just like in Ontario, should it not? It hasn't worked. Gross handles, as mentioned above, are down.
If McDonald's closed 500 money losing stores in the western world and shifted those stores to the rapid growth China market, where people are going crazy for McRib's, one would expect their gross sales to rise. If that did not happen, they might want to look into their product or other factors, because something is terribly wrong. Horse racing probably needs to analyze the exact same thing because that's exactly what seems to be happening.
The story is much deeper than that, however. The allocations of racedates, by track, are different in 2014 than they were in 2013 over that period.
In Canada, where there were 17 tracks in Ontario, the track numbers were culled, mainly due to the loss of slots. Out of the 17 tracks, only eight or nine did proper handle, the rest were an afterthought with bettors. The thought was, if racedates were taken from the small handle tracks and given to higher handle tracks - those with better racing, more of a following and better signal distribution - it should result in more handle. That occurred. In 2013, racedates were off close to 20%, per race handle was up greater than 20%, and overall handle was up. For the harness racing tracks in 2014, this has continued, with an increase of 12.4% handle per race, and a 3.13% overall handle rise.
In US Thoroughbred racing a similar thing occurred this fall in two main jurisdictions.
Moving dates from Hollywood to Del Mar one might expect a big bump, and that did occur. In November of 2014, abut $116 million was bet at Del Mar over 132 races. Over the same period in 2013 - with even more races, at 140 - Hollywood Park chipped in with only $103 million. It was a double digit bump, and even higher per race.
Moving dates from Calder's signal to "Gulfstream Park West" should've seen a tremendous rise as well. Gulfstream's brand and signal distribution is good, and their Rainbow Six carried on. I don't have dates distribution, but from a database (thanks CR), this year's GPW handle in October and November was $29 million, versus only $13 million over that same period last year at Calder. Another win, and another perfectly expected result.
That jump, along with the jump in handle in the Breeders' Cup should make things better year over year, just like in Ontario, should it not? It hasn't worked. Gross handles, as mentioned above, are down.
If McDonald's closed 500 money losing stores in the western world and shifted those stores to the rapid growth China market, where people are going crazy for McRib's, one would expect their gross sales to rise. If that did not happen, they might want to look into their product or other factors, because something is terribly wrong. Horse racing probably needs to analyze the exact same thing because that's exactly what seems to be happening.
Sunday, November 30, 2014
Two Sports' Two Horse of the Year Votes
California Chrome won at Del Mar yesterday, trying turf for the first time. He was very impressive.
In the TVG, Sweet Lou - the sport's most dominant pacer - won easily, as dominant has he has been for some time.
California Chrome lasted the entire year at a high level, winning early fast, and late fast, on a new surface. He was only a couple of lengths from a Triple Crown, which makes his late season fitness and sharpness something not seen very often. As o_crunk put it on twitter, usually early season three year old stars are only found late in the year "on milk cartons." He won six races in nine tries in what can be described as a throwback type season.
Sweet Lou has won 11 of 19, set track record after track record, won ten in a row at one point, all in the hardest division to win races in - the older "handicap" division. It's not 1990 anymore, you have to go fast every race, and there are no easy ones for older pacers. O_crunk's words fit well here too, because a lot of older pacers are only found on milk cartons at the end of the year. 11 of 19 in this day and age is spectacular in this division.
In thoroughbred racing, Grade I's mean everything to many, and perfection is often trumpeted. Main Sequence, the talented turf horse of Graham Motion, has won four of four races, and they were big ones. Right now he feels like the favorite, especially with the east coast crew.
In harness racing, right now Lou is not the favorite either. The fans and some see the perfect two year old record of Jk She'salady and say "she has never been beaten, while Lou lost some races, so she's a slam dunk". The voters may agree, despite this sport, and thoroughbred racing, almost never giving Horse of the Year to a two year old. The division is not deep, two year olds can get on a roll. We've seen in both harness and the thoroughbreds, many, many two year olds go undefeated or near undefeated. Great two year olds like Artsplace and Somebeachsomewhere barely even registered a vote.
