Horse Racing Can Do What Amazon Can't

Yesterday, the WSJ had a super-interesting article on Amazon's strategy with their connected homes, and Alexa speakers. 

Since the early 2010's, the retail and tech giant had a plan. Sell speakers and peripherals at or below cost, and with hundreds of millions of people in possession of them, they will buy Amazon products.

This is not a new concept. In what feels like a hundred years ago, Chris Anderson of Wired wrote the seminal work in the software as a service space called "Free". Give away free trials, get in front of people, and sooner or later they will pay. 

This, however, failed miserably at Amazon. People don't "pay", they just use the speakers: 

"Hey Alexa, is Irad going to force his way out in the third?" 

According to the article, Amazon has lost billions and they're remonetizing. 

What doesn't work for Amazon, though, does work for horse racing. 

But this sport sadly never embraced it. 

This is rebating. By giving lower takeout back, bankrolls last longer, and people can become long term customers. Even those of you who don't get CAW rebate money know this well. Each and every one of us bet that $37 that's deposited the next day in our accounts. 

What do long term customers do? We open the PP's. We bet. We buy horses. We visit racetracks. We plan trips around big events. We spend lots of money on the sport. 

The fewer of us there are, the fewer hands go up at horse auctions. Flights are booked for the Final Four, not the Haskell. 

Horse racing, like so many others businesses and verticals who have, could've made "Free" work.

They just never really tried. 

Have a really nice day everyone.

Some Betting ABC's

I got an email alert on my electronic mail today that Blogger (the software that hosts the PTP Blog, among maybe three or four other big blogs) has eliminated bot traffic. Not only will this hurt my prodigious blog advertising revenues, I will lose a whole lot of Russian readers. 

Despite this, I trudge on. 

ITP posted this for discussion on the Twitter box last week.

You’ll do much better and have a chance to actually win if you spend 3 minutes per race looking at 80 races and bet your best 8 races than you will spending 30 min per race on an 8 race card and betting all 8 races. https://t.co/cDbBFueB5Q

— Inside The Pylons (@InsideThePylons) June 25, 2024

What do you think?

In today's day and age, I could not agree more with the warm and cuddly one. 

If we eliminate i) short fields ii) maiden races where we don't have a clue and iii) any other races with a strong chalk with no holes, we're left with a handful of races per day. Working from there and building around those races is probably sound advice. 

Software makers and the mean old CRW modelers have been on this for awhile, in fact. 

I remember Jeff Platt designed his jcapper play modules to weed out any races with 7 horses or less, for example. 

I know it's difficult to not want to dive in and invest heavily in a short field Grade I dirt card, but in most cases it's not mathematically wise to send it in on those, or anything that looks like them. 

So, the first letter on the ABC's of betting (I have to work hard now to get traffic so each blog will have a proper listicle) is : 

Yes, ITP is wise, don't bet races with short crap fields; find the best races, then bet. 

Meanwhile, I'm really liking the analysis by some track talking heads nowadays. They've always been good at 'capping, but there's a lot of bobbing and weaving going on. There's also a whole lot of rider, or driver and trainer content through interviews. 

That brings me to the second point. Let's call it "B" because I titled the blog with letters: 

Listen with your ears, but bet with your eyes

"The trainer of the 7 said he didn't get a lot of fitness into him, so he might be a bit short."

Oh no, let's pitch. 

But the horse is 5-2 on the board, we see his work tab isn't perfect, loved his works or qualifier, and we went through the entire field and concluded this horse doesn't have to run a big one to win. The rail horse is going too short, the 4 wants grass, the 8 is going to the back of the bus (for harness friends). 

The trainer doesn't know that, we do, and the crowdsourcing concurs. Our 33% chance for this horse is paying $7.80..... so we bet. 

Trainers have a lot to worry about with their horse, and asking them to handicap a given race at a given time is like asking me who I like in the Euro soccer thing when I don't even know what offside is. Most times, if you're good a trainer should be asking you about their horses chances, not the other way around. 

I'm not saying information is not valuable, it certainly can be at times. But if we have confidence in ourselves, betting what we see, not what we hear is "EV". 

The last of our betting ABC's today is pretty simple. 

Learn from Tony

Having kibitzed with the venerable Mr. Zhou the past couple of years you learn quickly Tony makes a lot of sense when it comes to making scratch. 

And he offers a couple gems right here, for free, devoid of Russian bot traffic  -- 

Bet wisely & Being right is irrelevant. 

This concludes my first post-Russian-bot blog post. I hope you enjoyed it, and I hope you all have a great week. 

Ray Cotolo's Hot Dog Stunt Elicits Strong Industry Reaction

We'll all remember Memorial Day '24 because of the Met Mile as the day Ray Cotolo dressed up like a hot dog. 

Hope @RayCotolo auctions the used hotdog suit for aftercare pic.twitter.com/KzmeOjGivP

— Stalk the Pace (@StalkThePace) May 27, 2024

I highly doubt Andy Serling or Mark Patterson could pull off that look, but Ray, well, it's like he's worn that outfit his entire life. 

Industry reaction was swift. The Nancy Takter stable twitter feed was none too impressed. 

What an embarrassment for our sport 🤦🏼‍♀️

— Nancy Takter Stable (@NancyTakter) May 27, 2024

Reactions ran the gamut. Some were confused, some perplexed, some mad, some hopeful, some called for generational change. 

"This triggered me", wrote Inside the Pylons on X formerly known as whatever. "I gave my life to dressing up as Hoosier Buddy each and every day and was fired mercilessly. It brings back horrible memories."

