Sunday, August 31, 2014

Pacing Derby Night to Execs: "It's a Betting Game"

It's was a big night at Mohawk Raceway this evening. Three "Grade I" races were contested, along with several "Grade III's". In total, $2.4 million in purses were given away.

Big night for handle I bet? Yes.

Over $5.1 million was wagered on the card. It was the largest handle at the Milton oval in its existence.

However, what if I told you that for all that purse money and all those stakes, the handle after the first eleven races was $2.7 million, but the handle for the last race - one race, a nondescript $30,000 conditioned affair - was $2.3 million alone.

You'd think I was cray cray as the kids say.

But that's what happened. The last race of the evening had a carryover of the Super High Five, and bettors, going after a takeout reduced pool went to work.

Stakes races, pomp, pageantry, a hundred or so horses and a couple of millon dollars brought in $2.7 million through 11 races. A takeout reduction in one race brought in $2.3 million.

This is a betting game.  One of these days the industry will treat it as such and be better off for it.


Modern Legend won the CPD and paid boxcars. You know and I know he is a nice horse and have tabbed him in Open Stakes in the past, but he hasn't seemed too sharp this year and it was a big surprise. What a thrill for a small stable (their only current horse) who takes care of their horses like gold. Modern Legend, whether he won or lost would've had a home for life, and it's nice to see people like that win races like this.

The super payoff ($8k) is worth looking at. Sweet Lou, who drifted last week and looked like perhaps the wheels might've been falling off was a logical fade out of the top four, but that price is ridiculous. Even if the 1,2 players were out in full force, or someone took weird boxes, this was strange.

How good is Artspeak? Who knows. I could not find a horse to even be second to him in that field. This wasn't a Metro of two years ago when it was a blanket finish in 49.2, or the Beach year where multiple millionaires were knocking heads in 49. This looked like a Thursday night non-winners of two, with horses struggling to beat 53.

Foiled Again is a horse to watch out for. He raced super again, and if a few of them (this FFA field this year is not talented like last year) falter, the old bugger can win out. I love that horse.

Something seems to be wrong with Sunshine Beach. He's way better than he has been his last two. End of the line?

JK Shesalady is the real deal. Sharp, talented; and she was overlooked when she was baby racing.

Carmen Hie and Dave Drew won races tonight. Somewhere the harness Gods are smiling.

Have a nice evening everyone.

Friday, August 29, 2014

Horse Ownership, Owner Breadth and Reasons to Leave the Game

I had a fun conversation today with Brad Thomas and Chuck Simon on twitter about horse ownership, big stables and the ever-changing game.

We've all seen what's been happening: Big stables get bigger, vet bills and supplement costs grow, partnerships are formed which drives down the price of breeding stock (both on the higher and lower end).

There's a real crowding out going on, and it has been going on for some time.

Why is this an issue? Because it has decreased owner breadth, and made for bad betting races. Since owners (suppliers) and horseplayers (the demand which allows for supply to occur) are the complete, unequivocal lifeblood of the game, this is a huge issue. With slots especially, aggregate demand for horseflesh is looked at and trumpeted, but the make-up of such demand is as, or more important.

In HRU over two weeks, this ecosystem was looked at. Some of it is probably hard to read, but I feel it is steeped in logic. The horse ownership demand curve is hurting, and needs some fixing.

Part I - About Charles Dombeck's comments in leaving the game to others (some of these very same points) (pdf page 4) & Part II - some lighter fare - What Can the Track and Industry do to make things more attractive to a new owner.

Have a nice long weekend everyone. Good luck and good racing.

Thursday, August 28, 2014

Thursday Notes

Happy Thursday everyone.

It's a good weekend in racing.

Tom Durkin's last day is Sunday. "End of an era" is used a lot these days in sports and entertainment. This time it really means something. We grew up with Tom - both in harness, "here comes Nihilator on the outside with swift and powerful strides" and in thoroughbred racing, "Sunday Silence in a racing epic" - and I, like many, can't feel anything but a bit sad about him leaving. Good luck Tom. Enjoy life.

The card on Saturday at Mohawk is astoundingly good, from a fans perspective. We've still got that silly "winners pick posts" thing going on, which makes stakes finals more of coronations, not races.  Unlike previous or some current big cards, however, Mohawk has at least tried to make things better for the punter too. The Super High Five will be paid out, and we should get good value. 

The Zweig is Friday at Vernon and Monday is the Cane Pace, the first leg of the very popular Harness Racing Triple Crown.

Churchill Downs names a new CEO. Bill Carstanjen, which to me is always tougher to spell than Leroydeserdesonomeaux, is the dude. I think we can expect more of the same with this appointment. Let's hope after the terrible spring meet he does not raise rakes to 30% to "make more money", though.

I am almost through the fascinating "The Sure Thing", a book about Irish professional punter, horse trainer and jack of everything racing, Barney Curley. There are plenty of unique and interesting stories, but one made me laugh.

Learning he was going to be in New York in the early 1980's, The New York Post decided to interview him. When asked about American racing, the only thing the long-time professional racetrack gambler said was "At 18% pari-mutuel takeout I would not last twelve months." Maybe we should send that quote to Bill Carstanjen.

What doesn't fit in this DRF article on Saratoga handle? Handle is down (expected), ontrack handle is near flat (expected, I guess) but attendance is up 12.1%.  We'll get Columbo on the case to see if they're counting barn cats in the attendance figures.

Old school time and why John Campbell is the best who ever lived with a square gaiter: They gave Nuncio time to learn to race from the back, and it's worked well. 98 out of 100 horses nowadays are not given that much patience.

Speaking of patience, Barney Curley was a friend and fan of Charlie Whittingham. He marveled at how patient he was with horses, along with his ability to get them to peak.  He shared the often used Bald Eagle quote about the Arlington Million back in the 1980's. A reporter asked when he thought his charge - Estrapade - was a winner. Charlie responded, "when I entered her"

Kentucky Downs opens soon. Get your handicapping sheets ready. It's got the best betting value in North America.

Loved this. A horse went a big mile at Charlottetown and set a track record with new driver Billy Davis on her. Some cried "juice" but a nice post on a chat board in defence sets some straight.

I got a gazillion hits on yesterday's post. People must like to hear about iPhones or something. Thanks for reading and sharing it. 

I think Bettors Edge beats Sweet Lou this weekend in the CPD final.  I thought he would get beat two races ago as well, so beware any PTP Sweet Lou Proclamations.

Have a great day everyone!

Wednesday, August 27, 2014

The Betting Spiral, To the Power of Two, And What's an iPhone?

I follow some fun, smart people on twitter and last evening, one (Crunk) tweeted that he thinks handle for August will be off close to 4.5% in the US, year over year.

A link followed from Alex titled "Is Horse Racing Entering the Final Furlong" from a UK paper.

“It’s football and these other sports which are helping to counter the ongoing decline in attractiveness the industry is seeing in the dog and, in particular, horse-racing markets,” Ladbrokes’ chief executive, Richard Glynn, warned at the bookie’s half-year results earlier this month.“If turnover trends do not improve and if the current cost structures are maintained for horse betting in particular, it may rapidly reach the point where it becomes unsustainable as a product.” 