What we have here is two horses who have raced often, put their record on the line, have taken on most of the best horses in their midst, and have won many races, but weren't perfect. Against them are a thoroughbred horse who raced an abbreviated schedule - a more modern type season - and won out, and a two year old who was undefeated, like several before her were. In both sports', perfection is always something that captivates voters, especially if done at a high level.
That might be somewhat curious. Fans of both sports' lament that horses do not race enough nowadays, but then we give abbreviated schedules the hardware. A mixed message at best.It will be very interesting to see which way the votes in both sports' go.
In the TVG, Sweet Lou - the sport's most dominant pacer - won easily, as dominant has he has been for some time.
California Chrome lasted the entire year at a high level, winning early fast, and late fast, on a new surface. He was only a couple of lengths from a Triple Crown, which makes his late season fitness and sharpness something not seen very often. As o_crunk put it on twitter, usually early season three year old stars are only found late in the year "on milk cartons." He won six races in nine tries in what can be described as a throwback type season.
Sweet Lou has won 11 of 19, set track record after track record, won ten in a row at one point, all in the hardest division to win races in - the older "handicap" division. It's not 1990 anymore, you have to go fast every race, and there are no easy ones for older pacers. O_crunk's words fit well here too, because a lot of older pacers are only found on milk cartons at the end of the year. 11 of 19 in this day and age is spectacular in this division.
In thoroughbred racing, Grade I's mean everything to many, and perfection is often trumpeted. Main Sequence, the talented turf horse of Graham Motion, has won four of four races, and they were big ones. Right now he feels like the favorite, especially with the east coast crew.
In harness racing, right now Lou is not the favorite either. The fans and some see the perfect two year old record of Jk She'salady and say "she has never been beaten, while Lou lost some races, so she's a slam dunk". The voters may agree, despite this sport, and thoroughbred racing, almost never giving Horse of the Year to a two year old. The division is not deep, two year olds can get on a roll. We've seen in both harness and the thoroughbreds, many, many two year olds go undefeated or near undefeated. Great two year olds like Artsplace and Somebeachsomewhere barely even registered a vote.
What we have here is two horses who have raced often, put their record on the line, have taken on most of the best horses in their midst, and have won many races, but weren't perfect. Against them are a thoroughbred horse who raced an abbreviated schedule - a more modern type season - and won out, and a two year old who was undefeated, like several before her were. In both sports', perfection is always something that captivates voters, especially if done at a high level.
That might be somewhat curious. Fans of both sports' lament that horses do not race enough nowadays, but then we give abbreviated schedules the hardware. A mixed message at best.It will be very interesting to see which way the votes in both sports' go.
Saturday, November 29, 2014
Saturday Notes
Good morning racing fans.
The TVG trot and pace is tonight at the Big M. Unlike last season where we had a three year old in the mix, this year these races are more traditional. The Trot seems a better betting affair than the pace, with Sebastian K possibly providing some board value - as strange as that is to say. Sweet Lou's last race is this evening over a very jam packed four year career. For the HOY watch, if Sebastian dispatches this field easily, I expect the voters to give him the nod over the two year old. This is a sport that rightfully demands more than just perfection from a two year old to win HOY. For reference, Somebeachsomewhere didn't even get a sniff.
"Grinding versus Rapid Bankroll Growth" - No that's not a story about racing, but daily fantasy sports. It shows just how similar the two games are. The article, in effect, says that one should bet win (play 50/50 games) to see if one can become a long term winner, then branch out to exotics (tournaments) if that occurs.
Further: "The Daily Fantasy Sports Takeover" is an interesting read.
Kentucky steward Veitch ordered to get his back pay because he was improperly fired. Although I have no Matlock skills, and no special understanding of that whole Life at Ten event, Veitch always felt like a scapegoat to me. Nowadays it seems to make people feel good if there is someone to blame, whether it's the right person or not. Honest thinking people should never want that to happen.
California Chrome races today, on turf. I like when horses of this ilk try different things. This horse is a huge star. If California was a country it would be the 8th largest in the world, and it shows. That state follows this horse, and their bettors bet races that he is in. Handle will be very high today.