"I'm just glad it knocked the story about the stewards getting their race distances from a cartoon image on the program out of the headlines", typed an unnamed NYRA exec. 

"I love hot dogs" wrote Nick Salvi. 

"Ray had to be on Lasix because he was out of his mind, which is why it needs to be banned" said the Jockey Club. 

"This was a bold statement, a reminder in the world we live in. Harness racing is existential, a part of our being. I think Plato wrote ...." typed Tinky before getting cut off because he forgot to pay for this month's blue checkmark. 

"Our sport has to be professional and this wasn't it. I am outraged" typed an unnamed harness driver, who just last night moved over to let his buddy up the rail, changing the outcome for $115,432 of bettor money that was wagered on the race. 

"I don't like this sort of thing," said trainer Bob Baffert. 

"I'm just going to retweet DeRosa's reaction," noted Nico via DM. 

"Mangled horses are rumoured to be in hot dogs" said Joe Drape in an Op/Ed in the New York Times.

"I don't know how this type of publicity grows the sport," typed Alix Earle on Instagram. 

"This is way worse for the sport than how some jocks not named me force their way out of a hole and put the horse into the hot dog cart on the tarmac", said Irad Ortiz junior. 

"This is exactly why I want to expand the Bet with the Best podcast to live video" said Chris Larmey. 

"As your commissioner I have a bold statement to make after I ask Pat Cummings what he thinks," noted Mike Repole. 

"This is why racing needs HISA" noted HISA. 

"Thank god I don't broadcast racing anymore", DM'd Michelle Beadle.

"Racing is dead" typed Ed DeRosa.

"Racing is dead" typed Nico.

Those are some notes from the heavy hitters. As for small hitters like me, thank goodness Ray Cotolo is a part of this sport. Jeff Gural dressed as a hot dog just won't cut it. 

Have a nice day everyone. 

 

Can AI Kill All the Wagering Value?

I ain't no AI expert. Sometimes I can't even get the microwave to work right. But, Microsoft's presentation on AI this week was a barnburner. 

One graph caught my eye. 

Here’s the CTO of Microsoft saying that the abilities of AI are going to continue to scale for the foreseeable future & exponential growth continues. Since MS is training the models, he knows more about what the impact of more compute will be than almost anyone.

Worth noting. https://t.co/odImG1WcQl

— Ethan Mollick (@emollick) May 21, 2024

That curve is kind of staggering. 

What we see today in this space is different from what we'll see in like ten minutes. 

In horse racing we've seen less and less meat on the bone due to the power of computing, some very sharp math people, and the assorted groups they've built. Now this?

There are a great many factors in horse racing particularly where we can still find value, and I'd proffer that we lean on these more and more outside the algo space. However, with this kind of learning power, those too should be modelable. 

Then what's left?

A first time starter the models were not on won the first at Gulfstream. There's some getting while the getting's good at least. Have a nice Thursday everyone. 

A Good Handicapping Habit (from an NFL Quarterback)

I was listening to the Bussing with the Boys podcast yesterday, where the guest was Prime Time Cousin Kirk, and he told what I thought was a very interesting story. 

In 2014, he was being pulled every which way with his time, and he said he never felt comfortable on game day. He felt he didn't have everything down, and with the dysfunction of the then Redskins ownership and locker room, it made it progressively worse. 

He was not playing well and his wife told him he had to schedule blocks of time when things would get done - he had to create a routine. He built (the man is an obvious geek with stuff like this) a spreadsheet and followed it. 

When Friday evening came around, he felt he had nothing to do. He felt fully confident on game day. 

He said it was the big reason he threw for 5,000 yards and his team made the playoffs the following year. He's been doing the same routine since. 

For regular people like us who remember taking an exam, I assume it's a similar feeling. Confidence breeds results. 

This story struck a nerve, because I made a point of doing similar with my handicapping this year. 

For example, on Tuesday evening I get done my 'capping work for Thursday. When I open the PP's on Thursday, I will have gotten what the odds board should look like in my mind before it opens. I will have an idea why the first time turfer is taking CAW money in pick 3's. I'll have an idea why an off claim horse is dead on the board. Or why a horse off a qualifier or set of works I loved looks like a solid single. 

Because I've done that work already, and wasn't scrambling, I am looking at holes in markets, rather than trying to work backwards to understand the board.  I've mapped out where I need to be, and where I don't in multi legs. 

This works for the other days of the week. For example, if I do my work for Thursday on Tuesday and can pass that final exam, I can have my first look at Saturday's exam on Wednesday evening. 

This game is brutally hard. Not hard like beating a Brian Flores green dog disguised blitz, but a different kind of hard. The rake is brutal, and we're competing against some serious sharps. I believe when we've done the work and are not blindsided short of time, we can perform a hell of a lot better. 

Setting blocks of time to get the work done in busy lives helps me greatly. The routine makes me confident on what I am doing is right. It gives me time to construct tickets and look for curve balls and be a better bettor. 

If you don't already have a routine, maybe it will help you, too.

Have a great day everyone.

The Kentucky Derby Never "Gets it Right" (& I'm Okay With That)

The Derby non-placing of Sierra Leone for beating up Forever Young like Mike Tyson against a high school welterweight has caused a lot of chatter on the social medias. 

For all of you who say Sierra Leone should've been pitched from second to third, that Forever Young would've won the Derby if he was outside, not inside the Chad Brown horse etc, etc, I agree wholeheartedly. 

