Public Cappers Cap for the Boss

Unless you are off the twitter grid (God bless you), you've no doubt witnessed the feud of the month(s) between ITP and some public racing handicappers and racing analysts.  It has not been unentertaining. 

ITP, profiled here in the antithesis of an average-quick-hit-interview-with-an-owner-or-breeder, clearly makes sound and logical points. Namely, why are you giving out negative EV bets, because your and the sports' future depends on helping your customers win more money (and those suggestions do the opposite). 

The comeback - again with some validity - is about making sure your customers have a better chance of winning that sequence or day, by giving them higher hit rate outs. They don't care if their tickets will pay 70 cents on the dollar long term. 

It's been like this forever, of course. Your newspaper handicapper would get a raise with a 37% hit rate, fired with a 18% one, even if the latter was $1.07 after crunching the numbers. 

The difference (chasm) between the two points of view lies, in my opinion, on a pretty simple fact. 

ITP is offering suggestions to help the customer beat the game. The public handicapper is offering advice to cash a ticket. The former is the sole reason you and I and everyone who may be attracted to the game do so; the latter is following a dogma that has existed for generations. 

What dogma? A dirty little secret (that's really not one in this business to anyone who follows it) is that the racetracks have never been focused on you making money. This statement is not even debatable. If it wasn't true, takeout would be lower and/or rebates would be more readily accessible. Where's yours?

With a focus that's not on you, many public track handicappers have no choice in the matter. When you see them offering a spread ticket with chalks, telling you absolutely positively without question should be taking a 74% takeout jackpot ticket, or using all three favorites in the first leg of the double, they're handicapping for their bosses. 

I don't want to paint a broad brush, so I'll make that clear. I believe there are several excellent racing analysts giving out gems of wisdom, presenting some good ideas and that do their homework. They do want you to win, and coming to work is more than just a paycheck to them. But they're the outliers; they're the ones bucking the trend. And they're the ones quietly nodding that ITP is making a strong point. 

Have a nice weekend everyone. 

3 Ways to Manage Our Betting Bankrolls

I wrote the following for the Handicappers Edition of Trot and reprint it here:

For those of us who’ve made the “walk of shame” to the ATM at the track (or had way-too-many deposits to our online account) know, bankroll management can always use some work. There might be nothing that’s more frustrating or misunderstood than the bank we play this game with.

I’d like to offer three ways we can maximize our betting bankroll (or at least feel better about it) and hopefully make this incredibly tough game more fun.

First, it’s important to remember that when we bring $100 to the track to wager, it is not our real bankroll. We as bettors, over a month or two, have a much higher stake to bet with than we think. What we need to do is gather what we can use as our real bankroll – usually a figure we are comfortable with – and bet off that number.

I know some bettors who start with a ‘real’ grubstake of $500 and they use that as their anchor. When their account gets over, say, $1,000, they take $500 out; when a losing streak inevitably happens, they top it off. This anchor number can minimize the frustration and mental stress with continual reloads of $20 or $100, hoping to catch lightning in a bottle.

We as horseplayers tend to like things a certain way. Picking a bankroll number we’re happy with allows us to get comfortable and worry less about how much money we have and more about making it.

Second, I saw professional horseplayer Mike Maloney not long ago chatting about properly managing bankroll, and he suggested a really great tip that fits so well into today’s world of harder to hit exotics. Mike advises that some bets in some sequences should not be played if we do not have the bankroll chops to play them; this because we cannot adequately cover all of our opinions.  

Although this advice might be more apt to a big Thoroughbred racing day, like the Breeders’ Cup or Kentucky Derby, it is sound. If we can’t cover horses in a pick 6 that we want, and constantly find ourselves “cutting down a ticket” why are we playing that wager? We can’t build a bankroll if we never win.  

Mike believes that lower capitalized players should wager rolling pick 3’s or doubles instead of a pick 5 or pick 6; play a triactor instead of diving into a 50 cent super high five, or alternatively (if we want the action) splitting tickets with friends or a group. There is no need to swim with the sharks when we don’t have the teeth to.

My last suggestion is more mental than anything, but I believe is extremely important. To manage our bankroll properly we need to be playing the long game. This means eliminating from our vocabulary phrases like the “get out race”, where we need to make a score in the last race of the day to break even. It’s not 1948 where the track isn’t open until next week. Getting out, or wagering with a short-term mindset usually means we’re making terrible bets, and bad bets kill bankrolls. Seasoned, successful players manage to monthly or yearly targets and don’t sweat the day to day. It’s pretty sound advice. 