..... and as turnover has fallen, racing has been after more money.

"The bookie believes that next year racing will only account for a fifth of winnings at its betting shops — down from 40pc in 2005 — unless “drastic action” is taken to reinvigorate interest in Britain’s second biggest spectator sport. Over that nine-year period, the bookie says, the costs of racing to the betting industry have doubled. The two main costs are the horse-racing levy, a statutory duty on bets placed “off course”, plus media rights"

So, cost of betting up, betting demand down. As betting demand goes down, the stakeholders ask for more of the existing pie by raising costs again.Sound familiar?

We can talk cost and pricing 'til we're blue in the face, but there's more to it.

In the UK since 2006, field sizes have crumbled (from around 12 entries per race to 9), while events have increased. (see stats here). Bottom line? They're asking players to make gambles that are poor. And they expect them to play bad racing events in the same frequency. Round peg, square hole.

Further to that,the evidence that racing itself has usually lived for the here and now, and reacted later to changing environments. In the UK, and here.

I presented on a panel with Mark Davies back in, oh 2007 maybe. Mark's a UK racing nut, one of the original founders of Betfair, and one of those guys who looks forward, not backwards.

Many years ago now, Mark was working on his "2020 Project" - what racing can and should do, to ensure viability and growth in 2020. One of Mark's thoughts was to have wifi and clouds at racecourses, cutting edge betting conduits on course; flashy apps to take advantage of bettors on course, who use new technology like iPhones, which was starting to gain big market share.

"With the explosion in iPhone and Blackberry ownership in the last two years, and with the demographic of race-goers almost certainly having a significantly higher level of such ownership than the general public, it seems foolish to me for racing not to be developing solutions for this now, rather than turning to address it in a few years’ time, when someone else has beaten them to the punch (whereupon everyone can start whinging about the fact that they don’t own the product)."

I guess we can give him a pass when he mentioned blackberry, but remember, this was awhile ago.

When discussing this with racing's stakeholders at the time  .........

 The answer I got was, “Not everyone owns an iPhone.”

In both UK and North American racing, excuses about why people are not playing horse racing like they used to are frequent, sometimes comical, but certainly overused. Racing is in the state its in for many, many reasons. One of the reasons is that it has lacked vision, an understanding of the betting market, and the changing world.

Much of the hand racing is dealt is out of its control, but some of it is clearly self-inflicted.


The word "great horse" is thrown around way too much nowadays, but one horse retired yesterday - I Luv the Nitelife - who I think it was right for. I can only think of one filly since 2000 who was as dominant, tough, fast and versatile, doing it against a decent crop of horses and that's Rainbow Blue. What a shame she had to bow out off an injury. She would've been great to watch for a couple of years. Great horses usually are. To watch her in defeat, which showed her greatness more than any of her wins, click here.

Hey, I read twitter and everyone says only harness people do this stuff? In the famous words of Mike (@gatetowire), "head in the sand". Nothing to see here, move along.

The super high five mandatory payout takes place on Saturday at Mohawk. We're looking at over $600k in the pot and one might expect (with an amazing card) that might be close to $2 million when all is said and done.

Have a great day everyone.

Tuesday, August 26, 2014

Fantasy Sports & the NFL's Multi-Pronged Attack; Much Different Than Horse Racing's

Good Tuesday everyone.

With the NFL Season approaching, people who play Fantasy Sports are in high gear, ready to draft their teams.

Fantasy Football, long ago a part of a geeky stats and football subculture, has gone beyond mainstream. The market is worth billions and information is at your fingertips. The culture keeps on growing and growing and with it, so do revenues.

How big is this market? Well, ESPN alone (one of many companies or media enterprises who run leagues) has 14 million players. There are dozens of ESPN's, and sites like FanDuel where much dinero change hands have exploded.

This has now, as the article above alludes, caused some hand wringing by governments and others, because Fantasy Football had a carve out with 2006's Unlawful Internet Gaming Act of 2006 (the same carve out horse racing has gotten).  This is gambling, no doubt about it.

This niche market, that has grown beyond niche, is a testament of the power of a medium, when intertwined with gambling.

While racing relies on betting revenues to pay for virtually everything, the NFL does not. This medium is a way to encourage people to become football fans for life - to watch the games on TV, buy shirts, etc. 

Let's think about that 14 million number at alone. That's about the number of people who watch the Derby every year. While racing can't do virtually anything with these casual fans, ESPN has already signed them up. It's astounding.

The NFL has been pretty mum on the issue. There are sites outside theirs who are "using" players and the league to host these games. Money changes hands, there's gambling going on. The NFL has not tried to block them, or charge for stats, or anything along those lines. They are a partner, albeit a silent one; one which the NFL doesn't only tolerate, but tacitly approves. 

It can be argued that the NFL has done more for its sport with gambling and the 2006 UIGEA than horse racing has.

Racing is not in this position because it does not have TV contracts supplying revenues. However, it clearly has not done enough (knowing that the UIGEA of 2006 provided racing with a near monopoly in online wagering, and seeing where it stands is evidence enough). While the NFL encourages partners to sell the game for them through these various means, racing tries to more often than not, shut them down. ADW's are constantly being bombarded for more fees because they're "pirates", Betfair is the devil according to most. In racing, a past performance is treated like a piece of gold, not like a box score.

I think it's obvious this has been a big mistake. 

Back in 2000 the NFL could've played hardball with fantasy football. By making a strategic decision they didn't.

14 million people are signed up in only one league this year, and come next Sunday the bulk of them will be watching Sunday Night Football, at the bar having a beer, wearing their favorite players shirt or hat. They'll bring friends to watch and play with them, their families will grow up in the same culture and it's very likely that for generations they'll be watching football.

The NFL was very smart to embrace a new way of doing things, despite fantasy football being looked at like a defacto "competitor". Realizing this early on has grown the game leaps and bounds.

Monday, August 25, 2014

Monday Musings on the Racing Weekend

Hello horse racing peeps.

Although I don't mean it to, these Monday posts with weekend musings are becoming a trend. Somehow I don't think it's overly groundbreaking, but, anyhoo, here we go.

I watched the Pacific Classic and was pretty impressed with the Shared Belief victory, despite it being trip and pace aided. It's nice to see a horse win a big race like that, look fresh and sound doing it, when the connections skipped the Kentucky Derby and Triple Crown to do just that. We've seen horses scratched the day of the Derby, or before it, because it was on the calendar. It was on the calendar for Shared Belief, too, but they didn't take the bait.  As for his Beyer, well, I agree Mike.

I am unsure why old Game On Dude takes so much flack. The old boy shows up, and even with a ridonkulous 45 and change (on poly no less), he still didn't give up.  It seems every time the horse loses, twitter chimes in with "Dude no good". Dude is very good.

Sweet Lou won his 10th in a row Saturday in his CPD elimination. I didn't think he looked fantastic but the depth of field he faces next week is not overly stout. In the other CPD elimination, Clear Vision rolled home fast like a little fish, off way too slow fractions on the front end.  I'll be betting against Lou in the Final, I am just not sure with who.