But I'm super glad they didn't even look at it. 

We seem to live in a get-it-right-at-all-costs world in sports fandom, but I think it only takes half of it into perspective. There is a cost to get it right. 

The ending of NBA games are excruciatingly long. The NHL can have five minutes of game play, a goal, and then a review of an offside that happened five minutes ago that has nothing to do with nothing. In the NFL, when everyone is tired in a two minute drill, a delay of five minutes can result in giving everyone a rest with fans left wondering what the score even is. 

And let's not forget, that when we have to "get it right" there's always more to get right, which means more replay, more delays more stoppages, not less. 

So, let's get it right in the Derby and pitch Sierra Leone. 

Then, let's have a look at jockey Brian Hernandez's move up the wood to see if he took a spot and forced his way through. Let's look at the first turn where everyone is getting mowed down, each and every year. Let's post the thrill of the result, then wait for the stewards to dissect the Zapruder film. 

Maybe at 10:30 that evening, when we're curled up watching a true crime special on NBC's Dateline, we'll see an alert -- we now have a Derby winner.  We hit pause, and scatter to check the ADW to see what we got paid. 

If we do that in the Derby, let's for sure do it at Gulfstream in two-turn turf races where horses shove others into the 7 path as a matter of course. Let's do it at every track everywhere - not just with the infractions that occur late in the race because visibility bias is so yesterday - but occur anywhere. Nine hour cards anyone?

My Forever Young win bet and exotics are in the wind somewhere, just like a lot of bets I make each and every day. I'm totally okay with it. For 150 years the Derby has never, ever gotten it right, and I hope it continues to get it wrong for a 150 more. 

Have a great Monday everyone. 

If I'm Using Fair Odds I'm Doing it Wrong

Hat tip to @dennycaps1 (he's talked about similar to this on his feed), but happy to report that my fair odds lines are going in the dust bin. 

Yesterday at Keeneland I liked two horses. 

In race three, we had a Thomas filly, second start off a layoff, returning to turf. The work tab looked solid, the field didn't look like much, there was what looked like cheap speed, and the 8-1 morning line should provide some value in multis. I made the horse 4-1 to 9-2. 

In race seven, a 10 furlong allowance, I liked the six. Mott's shipper I felt would be overbet, and this trainer clicked on Saturday with a nice win. I expected this horse to be very good and made her about 3-1 off her 9-2 morning line. 

In race three the 8-1 morning line horse was well bet in all pools. She opened at 4-1 and was hit late to 3-1. She was below my fair odds line. 

In race 7, my pick opened fairly strong, the horse I was fading was dead on the board, but my filly drifted and was fourth choice in the multis. She was 5-1 near post time, well above my fair odds line. 

What did I end up doing?

I bet large on the horse below my odds line in race 3, and didn't bet the horse that was well above my odds line in race 7. 

The horse in race 3 ran amazing, getting in traffic trouble, coming second. Gold checkmark. 

The horse in race seven ran as bad as a horse can, making a little move around the turn and cantered across the finish line in dead last. 

It ain't our first rodeo in the modern racing game. 

This game has absolutely changed as lines get sharper, and as lines get sharper, in my view at least, we have to use them 180 degrees differently than Mark Cramer and others taught us a generation ago. 

Have a nice Monday everyone. 

Fixing the Open Betting Skies Game Could Use Some Tweaks (Some that Many Probably Won't Like)

Air travel began to be deregulated in the 1970's. Business people like Southwest's Herb Kelleher and others could fly the friendly skies, delivering a service to millions. 

However, how could passenger airlines grow as an industry if planes were unsafe?

In 1970 there were 3,218 fatalities for every trillion dollars of passenger miles. In 2018 there were just 59, a 64 fold decrease. 

Even with throwing an industry open, safety innovation improved incrementally year over year, sometimes in the lowest tech ways possible, like moving a button or a pedal that might be mixed up in flight. Economic historians tell us it had to be a focus, because the long-term life of the business depended on it. 

As we all know, gambling markets have been blown wide open since about 2018. Today we're not rummaging through betting slips for our bet from Sam the Bookie, we're not stooping for tickets at Belmont. Everything has changed. 

Is this a good thing or a bad thing? 

One writer at the Atlantic, shared by Crunk, doesn't think so. He believes it's making sports worse, and he does make some worthwhile points. 

• Same game parlays with real time apps on phones results in some serious bankroll succkage, and could certainly be at least partially described as predatory. 
• Sports leagues, seeing this cash shot directly into their veins, are all to happy to share prop bets at halftime of games, especially those that are blowouts. 
• Leagues and networks partnering with gambling companies feels, well, kinda sub optimal doesn't it? 

In horse racing, I think we have many of the same characteristics. 

In 1970 when Herb Kelleher was working on building an airline, racing was humming right along. The nine race card at your local track had a betting array of win place and show, maybe a double, a few exacta pools and a late triple. Takeouts were pretty fair, considering it was a monopoly. 

Fast forwarding to today, we can bet every exotic bet imaginable, almost 24/7, with racing from dozens of countries in the world. It's all there, with the push of a button. 

In the background lurks the computer teams who - and this certainly never happened in the 70's - blanket combos on these hard to hit bets, while getting a huge price break compared to the rest of us. The result, as we all know by now, is a massive effective Dick and Jane takeout, breaking every day customers each and every day. 

