Tuesday, June 24, 2014

Horseman-Think

New York horseman dude Rick Violette:

Where would you want to see that money [money for drug testing to catch cheaters] come from?

“I’d like to take some of it off the top of handle. We certainly need the investment. Handicappers, or handicapping groups, are the first ones to rail about catching cheaters."

Ya, that's it. Those handicappers and fans would benefit so they should be paying for it. The horses - that many claim to love - won't benefit. They might be injected with frog venom, or given blood builders, ruining them for life but they certainly won't be helped by catching the people doing it to them.

Or the fact that the game gets sullied with "cheaters" where PETA comes out against it, governments rail against it, and owners leave, stop investing in horseflesh,. because they don't want to play a mugs game against a juicer down the street. That costs trainers like Rick Violette, and breeders and hay men and feed men, and vets and Bob Evans and  everyone else who draws a paycheck from the industry money. But they won't benefit.

No, it's the gamblers who would be the big beneficiaries, because they "rail against it".

The big picture vision in racing's alphabets and those who speak for them is incorrigibly blind. 

In a sport that has recieved billions and billions in slot revenue - money that this sport should be using to make the game better, by oh, I don't know, maybe paying for drug testing - it is maddening that this industry's participants constantly come back to customers to pay for everything that benefits them.

Leaving the fact that if takeout was raised to pay for it, less money will be bet, and they might have less money than they do now aside: It doesn't make logical sense and it has never made logical sense.

If a company wanted to create a stock purchase plan they don't ask shareholders to send in one of their shares to keep the employees happy. General Motors would not ask Ralph Nader to raise money for airbags because "he is always railing against consumer safety". If at a meeting you suggested to Steve Wynn he increase the craps take to 6% to pay for new security cameras you'd be fired before you grabbed the last donut.

In horse racing the mantra is, and always has been "great idea, as long as I don't have to pay for it."

The person paying for it is usually the customer, which is a big reason why racing doesn't have very many of them.


16 comments:

Sal Carcia said...

Rick Violette has demonstrated many times that he does not understand that serving the customers' needs is really in line with serving the interests of the horsepeople. It will be difficult for the game to thrive without this connection being made by horsepeople.

Anonymous said...

You don't think the customer helps pay for advances in every industry? If they add airbags, don't you think the cost of research, development and implementation is included in the price of the car? For sure the car companies don't do it for free. And aren't there people who draw their paychecks by playing the horses?

Pull the Pocket said...

Anon,

Customers don't "help pay" for anything. Customers aren't asked to help pay for anything. Retained earnings pay for R and D and other costs in business.

The horse racing industry has $1.1B in purses, and a similar number in profits each year. That comes from fees, government money from agri-business grants, their share of takeout, slots and a number of other avenues. That's $2.2 billion that needs to be used for drug testing. Take some of that and don't mention the customer ponying up anything.

PTP

Anonymous said...

Retained earnings come from net income, which is driven by the profit made on cars. They make a profit on a car by calculating what it cost to make, including R & D, and setting the price accordingly. It is the same in the pharmaceutical industry. Drugs are not expensive to make, they are expensive to develop. That's why they cost so much. All of this is the cost of doing business, and, ultimately, the customer foots some of the bill.

Pull the Pocket said...

Anon,

Profit pays for R and D, not more off the top of margins.

Have you ever heard a business say we are increasing our margins to pay for air bags, because customers would benefit so they should "chip in more"? Of course not. In fact, the capitalist system would find it laughable.

If Violette truly wants drug testing, it can come out of retained earnings, not from increased margins.

PTP

Anonymous said...

To my knowledge, car companies don't explain why the car costs more, they just raise the price. Costs go up, the price of the car goes up to defray the cost, profit margins don't go up. I don't think many people would object, knowing that the car costs more because it is safer.

Pull the Pocket said...

"profit margins don't go up"

Exactly. Tell that to Rick Violette.

PTP

Anonymous said...

Exactly what? His suggestion would not raise profit margins for racing, it would help defray the cost of enhanced testing. Just as the added cost of the car does not go into the pockets of the car companies, it helps defray the cost of making the car safer.

Pull the Pocket said...

Hi Anon,

"His suggestion would not raise profit margins for racing"

Ummm. Yes, it would. Horseplayers do not get a share of takeout, so for "customers to help pay for it" it means an increase in margins.

PTP

Anonymous said...

I didn't see anything about raising takeout. The suggestion was to take it off the top of handle, before takeout, so that the racetracks and purses would also pay a share. The money would not go to the horsemen or the tracks. Margins would actually decrease.

Pull the Pocket said...

Hi Anon,

Customers do not share in takeout. They get payout.

"The suggestion was to take it off the top of handle, before takeout."

That means that takeout is raised.. Which is what everyone who is a customer is upset about.

PTP

Anonymous said...

PTP, you're a very patient man.

Anonymous said...

Yes, the horse player would pay a share, as would tracks and horsemen. Technically the takeout would not be raised, but it would cost them something. If you don't think horse players should pay anything, even a fraction of a penny on the dollar, to contribute, that's your opinion and I respect that. But I don't agree with the assumption that car companies don't raise car prices to defray the cost of adding safety features or that NFL owners don't raise ticket prices to defray the cost of dealing with the concussion issue, even if they don't make a public announcement about it. I do believe that, whether they know it or not, the customer shares the expense of improvement, no matter what business you are discussing.

Cangamble said...

Anon, the only way to interpret Violette's comments is that he is suggesting a takeout raise. IE if the bettors are supposed to pay for it, how do they go about paying for it unless they receive less money every time they cash.
As for the NFL, ticket prices are determined by supply and demand, so are the advertising dollars they are able to capture. The cost of concussion lawsuits and research aren't a factor in what the fan pays or how much they charge for advertising.
Same with running a casino. The cost to run a casino, whether it is employees, heat, new security measures, etc. has zero to do with the what they house takes in blackjack, roulette, slots, etc.
The house take is determined by optimal pricing (what price will cause players to lose the most money collectively over longer periods of time). Each game is different.
The problem with horse racing is that they don't think in terms of optimal pricing, and yet they understand it exists, or takeouts would be 50%. However, there is no way optimal takeout should be anything near as high as 21% on average. And as CD just learned, having Horseplayers pay for purses by going farther away from optimal prices doesn't work.

Anonymous said...

Two problems here:

1 - Most horseplayers couldn't care less about "juicers", as long as the "juice" is given regularly, and NOT when the stable is looking to cash a ticket. If anything, it makes handicapping easier, and more predictable for most players

2 - I don't see anywhere in Violette's remarks the request to make the players PAY for testing. When he refers to taking some money "off the top of handle", I assume he means taking some money away from track operators and horsemen, both of whom derive income from that handle. I'm not sure how you reached the conclusion that the players are being asked to "chip in".

Dave Z. said...

Takeout is what is taken "off the top" of handle. Whether the track does it or a state regulator. How is this hard for horsemen to understand?

Trainers get expenses paid by the owners whether they win or not. They are NOT paying into the game. Only the owners and customers actually pay anything.

Horsemen might find themselves on the outside looking in if they aren't careful.

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