Friday, November 24, 2017

The Restaurant is Open, We Just Don't Have a Menu

As most know by now, Churchill Downs has banned the DRF from its premises. There's good news though - you can still buy it at a nearby gas station.
Come for the food, just don't bring the menu you've used since Duke Ellington was on the charts. If it wasn't so sad it would be comical.
Racing - especially the corporate variety - has become more and more insular. Signals are withheld, big day signals are priced super-high, the usual horsemen-track signal fights, and increased takeout are all signs of shuffling the pie, in a business that simply can't seem to grow it.

In every instance some faction wins something from another faction for the short term, but then the faction that was aggrieved does the same thing in a month. No one really wins.

There is someone that always loses, though: The Customer.

I've gone to conferences, chatted from time to time with people in power, and I often hear the same complaint : "Why don't we have more customers?" Racing doesn't have more customers because continually and without fail, they treat them like crap.


Mike Maloney and Peter Fornatale wrote what I think is one of the most wonderful, informative, and interesting books written from the horseplayer side of the game. "Betting With An Edge" is both life story between fathers, sons and friends at the track, and handicapping book. I'll review it at some point, but really great job guys.

Can half mile track racing be improved? Here's a deep dive into some stats, and what may help increase field depth and make for better racing. 

The Woodbine harness pick 5 is continuing its run of not only beating, but crushing the throughbred pick 5 handle at the same venue. I know why they chose 25% takeout for the pick 5 at the runners and 15% at harness, but they should've dropped the hoodwink and went 15% for both.

Speaking of hoodwink, the 14% pick 5 at California racetracks is so popular they are adding another pick 5. This one at 23.68% takeout. Trevor Denman's call of Zenyatta winning the 2009 Classic comes to mind.

Have a great Friday everyone!

Monday, November 20, 2017

Racing Transparency

I followed along with an interesting twitter conversation this weekend between several insiders talking about what should, and should not be spoken about publicly.

In this case, it was about an Australian caller talking about a horse bleeding from EIPH, something fairly common in horse racing. Vic believed if he did it in North America, he might be out of a job. He may be right.

Australia is a very mature racing and betting market, and like the UK and some other jurisdictions, both fans and gamblers understand the implications and causes of bleeds. When an announcer or commentator mentions it, well, it's kind of old hat. It's not too much unlike an NFL announcer talking about concussion protocols because it's "part of the game". I suppose Roger Goodell could call Jim Nantz and get him fired for talking about it, but since everyone knows the concussion issues in the NFL, it wouldn't do much good.

In Thoroughbred racing in North America, however, it's almost sacrosanct not to mention something like this. Probably because someone could be listening, and if they are, they'll learn everything is not roses and lollipops. This, to many in the sport, is big time trouble.

Flipping over to a sport a little more down the curve - I've always thought harness racing is a leading indicator for Thoroughbred racing - it's a little more open, and transparent. Harness racing's struggles are for all to see, and the protagonists don't seem to care all that much.

This weekend in Harness Racing Update, the letters to the editor were flying. Joe Faraldo - leader of a New York horsemen group, called Meadowlands Racetrack owner Jeff Gural a "punk" for suggesting that if drivers want to participate in his $12M stakes program, they should race at his track.

As most know, this is something that has stuck in Gural's craw for some time. He's been propping up the stakes schedule and his overnight purses are a fraction of what they are across the river at slots-filled Yonkers. Because of these low purses, drivers - who are independent contractors - have been leaving his track more and more often. Then, of course, when the money gets better they parachute back to the stakes program.

Gural really isn't doing too much out of school here, and such deals can be common in the rest of the world with privately owned racing clubs, but to say it doesn't sit well with a lot of people is an understatement.

Regardless, this fight is open and transparent, and in the end, you'd hope when a policy is changed people know why, and got their say. 