The sports betting and racing industry can say that they're just giving the customer what they want. And hey, I'm probably more libertarian than the next guy, but come on. The bottom line is you've created a system that's built in the long-term to break your core customers. 

The Atlantic author and Crunk feel that the sports betting ecosystem will settle and change, at least from a broadcast perspective. I think they're probably right, on the surface. It's easy to not push gambling and real time wagering as much as they do, because people are tuning in to see the sport first, and the gamble second. It will likely be in their best interests. 

However same game parlays, 40% takeout wagers and all the rest? That's more of a nut to crack, because even the states are drunk on this revenue.

Over in racing it's the same story, in my view. There is zero doubt in my mind that going back to more of a 1970's betting menu - with some tweaks like saving the big sweep bets to certain days - would be beneficial to your average customer. There's zero doubt lowering takeout, or expanding rebating would help the player. I have no doubt that regulating the pools could still keep team-play a thing, without the subsequent damage.

But I also have no doubt a pivot like that in this new, free, unregulated industry will never get done. 

Back in the 1940's a dude by the name of Alphonse Chapanis was wondering why air accidents were happening and he noticed that tired pilots were mixing up a pedal which resulted in the flaps being engaged instead of the landing gear. Engineers moved the pedals and it wasn't the problem anymore. The airline industry realized that it wasn't going to find pilots or passengers without constantly tweaking, innovating and getting better each and every day. 

Horse racing, as well as the online sports betting wagering industry, has built the fuselage, designed the landing gear, and they've got themselves a pretty nice plane. The passengers seem to be enjoying themselves n' all, too, at least on the surface. But, I can't help but think they're flying it right into the mountain.

Have a nice day everyone. 

Big Pick 5 Payouts Are Not Always Inscrutable

If we see a $25,000 pick five in the throughbreds we can often look back at the sequence and make a case for a hit. Thoroughbred racing often has fields where four or five horses can look completely logical in a sequence, yet it can pay boxcars. 

Harness racing is different. The fields are rarely deep, and the racing is often formful, with 50% or higher chalk hit rates occurring at a track near you. Often players make scores in harness racing with $15 pick five or $10 pick 4's hit with chalk or near chalk, and twenty cent tries are completely fruitless. 

Last night at Mohawk, however, I think we had a $0.20 pick five hit for $5,100 that was completely logical. 

Recognizing them might help us hit one of these again. 

Race 1 was what I would describe a bit of spread race. The ten was taking money off a driver change from Renaud to James MacDonald - this angle as a key is fine, but as we'll see, we wouldn't hit this pick 5 if we applied the same logic. Regardless, if we're trying to hit a price, we're not using an angle that everyone at the OTB is using, so we'll spread with three horses. 

The second race is a puzzler, but if we're sharp we're probably going to look at doubles. What we would've seen is a horse not picked much anywhere, off terrible form, being bet. This barn is known to bet, and if this horse is ready he has a class advantage. For 20 cents we can swing. 

In the third race we had a horse who everyone on replay said qualified badly, but the horse - who started in the Hambletonian last year - was better than all of them if sharp. And, the trainer just sent a horse off a meh qualifier last week that crushed; was seriously 20 the best, and dropped a few seconds of time. 

The fourth was a spread race, a cheap claimer, no angles, with three contenders I could see. 

The fifth - and here's where we're at it again - was a Renaud to James MacDonald driver change on a nice horse, but one who is woefully inconsistent. Since we didn't key this obvious change in the first to gain value, we could look elsewhere here. 

Interestingly, there were a couple of others in there, including the seven horse, who has been great but hasn't been put into play in the Opens. In my view, this is because the Open's have had two huge speed horses who the driver has not wanted to challenge. Tonight, maybe he tries this sharp horse, although beating the two horse at 1-5 seems tough. 

So, we might go 1710-6-2-156-2 for $2 ($18 total)

And 1710-6-2-156-37 for twenty cents ($3.60 ticket)

The setup, steam horse in two won. The off qualifier horse in three dropped time and won, just like the same barn did Friday, and in the last leg, the 1-5 shot got off several lengths back and the seven horse did take a shot to the lead, and went wire to wire. 

Our second ticket for $3.60 hit for $5,100. 

The sequence was two chalk, a $9 winner, an 8-1 winner and the seven in the last leg at $30. 

One mistake players can make is to look back at a pick 5 or 6 and reverse engineer and backfit, but in this case I do not think we're doing that. 

This was a logical way to hit for huge money for $4 or $5 in a pick five by being just a little creative. The teams were playing $20 pick 5's and those can be perfectly fine in chalky harness racing. But if there's an angle to be had against them and it can cost us only a few dollars, the leverage can make a boom goes the dynamite. 

I hope everyone is having a nice Tuesday. 

 

Recognizing Market Moves in Racing Are Never Easy

Crunk noted the offshore pricing on Tarif in the Rachel Alexandra at FG a couple of weeks ago in an informative tweet; namely, the horse was never 6-1 like she was on the tote. 

Learning how a game is played in today's world is really important to our ROI and it's important to work on these things, in my view. 

But, it isn't easy, even if mediums like Betfair and others are available. Markets do all sorts of things, because in the end they're still a collection of opinions. 

Around 13 or 14 years ago when I was playing seriously, I would get ready every year for the Woodbine meet opener. It was a collection of 4.5 furlong affairs. 

Going through back data I found that pace figures worked because most races went gate to wire. You needed early speed. CJ's old pacefigures were a good input, as the Timeform ones would be in the present. 

I had a proprietary workout score - something @dennycaps talks about being important even today - and that was indicative of success. 

