Everyone Wants Control, But It Doesn't Work That Way

Yesterday evening, Northfield Park in Cleveland had a $12,000 super high five carryover, and realized $151,000 in new money. This past weekend, the Meadowlands only received about $380,000 in new money on their super high five carryover of more than $231,000.

At the Saratoga Gaming and Law conference, the bill which would put the USADA in charge of much of racing's testing (and penalties) was looked at and discussed. Most of the horsemen lawyers at the event (and others in the sport) are against ceding control to the USADA.

A day earlier, at the Jockey Club Round Table, a partnership between Stats Inc and Equibase was announced. This will allow Equibase to offer other products so horseplayers can scour databases and check angles etc.

All three items represent horse racing wanting control of something that they probably have no chance of ever controlling successfully, or have never controlled successfully.

Signal fees are going higher at places like the Meadowlands, but controlling this signal often comes at a price: lower handle. Why? Because your price is not controlled by decree, by Barack Obama, or what you want it to be set at. It's set by the market. Northfield's price is fair, taken by all outlets and if you as a customer wants to make a bet, you will be able to make a bet. If I read "we need to take control of our product" one more time, it's gonna make me even more bonkers. The customer is in control through betting handle, just like any other business, not you.

Horse racing wants 'control' of its medication policy. Well, that ship has sailed. Racing has been in 'control' of this for a long time. In fact, that ship not only has set sail, it's banged into an iceberg once or eleventry trillion times. In 2015, there is no such thing as 'control' because states hold the purse strings with slot machine legislation, protection, subsidy, etc.

Equibase has always 'controlled' data in horse racing. It's how the company makes money, and it helps fund the Jockey Club. A 'new' partnership is probably not needed to do what they say they want to - packages like jcapper and HTR have done that for a long time. Further, as Matt notes:
  •  Given all of this data goodness (or, really, badness), forgive me if I'm skeptical of the Equibase-STATS partnership. Based on the current lay of land, I'm pretty sure we'll be presented with some dressed up data packages that still require horse players to shell out good money to access what that fan of any other sport can access for free: result
In all three instances there are principles being used that don't pass the smell test.

Vegas, with a monopoly for a lot of years didn't 'control' the price of a money line. Customer demand controlled what price they charged. Average cost pricing is for the Hoover Dam, not for Bally's.

Cycling tried to 'control' testing and penalties for a good deal of years, to absolutely no avail. Only when the USADA came in and used non-traditional means to catch the bad guys, were the bad guys caught. The USADA changed the culture of cycling.

The NFL and major league sports have not seen a cottage industry of fantasy sports totaling many billions of dollars by charging for box scores. They have not seen the subsequent gains in television viewership, fandom, jersey sales and the rest, through not telling people who rushed for over 100 yards on Sunday, or asking for $14.99 to find out.

Henry Ford said (paraphrasing) 'We don't pay the wages, we only handle the money. The customer pays the wages'.

The customer will tell you what signal fee to charge.

The customer needs a storefront to shop in your store, and storefronts that charge admission don't work very well in a perfectly competitive industry.

The customer of racing, when it comes to drugs, violations and the treatment of animals, is the public, through its elected representatives, not racing itself.

I realize the sport wants to control what they charge, what they sell, and want to regulate themselves. That might have worked one day. But it doesn't work that way anymore.

1 comment:

Ron said...

I wish you were in charge. Then maybe my adw could accept wagers on my favorite track, Oaklawn Park.


Carryovers Provide Big Reach and an Immediate Return

Sinking marketing money directly into the horseplayer by seeding pools is effective, in both theory and practice In Ontario and elsewher...