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.


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