The comments yesterday on the blog were, what I found, kinda funny. Three comments, three "if someone says they are winning betting 22% takeout they're wrong" comments. This is what this sport - for a long time - encourages. Twinspires, other big ADW's accept bets on Philly Park at 30% rake, keep about 20% of it, and watch their customers get killed. If you have a 1% hit rate on tri's, how you can possibly hit enough, with a proper bankroll at 30% juice to win is beyond me. I can't even do the math in terms of bankroll, it's so out there. It's a big reason why the skill game gambling market is over $500 billion worldwide, casino volume is in the trillions, $2B will be bet on Fantasy sports, poker still has billions upon billions bet, while horse racing in North America, in a place with $20 trillion in GDP, tracks with over a hundred supply points, 40k races, with a near monopoly on online wagering, can barely muster $10 billion.
Speaking of edge's and hit rates, I have been studying (ahem, honestly I am) the Canadian sports betting lottery market in my spare time. I began to dabble on some of these bets. At times the odds in some areas (usually three or four games a day) are out of whack from the super-tight Pinnaclesports odds. Because the general public who are more casual players overbet favorites, longshots seem to be worth upwards of 1% to 4% more than they should. Also, "tie games" - 5 points either way in basketball - show an edge if the spread is over 9 points. So, that's good.
But, you still have to hit the games.
I have taken 16 ties and won one, at 4.5-1 odds. Even in lottery betting you need to use Kelly, or a variation, because when you are trying to hit parlays with 5-1 type occurrences, you need to make your bankroll last. I think my experiment is over, even though I am sure I can dabble and make a few dollars. It just takes time that I'd rather spend on racing. Time is money.
Enjoy your weekend everyone. And a friendly reminder, if you are playing Churchill today and you're betting exotics, they raised the juice to 22% in April. That same 22% the bettors on the blog spoke about yesterday :)
Good luck and good racing.
The TVG trot and pace is tonight at the Big M. Unlike last season where we had a three year old in the mix, this year these races are more traditional. The Trot seems a better betting affair than the pace, with Sebastian K possibly providing some board value - as strange as that is to say. Sweet Lou's last race is this evening over a very jam packed four year career. For the HOY watch, if Sebastian dispatches this field easily, I expect the voters to give him the nod over the two year old. This is a sport that rightfully demands more than just perfection from a two year old to win HOY. For reference, Somebeachsomewhere didn't even get a sniff.
"Grinding versus Rapid Bankroll Growth" - No that's not a story about racing, but daily fantasy sports. It shows just how similar the two games are. The article, in effect, says that one should bet win (play 50/50 games) to see if one can become a long term winner, then branch out to exotics (tournaments) if that occurs.
Further: "The Daily Fantasy Sports Takeover" is an interesting read.
Kentucky steward Veitch ordered to get his back pay because he was improperly fired. Although I have no Matlock skills, and no special understanding of that whole Life at Ten event, Veitch always felt like a scapegoat to me. Nowadays it seems to make people feel good if there is someone to blame, whether it's the right person or not. Honest thinking people should never want that to happen.
California Chrome races today, on turf. I like when horses of this ilk try different things. This horse is a huge star. If California was a country it would be the 8th largest in the world, and it shows. That state follows this horse, and their bettors bet races that he is in. Handle will be very high today.
The comments yesterday on the blog were, what I found, kinda funny. Three comments, three "if someone says they are winning betting 22% takeout they're wrong" comments. This is what this sport - for a long time - encourages. Twinspires, other big ADW's accept bets on Philly Park at 30% rake, keep about 20% of it, and watch their customers get killed. If you have a 1% hit rate on tri's, how you can possibly hit enough, with a proper bankroll at 30% juice to win is beyond me. I can't even do the math in terms of bankroll, it's so out there. It's a big reason why the skill game gambling market is over $500 billion worldwide, casino volume is in the trillions, $2B will be bet on Fantasy sports, poker still has billions upon billions bet, while horse racing in North America, in a place with $20 trillion in GDP, tracks with over a hundred supply points, 40k races, with a near monopoly on online wagering, can barely muster $10 billion.