Bolt the Duer, who has been flat as a pancake with some sort of maladies this season, won Saturday at Pocono and driver Mark MacDonald said he felt like his old self. 

The Canadian Pacing Derby card will be a good one, and the last race of the day has a mandatory payout of the super high five, aka the only day people should probably be playing that bet.

Palice Malice's work Sunday was reported as poor and this was confirmed when owner Cot Campbell (guys named Cot are made for racing, I think, but I digress)  said he's out for the Woodward. Palace Malice's issues appear to be deeper than originally thought. Something is wrong with him, I suspect. .

I watched the Travers. I, like everyone in racing except people who did not watch the race, or those who have real trouble with numbers, was surprised Joel Rosario pushed that pace. Tonalist raced super, I thought.  I really like that horse.

Speaking of the Travers, attendance was announced at 45,557. I don't know about you, but when I hear NYRA attendance numbers now, I think of stories about Fidel Castro winning elections with 99.3% of the vote.

I saw an exacta payoff or two at Del Mar today (I don't play Cali racing, so I never pay attention), and saw just how terrible that exacta rake is for punters. If you have a positive ROI in the exacta pool in Cali since late 2010 when they jacked the juice, you are probably the greatest horseplayer alive.

I was surprised that Pacific Classic day only handled around 17 million. Satuday's Travers card handled something like 40 million. 

Captaintreacherous was scratched on Saturday. It was announced his next race is the Winbak Pace on Jug day. They said they were going there early in the year; and it's ballsy. It's been no secret the Cap'n has little quick speed and is not the best gaited horse around the turns. He'll likely need a good post, or park the mile first over to have a chance.

The four year old male pacers continue to have a terrible year. Sunshine Beach looked nothing like the horse he was last year on Saturday (or even off his qualifier this year), and horses like Lucan Hanover are non factors. Conversely, the four year old mares are not too bad (despite no ILTN), female trotters aren't either, with Classic Martine, Ma Chere Hall and others doing well. Bee a Magician is not going as fast as she was last year, but she's done alright, too.

Joe over at the VFTG blog looked at harness horses who have disappointed in 2014.  I have to take issue with Foiled Again. If one thinks he would do super-well having to pace 1:47.4 each week at age ten, I don't think that was wise. He's Tom Watson. Last year at age 55 in human years, Foiled could really contend in the Major's. But this year at age 65 in human years, he is not quite up to snuff. But he's still a really fast, nice horse, who can win races.

This weekend someone asked me why, with computers and technology, tracks don't payout to the penny. Short answer: They don't want to.

I played a few races this weekend with TimeformUS PPs, and their website only. If you have not tried it, I recommend it. It's good, and modern, with a lot of clickable stats that are useable.

I have never felt this way before, but I think the two year old pacing fillies - as a group - are faster than the two year old pacing colts.

Have a nice Monday everyone.

Friday, August 22, 2014

CHRB Meeting: If You Can't Ask a Proper Question, You Can't Get a Proper Answer

As most know, I have long given up on California Racing steering themselves out of the abyss, and don't pay much attention anymore, but I got an email with a link to yesterday's meeting. And I listened.

"Racetrackandy" on twitter - not employed by the industry, but a guy who probably works harder for it than a lot of people who are paid by it - drove up to make a public comment, as is customary at CHRB meetings. His comment - well thought out - regarded takeout rates in California, their changes, and the analysis of them.

It was an academically sound question and comment: 'There is a proper takeout rate for wagers in California that increases purses and increases payouts to customers to encourage more betting, both short-term, but particularly the long-term. Can California racing move toward this number, professionally and academically, rather than specious, arbitrary changes that no one can learn a thing from?'

The response, and question, from CHRB member Madeline Auerbach shows how far racing needs to go to change its preconceived notion of what gambling and takeout is, and how to begin to move the sport forward.Paraphrasing, she said "How can you guarantee these takeout changes will not hurt the people who invest in horse racing."

The thinking is: We now have "$X" because takeout is "set". We may have less than $X if we adjust off this "set" number.

That question is misguided (the easy answer to that is, "with real handles off 50%, purses down, racedates down, foal crops down, the threat of online poker from Indian casino's up, and everything else, how can you afford to not find optimal takeout rates."), but it's much more than that.

Racing has clung to a takeout number that has never been set by the gambling market. It's guaranteed to be wrong. I'll type that again: The current pricing structure in California (and elsewhere) is 100%, bet all you got, Secretariat in the Belmont, never a doubt, no question, unequivocally, wrong.

Neighborhood bookies are not charities; they did not come up with 5 cent or 10 cent lines because someone told them to. Slot machines, long in Vegas priced at terrible 15-25% takeout rates in the 1960's and 1970's, did not come down to their present 2%-7% levels because a politician told them to set them there. Poker, long played in more than spaghetti westerns over the years, does not rake 4% out of a pot because someone liked Bobby Orr's number.

Those rates were all set by markets.

Racing's current takeout structure was not created from analysis, trial and error, the market, or anything else. They were set in 1907, and changed based on whims. As a monopoly, this could be done. Cash strapped governments who haven't liked a program they did not want to fund, needed more and more money; racing happily went along for the ride. Even though this price setting did not work and never really has (read up on the handle and revenue changes in the 1940's to see evidence of that), at least racing had a monopoly, where some sort of average cost, rather than marginal cost pricing could allow it to get by.

That all changed in the 1970's, 1980's and then through the massive disruption of the Internet beginning in about 2000.

Ms. Auerbach is asking a question that has no basis in reality, in terms of academically and fiscally sound pricing policy. She's asking to protect a takeout rate that has never been set by the market. She's protecting a phantom number.

In regular businesses, we have discounted cash flows, internal rate of return targets, and opportunity costs of capital. Those are taken into account with a capital project, pricing changes, what have you. A company who sells widgets for $4 (because the market says so) can raise their price to $5, analyze the changes beforehand with forecasting, and analyze the emprical results afterwards. it's been done forever. They can ask the question "will this price change hurt us" and do so with sound logic.

Racing's pricing is phantom, a ruse, a number that might as well be made up. Protecting it, or not wanting to move away from it to ensure the business is doing the best it can is not logical. It's not sound. It's not right. And it's bad for horse racing.

I see on chat boards and on social media, Ms. Auerbach is getting criticized. I guess I did the same above too, but I don't mean to, nor do I blame her. The culture of racing has taught her, and others, to think that way. They think at current rates the pie is full, and a change off them lower will cause a "piece to be taken away" from them. It's wrong, and it's detrimental to racing, but like Will Cummings in his pricing study paid for by the HBPA said in 2003 "racing has lived with high takeout for so long" it really knows no other way.

One day - and I am sure of this - racing will move off the numbers. The old guard will be purged and change will come. When that day comes, racing will begin to move forward and be priced like the rest of the gambling world. For the people Ms. Auerbach speaks about who invest everything in this sport, I hope that day comes sooner rather than later. 

Have a nice day everyone.