Further to that, Clay Horner, a big time Toronto lawyer and Chairman of the Woodbine Entertainment Group, continues to stoke the fires regarding trainers who have had some trouble (along with some miraculous training results), and the movement of their stock to switch barns for (mostly) stakes racing. 
  •  Events of the past couple of months have reinforced the need to adopt new staking conditions based on increased trainer and owner accountability. Most who follow our top-level racing are aware of the epic double failure of Lady Shadow in the Milton elimination and final and the panicked effort to restore her lustre by immediately returning her to her prior trainer. That was followed by a similar failure to perform on the part of two high-profile and accomplished horses in the Breeders Crown following a necessitated trainer change. Of course, they immediately returned to their former trainer and won their next starts, one in a track record time. In a new twist, the trainer of a Breeders Crown winner had another stable star scratched due to a prerace test in a stakes race only a week later. 
In Thoroughbred racing this thing happens as well - the Navarro situation is similar - but it's all kind of hush hush and no one in a position of power like Horner would say much. Even when Randy Moss casually mentioned the story on the Breeders Cup telecast, you could feel the industry cringe, praying for a quick throw to a Slim Fast commercial.

But in harness racing, it's boom just like that. There's a want (some might say a wish) to hammer home what some think are ruining the game, to improve the game. On the runner side there, in my view, is still a want, or a wish, that it simply all goes away.

Racing overseas is a mature market and they don't run away from publishing vet reports, fully disseminating and distributing news about drugs or positives, and being open with their seasoned fans and participants. Harness racing is a whole lot different. They have serious issues in terms of their  place in the betting marketplace, and relevance, but they too share a certain transparency.

Thoroughbred racing in North America has not followed those two sports. In my view they will at some point, but that point is probably not right around the corner. Until that day comes, expect more feel good news tweeted and facebooked regularly, and relegate yourself to the Thoroughbred Dark Web if you want to discuss many of the real issues.

Wednesday, November 8, 2017

Gambling Growth & Racing: The Importance of Eyeballs, Regulatory Value & Positioning

Legal Sports Report shared some comments from the Draft Kings CEO recently. The DFS company's head said that down the road Draft Kings could become an online sportsbook, if laws are changed in states to allow sports betting.

Sports betting, as most know, has been growing. In Nevada alone, $557 million in bets were taken in September, which was a new record. States like Pennsylvania are setting the table to take bets, should the federal laws change. ESPN, and other mainstream websites, now happily report point spreads, like it's old hat.

Draft Kings (and DFS in general) has been taking some major hits of late, with some feeling their value is overblown. That isn't new in the tech world, and there's some truth to it, but Draft Kings has an edge most others do not.

They are already approved, through regulation, in many states.

They are positioned to generate big ROI from a sports betting offering from day one, because they have active users and plenty of eyeballs. Their database of 8 million users, 4.5 million of which are active, is an ocean of potential revenue. These people are already prequalified to play (and wager on) sports. They are already captured.

If you need to know why investors purchase shares, or are bullish on tech companies who have "eyeballs" but no real revenue, that's the reason why. Tomorrow's revenue is not today's.

For, say, Draft Kings, let's say 4.5 million users bet one $20 bet on each NFL week (including the playoffs) and lose 5%. That's over $100M in revenue on just the NFL season.

Racing, on the other hand, is in an entirely different position. Their regulatory edge lies in bricks and mortar, which has allowed them to gain slot revenue. As a business long along the curve, they've had serious trouble increasing eyeballs, and in fact, it can be said that they don't even know who their customer is (trainers, grooms, owners, bettors?).

And, on days where there is an audience, say when 15 million watch a Derby, or 50,000 people are jammed into Oaklawn, these folks aren't Draft Kings customers, they're one-off eyeballs. Racing can't - never has really - converted them.

When we talk about eyeballs on the blog - and racing's lack of them from an end-user perspective - this is what we're alluding. And when we complain that when someone enterprising in this sport - for example a Betfair, or Derby Wars or data companies - who are positioning themselves to grow eyeballs are shut down in a myopic way, we do so because in the long run it hurts the business.

Draft Kings is regulatorily positioned to take advantage of legislative changes with sports betting. For them, they bait the hook, and drop their line in a pond and immediately get bite after bite after bite.