Speaking of edge's and hit rates, I have been studying (ahem, honestly I am) the Canadian sports betting lottery market in my spare time. I began to dabble on some of these bets. At times the odds in some areas (usually three or four games a day) are out of whack from the super-tight Pinnaclesports odds. Because the general public who are more casual players overbet favorites, longshots seem to be worth upwards of 1% to 4% more than they should. Also, "tie games" - 5 points either way in basketball - show an edge if the spread is over 9 points. So, that's good.
But, you still have to hit the games.
I have taken 16 ties and won one, at 4.5-1 odds. Even in lottery betting you need to use Kelly, or a variation, because when you are trying to hit parlays with 5-1 type occurrences, you need to make your bankroll last. I think my experiment is over, even though I am sure I can dabble and make a few dollars. It just takes time that I'd rather spend on racing. Time is money.
Enjoy your weekend everyone. And a friendly reminder, if you are playing Churchill today and you're betting exotics, they raised the juice to 22% in April. That same 22% the bettors on the blog spoke about yesterday :)
Good luck and good racing.
Friday, November 28, 2014
Good Gambling Play Should Near Always Reflect the Rake of the Game
Yesterday's post about Fantasy gaming sites led to an interesting discussion. These sites keep between 5 and 10% and payout the rest.
During the discussion, some felt that because they are difficult to win at - even though you may get paid near half the time in a 50/50 contest - losing can get old real fast. Others feel the market is so large, and a fair portion of users are used to playing props and sports lottery type games with terrible takeout, that that level can be withstood.
Currently, for example, if you bet $50 in a 50/50 game and land in the top half, you get back $45. One post on twitter noted this:
Meanwhile in horse racing, it should be that simple, but it's not.
You are not betting a 3-1 horse and getting paid $8.00. You are betting a horse "around 3-1, that might go down to 2-1 at the bell, or might even go up". There are different races, you may have different opinions and different tracks, there are exotic bets, and sweeps and everything else. It's muddy. It's not in your face like this.
When we get down to it, however, the rake should matter a lot, and just like FanDuel and others, higher payouts should be used by any good gambler as a part of his or her play.
A serious fantasy player might play 2,000 games at $50 per game in 50/50.
At $45 win, with say a 53% win rate (slightly better than an average player)
Handle: $100,000
Return: $100,700
Profit: $700
At $47 win, with the same hit rate
Handle: $100,000
Return: $102,820
Profit: $2,820
Player B is certainly encouraged to bet more, get better and use the lower juice to his advantage.
In racing, we as players should act exactly the same way. By keeping track of bets we learn what our hit rates are, what our ROI is, and can learn from it.
If you have a hit rate of 27% on 3-1 shots on $4,000 a year bet at a high takeout track:
Handle: $4,000
Return: $4,320
Profit: $320
At a lower takeout track, say that pays $8.60 instead of $8 for a three to one shot:
Handle: $4,000
Return: $4,644
Profit: $644
If you multiply this by thousands of bets, that profit difference, just like at FanDuel, can be huge.
This is why win bonuses work to encourage play. It's an increased payout on that $8 horse, and can turn a $50,000 a year bettor into a $500,000 year one in a a flash.
As for non-bonused players, I often hear, "I know this track and I can beat the 22% rake, rather than at that other track at 12% takeout". I am sorry, but if you are profitable, that's nonsense. If you are good enough to have a hit rate of 27% on 3-1 shots over a long period of time at the Big A, you should be able to translate that to Gulfstream. If you don't and are that variant between tracks, it likely means that hit rate is inflated due to smaller sample size, or it doesn't exist in the first place.
If you are good enough to win at a track with 22% takeouts, and one opens next door with 12% takeouts, run as fast as you can and bet the lower rake track.
Most players aren't good enough to win at 22%+ rake racetracks and push volume - I'm not that's for sure - so in reality almost 100% are losing. I am not comfortable with losing and neither are you. We have to take every edge we can find if we want to make money.
I, for one, take a page from the FanDuel users and flock to those '$47 games, instead of the $45 games'. It might "only be $2" like at a racetrack it's "only 2%", but over time, as things regress to a mean in my hit rate, I end up making more money.
During the discussion, some felt that because they are difficult to win at - even though you may get paid near half the time in a 50/50 contest - losing can get old real fast. Others feel the market is so large, and a fair portion of users are used to playing props and sports lottery type games with terrible takeout, that that level can be withstood.