Thursday, August 21, 2014

The Horse Racing Media

I have tried to catch up on a little reading the last several weeks. I forgot how good for the mind and soul it is to read something that I am not clicking to read all day.

One book I grabbed was by sportswriter John Feinstein called One on One. I've always enjoyed his writing, and had not read one of his books since The Last Amateurs, about the Patriot League way back in the late 1990's, so I figured it was time. I didn't love the book but one set of stories - on Tennis - were pretty compelling.

Tennis, like boxing and horse racing, has left much of the North American's public's consciousness the last twenty or so years.  The days of Borg and McEnroe ( I remember getting up early on Sunday's as a kid for Wimbledon, just because of them) are long gone, and with them, so seemingly did Tennis's popularity.

Feinstein laments (rants) that the Tennis media is one of the reasons for its downfall. He says (paraphrasing) that those who cover and broadcast the sport carried water for it - "cheerleading" at every turn. Players, he says, could not be criticized, the Tennis association spoon-fed stories which were repeated, its problems were never broached, and this created a culture of a lack of accountability. He also spoke of the insular nature of tennis where policy dictated the media had almost no access to cover the sport, unlike golf, or other sports where the media could be in the locker room at almost all times.

Sour grapes perhaps, but the parallel between it and horse racing was not lost on me.

Over the years the racing media has held the same labels. Press releases were spoon fed and copied, too many friends or friends of friends were in charge where media members would not be critical of them, or their decisions, should they have made a poor one. Bad news or bad policy was apologized for, or swept away. You've heard the criticisms of the racing media, so I won't bore you any longer.

Although for years and years I agreed with that; I still do to some degree of course (we can find examples almost each week in some quarters). But I think the horse racing media - in 2014 - is much different than even five years ago. It's much better.

Beyer is not copying a Gulfstream press release about a Rainbow Six, he is writing columns saying why its a bankroll killer and a sucker bet. Other columnists like John Pricci are doing what they do, without any hesitation.  Finley, through his columns and his thrice weekly paper "Harness Racing Update" does not shy away from the problems.

Sure, that's the columnists you might say. But it's more than the usuals like Beyer and Pricci.

Paulick will try and tell what's what, despite being a slave to advertising (it's how he pays the bills, after all). Perhaps he has gotten more secure with his website as a long-term entity, I don't know. But he has angered several of his "friends" in the sport when he feels they are hurting it. He has for years now.

Read the Bloodhorse. The stories covered are not pablum, spoon-fed stud farm releases, or horsemen group claptrap. They're covering bettor boycotts, drug issues, and people like Tom LaMarra have columns where they can express themselves regarding the problems of the sport.

Overall, when you read a "handle down again" story in 2014, there is some analysis. It's not all the "weather was bad" or "well, the Olympics were this month" - although that still happens (think "field size" and "Churchill Downs" recently). Tough questions are being asked.

People (I am guilty of it when I thought it deserved) slam the racing media relentlessly. But if we look at things dispassionately, I firmly believe it has gotten much better the last eight to ten years.

Maybe it's because of social media, blogs, horseplayer groups, and others who help get an alternative point of view out, or who analyze policy and dig deeper. Perhaps it's because the industry has fallen so far the last eight years that everyone is fed up. Or perhaps this change only exists in my readings, and is wrong. I don't really know.

But I think things have changed. The media - possibly more so than ever before - has done a much better job being curious; by not taking things at face value. By being journalists.

Racing is better for it.

Wednesday, August 20, 2014

Analyzing Industry Decisions, Properly

Horseplayers are generally pretty bright. To have a modicum of success you have to analyze hundreds if not thousands of factors, put those factors into an overall odds line and pull the trigger. Even when you do that, then you have to structure tickets properly. It's like analyzing a business case.

Jeff Platt is a pretty smart horseplayer, and analyzes data better than most.

In a two part series on the HANA blog, he looked at the thinking behind the daily double takeout changes in California. As most know, they changed the double takeout from last year to this, dropping it about 4%. They also, for some reason unbeknownst to anyone I have spoken to, eliminated the rolling doubles, only offering three per day.

So, when analyzing the above, you have to take into account variables like the overall handle change, daily double handle changes, and the lost number of daily doubles. Some standardization is in order.

At the CHRB meeting last month, as Jeff spoke of in part one, this was not done. Overall double handles were looked at without looking at any other variable. Clearly handle would be down, because only 207 doubles were offered, from 545 during the apples to apples period but they did not take this into account. Politics? Probably. If McDonald's dropped the price of Big Mac's by 10 cents, closed 62% of their stores and saw (the only obvious result with that many store closings) gross Big Mac sales go down they would never say the 10 cent drop was a bad idea.  But Cali racing did.

Give part I and part II a read here. If you like to see the inner workings of this sport, and why math, science and real analysis takes a back seat to people, politics and personality, it's eye opening.And it provides us with a good glimpse on why policies that raise handle in racing have been so difficult to get enacted.

Have a nice day everyone.

Tuesday, August 19, 2014

Boost Ownership By Catering to What Racing Is All About

I had a neat chat on social media yesterday with a few geeky horse racing and business folks. We were trying to come up with some sort of linear function of what horse ownership is.

Clearly, when approximately 50 cents out of every dollar invested in horseflesh is your rate of return, it's much more than just about purses; which is pretty interesting, considering how much horsemen groups particularly place on the purse variable in racing; not to mention the empirical data that is accompanied it.

What's it all about? A lot of things.

Over at Thoroughbred Commentary, York Racecourse was looked at in this regard:

"Since 2011, owners with runners at York have enjoyed the use of a dedicated lounge and dining room, with unobstructed views of the racecourse and parade ring. A recently completed building was also set aside to congratulate connections of winning horses.  They instantly receive a USB stick with a still photograph of their winner, together with a DVD of the race. Within a week, winning owners are sent a photograph of the happy occasion within a silver frame. And celebratory glasses are raised not just by winning connections, but by those owning the second, third, and fourth horses home. "

We can call that ego stroking, or giving into rich horse owners wishes, or whatever you want to call it. I call it good business.

Perks are a big part of shelling out hundreds of thousands of dollars a year for a horse. Perks are a big part of $5,000 a month bills, and $10,000 vet bills, and everything else. The owner experience in both Thoroughbred and harness racing can, and should do much better.

Monday, August 18, 2014

Monday Musings on Price, and the "What Have You Done For Me Lately's"

Good morning. It was an interesting weekend in Horse Racing Land, so here are a few thoughts on that, along with some general musings.

It's One Race, Take a Breath

I read on the twitter, after Palace Malice lost in the Whitney, some serious angst. Pletch could not find a thing wrong with him, sheets guys were looking for bounce clues, hand wringing ensued. Pletch must've panicked a bit when the blood came back good too, because he added blinkers for his next work. This is the horse that ran like a quarterhorse with them on in the Derby.

Sunday, Father Patrick, the very good three year old of Takter's who has only lost once, lost again. He was beaten by the good Datsyk.  Father Patrick, who can sprint home as fast as any trotter out there who is not named Sebastian K, had no response, crawling home in only 28.2 off cheap splits. Enter hand wringing.

