For Those Who Seek Change, Reality Really Bites

Two of the more strange, weird, wacky and asinine policies in horse racing involve uncashed ticket revenues and breakage.

Uncashed tickets from you, the customer, happen when you forget to cash a 25 cent voucher, tear up a ticket, or take one home from the track and don't get back to cash it in time. Breakage involves taking a tote price down from say $2.57 to $2.40.

It has been proposed time and time again, that uncashed ticket revenue be returned to its rightful owner, in some form. This could be done through a seeded pool, player rewards, or what have you. It's also been proposed that breakage be eliminated. The technology is not only there, it's been there for 40 years to pay to a penny.

Both should be slam dunks.

But when you dig deeper, reality bites. Horse racing is like congress. Everyone has a finger in the revenue pie somewhere, so bad policy can keep right on rolling on.

Take for example, California.

The state used to get a portion of uncashed ticket monies, but in 2009 that was changed. No silly goose, not to right a wrong and give that revenue back to you, but to give that revenue to people who lobbied the law to be changed. Last year, $986,678 of your uncashed ticket cash went to a horsemen fund. $1,681,759 was given to purses, and the track, each. Further, unclaimed refunds went to jockey's, and this amount totalled, $871,311 (source 2013 CHRB Annual Report).

Breakage, the thing that happens because a horse racing Commodore 64 can only round down, yielded a tidy sum of  $5,272,744. This money went into purses and into commissions, like the CHRB.

Let's say me or you - and someone smarter than me or you - put together a business case. Handle would go up by 10% over three years, and revenue would go up by 5% over three years if breakage was eliminated. In addition, if uncashed money was given back through seeded pools, this carryover (takeout reduction) would yield a handle bump of 5% and a revenue bump of 2%.

So, the jock's would get more money than they received from the old policy, so would purses and the CHRB. Yippee, right?

Well, it would not pass. Never. Not even close. You'd have a better chance to hit one of those Frank Stronach triple superquadrefecta's he talked about a few years ago.

Money that is earmarked - even if you can prove there would be more money in the future - is too strong. It's good old-fashioned entitlement.

That's why reality bites. That's why horse racing stagnates. And that's why trying to change it is an exercise in futility.

1 comment:

Peyton said...

Great information but I can't abide by the last sentence. At least not yet, because once I do then I am completely done with horseracing. Not ready to quit trying yet.


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