Currently, for example, if you bet $50 in a 50/50 game and land in the top half, you get back $45. One post on twitter noted this:
@Pullthepocket @o_crunk To be blunt,it needs to be installed/accepted as a loss leader, to start. Clock the handle -- and public reaction.
— Richard Witt (@rich_witt1) November 28, 2014
So, in effect, you would win $47 instead of $45. That's lower takeout.
But if this is advertised, people would flock to it. Why would anyone want to enter a 50/50 game when they get back $45, instead of $47, even if it's "only $2"? They would, and they'd be flocking to "lower takeout", the big bad wolf that some think does not matter.Meanwhile in horse racing, it should be that simple, but it's not.
You are not betting a 3-1 horse and getting paid $8.00. You are betting a horse "around 3-1, that might go down to 2-1 at the bell, or might even go up". There are different races, you may have different opinions and different tracks, there are exotic bets, and sweeps and everything else. It's muddy. It's not in your face like this.
When we get down to it, however, the rake should matter a lot, and just like FanDuel and others, higher payouts should be used by any good gambler as a part of his or her play.
A serious fantasy player might play 2,000 games at $50 per game in 50/50.
At $45 win, with say a 53% win rate (slightly better than an average player)
Handle: $100,000
Return: $100,700
Profit: $700
At $47 win, with the same hit rate
Handle: $100,000
Return: $102,820
Profit: $2,820
Player B is certainly encouraged to bet more, get better and use the lower juice to his advantage.
In racing, we as players should act exactly the same way. By keeping track of bets we learn what our hit rates are, what our ROI is, and can learn from it.
If you have a hit rate of 27% on 3-1 shots on $4,000 a year bet at a high takeout track:
Handle: $4,000
Return: $4,320
Profit: $320
At a lower takeout track, say that pays $8.60 instead of $8 for a three to one shot:
Handle: $4,000
Return: $4,644
Profit: $644
If you multiply this by thousands of bets, that profit difference, just like at FanDuel, can be huge.
This is why win bonuses work to encourage play. It's an increased payout on that $8 horse, and can turn a $50,000 a year bettor into a $500,000 year one in a a flash.
As for non-bonused players, I often hear, "I know this track and I can beat the 22% rake, rather than at that other track at 12% takeout". I am sorry, but if you are profitable, that's nonsense. If you are good enough to have a hit rate of 27% on 3-1 shots over a long period of time at the Big A, you should be able to translate that to Gulfstream. If you don't and are that variant between tracks, it likely means that hit rate is inflated due to smaller sample size, or it doesn't exist in the first place.
If you are good enough to win at a track with 22% takeouts, and one opens next door with 12% takeouts, run as fast as you can and bet the lower rake track.
Most players aren't good enough to win at 22%+ rake racetracks and push volume - I'm not that's for sure - so in reality almost 100% are losing. I am not comfortable with losing and neither are you. We have to take every edge we can find if we want to make money.
I, for one, take a page from the FanDuel users and flock to those '$47 games, instead of the $45 games'. It might "only be $2" like at a racetrack it's "only 2%", but over time, as things regress to a mean in my hit rate, I end up making more money.
Thursday, November 27, 2014
Newbie Racing Marketing - Why Fantasy Sports Betting Sites Succeed
The Existing
Betting Customer Is Racing’s Best Hope
-- When compared to
ease-of-use and churn focused fantasy sports startups like Fan Duel and Draft
Kings, racing is simply not built for the newbie skill game gambling market --
Fantasy sports – drafting, fielding and managing a team made
up of players in all major sports – has
been on a tear. Back in 1988, according to the Fantasy Sports Trade
Association, approximately 500,000 people were playing games in some form. In 2003, with the help of the Internet and a
growing set of dedicated websites, magazines and software, that number grew to
15.2 million. In 2014, it is estimated that over 40 million people this Sunday
will be fielding NFL teams as the NFL Fantasy playoffs approach. This market will spend upwards of $1.7
billion this year on the craft.
Happy Thanksgiving. Enjoy your day!
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