In contrast, racing drops their line and finds out the pond has been fished out.

That's what happens when your focus has been on squeezing the customer - increasing takeout, making it harder and harder to be a customer through closing the tent and not embracing pro-growth policies - rather than attracting more and more of them.

Tuesday, November 7, 2017

Incremental Racetrack Changes -- Glass Hall Full or Empty?

Over the last ten or so years the racing industry, and how it presents races, has gone through some changes. These aren't big changes, no, but they're incremental.

You've heard, no doubt, racetracks now talking a great deal about field size and presenting better races. This concept was not pushed nearly as hard decades ago, as racing was a slave to the putting on races and they will come narrative. Southern California racing, along with the races at now defunct Bay Meadows, were the prime examples of that.

Yet another example I've seen, is the scheduling of races.

I remember years and years ago watching the Breeders Cup, while at the same time watching Woodbine, which I played religiously when they were featured on Betfair. Without a word of a lie, the gates for a race at Woodbine and the Breeders' Cup Marathon sprung at exactly the same time. I couldn't believe my eyes, but it's the way it was. Many tracks were operating in a vacuum.

You've read complaints about the scheduling of races from bettors for years. These were not uncommon problems in the trenches. 

Fast forwarding to today, I received a spreadsheet from a friend yesterday (thanks Mike) where he examined and detailed a lot about the BC races, including off times at other racetracks. Here's the off time grid:

This, nowadays, doesn't look much different than it has for many years among the top racetracks in the UK. There was very little overlap between Del Mar, Aqueduct, Woodbine and Gulfstream, and supply was increased, to a customer base willing to play the races on an important day.

We see this incremental improvement elsewhere too. Gulfstream has maximized their reach with good results. Tracks like Canterbury who had myriad problems last season were forced to study them deeply and improved in 2017 (it's sad they raised juice back up or it really would've improved) and so on.

This concept, firing bullets instead of cannonballs, is done in the corporate world all the time, and racing has been finally catching up.

So, the business has gotten better at maximizing reach. They've gotten better putting on better races. They, like Magna, have increased their audience by exporting to other countries. They schedule things much, much better to extract more dollars for customers.

But still, there is no real growth, and new customers are not responding. Handle over the last three years will be near flat, and when looked at with inflation, it's negative. Is the glass half full - firing bullets is helping the sport grow-  or half empty - despite doing things much better than they were ten years ago, there's still no growth? Time will tell.

Monday, November 6, 2017

Breeders' Cup Postscript

Good morning everyone. Here are a few of my thoughts on this year's Breeders' Cup.

I thought Del Mar was a great venue from a betting perspective. Both courses seemed fair, and the surfaces played perfectly. This is in sharp contrast to some BC's where souped up dirt tracks make the racing less interesting for both spectators and bettors alike. Kudos to Del Mar.

Handle was again good, buttressing the argument made here and elsewhere that the big days and big meets (outside Keeneland this year, I suppose) keep getting bigger in this sport. The everyday bettor is screaming for fields that offer potential value, and the BC delivers that in spades. Its field size, as well as the quirky nature of the fields makes for some excellent wagering. You rarely have to make excuses, like checking the New York weather report, when the handle is going where it should be.

To the Classic, I enjoyed the Steve Asmussen video watching Gun Runner down the stretch. I submit that wasn't about money and it wasn't about winning a trophy. I think a part of it was about being told all week from some that his horse could not win at ten furlongs. It was being told his horse could not beat Arrogate, who owned him in previous attempts. It was being told his fine horse was beating "tomato cans" all summer and would wilt on this big stage.

I think I know that look and that emotion. It was, "That's my horse. His name is Gun Runner. Take that".

Checking the wagering, how is it when every eye is on these horses we get so many overlays? I'm not speaking about horses we think are overlays (we all do when a horse we like pays $14) but real overlays that help beat the takeout? Lady Aurelia, Lady Eli and Arrogate are obviously fantastic horses who had a shot to win their races, but they don't win those races what they were priced at.