Last up, old trainer data was important, because some barns had their horses ready to fire and some didn't. 

It was a simple model, but it did work fairly well in previous years. The ROI was in the 1.20's if my memory is right. 

One year I handicapped and had the collection of horses I liked. I opened Betfair and started playing. 

Almost immediately the markets were really weird; unlike I've ever seen before. 

A horse I had as a slam dunk early leader that fit my criteria was 6-1 on the tote and 15-1 or higher at Betfair. Keep in mind there weren't rolling doubles or pick 3's to check pricing. Regardless, I wondered if I had done something wrong or if the horse was a dud. 

I started betting the 15-1's and the bots - a precursor to the CRW models of today - kept lining up offers. I took a few more of them and fought this market. 

The horse won. 

In the second and third and fourth races the exact same thing happened. The "CRW" bots hated my horses, and they won. 

I telephoned a friend who had a sizeable bankroll (over $500,000) at Betfair and told him what was happening. The bots were freaking out and I could get more and more money down, but I rarely overbet a bank. He could join in. Knock himself out. 

By the fifth race this was still going on. A filly from the outside which was my best bet of the day was 5-1 on the board - locals sure knew who was live. We got filled at 18-1, then 20-1, then 22-1. The bots just kept putting money up and we took it. The horse won by daylight. 

If I remember correctly, ten of eleven first call leaders won that day. I can't remember what I ended up, but I do know my friend talks about it as his first $100,000 profit betting day. 

We fought the market, we fought the CRW's, and somehow we won. 

Meanwhile, the bots and other sharps are never that bad. Something very weird was going on in this market and fighting it is normally almost impossible. Case in point - I kept track of my wagers religiously at this time. When I fought a market - outside this one time - in the exact same way (with CRW's lining up to take my cash) my ROI, which I quickly checked for this missive, was $0.52. I fought them, and they kicked the living shit out of me. 

We've all been at this game for a long time. In my view, in today's game, market moves to fade or hop on or ignore completely are some of the toughest decisions we have to make as bettors. 

As a rule I listen to the market more than I ever have. I check everything I possibly can. I'll never be an expert, but if I feel if I am not doing my homework to at least understand what's happening in the markets, I'm never going to be able to win at today's game.  

Thanks to Crunk for sharing his two tweets. There was a lot of wisdom in them. 

And ya, I bet Tarif even though I didn't like her much and had no intention of betting her. I had to abandon much of what I've believed over 35 years or so of betting to place that bet.  I listened to the market and that time it was right. 

Have a great day everyone. 

NFL Salary Cap Increases, Kinda Like Purse Increases, Not Really

They announced the NFL salary cap has ballooned to $255M in 2024, an increase of about 100% since 2014. It's staggering. 

This increase has its pluses and minuses. 

The good:

• Teams can spend more on their star players that were destined to leave, if they wish. If there's enough cap room to sign a Gabe Davis or Danielle Hunter who are very happy with their teams and city and life, Buffalo and Minnesota fans can be happy. If it adds to stickiness of rosters, it's all good. 
• Athletes can choose many sports to play. If growth is happening it means more opportunity. Growth is always good. 
• A rising tide floats all boats. Viewership up, ticket sales up, everyone benefits. The salary cap growth helps the $1M per year player, and the $50M per year player. 

The bad:

• Ticket cost has increased, TV deals are splintering the viewer landscape angering fans, player jerseys cost an arm and a leg. 
• The higher the labor cost the lower the spend on the ancillary, some of it very important. 

The bottom line with the NFL, however - things are growing, the ecosystem is healthy, and it's reflected in the cap. 

In horse racing, we've seen purse increases which many may think means things are okay, but these have not been driven by a healthy, sound business. 

Handle is not increasing; revenue from handle has gone down, not up. 

Outside the Triple Crown, the sport pays television to show it, not the other way around. 

We don't sell Irad Ortiz jerseys. The sport's popularity is not rising. 

Maybe we should just be happy purses are up, because they have to be doing something positive, right? I really don't know about that. 

On the low end, inflation has been deadly to the small trainer. They can't make enough money. Purses have not gone up enough, and sadly, if the purses do rise to high levels - say where a 5 claimer has a purse of $15k or $20k - the supertrainers swoop in, crowding out the small timer.

On the high end, how many barns with fifty or more big priced horses does the sport need? Clearly more than one or two. Hong Kong horse racing has barn caps for a reason. If horse racing was the NFL, and Todd Pletcher was Patrick Mahomes, he'd be making a billion a year, and Joe Burrow four million. 

The NFL has ended up with a growing business fuelled by revenue growth. Its foundation is not without problems, but it is sound. 

Horse racing has not put that money to good use, because the foundation is not sound. In some spaces it's downright unbelievable. 

Yonkers $35,000 race with a $19,207 handle.

— harnesstimes (@harnesstimes) February 23, 2024

The answer to all of this is beyond my pay grade. But, the NFL's model of revenue up purses up is what horse racing has to show some semblance of. Purses up handle down means the present is okay, but there is no future at all.

Bettors are Easier to Find When You Know Who You Are

Penn Gaming recently signed a deal with ESPN, booting the previously partnered Barstool Sports. Leaving aside the megabucks involved, it's appeared to have paid some dividends. 

Today, they announced ESPN Bet drove about 1 million first time sign ups in Q4, which is more than they budgeted for the entire year. If, and I don't know this, they generate $400 of lifetime customer value from each on average, it would be a $400 million dollar jump for one quarter, which seems not bad. 

