Uniform Judging is (Unfortunately) a Pipe Dream

When you see a potential riding or driving infraction that affects the outcome of a race, how many of you are confident in the ruling? Show of hands. None, okay, me neither. 

Brett Sturman wrote an article on HRU this weekend that focused on a few rulings of late (this case in harness racing) where he was completely confused. One of them (about going inside pylons) was bonkers and the other (I was involved in this one, and it cost me a lot of scratch) regarding the breaking rule that defied everything we've been taught to believe. 

Both of the sports we bet seem to be discombobulated with the rules. 

In runner-land things like herding are let go (at times, sometimes not) where the outside horse loses momentum and loses the race by a foot. It kind of depends on which track the infraction (or non-infraction) occurs. All I know is when I see the inside jock yank the horses head right to make contact or stall the outside runner (and I bet the outside runner) I start having some very bad feelings. Again, at some tracks the feelings are more frightening than a Wes Craven movie, at others I am only mildly terrified. 

In harness-land, things can be, like Brett wrote, like living in Blair Witch, where your next door neighbor is Regan from the Exorcist. Depending on the track, things can be called almost the polar opposite. 

At the Meadowlands it's not uncommon to see a horse pitched who alters a horse who is nowhere near the action involved, simply because a driver gets antsy and changes his path. At Mohawk, things are called much more in-tune with the Thoroughbreds (mostly) where it needs to affect the finish. 

I think we bettors do not expect to agree with every decision. Much of it is subjective. But is it too much to ask for the sport to take it seriously? 

As Brett alludes, on the ruling at Batavia Downs, the real judges were out of town, and were replaced by out of state judges who judge at a country fair circuit. No, I'm actually not kidding. How is this possible in a sport with billions shoved into the windows?

Flip on twitter and you'll hear a lot of gripes about the sport. Some can surely be invalid or sour grapes. But can we blame anyone for being negative when a billion dollar sport treats these decisions involving a ton of money with such carelessness?

I was asked to help with this issue years ago in Canada, and we did bang out some uniform rules. It didn't work as planned but I can say, at least in this country, we see better than most. In the U.S. with all the jurisdictions it was a different story and I think it's a complete mess. 

Whatever the case, the problems seem so systemic that confidence can't help but wane when we talk about a sport professionally running its judges booth. It's a pipe dream, and as long as it is, we'll continue to gripe about it, almost on a daily basis. In my view, it's not a bug anymore, it's a feature. When we open a form or program, it's simply a part of our world. 

Have a great Monday everyone. 

Winning Player Post Follow Up - 3 Building Blocks to Win More Often

I got a lot of horseplayer feedback on this weekend's post about how often different subsets of winning horseplayers end up green. Thanks for that!

I promised a follow-up, so here we go. 

I'd like to leave aside the volume players in this discussion, because let's face it, most people aren't going to start playing $4 million a year through the windows. It's hard enough to compete nowadays with CAW's flooding that zone anyway. 

I'd like to examine the lower volume spot-type players. These are very seasoned folks who've developed a way to beat the game. We can, in my view, learn a lot from them. 

Picking Spots, Keeping an Even Keel

First, these folks win only around 40% of racedays, which means a couple of things, i) they aren't hammering the chalk and ii) they have developed a winning mindset that allows them to lose more frequently than they win and still keep playing week by week. 

Finding spots where the betting pools have made a mistake - playing horses from say 3-1 to 7-1, and in many cases higher - is a big part of their games.  It's definitely a learned skill, but in my view, many people on my twitter feed have this skill. Keeping an even keel (and executing these opinions in the proper way) is the bugaboo.

The Defensive Trap

Despite strong handicapping skill, many are still underwater and I believe this is where the second point comes into play -- they've developed the winning mindset. And because they win, this mindset allows them to play free. 

What do I mean by playing free? It's quite a bit about what ITP got flamed on twitter about for so long - they don't care even one iota if they win or lose the bet, they just want to ensure they bet their opinion properly. 

That involves, as I see it, not falling into defensive mindsets. 

Here's an example:

When a good (but not winning) player sniffs out a 9-1 horse, he or she often plays it defensively. This involves boxing up the horse with the chalk, taking chalk underneath, or in supers, or tris, or trying to group it with a chalk double to get "extra juice" on the bet. I can't tell you how many times I see this.