We truly do live in a what have you done for me lately horse racing society.

Both Palace Malice and Father Patrick - like thousands of horses throughout racing history - will come back next time and answer the question that needs answering: Was it a fluke or is something wrong with them?

It was one race. Nine times out of ten these types bounce back - it was an allergy, or the horse had a bad day, or a dozen other reasons. No need to go crazy about it until it becomes some sort of a trend.

Where's the Money?

I keep checking the handles and I don't see much that gives me any confidence the tide is turning. Del Mar handle, dutifully updated on Racetrack Andy's email list, has been poor. Saratoga is seemingly softer. For years now, everyone wants to point to one thing for the decline. "Lack of cooperation", "PETA", "bad trainers", "smaller foal crops"; the list is literally 100 miles long. What I point to is pretty simple. There are fewer people betting horse racing. This year, like other years, I have heard from so many players who say they are fed up. Pricing is going higher, like at Churchill Downs. Signal fees are going higher, where it is harder to make money long term. There are fewer and fewer races to bet with proper field sizes.

Horse ownership can move up and down with something as simple as the stock market. If your Apple stock realizes a 40% gain since 2007, you can take a little out and buy a horse. The economics are what they are. Horseplayers do not take money out of their investments to buy a superfecta ticket. They use the money gained from other bets to finance their bankrolls. Their bankrolls are growing smaller and they are leaving.

I heard from one chap last week. He bets probably close to ten million a year. "I'm playing more poker" he tells me. If you think he's the only one who has done that since 2008 (I forgot, it's "the economy" right?) I think you're living under a rock.

Speaking of That....

Beyer has a piece about the Players Pick 5 and lower rake in general in the DRR and WaPo:
  •  Even with the low takeout, it benefited the industry. When horseplayers handicapped the pick five, they formulated opinions that led them to the races individually. When the wager was introduced at Hollywood, Panza said betting increased significantly on the early races of the card. The pick five became the best argument ever made for the virtues of lower takeout.
 Fort Erie supports the Equilottery

"Scheme", What in the hell is a scheme? Only in horse racing

Racing Victoria, a down under racing jurisdiction, creates a "scheme" to lure offshore punters back into the pools.  The "scheme" is to offer part of the margin back, through a takeout reduction.

The curious thing is, as the industry has evolved in the free market, Australia never had it better.

With the state run totes, offering very little in the way of innovation and price breaks to regular players in the early 2000's, offshore wagering was sky high. According to the AWC, offshore wagering was 37.7% of the market in 2003. In 2011, this number fell to 13.8%.  Corporate bookmakers (which came aboard from 2007-2010), offering a square price, betting exchanges, innovation and a good price, as well as their advertising dollars helped bring people back onshore.

But, that was not good enough for racing. They've been after more money from them to "support the industry" (racing has never met a margin they don't like hiking, especially if it's popular). As those margins are increased, of course, players' margins decrease and some head offshore.

Now racing is back, trying to undo what they've done. This is like hitting yourself in the head with a frying pan and wondering why your head hurts.

Racing in North America, which continues to do similar should take heed; they won't. It's all about squeezing the lemon for short term gain, while people leave in the long term. Then they have a symposium to blame the losses on something else.

Mohawk Thoughts

I don't put too much into the soupy track performances at Mohawk; that track can be tricky. But you can't help but be impressed with JK She's a Lady on Saturday.

I thought the Captain looked okay at Mohawk on the weekend. But people are beginning to see how he ran the table last year but is having trouble this season against better (and what good handicappers noticed last year): At the quarter he is chased along to pass in a dawdling type pace, just like he did last year several times. But this year a horse runs at him who has some talent (like Sunshine Beach did). In the Open events it's not only one who does, it's sometimes two or three. The Captain, who is fairly devoid of quick speed, can't make his own race by intimidating cheaper stock this season, even though he is the same horse. There are no more 55.2 halfs with a grind home.

Handle at the Hawk was over $2 million. Which is a sparkling number.

At the Gold Cup and Saucer, single file racing is not allowed. Wow, what a half mile track barnburner.

Have a nice day everyone.

Saturday, August 16, 2014

Gold Cup & Saucer, Grassroots Appeal, Even on the Interwebs

Tonight is the 55th edition of the Sobey's Gold Cup and Saucer in Charlottetown, PEI. The event, which has been branded the old-fashioned way - without money spent on branding - is a stalwart of the grassroots harness racing season in North America. The $75,000 purse Gold Cup is contested at midnight Atlantic time (11 eastern) in front of a raucous, fun crowd.

I was perusing the social media-a-sphere (that's not a word, but I like it) today. There is the Garrity at Saratoga for $250k, there are a half dozen or more stakes at Mohawk, where the Grand Circuit has moved into town and the who's who of the sport are in those places. However, check it out:

"Gold Cup" and "Charlottetown" and "PEI" are all harness racing topics being spoken about, moreso than many other topics in the world of harness racing. That's tantamount to a $75,000 open stake at Remington Park being talked about as much as today's Arlington Million.

As I mentioned on twitter, I was sitting at the beach in Nova Scotia last evening and someone had the classic rock station Ocean 100 on. Lo and behold at a commercial break they played the stretch drive of the 10th race last evening from Cahrlottetown Driving Park. Harness racing, even not the Gold Cup card, is a big deal. Racing, unlike virtually everywhere in North America, does not have to pay the media to cover it, it's covered because it's a story. 

For the full story on tonight's Gold Cup, it's here.

Wednesday, August 13, 2014

Early Favorites to Replace Collmus at Churchill Downs

If last night's scuttlebutt is true, and since it is reported by this guy, who looks officous and newsmanlike it probably is, Churchill Downs will be looking for a new announcer.

I've heard down the grapevine that the new caller needs to be "accurate" but most importantly needs to work for peanuts. As we all know, Churchill doesn't pay overly well, so this makes sense.

My grapevine, which is sometimes wrong but most times really wrong, has given me the inside scoop. Here, six or seven dear daily readers, is the early line.

The Big Board 9-5 (with Churchill Downs increased takeout, 7-5):

I'm hearing this is the heavy chalk. At a meeting an unnamed board member with a lot of pull apparently said "we can get a day laborer - maybe even an intern - to type the names of horses on the board. Who needs sound because a lot of people can read good. This will help raise on track attendance. If you are not at the track you won't know what's going on."

With logic like that it's pretty hard to argue. That's a strong favorite.

HAL 4-1 (with Churchill Downs raised juice, 3-1): 

The talking eye from 2001 might be making a comeback ("We can get him for nothing" says my source); but I am hearing there are stumbling blocks.

"Using our crack staff we can not program him to say horse's names so the user experience is not that great" said my source. "He says 'here.... comes ...... three..... there .... goes ..... number ...... eight.....' , and it doesn't sound like a human person calling numbers, like at Bingo. It's not bad for some short field five claimer, but for the Derby even drunken infielders would expect more."

"The software upgrade to get HAL to speak horses names can cost upwards of $7,500, so right now it's stuck in corporate" added my source.