Penn saw some value in the ESPN brand, and pounced on it. And I think it made at least some sense. ESPN and betting is closely linked. Probably more so than Barstool or others. 

Meanwhile back at the ranch, we continue to talk about the big branding story in horse racing: Alix with an i and Gulfstream. The tik tokker (I can't believe I typed that at my age) who reddit says charges $250,000 for a post, went to the track, and we haven't heard much about increased ADW signups or track visits, but I'm guessing we're not because they haven't happened. 

Honestly, how could they, with branding that shows Alix with an i losing all her money betting horses?

couldn't have come up with this level of marketing if I tried pic.twitter.com/PFE5sCR9g2

— Mayhemily (@EmilyOptixEQ) January 29, 2024

Horse racing is constantly confused as to what they are. 

Is the sport a day to look at the pretty horses and colorful jockeys or is this a gambling game that makes money that way? 

Some people say both stories should be told, but without unlimited money, and a sport that seems to focus worse than a dude after a three week meth bender, at some point you have to pick one. 

Penn Gaming picked one, and it seems to have started out well. 

For those waiting for horse racing content like a Youtube show where a horse bettor teaches Daniel Negeanu how to wager a mathematically perfect pick five, I think you'll be sifting through a whole lot of Alix Earles before then.

Have a nice weekend everyone. 

There's a Place for Sharp Bettor Education, Sharp Money and Sharp Action

Back in 1998, when the online sportsbook boom was in its nascent stage, Pinnacle Sports was created in Curacao. This online sportsbook was different, because it didn't push signup bonuses or anything flashy, it simply decided to offer high limits and good odds. 

For a hundred or more years -110/-110 odds were commonplace, and in most of the betting space it's the same today. It's not uncommon to see football games priced at -108/-108 or baseball posted even lower at Pinnacle. 

And over time, despite zero advertising, everyone knew the place. 

In a long ago episode of the Sopranos, Tony overhears someone that got a great bet down for $50k on a boxing match. Surprised at the good price, Tony asks where he got the bet down. "Pinnacle", said the bettor, much to Tony's chagrin. 

Interestingly enough, as per a conversation on twitter yesterday with Crunk, ITP and others, Pinnacle is the place that, despite these great lines, wants you as a bettor to get better, not worse. 

They have articles like this, on if you should bet volume or edge, discussing EV, right in the limelight. There are many of them. 

Pinnacle works on high volume, low margin. It educates customers of this. It offers the lowest prices around. There are no, or few, gimmicks. There's no promotions. There's no fancy hat parties. There's no ABR bus. There's no barstool guy drinking beer, eating pizza and swearing at a receiver. There are no pick 6 tickets with ABC's. 

If they wanted to why can't horse racing achieve this type of medium, when their system - pari-mutuel - doesn't even have bookmaker risk?

The reasons are numerous, and they are nothing new. Too many fingers in the pie, a lack of willingness to accept price as an important variable, to name just two. Even when they're handed a medium for high volume-low margin, like betting exchanges, they're sabotaged with high hold and lack of a push. 

But in my view it's probably more than that. 

As Rufus Peabody today scribed on the twitter, sportsbooks are corporations. They are burning through cheap money, hiring everyone everywhere, and are 100% focused on growth. With growth comes same game parlays and casinos and high vig and everything else. 

And as Rufus notes, bloat is normally associated with big government, but it works in today's corporations as well. Bloat is so inexorably tethered to inefficiency, a place like twitter can fire 75% of its staff and ostensibly work the same as it always did. 

Horse racing betting, like the firms Rufus references, works similarly. They aren't nimble. They can't experiment quickly and pivot, offering things quickly like Pinnacle can, or eliminating them when they don't work. 

It's at least partially why we're stuck with one-week takeout experiments, or countless meetings to offer bet $200 get $200 promos. Even those simple promos seemed to take a decade with horse racing corporate owned ADW's. 

There's a place for sharp money, sharp bettor education and sharp action. But it has to have certain characteristics. Those traits are at a place like Pinnacle, and for horse racing it remains elusive, and in my view, probably always will be. 

Have a nice Tuesday everyone. 

Remind Me Because I'm Dumb - Why Does The Sport of Horse Racing Need "Influencers" Again?

I'm the first to admit I don't get this trend of tracks hiring influencers to, do what I am not certain, but this week's chatter about Alix Earle (yes, I had to google this person) made me want to at least think about it a little. 

I did. And I have come to report, I still don't get it. 

Out of all the things I can list that I believe horse racing needs to improve upon, hiring someone on tiktok might be about 289th. 

Let's think about this audience target. 

I've scoured twitter and I have not heard one complaint that there are too few hats on Derby Day. Hell, turn on the teevee, all we see is hats on Derby Day. It's a freaking hatapalooza. 

I'm not sure there are too few plastered kids at Keeneland. 

No complaints that there are too few people dressed like Michael Iavaronne at Gulfstream. 

I have not heard what the Derby telecast needs to turn horse racing around is more Johnny Weir. I like Johnny Weir, don't get me wrong. His sidekick seems nice, too, but I don't think more Johnny Weir means a bigger foal crop. Do you?

Frankly, if there's something that doesn't need fixing in horse racing, it's the on-track crowd for the big events. 

TV ratings for the Derby are massive, crowds at big events are still good. Saratoga rocks. Even Kentucky Downs raised takeout because apparently a hundred million in free subsidy money couldn't pay for tents. They really wanted those tents. Maybe they're going to fill them by hiring more influencers.