It's exactly wrong.  

When I ask a player I know who is sharp who he likes in a certain race and he tells me a 15-1 shot that ends up winning, I look at who ran on the bottom. If it's a first or second choice, I know he's dead. If it's a 6-1 or 10-1 horse who looked like they could clunk it up, I ping him to see if he scored and I usually get back, "I got the exacta". And he doesn't bet it for $3 or because he bet a wheel. 

When we think about this mathematically it makes sense. We like a 9-1 shot, so we probably don't like the chalk. Even if we like the chalk some underneath and don't like anything in the ex, we should just be betting win. Why have a $20 winner and a $40 exacta with a short shot we don't really like? 

For further evidence of this, listen to the Sport of Kings pod with Chris Larmay sometime. When he has an opinion on a 10-1 shot, when do you hear him say he's going to bet exs or tris with the favorite? Never. 

The defensive mindset is strong and it's very hard to shake. These players never acquiesce to it. 

We Need to Learn to Race

For many folks, winning 40% or less of the days is not a viable path in developing the winning mindset skills the great players tend to have. Bankroll management and emotional control is a steely beast to stab on the jump. 

I have a couple of (stolen) suggestions that may help.  

Mike Maloney (for my money one of the greatest to ever play this game) has spoken about not having to big game hunt. With limited bankrolls so many players seek glory in pick 5 pools when they should be betting their opinions in pick 3 pools, or doubles. 

Personally, I have pivoted from spending $X in pick 4 and 5 pools to maybe 1/10thX on those pools. I play pick 3's, doubles or vertically at much higher rates in this new CAW land. The nearer the pool the more transparent they are, and I am eliminating some risk. 

The effects of this are obvious, and twofold, i) You cash more tickets, giving you added confidence in your play, and ii) your bankroll is less swingy, reducing the probability of tilting, and overextension. 

Second, and this one is partially stolen from ITP:

No matter how much we like the horse, we don't have to bet every pool around him or her, searching for glory scores. If the bet - whether it be an ex, tri, double or pick 3 or pick 4 - is not there, it's not there. 

This tip is personally difficult for me, even to this day, and I have to continually check myself. 

Recently I loved a horse which I considered one of those "bet of the year" things we tend to prattle on about. He was 5-1, and I frankly hated the pick n's around him, and didn't really like anything underneath. I spent oodles of cash on exotics anyway, because well, I'm dumb. 

The horse won. I didn't cash a single exotic. I wasn't even close. I made money on the race because a $12 winner is good, yet felt I lost miserably. I don't know why I still put myself through it, but no one said this game was easy. 

In the end, I believe that before we reach the Groovy sprinting skill and Affirmed mental toughness of the 40% winning days player above, we have learn to race. Learning to race means (in part) more winning days than losing days to give us confidence we can do it.

Sure we can split pick 6 tickets with friends, or take stabs at carryovers, but big game hunting or having to sweep pools because we love a horse tends to lead us into some very bad places. 

Summary

First thanks for reading and please share your thoughts on twitter or elsewhere, and second thanks to the players who chatted with me. It's a weird game. We compete, yet we're open to talk about this difficult, passionate game. 

Have a super rest of the day everyone. 

How Often Do Successful Horseplayers Win? I Found Some Answers

How often do you have winning days at this very hard game? I think it's an interesting and informative question, and in some cases I am pretty sure it can help us become better players. 

Over the last 18 months I have changed my style of play. I felt I had to with the increased presence of the betting teams. My old way  - playing more volume, sticking with my 2000-2015 thoughts of what "value is" - was passing me by. 

I went through some of my daily statistics and found this shift brought an interesting change - I play less money, but I win more days than I lose. Right now I am at about 59% winning days in the last eight months of data I looked at. 

This got me wondering. With different styles of play in this game, what do players who I know are successful do in this regard?

I asked two sets of players - the volume player and the more spot or value player - what their betting make-up looks like. 

The Volume (in this case) Dudes

"I have 48% up days and 52% down days," said one. "But the key is my up days are 1.5X the down days"

Another echoed that sentiment. 

"My key is, my biggest, best or average days are all bigger than my losing days."