Bankroll management is math, but a whole lot of psychology, too. I hope the three suggestions above help you manage your bank better, or at the very least make you think of more ways you can.



ADW's and their Racetrack Suppliers, Just Another Business Lesson

I was perusing the Financial Post today and there was a story about the supermarket-supplier relationship

Summarizing, as supermarkets get bigger and bigger (the top three have a 75% market share), they do things that are pretty uncompetitive to their suppliers, like added fees, extra taxes and hidden squeezes to fund their ecommerce pursuits. 

This allows them to have pricing power (and to get bigger market share), taking away from mom and pops, and the farmers and suppliers (ever notice the big dogs don't particularly gripe a lot about minimum wage hikes; it's for this reason).  The Post calls this industry, at this point, "dysfunctional". 

What this has accomplished, however, has provided the consumer with a ton of choice. We can buy more goods of different types, with more choice, more than ever before. We can buy online, get things delivered, or shop 24/7. 

Over in ADW land, it's kind of the opposite. There the suppliers (the tracks) are the ones squeezing the distributors (the ADW).  Host fees, increases in margin are all on the table of late. People on both sides have called each other "dysfunctional". 

Like the supermarket supply problem, though, it provides us with a pretty decent business lesson, and we don't need our MBA to understand it. 

If racing cut their supply fee (host fee) to 1%, we'd see a massive influx of distributor investment and activity, just like we've seen in the supermarket sector. At 1%, Draft Kings would likely expand an offering and open an ADW; small ADW's would spring up rapidly; prices would be cut spurring serious handle growth. R&D investment in the end user would be huge, with new technology innovating. Perhaps at 1%, OTB's would dot the landscape again (especially if they're seen as a possible vehicle for sports betting). 

But at 1%, like those folks supplying veggies and cheese and chickens, it's tough to see an uptick in volume that would warrant such a price. 

Similarly, with some host fees massively increased, the opposite occurs. Marketing budgets are cut for the end user, price breaks etc are lowered, and demand falls. There are fewer supermarkets offering great products, at good prices, open 24 hours a day or online. 

In racing we seem to want our cake and eat it too. We want all these distributors pushing the sport; pushing it to make it mainstream and grow handle; to have a betting vehicle on every street corner or in all areas of the web. At the same time they want the tracks to be able to charge 75% for their host fees because they "put on the show". This simply can't be done. It's an intellectual and business fallacy. 

Like with supermarkets there is a sweet spot where everything works best in this sport. Suppliers are paid and working at optimal efficiency, with a demand side pushing the racing product to new markets with new tech. But with no one minding the store, dysfunction is likely here to stay. 

Have a nice weekend everyone.


The Old for the Traditional, the New for the Bettors

 The PGA just announced a hosting and data partnership with Amazon Web Services. The deal has two main planks:

  • AWS will help the TOUR store real-time and historic content that will give fans and media access to content dating back to the 1928 Los Angeles Open. This “data lake” will contain video, audio and images that AWS technology will tag for easy cataloging. This will help the TOUR and its content partners search, review, annotate and package new content and give them instant access to key moments in the TOUR’s history.
  • “We are excited to utilize AWS media services to further enhance new and existing innovative services for our fans,” said Scott Gutterman, the PGA TOUR’s Senior Vice President, Digital Operations. “Features like Every Shot Live and TOURCast will now be powered by AWS, which will allow for a more streamlined process and overall better product for our fans.”
So, the Tour will have an historical digital data dump, all the way back to 1928. It will, in effect, catalogue the entire sport in one spot. If any partner wants to use footage - to promote an event, or the sport itself - it will be there for use. 

Second, and perhaps most interesting, the "innovative services for fans" is corporate speak (as Geoff Shackleford explains) for real time shot tracking (via video or over the web) that enhances their vision for in-running betting. PGA shot by shot betting has been bandied about for some time as a big growth opportunity for golf.

It's rather interesting that this tight group has created a vehicle for both the old and the new. They're preserving the sport and enhancing its future. 

It's hackneyed at this point to talk about, but horse racing's history, digitally at least, is an absolute mess. And its future in terms of wagering with data, video streams or what have you is an equal mess. 