Regardless, here's what the smart marketing people think we are all supposed to believe in this fantasy land -

i) One in like one million people will see Alix (not with an "e") on tiktok, and it looks like she's having fun with all the pretty horses. 

ii) This tiktok unicorn person lives in Pittsburgh. 

iii) She or he and a few friends will be "influenced" and hop in the car and go to Mountaineer, and they get the bug. They become regulars, bettors and possibly even new horse owners!

We were born on a day and it wasn't yesterday (well except for those of you reading this who are one day old). We know that even if this black swan event happens, these kids will take one look at Mountaineer, see a bunch of people that look like me, and immediately leave for the casino and play blackjack and drink free drinks. 

Influencers. Out of all the boneheaded and bizarre things horse racing does, this one is so bonkers I think all the other dimwitted ideas orbit around it. 

Notes:

For a more nuanced take on this, try Andrew Champagne. 

If you haven't seen the interview with Chris Larmey, which in my view does have actionable intelligence in growing the sport, click here. Thanks to Bacon for re-running it. 

Navigating Those Damn Models

Models and math geeks can be infuriating, and for some fans of yesterday's Lions-49ers slugfest, that was on full display. Making decisions that just don't "feel right" do not sit well with us. We're emotional beings. And we sure had alotta feels yesterday, especially on 4th down calls. 

For football, or as we wager on horse racing, modeling helps us learn something by taking the emotion out of it. I think we all know that. But, according to many that's the problem - models can't account for a lot of things outside the numbers. 

As for Dan Campbell's aggression, the pure numbers did say he made the right decisions. The win probability gained definitely shows it. 

But what about game state, and momentum and everything else we use as a crux to be anti-model?

That's where we can use some of the qualitative (and for anti-model people, in this instance, this probably isn't going to make you feel any better).

As Bill Barnwell notes, should Dan have been less aggressive or more aggressive based on these (mostly) unmodelable factors?

"Absolutely (more aggressive). There's hardly a question. The strength of the Lions is their offense, especially their offensive line and ability to overpower opposing defenses. Their weakness is their defense, particularly their pass defense. They should be more aggressive than the numbers suggest on fourth down because it aligns with the strength of their team."

So, long story short, yes, we don't have to be married to the numbers. We can pivot and adjust, but if it walks like a duck and quacks like a duck it's a duck. At that point, no emotional factors or stubbornness or feelz should cement us to go against it. 

Switching over to horse racing, we hear much the same about the "models" - they don't factor in 'stuff' - and that can be true. This gives us an out to hold on to some old angles, or things we think or does work, but the same prescription should apply. 

We may notice, say at the Big A, a 0-11 horse taking money in pick 3's and doubles to 3-1. He's on the board at 3-1, as well. We've watched replays, it ain't our first rodeo and we're convinced this horse simply isn't a "winner". 

We may be right and it's an auto-pitch, but the modelers are telling us he has a 25% chance. Here, rather than just relying on the 4th down decision bot, we can go deeper. 

Is the horse dropping? Did he lose the races simply because he was against better horses? Will he get an easy lead today, where as we all know that can turn perennial losers into winners?

Rather than sticking what makes us feel good and relying on base cases that may or may not be correct, we keep open minded and can pivot. No, we may not bet the horse, but we might decide to sit the race out, or not go all-in on the 9-5 shot, because we convinced ourselves the 3-1 loser has "no shot".

I've changed my horse racing play dramatically over the last six months or so. 

Just recently I loved an animal for a sizeable wager. Just loved the horse. When the board opened and I checked will-pays, a horse who has a high ceiling but has been racing terrible was completely hammered. I watched replays, I looked as hard as I could for something I missed, and nothing. Meanwhile the horse I loved was not being bet. 

Five years ago I bet the horse I love with both fists. Two years ago I bet my horse with one fist. Six months ago I might sit the race out. 

In this case I didn't just sit the race out, I actually bet on the horse I was confused about. He won by 8 and paid $5. 

The bottom line is that models work. No not all the time, but they work. 

It's why NFL coaching is getting more efficient, and at least partially why we're seeing more close games. It's why every topic under the sun in racing involves "CAW" teams winning too much. 

No, they aren't the be all and end all, and knowing and learning when to add data and pivot is important. But they aren't going anywhere, and if we're sticking with emotion or feels, or any other heuristic that's married to old mindsets, in my view we're not doing ourselves any favors. 

Have a great Monday everyone. 

(Somewhere Else) Horse Racing Has "Been There Done That"

The Tinky-Mike Repole King of All Horse Racing battle on the twitter is kind of interesting. 

I guess battle is not the right word, since Tinky's blue checkmark 3,239 character missives are usually met with one word replies. But they're interesting to me nonetheless. 

Tinky

Most of what Tinky and the rest of the horse racing world talks about, in my view, is what Crunk calls "Groundhog Day". We've been through this many times before. It's rinse-wash-repeat. 

And it truly confuses me. 

I got an email today from Microsoft detailing a new feature. Microsoft owns Bing, which is a search engine like google's is, and they have their own ad platform to drive search revenue, just like google does. For 15 years or more, Microsoft tried to create their own "thing" to deliver ads. They spent money, they experimented, they created various iterations of platforms. 

However, over the last six or seven years, their big corporate change is to do whatever google does. If google changes an ad type, they do. If google creates a new set of audiences, a month later they do. 