When I was playing volume this was exactly my experience. And it makes mathematical sense. 

The risk in this type of play is that if you are losing so many days (180+ days a year of red) it's easy to go on tilt from time to time. I admire people that are able to control this emotion.

Spitballing, I suspect playing with algos or batch betting helps with this. You can check at the end of the day if you are red or green and don't get the emotional whipsaws. 

I *think* @dennycaps (Bet with the Best Pod here) fires bets this way, while conversely, ITP plays with pen and paper, race by race with mouse clicks. If either of them - or anyone else reading - wants to share their up/down day stats, or dealing with tilt at high volume, please do under the twitter post. I'm sure people would be interested. 

The Spot Play Types 

This was my most favorite type of player to look at. I have less experience with selective type play (although I have moved that way lately), and it's probably most-interesting to many.

I went in thinking that they must be winning at over 60% because they are i) very good cappers and winning players and ii) they're selective. 

The first two players I chatted with blew that supposition out of the water!

One player hits about 25% of his win bets, precisely because he does not wade into the chalk waters. And when you hit at only 25% you're going to have many losing days. He in fact says he's around 40% winning days and 60% losing days. 

Another player whose play I admire much echoed that. 

"I play with more risk, so it's about 40% winning, 60% losing."

I got some of my confirmation bias quenched with a third player - but he bets win only. He's an excellent player and he's not afraid to hammer the chalk when he thinks it's good chalk (and favorites are winning a lot more than they used to). He wins around 3 of 4 days. 

The one set of player - and it's a big one, CAW's - I did not do any asking. I always get a weird sleeping with the fishes feeling (only half joking) when I ask them questions like this, so I did not. But as one sharp player put it, they probably win north of 70% of the time because of their style of play and I think I agree with that. Once again, if anyone wants to share their thoughts on this, please reply to the twitter post. 

I think there's value in the above. If we delve into it a little, there are characteristics of play that can help every day players or weekend warriors get better. I'll share some of those thoughts in a follow-up post this week, hopefully. 

Have a very nice Sunday everyone. 

Horse Racing's Massive Big Tent

I was chatting with a friend recently about success we may have had betting a particular meet, and one meet immediately came to mind to me - a meet around 15 years or so ago, Sunland Park. 

I was playing regularly at that time, and I used to download every racetrack (there were many more then) and for whatever reason I decided to run numbers at Sunland to maybe take a crack at it. 

As I started to play, I noticed some interesting patterns. There appeared to be a strong bias, where in sprints, the outside speed would stay wide, then open up at the head of the lane, and rarely was beaten. It was like clockwork. After further investigation, it appeared the wind blowing down the back had a lot to do with it. Handicapping involved trying to find the horse (and jock) who would get this trip. It was remarkably consistent for over a month. 

I had no idea where Sunland Park was. I didn't know the jockeys. I knew maybe one trainer, Justin Evans from Turf Paradise, but dammit, what was my favorite race meet; the Spa, Ascot, Arlington, Del Mar? No, Sunland Park. 

Meanwhile, the day many focused on at Sunland was Sunland Derby Day. Prep season was in full-force. People were watching and talking about the Fountain of Youth, The Rebel, The Louisiana Derby. Some folks were posting workout videos of Derby contenders; some were posting pictures of trips to these tracks that they were especially making to cool the winter blues. 

Then came Keeneland. The poly was installed and again the bias was at times real this time for outside closers. I found the cheapest races on the card were the most beneficial to find a horse. Many were hoping to see the Wesley Ward firster or who'd enter the Shakertown. The entries would open and I was hoping for a claimer, trying to find a S or P horse with poly experience, and outside post and a standout late pace number. 

Either this year, or the year after I visited Keeneland where I found another big tent. The U of K kids dressed up nicely were everywhere. They probably couldn't afford a downtown Lex bachelor pad like the great Gabe Prewitt (waterbed odds, -180?), but they sure looked like it. They were not there for a Wesley Ward firster, and I don't think they knew a late pace figure if Professor Marshall Gramm explained it to them. But there they were - everywhere having a wonderful time. 

This game talks to everyone, and it caters to everyone. The fan has copious enjoyment, the bettor has just about everything to choose from. And I haven't even touched on the horsepeople who wake up every day, some since before they could walk, to care for the horses. To feed them and jog them and work them; to get their feet trimmed, braid manes, or give them rounds of Legend when they're off their feed. 

