Churn Killing Bets are Approaching the Absurd

Gulfstream Park announced today they are starting "Rolling *Jackpot Super High Fives". Yep, you read that correctly.
"The Rolling $1 Super Hi-5 will have a new twist that has the potential to generate jackpot-size payoffs. The innovative wager with a $1 base will be offered in every race, challenging the bettor to select the first five finishers in exact order. The new twist requires the bettor to hold the only winning ticket in order to cash. If no one holds a unique ticket or if there are multiple tickets with the first five finishers, the entire pool will be carried over to the next race." 
* So, they sent out some sort of correction of the above - the high fives will be rolling, but if multiple people hit one, they do get paid. The rest of this piece is about generic hard to hit bets and churn.

Gulfstream Park now has rolling high fives and a jackpot pick 6. As most know, these bets are based on very high takeout, which almost eliminates any churn. Players like you and me may play this when it's carried over high enough, or on mandatory day. However, that's not the point.

The point is, the casual player can never be attracted to play horse racing more than a few times a year if he or she goes home broke every day.

Gulfstream is encouraging the casual player to come to the track and bet super high fives which are almost impossible to hit. Then they hope this casual player - after losing each race chasing a pot - has enough left over to chase another almost impossible to hit bet, the Rainbow Six.
Compare that to the 1970's and 80's, where your casual player might bet a few bucks to win each race, or an exacta box, cash and have a little back to play the next race. If they got good enough at the craft, they come back the next day to play, with a little bit of a bankroll.

This type of thinking puts a governor on growth; on attracting new people to play. Losing money on hard to hit bets is the lottery, not horse racing, and horse racing can't out-lottery the lottery.

Compare this to a real gambling enterprise - one which track execs and horsemen groups in this country seem to have an issue with, Betfair. From their annual report:
"Racing knows that customers who go racing, and a) feel they had no value for money at the racecourse, and b) don’t win a single bet all day, don’t have much fun. They may not come back. In just the same way, we know that the least valuable customers to Betfair are the ones who lose all their money quickly. They go away and never come back. So, we are happy to take less off our customers per bet."
Churn killing bets can and are being used for promotion and that's fine, but too many of them send more and more people home broke, over and over again. That strategy, for a gambling game, will never work. I think most in charge know this to be true, but they do it anyway, and blame handle losses on contest sites, the weather, or whatever is in the news that helps their narrative at the time.

As one racing person said to me once regarding things like this: The industry can't look further than the end of their nose. 


Ron said...

Stronach is 83 years old, the last thing he's worried about is long term growth. Especially with handle being up at Laurel and Gulfstream at Calder. His motto has to be, if these idiots keep betting I'll keep taking.

Eric Poteck said...

Churn ceased to exist once the simulcast era began.


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