This change is not because they're lazy or dumb. They realize that google will i) try and maximize their ad serving revenue (it was over $200B last year) and ii) have reams and reams of data and engineering to support the change, so the change is probably right. 

The thing is, horse racing has that, too. 

We argue about fixed odds, like it's something new, like one of those Stanley tumblers everyone wants. Fixed odds for horse racing has been around for three centuries. 

For a dozen years we argued about exchanges. Betting a horse to lose, cannibalization, revenues, margins, blah blah. Meanwhile, it's been running for over twenty years already in several parts of the world for horse racing. 

Fixed odds has been perfected over the years. Sure people can get tossed if they win too much, but it's a vital part of the ecosystem in places like the UK and Australia. It drives reach and revenue, and it's there if people want to use it. It's changed over the years and continues to. It's profit driven, and for the most part taxed on profit so it drives near optimal revenue. 

Exchanges are like some new bogeyman in 2024 in North America, but they happily drive reach and revenue just like fixed odds do. And they innovate and change as well with regards to prices and profits. 

A bunch of years ago Racing Victoria downunder wanted more money from exchanges, so they increased the hold. This brought in less profit, so they reversed their ask and went back to the hold around 7%. How many times have you ever heard a racing jurisdiction ask to lower the takeout to a bet taker with data to back it up?

This goes for a lot of other things in this sport. Field size, driving horse ownership, allocation of purse funds. Many places have "been there done that".  They are more centrally run, they have the data, they have tried things over and over. 

The UK, Australia, Hong Kong are not perfect and everything isn't wine and roses, but they have done much of the work for you. No one is starting from scratch. 

The job of "racing" in North America, whether it be the Jockey Club, or Repole, or the Tinkster, is to create some path that allows the sport to use the work that's already been done by others. 

For Microsoft it's easy. They simply create a platform with an ability to mimic another. 

For racing, it probably is another Groundhog Day moment. But it sure would be nice for them to focus on that side of the issue, than to start from scratch when much of the data is only a google (or Bing) search away.

Have a great weekend everyone!

Interesting Nuggets from the Much Talked About Bloodhorse Wagering Survey

Twitter, or X or whatever, was abuzz with the Bloodhorse Industry Wagering Survey article. It, for those who didn't read it, asked questions about racing to various stakeholders, most of whom have some power in the sport. 

Unsurprisingly, I have some thoughts. 

First, a shout out to the "I don't know much about this topic so I'll just say this" responder, Dr. Dionne Benson. Dr. Benson knows her lane and simply said sound horses and full fields surely help wagering. Kudos!

Most know Dennis Drazin of Monmouth. He's the one who pushed and implemented fixed odds betting through Monmouth Bets dot com. So, we'd expect to hear about fixed odds, right? 

Nope, Dennis noted "we need to increase and expand entertainment opportunities at our venues to encourage live attendance." That probably tells us how fixed odds wagering is going. 

Another Dennis, this time Cornick of West Point, had a great answer in my view. He touched on all the wagering bases including the simple fact the industry has to be responsive to the customer base when it screws up. It's remarkable to me that he was the only one who spoke about this. 

I thought Michael Mulvihill of Fox Sports had arguably the best big picture comment.

• Horses and horse racing are soulful. Online sports betting is frankly soulless. Racing has to emphasize the qualities that are more satisfying than just staring at your phone. Racing can't compete with sports betting on either takeout or volume of betting opportunities, so fan satisfaction has to come from other qualities: the art of handicapping, the unrestrained fun of a day out at a good track, the enjoyment of being around the animals. Horse racing has to build its brand on the unique qualities that make it more than a digital roulette wheel.

Some might roll their eyes at that but there's some meat on that bone in my view. 

I think it was Mike Maloney, many years ago now, that said "we can't out casino a casino".  Currently, casinos are not trying to out casino online betting either. To put another "00" on a roulette wheel you better be attracting people with something else. 

After 3,000 posts you know this isn't me advocating for putting another 00 on the horse racing takeout wheel, I am speaking about the top funnel which the sport (and us as bettors) are dependent upon. Differentiating your product in the current gambling landscape is not a weakness but a strength, and exploring that is smart business. 

I thought Elliott Walden made a strong point about bringing "inside racing" to the masses. I've believed in this for a long time. The more open and transparent you are, the more chance you're giving people a new data point, or reason to wager. 

Most of the rest I found frankly wishcasting, which can be prevalent in the business. 

I suppose the underlying point about these stakeholder thoughts should not go unmentioned.

I listened to a podcast recently about tech bloat at Twitter. They over hired, and project managers were paralyzed to do anything because you'd have to speak with so many others to get approvals (for sometimes the simplest of things). This was a privately run, public company with management under one roof. It was a company who just a few years before was smart and nimble. 

So, let's say we wanted to change wagering because we had the Best Racing and Wagering Idea of All Time™. 

Every person on that list. From horsepeople groups to HISA, from NYRA to Stronach, from Dennis Drazin's fixed odds platforms to 1/ST racing's pari-mutuel, from the COO to the Jockey Club to a wife of a trainer who has an idea or two. All of them would have to sign off. 

Wagering ideas are great. Some of the respondents to the survey were quite thoughtful. However, as someone I read somewhere wrote, "you can do anything but not everything". 

Horse racing's structure proves that wanting to do everything with people who are focused on 'their thing' is a ball and chain so big that other ball and chains orbit around it. Fixing that? Maybe we need another committee. 

Have a nice Tuesday and all the best to you and yours in 2024.