Larry Collmus Cardboard Cut Out (6-1, with Churchill Downs increased takeout, 5-1):

My sources say that they are trying to create splicing technology to have Larry call the races, using last year's races. A cardboard cut out of Larry (or several of them, perhaps one with Larry waving, one with binoculars, one eating a hot dog while waving, etc) will be propped up in the announcer booth, for added realism. This is forward thinking and downright cheap, as we might expect from Churchill Downs.

"Larry might tie this up in court" says my source. But he later adds "we got a lot of lawyers, so we can play hardball"

As a bettor I do think this has a chance.

Announcer Idol 8-1 (with Churchill Downs increased takeout, 7-1):

Create a contest, have contestants sign a waiver that they are not paid for their participation, then let them call the races. That's a recipe a cost-cutting track can hang their hat on.

Scott Blasi 10-1 (with the rake hike 9-1): I don't know, this seems far fetched. 

Mark Johnson, 10-1 (with Churchill Downs increased takeout, 9-1):

No, not that Mark Johnson, but any Mark Johnson.  By saying Mark Johnson is calling the races, people will think it's the professional race caller, but it will really be a random guy named Mark Johnson. He will be paid with free plays of Luckity at, and receive ten points for every accurate race call. That's serious value.

No One, 12-1 (with Churchill Downs increased rake, 10-1):

 "It was good enough for Keeneland for awhile, it costs nothing, and it may help field size", says my source. How it helps field size is something only Churchill knows, but those Churchill guys are kinda funny with the whole field size thing.

The Field 20-1 (with the juice boost, 18-1):

This includes people on this guys' list and: Richard Grunder, the guy that says "ils sont partie", Super Saver and anyone that currently works for Churchill Downs, Yum Brands or who lives in the state of Kentucky.

Enjoy your day everyone.

Monday, August 11, 2014

Cub Reporter has the Inside Scoop on Social Media Imposters

As we see with today's Paulick Report’s expose about a purported con man, sometimes you don’t know who you are speaking with on various forms of social media. Is that person really who he says he is? Is she really an accountant from Jersey who loves reality TV? Is he really a hairstylist from Vermont who rescues abused malamute huskies in his spare time?

Fortunately you need to worry no longer. Cub Reporter has been scouring the archives,, various media outlets and been using state of the art identification software, just like is being used by people in government (and google) who know pretty much everything about everyone. He has the inside scoop on who is real, and who isn’t in social media in horse racing.

“Don’t tell anyone Pocket”, he said in an email to me. “OK, I won’t say a word. Your secrets are safe with me, Cub”, I replied

So, here is what he told me.

 Twitter's Gate To Wire: This is someone who many of you know. He wants 72 hour security barns for all races, workouts, qualifiers, polo matches and the race Hidalgo was in. He is actually the US Anti Doping Agency's Travis Tygart. You heard it here first.

The DRF’s Matt Hegarty: The DRF supplies their correspondents with encrypted image software, not unlike is being used in the new $50 bills. If you see a red background DRF logo with a dude with glasses, it is impossible to fake.  

Peter Rotondo: Ya right. No one looks this good. 

Alan "Left at the Gate" Mann: Fake. He's actually a Tea Party Republican who only listens to soft 1970's rock.

Sid Fernando and O_Crunk: I heard from Sid that O_Crunk was real, and I heard from O_Crunk that Sid was real. They have to be real, unless they're both lying.

Joe Drape: Real. No one could take that much abuse on twitter and not be real.
Ray Paulick: More fake than a three dollar bill, in countries where there are no three dollar bills, like the US, Canada, and probably some Caribbean island.  Cummings Report founder Brad Cummings made him up as his alter ego so people would say bad stuff about "Ray Paulick", not cuddly little Brad. This is one of the biggest and best ringers sprung on horse racing since Northern Dancer won the Kentucky Derby three times in a row (a whole other story that Cub might share one day).

Doug McPherson:  He's the 18 year old Ajax Downs track handicapper and twitter friend many of us know. He's also fake. No one 18 years old likes horse racing.

The Churchill Downs Executive Team: You've seen them quoted in the press, but some of their stuff doesn't make much sense, so you'd think they were from outer space. Not true, they are very real. And they are good friends with Alan "Left at the Gate" Mann and other high level Republicans.

Todd Schrupp: We've been over this a hundred times. He's not Todd Schrupp.

Andy Asaro: Real. Shakespeare is not creative enough to create a fake character like him.

Milli Vanilli: I have no idea why I am including them on this list, but just for the record, they're real.

The ABR Live Bus: A total ruse. There is no horse racing involved at all with this venture. A bunch of shaggy haired kids in a bus? Please.

Doug Salvatore: He wants you to think he's a horseplayer, but it's a clever game. He is actually on the board of directors of Acme Industries. Acme pollutes, throws old ladies out of their subsidized apartments, and other bad things that you see anchors on MSNBC say about businesses. I'd say I had to dig to find this out, but I didn't. His twitter pic tells the tale. I am pretty sure if you look closely you can see a stock option falling out of his pocket.

Twitters "Equispace": A ruse. He's really the Major Of Buffalo

Bob Baffert: Totally fake. He looks nothing like the guy from the 50-1 movie.

The so-called "Flim Flam Man", protagonist of today's big, surreptitious article: Fake. It's a story to increase readership to the Paulick Report Cummings Report so Ray Brad can sell more ads to stud farms, Santa Anita and the Equilottery.

Let this be a caution to everyone out there in Social Media land. You do not know who you may be talking to. There's only one first and that's safety first. I hope the above acts as a guide to help you through the wilderness.

Stay safe and have a great day.

Monday Notes

Good morning everyone.

Ray Paulick has an amazing story about a con man that a few of you might remember in your travels on social media the past year. Because you and I do not think like this gentleman, it shocks us how someone can be so creative and brazen, but when you think about it, a few well-placed emails, seeded stories and what have you can make for a persona that sounds legit.

Although I am sure this can work in any type of environment, it is conducive to work in horse racing. Racing, through backside innuendo, rumor etc, has always been ripe for this sort of stuff. A lot of folks are predisposed to believe a good deal of it. To overuse horse cliches, it's best to get any story from the horses mouth in this sport.

Racing is on soft footing in Trinidad and Tobago (hold it, they race there?). It seems a government imposed 10% betting tax on each tax bet has helped kill the business. Punters have moved play to the non-taxed sports betting circles, or moved offshore and handle is down over a third.

I'm not sure why in so many locales the horse racing business seems to think raising the juice will make more money for them. Not long ago in Australia, which only had the tote, offshore wagering was through the roof under similar circumstances. When the corporate bookies were allowed to do business without a net, this offshore money came back on shore. I read a recent study where offshore, illegal horse wagering there was below 10%. Not bad, and still probably less than it was in the neighborhood bookie days. Price matters. Racing needs to remember that truism in every decision it makes.

Horses sometimes throw clunkers. Sometimes a reason is given, or obvious (high white counts, lameness, something) and sometimes you just never know. Palice Malice's Whitney was a clunker, and Pletch does not know why. Underlying issue or simply a bad race and a bounce back? We'll find out in the Woodward.