Horse racing has a ton of problems. We all know that. But attracting people from diverse backgrounds with a breadth of intentions wider than the Grand Canyon is not one of them. It's probably the biggest big tent sport the world has ever seen. 

Have a nice Thursday everyone. 

Finding Value in Racing is Tough, but it's There

I found Chris's latest pod with Dennycaps interesting for a number of reasons; one of which was the dive into what pools at what track might be more valuable to look at. 

Last night at Mohawk the pick 5 pool in race was stout, approaching $100k. For most of the betting, including using the exotics, there were two contenders in leg one, the four and the six. Implied odds suggested the four would be around 7-5 and the six around 2-1. 

At the gate, the six was 9-2 and the four was 4-5. Expecting things to correct, the overlay on the 6 appeared not real. 

But it was - in the win pool at least. He won and paid $11.90. 

Just how much of an overlay was that in the win pool? The horse took about 25% of the pick 5 money (suggesting about 2-1 odds in multis). And get this, this $12 winner kicked off a daily double with the winner of the second race that paid $8.90. 

On bad field nights at Woodbine the overbets can be really overbet, and the underbets underbet. 

This pick 5 had a mix of both. A $12 winner onto a $3 winner onto a $3 winner onto a $13 winner onto an $18 winner only paid $440. It could've - on other nights - paid three or four times that. 

According to multi leg wagers the first race winner was a massive overlay. The 4th and 5th race winners were, too. $20 to win on each of those got you back $430. Spending $60 on pick fives and locking them up gets you back $264 if you hit it for 60 cents. 

With the late odds usually highly correlated to multi-leg wager payoffs we might've expected these horses to pay much less. So it's still really hard game. And yes, the pools are fairly efficient. But as Denny noted in the pod, they are not perfectly efficient. Last night at Mohawk sure proved that. 

Have a great weekend everyone.

Where's the Nuance in the Public-Private Horse Racing Space?

I've been reading the narrative on twitter (from some thoughtful observers) that the space has gone from one end to the other. Namely, several years ago you would be flamed or doxxed for saying something negative about wokeness even if it was not the least bit controversial; now if you state an opinion that's even remotely positive about a slice of DEI (or what have you), you receive the same vitriol from the other team. 

That's social media and not the real world you may say, and I suppose you're right. But when it comes to horse racing, I think the same exact thing is alive and well. 

How does a track go from flush with slots money, living the high life, to "decoupled" like Pompano Park?

How does Arlington go from a jewel of horse racing and million dollar races to a parking lot, with nothing to replace it?

How is it, as we appear to see now at Gulfstream, that the track goes from running a bazillion races a year, supporting an entire industry in a state, to what seems to be nothing?

There's no either/or - it's flourish, or deader than a doornail. 

I don't particularly understand the Gulfstream issue. As you see in the Bacon Report and in other places, the supply side of the sport in Florida is strong, and thousands of people are employed in the business (and the track does handle). Why are we either/or here? Where's the nuance to protect that industry in at least some form?

I'm not a big corporate welfare fan, but transitioning money is important for any industry when the rug gets pulled out from under it (whether than be for real estate money or slot money).  Where's that plan? 

Some jurisdictions have done things with nuance. 

Ontario for example went from high on the hog to having the slots at racetracks program cancelled, and that completely could've killed an entire industry. Because the government and racetracks worked together, a plan was consummated. The King's Plate and North America Cup and breeding programs across the province were saved with an influx of capital. In return, several tracks were shuttered, or remained slots parlors, adding to the government's coffers. 

This program was signed-on for the long term, so owners, breeders and trainers and jocks were able to have some sort of certainty. 

We often complain that the industry didn't do enough with its good fortune when they had good fortune, and that's very true. California might've had the nation's biggest and best betting platform when exchanges were given as a monopoly to them. Kentucky Downs is flush with cash and raises takeout for some god awful reason. Pennsylvania slots cash came into the billions and they still had 30% juice. The list is endless. 

But when the good fortune gets pulled, most industries are granted some grace. Horse racing, through its dearth of leadership, lack of foresight or whatever, doesn't seem to live under that same policy.  Like we've seen on twitter the last five years, it's one side thriving or dying. There's no in between. 