It's tough to build a house without a proper foundation. Golf with its control structure can, seemingly on a dime, do what they did with AWS. Racing, built much differently with no apparent leader to change the business, is not. Which one gets left behind?

Have a nice Wednesday everyone. 


There Ain't No "Public" in Harness

We'll often hear, "the public made the 7 horse 2-1", and historically I suppose it's meant something, but today it tends to feel more and more ancient. 

Case in point - the last two evenings at Woodbine Mohawk Park. 

As most know, there are stale dated horses racing because of the COVID mandated break, so "the public" can't bet on any form. As well, harness racing, unlike the Thoroughbred cousins, don't have fancy trainer stats to lean on. To add to the mix of uncertainty, Thursday's card was held in a snowstorm, where chaos often reigns. 

How did "the public" do, with no information, bad weather, no lines, and no stats? 

Favorites won at 61%. The average win price was 2-1. 6-1 was the highest priced winner. 

This is, of course, completely counter intuitive. Tim and Jane and Bill in their basements are not making horses with no lines and no form 1-9 (there were two of them in Ontario since the comeback); they're not shooting fish in a barrel at 61% rates. 

This, I believe, is an excellent exercise for those of us who play the game, and an equally good lesson for those running it. 

For us, the customers, we learn that we have to pivot in our play. 15 years ago we were watching the Big M, we'd see ten races of full fields where 6 of ten horses a race had a shot. We'd get to work on the puzzle, wanting to sniff out longest odds and most overlooked one to hammer. As WEG the last two nights show us, we have to totally rethink that. In today's racing there are one or maybe two horses going a race, and the insiders set those lines for us. Many times, the longest horse we like tends to not be value, but drawing dead. 

For those of you in and running it. Well, shame on you. This sport - the anti-Amazon - has chased so many of the "public" away, you're sitting there playing a game amongst yourselves. 

It will get better as the year goes on, and yes, we'll make a score or two in a competitive race here and there. But in my view it's very important to remember episodes like this. In the harness racing game there is no "public". They've hit the exits for years. The last two nights at Mohawk are just a completely transparent reminder of it. 

Have a nice Saturday everyone. 


Racing Resumes & Betdown Betting Notes

Good Day everyone. 

It was announced yesterday that racing at most of Ontario racetracks will resume beginning this week. The conditioned sheets will be posted, and once again, just like the last time they did this, there won't be any qualifiers needed to race. 

So, good news and much needed purse money for participants, not so good for us as bettors. But it is what it is. 

This time, to me, it does feel different; mainly it seems like the last time we'll see such shut downs. I suspect racing will be back on a normal calendar, and stakes season *should* go off without a hitch in the tundra. Down south, vaccinations are moving forward at a high speed, so stakes payments made by U.S. trainers should be realized in a start, and unlike last year, U.S. drivers and trainers and jockeys should be good to go. For those of you lamenting local drivers driving in all the stakes races, you'll have a reprieve. 

For us, say you and me in the tundra, perhaps we won't be visiting a U.S. racetrack quite so easily. The vaccination roll-out plan is really quite the clown show, even embarrassingly raiding a vaccine set-aside for poor countries. There's no timeline on when we'll be able to drive down for a race or visit (assuming a vaccination is the litmus test). But, at least some normalcy seems to be in the cards. 

For next week however, bettor beware. Watch your wallets!

Betdowns, ROI Positive?

With lack of form racing soon upon us once again, revisiting a gambling topic seems appropriate - bet downs. There are generally two truisms if you go through betting data. i) the chalk end of the spectrum has more ROI than the other end and ii) Bet downs (horses hammered below the morning line, for one definition) are not very good for the bankroll. #theydontknow

I wonder, however, if that's as true today in harness racing with its small pools and inside money.  The fact, is, bet downs are seen with more regularity in this sport, primarily at the Meadowlands, and they aren't pitches. 

You'll have a horse like Tellitsassymae at the Big M last evening, with a 6th by 8 last race 6 weeks ago in a nw5750 in a nw4500 off a qualifier of 6th by 11 the charter labelled as a "dull effort". That horse, bet down to 3-5 off a 7-2ML, was a horse we may think about pitching. She of course won easily. 