There was quite a bit of information from the Jockey Club round table yesterday. Of particular interest to horseplayers, the JC came out and said that new testing must be funded by purses, not by raising the takeout. The latter was trail-ballooned over the last year. I'm glad the JC is standing up for the wagering side of the game instead of just horse owners.

I watched the Dan Patch this weekend and at the quarter I thought Sweet Lou was beaten. He just seemed to have a little hitch in his giddy up. That did not happen. He raced really well once again, and is clearly the top older horse in training. If he somehow wins out, Ake's uber-talented Sebastian might have a run for his money in HOY voting.

I can't help but wonder with Lou, however. What would he be doing if the "handicap" division was as deep as last year? Warawee Needy, Pet Rock and A Rocknrolldance were all capable of toughing it out in 147. As we see with the Captain's record this season, who you race against matters.

Have a nice Monday everyone.

Friday, August 8, 2014

All Hail The English Beat & We Don't Have No Stinkin' Positives

In a not a newsflash to us bettors moment, Jeff Gural of the Big M was happy with attendance this meet but.....
  • The new Meadowlands did attract some new faces, many of them younger ones. The problem, Gural found out, is that it is very hard to get those people to bet. "Even as we continue to work to get younger people in there I don't think they are going to bet," he said. "It's not their thing. To give you an idea, we probably sold one program for every three people that were there on Hambletonian Day. What does that tell you? Two-thirds of the people there didn't need a program, so they were either betting on names or not betting at all."
 When you sell food trucks, or English Beat concerts, or what have you, you attract people who like food trucks and English Beat concerts. When you attract people without a proclivity to gamble, they don't gamble.

It's the culture of North American racetracks versus those overseas. In the UK, for example, when you attend a venue - and it has been this way for a hundred or more years - you are bombarded with betting. Bookmakers dot the landscape, offering odds to attract you to bet. It's what you are there for.

Alternatively in North America, we are not bombarded with betting in that way. It's "here's how you bet a pick 6" where you spend $24, are out in the first race and don't have very much fun. You might split a five horse box for a superfecta, lose and don't have much fun. You look up at the TV and don't have a foggiest where your horse even is, which is not much fun. You bet an exacta box, and with 20% taken out you feel it was hard to hit and you got back $12, which is not much fun.

How could visitors not say "hey, let's grab a falafel."

If a restaurant was spending a ton on marketing, getting piles of people filing in, and having them sit down and order water all day it would not be the best use of marketing dollars. They would pivot and try something new.

Horse racing, without control of betting, and betting systems, very little can be done by an individual track to attract entree orderers, not water drinkers. 

Jeff Gural said he is spending more money on social media for the Meadowlands thoroughbred meet instead. I don't know how well that will do to increase handle. It's tough to see taking a selfie with a superfecta ticket helping it a whole lot.

No Stinkin' Positives

On SC today, we saw a story that 99.302043940203% (I might be too exact) tests in racing do not breed positives. 

I am guessing these press releases are tailored to governments and government leaders, and that's fine. If they are speaking to insiders, oh my.

If you read books like The Secret Race, or others about cycling, you'd notice the same proclamations from the last ten years. In The Armstrong Lie (on Netflix), Lance Armstrong emphatically told a media member in an interview (paraphrasing) 'I've been tested more than any athlete and have no positives. Show me a positive or STFU'.

EPO was not able to be tested for much of this period. It has a half life of four hours. When the testing got better, doctors realized that injecting it under the skin would have a slow release, making it still undetectable. After that test was perfected, you could not test for a transfusion.

The sport was dirty despite, "we don't have no stinkin' positives"

When horse racing fans or participants and bettors see horses entering a barn and turning around in a week like Lance Armstrong on a mountain stage, they do not buy the 99.35% of the tests are clean narrative. What it does do is make them feel more and more that racing is out of touch with reality.

Have a nice weekend everyone.

Wednesday, August 6, 2014

The Big L & The Numbers

Lasix is again in the news. I'd make that statement up to the power of 47, but I don't know how to do that on my keyboard.

I wonder sometimes, racing sure spends a lot of time on issues that don't make a lot of difference in the grand scheme of things. No matter how you feel about lasix use on raceday, there are probably a dozen other medication policies that can be enacted ahead of a lasix ban. 

Like Bacon said in the linked article above, scare tactics and demagoguery come into play.

Some off the cuff comments:

Lasix use in the US, where 98% of the horses use it, is pretty silly. 98 out of 100 horses do not need lasix. Scarring, blah, blah, blah. I think you're full of crap.

Banning lasix like they do in the UK and elsewhere is a charade. There are other drugs and remedies that do similar and they are used in a uniform fashion. They will be used in the US too if the lasix ban goes into effect.  There won't be an "L" on the program, but unless you have a 72 hour D barn for every race, be rest assured it will happen.

Adding new remedies, drugs, vitamins, whatever to stop bleeding is probably inflationary for horse owners. This stuff will cost more than $40.

This is an elite versus the serfs issue; something that really plagues thoroughbred racing, in my opinion. Sure the black-typers who want to race six times a year at most and shuffle off to the shed will see little effect on their businesses. They might get invited to more horse racing parties in the UK and not made fun of. However, the dude at Mountaineer with a 5 claimer trying to make ends meet is a different animal. He or she is probably screwed. And would never get invited to a party at Ascot on their best day anyway.

Lasix is pretty evil. I think. I hate watching horses pee all day, lose weight, compete then go recover. I don't buy the starts/horse proclamations from either side, though one may be proven right over time, but it really is a drug that irks me.

In the end, I think whatever happens, racing will deal with just fine. I don't think this will shake the foundations of racing either way. I honestly don't.

I think uniform drug policy is a more pressing issue, as a matter of fact. I think tough laws that ensure someone that works with an animal and abuses it never works in racing again should be striven for (right now, inexplicably, these laws have no teeth at all). I think when someone is caught with egregious practices, like shocking on raceday, we should Gural them, call the cops, and hope the person gets sent away to think about it.

That doesn't mean racing should do nothing about the Big L. I just think there are much more pressing issues.

The Numbers

We've read about the mellifluous way attendance is being counted at Saratoga before. 

From the NYRA board meeting today.

2013 Per Capita Spend = Spend in 2013 / # of people in your venue in 2013

2014 Per Capita Spend = Spend in 2014 / # of people in your venue in 2014

 If no one really knows what the denominator is, I don't think you need a math degree from MIT to comprehend you're up the creek without a paddle.

Have a nice day everyone.

Tuesday, August 5, 2014

Lottery Bets, From a Gambling Perspective

By now I am sure many of you have heard of the Equilottery. If not, the company advertises itself as a conduit that “allows lottery players and horseplayers to compete in the same pari-mutuel pools on live horse races.” In effect, you go to the store and instead of betting numbers on a lottery, you bet numbers on a horse race. The concept of getting new money into the pools is perhaps the most intriguing characteristic of the venture, because, as we’ve said more than once in this column: In 2014 horse racing is not your grandfather’s horse racing.