Does Racing's Revenue Response Ignore the "Little Things"?

I read a story on Dave's Hot Chicken recently, and it more than just made me hungry (I've never heard of Dave's Hot Chicken before). 

The brand was started by four friends in LA, and a quarter of their 270 stores reside in the Golden State. As many of you likely know, California raised their minimum wage to $20/hr, and Dave's and other fast food brands had some choices to make. 

They set up emergency calls with all franchisees and went to work almost immediately. They had to cut costs, and find ways for customers to spend more money (because they had to raise prices, and higher prices mean lower sales).

Here's what they came up with, in almost real time, with all of these changes implemented within months.

On the cost side:

• They invested in automatic dishwashers instead of cleaning dishes by hand
• They contracted out cleaning work
• They shifted prep to contractors
• They installed grease systems that were automated and were able to reuse grease

On the revenue side they did increase prices (8%; to counter an $8M labor cost increase), but they did quite a bit more than that:

• They implemented self serve kiosks, and found out customers ordered more when ordering for themselves, upping spend per order (in betting parlance, churn). 
• They created "Hot Boxes" and new packaging to increase order size, and gross sales
• They created low-cost menu items like single chicken orders for $7. 
• They added new products

The CFO said "there's a lot of little things"; the CEO added, "We can't just raise prices, we have to get better."

All of those "little things" (absent price hiking) has increased the bottom line per store by about $200,000 per year (guesstimating here based on my knowledge of that vertical, that's about 5% of gross sales). And it happened with lightning speed. 

Over in racing, the response to falling revenue has been primarily twofold:

• For the vast majority of players margins are increased (from 6% in 1905, to 21% now; ironically, CAW's are the only ones getting 1905 margins). 
• More alternative gaming is asked for

Some racetracks, like the Meadowlands which relies on handle, have cut costs the best they can. They run two nights a week for a reason. 

On the revenue side, as noted in part in HRU this weekend, has the sport even tried to increase in-store sales by maximizing the track feed? We still see races raced over top of each other, why? Where are the coupons and discounts to every day customers to encourage wagering and wagering stickiness? 

If Dave's Hot Chicken can spend money on kiosks, letting customers choose their meals, why can't customers get access to better tools to allow them to bet better or bet late like CAW's can? Hell, can we get a system to the point where a customer knows what the final price is? Where's the single wallet? 

Jim Collins' seminal work - Good to Great - noted how companies flywheel to grow. They do a whole lot of little things. 

Dave's Hot Chicken received an $8M kick in the ass that could put them out of business and in response immediately did those "little things". Our sport seems to get hit over the head with a plank on a yearly basis, and I don't get same vibe. 

Have a nice Tuesday everyone.  

Poteck on Racing Wagering Trends in Canada & CRW Wagering

2024 marked the first year ever that Woodbine Entertainment did not put out a year end press release detailing their annual and year over year handle numbers. 

It had me wondering why so I reached out to the Canadian Pari-Mutuel Agency to request the numbers.

The charts below detail Ontario and Canadian historical wagering for the past 19 years and for the last 6 months of 2024. 

Woodbine represents ~70% of the 2023/2024 Canadian handle. The numbers are not very pretty.

Chart 1 Above (click to enlarge charts) - Canadian customers wagering more on U.S. tracks, less on Canadian tracks. International customers making up more and more handle (in 2024 making up more handle than domestic outlets) 

Chart 2 - Ontario wagering only since 2006.  

Chart 3 & 4 - Local wagering on Canadian tracks falls the second half of 2024. 

A couple of things jumped out to me. 

The amount Canadian's wager on Canadian tracks has decreased significantly over the past 19 years, down about 60% when not accounting for inflation. Clearly Canadian Horseplayers are not pleased with the product. 

I am not sure what happened the last half of 2024 as Canadian wagering plummeted 12% on Canadian tracks, 6.5% overall. An aberration or a sign of things to come? 

The amount Canadians have wagered on foreign tracks has remained stable when not accounting for inflation. However foreign customer wagering on Canadian tracks has approximately doubled over the past 10 years. 