You'll see a Whittiker in tonight, which me and Chip were on last time in a nw2500, get second over, hang a bit in the wind and come 5th at a juicy 6-1. He was a betback for me and I was a little excited to use as a pick 6 or pick 4 key. He was moving up in class to a nw4500, was 9-2 morning line, and right in the wheelhouse. He was bet down to even money, took all the money in the sweeps, and he won by 6 under a hammerlock. 

We, as bettors, are conditioned to avoid these low prices, unless the horse has no holes. What we see at the M and elsewhere are tons of holes, but if they're bet down (sometimes to bizarrely low prices), the holes we think we see aren't holes at all. 

The question is: should we keep avoiding these horses as they cross the wire winning not like a 4-5 shot, or an even money shot, but like a 1-5 or 1-9 shot? I honestly don't know. This is one tough game. 

Enjoy your weekend everyone. 


"We Can Make Some Money Here"

 We'll often hear a lot about marketing (mainly of the push variety) in horse racing. Although I find that sometimes interesting, I think it often  misses a big point about our gambling game, or any game really. 

A couple of weeks ago on a Monday I flipped on the interweb stock screener and noticed a mining penny stock I was following was popping. Volume was up and it was trading about 50% higher. What in the heck was going on? Did they find a new mine?

It turns out the evening before silver futures were moving on rumors of the Reddit Kids pulling a Hunt brothers and trying to run the silver market. That trickled down to my little stock and off it went. 

If we flowchart this for a moment it tells a pretty bizarre story. 

Kids on some chat board talk about something. The wires pick it up, silver moves. Then, six hours later a small stock in Canada (a stock with the word "silver" in its name), with a float of 5 million shares and a market cap of $4 million moves up on huge volume. 

Honestly, it really doesn't make sense. But that's what happened. 

When people feel they can make money they search out avenues - even those as ridiculous as this - in a matter of hours and act. It never ceases to amaze me just how fast it happens, and how it happens. It just does. 

In horse racing we're often led to believe we need billboards or commercials or marketing to promote the wagering aspect of the sport. But in reality, we just need to show people that they can make some money. That's what carryovers do - the ones where we scratch our heads and wonder where in the hell all this money is coming from for this Fonner Park or Century Downs Pick 5. Most of these people couldn't even find these tracks on a map. 

If the sport does more to help users "make some money here" it'd be the best marketing plan of all. 

Have a nice Wednesday everyone. 

Ontario Please Open the Racetracks

Ontario remains locked down after another lockdown. This one is was 28 days, which was extended on January 23rd, and its on the heels of the previous lockdown, which was on the heels of the previous one. Infections are still high, worse than early last year, no matter what they seem to do. 

One thing that makes this lockdown a little different than some of the previous lockdowns is that harness racing people can't race their horses. The main track was closed on December 26th. 

Premier Ford has been rather refreshing, in my view, seeing as he is kind of a Trump Lite guy but hasn't acted like one. He is surprisingly very self-effacing in terms of this and has left all decision making to "experts". But damn, these experts don't seem to follow much experting when it comes to harness racing. From day one this sport has been one of the safest activities and businesses in terms of the lack of COVID spread. I feel safer in the paddock at Woodbine than I do at Costco. I'm sure most of you agree. 

This decision does not make much common sense; none that I can find anyway. And there's no sign of it abating. So, another industry - one that has been proven safe - is shuttered. Horses need to be fed, walked, cared for, bathed, shod and jogged. That takes money. And there is no money to race for, because there is no racing. 

About nine months ago a few of us shared a story about a woman who drove to a large coastal park to walk her dog. Her car was noticed by the police, it was tagged and towed and the K9 unit was called. After 45 minutes of extensive searching they found her and her dog playing fetch in the ocean with no one for miles around. They escorted her back and fined her $700. The joke at the time was when it takes a police trained canine 45 minutes to find you, you should not get a fine, but a social distancing gold medal. 

Most of us gave them a break for this rather comical episode. Things were new, there were rules that she was breaking; in general, we give them the benefit of the doubt. 

But it's February of 2021 now. We expect better. We expect them to make decisions based on fact, because we now have facts to lean on. If we do that, there's only one logical conclusion: Let these people race their horses. Let them make a living. 

Have a nice Tuesday everyone. 

Hayward's Racing's Betting Business Story is Good, But it's Missing the Plot

If you've ever wanted a pretty complete history of the betting space in horse racing, you could do far worse than reading former NYRA CEO Charles Hayward's commentary today

Leaving aside the one very questionable, in my view, opinion regarding bots 'seeing into betting pools' for jackpot bets and the like (addressed nicely by the comment on the piece), it's a good read. 