 Back when horse racing had a monopoly (or near monopoly) on gambling, it attracted virtually everyone; sports fans, gambling addicts, recreational bettors and almost any other slice of the population enjoyed the pursuit in some form. As time moved on and lotteries, sports betting, slots, table games, and dozens of other avenues, both online and offline, dotted the landscape, a great many of these bettors were lost.

Now, horse racing is left with diehards, a small legion of $2 bettors who like the sport, and computer or big rebated players, trying to squeeze a one percent margin on their yearly volume to pay the bills. In a pari-mutuel game plagued with massively high takeout, it’s not a barrier to growth, it’s a modern day Maginot line that tells gamblers to go do something else. Horse racing is sold as a place where you can “beat a race, but you can’t beat the races” and never before have truer words been spoken. Despite $15 billion in yearly handle, only a tiny fraction of bettors’ truly do beat the game. It’s dog eat dog, shark on shark.

Poker saw a resurgence in the late 1990’s. Some think it was due to a movie called “Rounders”; others think it was a pocket cam; some think it was the World Series of Poker where an everyman (or woman) could walk away with big money. I am certain all of those things played a part; however, I think the influx of new money brought in more new money, and old money, too, which was a far more important catalyst.

During that time my current stable partner, and long-time University friend was managing a courier service, but found out quickly that the “dumb money” in the poker pools was there for the taking. After a year or two of making an hourly poker wage that was much higher than his employment hourly wage, he quit and became a gambler. That’s lasted until this day.

When new money is brought into a game and that money is less informed, it attracts more money because the game has what gamblers call an edge. That edge brought my friend into poker, along with thousands of others. Gamblers found a place with critical mass and edges where they could make money. In horse racing this concept is not a whole lot different.

I remember, back maybe a dozen years ago, I was asked by a racetrack manager at a tiny handle slots track what he could do with some of his slots money to increase his handle. I, off the cuff, said bet $100 on each horse, one through eight, every race. Because each horse’s fair odds are not 7-1, money must flow to balance the pools. With $800 “seeding” a win pool, it’s both a takeout reduction and incentive to bet. Additionally, with a win pool size reaching a critical mass, it can attract simulcast dollars.

Whether that would’ve been a good use of his slot money is anyone’s guess, but my off the cuff idea was steeped in gambling tradition. When the horse racing industry thinks of horse lotteries they think of getting a slice of what’s bet into the lottery itself for purses and profits. They think this might bring new fans to the racetrack. They think it will be like Sweden. Maybe those things can happen, I don’t know. But, it means much more than a few fans coming out on a Friday night. It helps seed pools, just like a seat at a poker table with a newbie and a fat wad of bills.

If $500,000 is bet on an Equilottery pick 6, many of those $1 or $2 combinations would be quick picks, uninformed bets, or bets that are well below fair odds for the ticket itself. This builds an edge, just like betting $100 on every horse in a win pool does. Me, you, and every other semi-serious bettor wants a piece of that action. It’s better than a pick 6 carryover every week, with a 10% rake. If that $500,000 in new money enters a pick 6, the money from existing players – long upset about rising takeouts, poor fields and terrible betting propositions – suddenly find somewhere to park their dollars. If they were planning on leaving racing, like many have the last ten years, here’s a reason to stay.

When existing gamblers see an opportunity, they pounce, and they aren’t the only ones. If big enough, and interesting enough, the pools can attract some of the people that horse racing has lost; those whom racing thought they lost for good; the people who patronize the half a trillion dollar skill game gambling market. Big pools with public money aboard help sell racing as an avenue that’s open for business, and that’s never more important in the current, highly competitive gambling climate.

Racing has long looked for ways to bring people to the racetrack. Billboards, promotions, food trucks, giveaway’s, bands – almost anything that can be tried has been tried. Those things have not raised handles, and have not created new bettors, because, frankly, they have nothing to do with gambling. The lottery concept is something that has not been tried in North America, and unlike a falafel, or a Stray Cats concert, it adds money directly into the pools, and that money can attract more and more money.

Horse racing should begin to embrace the concept and work with those trying to bring this idea to bear. It’s an idea that on the surface is new, but in the realm of gambling principles is as ancient as the first set of dice. Because of that, it has a real chance to be a game changer.

This column originally appeared in HRU.

Monday, August 4, 2014

Data Bog In Full Court Press

Alan over at Left at the Gate has an interesting post up this weekend. It expounds on the Saratogian article "Season passes inflate track figures: Daily paid attendance includes 6,300-plus pass holders", about Saratoga attendance figures.
We wrote about racing, and racing policy, specifically about Saratoga attendance not long ago.

"Does raising admission fees at Saratoga matter? Who knows. NYRA has a built in excuse and it will be hard to measure its benefit or detriment to revenues either way. Internally they probably will, but if the policy looks like a dud it's unlikely they will broadcast it."

When racing makes decisions (in this case an admission fee increase, in others, a takeout hike), it seems the most important thing to racing is not the effect of such a policy (good or bad) from a business perspective, but what effect the decision has on the decision makers.

Let's hope, somehow, an accurate figure that helps racing understand the effect of an admission increase to forward the sports revenues and popularity comes out of this. Unless something radically changes, it looks like the chances of that are between slim and none.

Friday, August 1, 2014

PGA Tour Goes Horse Racing

With a h/t to Phil J, this appeared on the Golf Channel website this morning. "PGA Tour's Silent Strategy a Double-Edged Sword". It's in reference to Dustin Johnson abruptly leaving the PGA Tour over personal issues. Speculation has run rampant, and the writer questions the Tour policy of keeping these things quiet, rather than telling everyone what the reason is.

This is not unlike horse racing. You'll see a trainer on a suspended list for "something" but that something is not announced. In shedrows, with handicappers, speculation occurs and it is usually something sinister. "He was using R24 rocket fuel on his horses and he will be suspended for life." Nine times out of ten it is not rocket fuel, but an overage for something or a mistake of some sort. Frog juice positives happen very rarely.

The PGA, like horse racing, is very different than other sports. The players and the participants are a big part of its structure. In the NFL or MLB this would not happen, but in racing or golf it's commonplace. I think those sports probably have to move closer to the NFL or MLB or NHL, not the other way around.


Yes, "EBITDA" is not the answer for horse racing. Long-term growth policies are. I have pretty much given up hope that with the present structure things will be done to foster long term growth. Harvesting is rampant in horse racing, and has for fifty or more years. Q2 for Apple means Q2's as far as the eye can see. For horse racing, it means Q2.

I have seen rumors that the price increases at Toga this year are working out okay, much as we have speculated. I am still firmly of the belief that revenue for big events re: admission and otherwise are much needed in racing. Lower the price of bet, yes, because the price is too high to spur handle growth (why anyone would want less handle in the first place is ridiculous when you are trying to drive eyeballs), but put on a fun, good show and try and make admission revenue part of the picture (like is done in the UK).

ICYMI: Hambo program for free is here. The Horseplayer Monthly, also free is here.

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