Taking Arrogate as an example, let's say you were right and pitched him out. Sensing he's either great and beats you from the win spot, or nowhere, you can get paid in verticals. Pitching out a horse with over 30% of the pools from a trifecta negates the 22% juice. You can get paid. Time and time again the BC presents many such opportunities.

On the big score angle, these deep fields reminded me a little of the old Keeneland poly. If you were right about a simple pace scenario, you could make them. My nearest hit was the superfecta in the Ami's Mesa race. On pure pace, I bet a closer super that had the 14 with the 1, 5 and 10, with 1, 5 and 10 with all. I also played alls in the other slots. The 5 nipped me, and the 5-14-1-12 super paid $35,000 for 20 cents. You can argue with me that I should've reversed the wager in the top slot, and from a ticket construction angle on a closer ticket that's sound - but the fact remains you don't get that chance near anywhere else in this game.

Gun Runner in one corner, and Arrogate in the other provides us a train of thought. If Nyquist and Exaggerator get stuck in traffic and Gun Runner wins the Derby, there's a chance he's long at stud. We never get to see him develop into the amazing athlete he now is. He's lights out better than a year ago, where the connections were avoiding the Classic because he 'might be a good miler'.

Arrogate, on the other hand, was given a chance to develop by not going into the Triple Crown series, and it paid off with jaw dropping performances the like we've probably never seen. Then, for whatever reason (I think soundness, but that's just a guess) he goes off form.

Horses are horses, not machines. They get good, they get bad. It depends on a lot of things. It's also why I hold horses like California Chrome and Zenyatta in such high esteem. They danced virtually every dance for years, and they showed up each and every time. I couldn't care less what Beyer they ran, what surface they won on, or if a field they beat had a few "tomato cans".

I pitched Arrogate, but I don't say that to crow (you know I don't do that on the blog, or at least try not to), but to share one reason why. Arrogate is a really long strider, and likes sweeping turns - (even his trainer has long said so). From the wood, at tighter turn Del Mar, he was probably going to have a tough time. Adding that the inside wasn't great, and two very good horses could get around Del Mar like a hoop around a barrel - Collected and Gun Runner - it was a no brainer for me, even if he showed up.

I know several people who handicapped the Cup beautifully this year, but could not put it all together to make a big score. It was tough. If you loved a bomb like Ami's Mesa like Brian DiDonato at the TDN did, you'd be four and five wide near the pace, and yet get nipped on your massive win price. If you played her underneath in exotics, you'd need another bomb to cash. If you loved the Juvy Filly winner, but played pick 3's, you had to go "all" in legs, because the winner of the Turf Sprint was mind numbing. Tough game.

The TV coverage - for me as a bettor - was impossible to watch. A race would end, I'd wait for the prices and often they'd come ten minutes later. And if I see another human interest story on last year's Classic (one of the reasons Arrogate took such a beating at the windows, no doubt) my head's gonna explode.

It's okay, I'm not their audience, but if they're (because of TV contracts) going to stop XBTV and others from showing the races live, they can receive our criticism.

Speaking of XBTV - great coverage guys and gals.

Snips - Lady Eli almost died. Her not firing for whatever reason in her last start is nothing to me as a fan of her. I hope she lives a long and happy life. She's fantastic.

Peter Miller's celebration reminded me of the sack races TD celebration by the Chiefs yesterday. Unbridled joy.

Chuck Fipke is an old time prospector and I know quite a few of those. It's a tough life where you scoured the streets looking for flow through financings, and trudged the bush for decades seeking a big win. You have to be tough as nails to survive it. When I saw Sid Fernando's video of him watching Forever Unbridled down the stretch, he looked like a 12 year old on Christmas morning getting a Red Rider BB Gun. Glorious.

Speaking of Sid, his mug was on NBC for like ten minutes and his eyes never left his phone. The man has two phones in case one dies; I don't know what he'd do without his phone. Seriously, congrats to Sid, he's a really good egg and an honest guy in this sometimes bad business.

To y'all who I chat with on twitter from time to time who had their mugs on TV doing analysis, or coverage. Kudos. You represented the sport beautifully. 

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