Charles' and many others point regarding primarily the rebate space is nothing new. One point he drives home that others don't very much, however, is the inflation on pricing for the regular player that rebates cause. 

The thinking is: X% of people get a lower price and because it makes them profitable (or more profitable) it sucks money out of the pools and this paradigm raises takeout for the every day player. Although I think his estimates of a 3%-5% to Average Annie is too high, the argument and math is logical and sound. This happens. 

The fix for this is always, without fail, doing something negative to any group or individual who is getting an advantage of a lower price. It's usually framed as populist rhetoric - us against them; stick it to them; raise their prices too. 

But it's, in my view, all noise. Racing is not the first business who has had a pricing and operational change in a business to consumer space, brought about by over-the-web or in home offerings along with new competition. It just seems to think it is, and often whimsically yearns to sell CD's for $18.99.

It amazes me that this business argues constantly about fixes to a pricing or betting pool, while addressing a symptom, not an underlying cause. 

This would be like a government taking over the auto insurance industry and seeing prices creep up to $5,000 a year per user.  The result - trucking companies are going out of business left and right, and the transportation system is having trouble delivering goods to market. To fix it, Peter Politico introduces legislation to rebate $200 per policy to a trucking company and to keep the budgets set, increases everyone else's insurance cost to $5,020. And in every newspaper, congressional update or blog, people are focusing on the $20 per policy increase, instead of the fact that car insurance should never have cost $5,000 in the first place. 

I'd once, just once, like to see someone in power say they'd like to really address this issue. Forget about creating bogeymen, just offer through every ADW in the nation, everyone a 5% rebate. Mandate it, and do it for two years. Study the results. Instead of complaining that people don't want to play into a system that can't work for them, do something about it. Lower your damn prices. For everyone. 

Have a nice Wednesday everyone.


Racing's Skin in the Game

Good morning everyone. I hope 2021 is treating you better than 2020 did, and since 2020 was bonkers, maybe there's a good chance it's happening. 2021 is probably treating me better because I was finally able to get a procedure done that I had been long waiting for. It was fairly easy peasy, so that was good. 

But, one part of it made me acronymically SMH. You see, there are fees on most things medical up here in the tundra, and this one was no different; I owed $260, and my bill showed up in the mail. I have no problem paying the $260 of course, so I opened the invoice and looked for a way to pay. It doesn't mention online banking where we can pay just about everything, so I log into my bank and look for this payee. It's nowhere. 

Lo and behold you can't pay this online; in fact you can't pay by phone, or even by carrier pigeon. You have to put a check in an envelope and mail it out. 

The medical treatment was pretty good, but we're apparently still in the bloodletting phase of invoicing. 

How could this happen, considering so many have to pay for services? I suspect it's because the health services organizations get billions from governments and happily work those budgets; this $260 is a smaller part of it. Where a private company needs that revenue to pay salaries, and has to ensure they have an easy pipeline to get this revenue (i.e. letting you pay online), the government does not. Without my (and others') timely $260, everyone from the docs to the nurses to the hospital administrators still gets paid. There's no downside, there's no penalty. 

There's no skin in the game

In horse racing we've lamented similar over the years. 

You've often read this blog where we've postulated how much better the industry would be funded if it wasn't priced by margin, but by net profits. Online sports wagering as new states come on board - where we see TV commercials every six minutes it seems - has exploded as private companies chase profits, not margin. When you let companies chase profit, the consumer wins because they get the best products at the best prices, the company wins because they get to enact policies that help them - they have the skin in the game. And finally, the licensee (the state, or in racing's case the racetrack) wins, because they get more money. 

Perhaps the best example and more apt to my outside racing problem above is clearly slots. When you are going to get $1B per year for doing absolutely nothing, where you have no skin in the game at all, you sit and collect the $1B, and let everything else (like handle) go to hell. There's no downside when you have no skin in the game; there's no penalty; no one is getting fired. You're asking users to lick an envelope and send you a check and no one cares. 

Racing's system is entrenched. Uniquely so. And until it gets unstuck, until it thinks of new paradigms to fund itself based on incentives to grow handle and in-turn grow purses, it seems we'll all be licking stamps for some time.  

Have a nice Thursday everyone. 


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