The increase is likely due to expanding the signal distribution and the growth of CRW's. The strength of the US dollar has contributed, as well. Hypothetically, if CRW's represent 30% of Canadian wagering then they account for upwards of half all foreign wagering in Canadian dollars, yikes! 

The question going forward is, has the signal expansion and CRW volume maxed out? And if so, how steep will future handle declines be? 

One interesting question: Is a takeout hike in the offing? 

The CPMA’s sole source of funding is the 0.8% levy placed on all wagers made in Canada. In 2006/07 the levy took in ~12 million. In 2024 it was $8 million. The CPMA can raise the levy to 1%, which is the highest they can go without receiving legislative approval. It will be interesting to see if they do increase the levy, and if the tracks absorb the 0.2% increase or if it will be passed on to the Horseplayers. 

One must wonder what these numbers would look like if Woodbine was not bestowed a Canadian online wagering monopoly where they take advantage of Canadian Horseplayers with the unprecedented scheme of increasing the takeout rate on American racetracks. 

A big thank you to PTP for sharing this information. And in the spirit of the blog, “have a great Monday everybody!”

Eric Poteck is a long time industry watcher, presenter at race conferences, horseplayer and general watchdog (aka pain in the butt) of the Canadian pari-mutuel business. He can be followed on twitter @Epo13.

Monday Racing Notes & My Horse Racing Twitter Tariff Riffs (This Kind of Rhymes)

Hello everyone, and Happy Monday. 

I've been playing the races, lurking, and not tweeting a whole lot (since I have very little to say of importance). But thank goodness for the blog where I can type in Twinky-form with impunity. 

Here goes. 

First off, I had a nice plane ride listening to part one of the Dennis Montoro Bet with the Best pod, but somehow I missed part two was released. It's here and I'll be listening to that tonight. Dennis provides insights on the pools that you won't hear in a lot of other places. 

A quarterhorse trainer really got nabbed last week, as reported on the Bacon Report. One of the drugs was not approved by the FDA way back in 2010. Seriously. So how is it around on a backstretch (allegedly, of course)? When people on the twitter complain about exotic drugs and get shot down like they don't exist, I think this is why they have that opinion. 

Despite takeout and all the rest of the bad, bad things, horse racing can be the best bet in the history of the universe. How can it be any other way when we analyze the late pick five at Gulfstream on Holy Bull day?

Leg one was Mike Maker, going a marathon distance off the claim. 

Leg two was Todd Pletcher with a surface switch going first time dirt, second off a layoff who opened at 5-2 (so someone knew something we should've been able to see). 

Leg three was a Eurton mare that was my best bet of the day. And I'm no Pittsburgh Phil. 

Leg four was a horse liked by many sharps, including Gallo on the Sport of Kings pod, and the great Marcus Hersh from the DRF/NFL.com.

Leg five was a key for me (I hit the pick 3, yay me), so I am sure it was a use for everyone. See leg three. 

This assembly of very logical winners paid around $80,000 for 50 cents. 

I hope the people who run this sport start doing some good things because that kind of value on the mind-bending yet scrutable chess board should never, ever die. 

As most know, Donald J. Trump did some serious tariffs on us poor souls in the Tundra last weekend. Our dollar sank, cold Canadians booed the U.S. National Anthem at hockey games, substituted US booze for Canadian booze (spoiler alert, you end up with the same hangover) and probably cranked a lot of Rush in the minivan. It was a wild weekend. 

For those that don't know much about tariffs, you've come to the right place because this is what PTP was built for. I took economics classes in the 1980's. Here's what it all means. 

Those of you with US betting accounts (how dare you, Benedict) just got a raise. It's like getting a rebate without being a CRW. 

Woodbine handle is about to go up. Tundra Dollar down, US dollars in, more handle. We'll see if they report the good news by attributing it to marketing. 

It's been reported that it costs 25% more to read Swifty twitter rants. Apparently Tinky is in the EU this week, so his 34,874 word tweets about the breeding of this new Chilean horse racing at Gulfstream in the sixth can be read by Canadians at the same exact price as it was last month. 

CJ and his lovely wife are about to take time off making speed figures and make more trips north, probably to the Curling championships. Bundle up my Oklahoma friends, it's been a cold winter. 

Speaking of speed figures, word is, all Canadian races that were scheduled for a mile are now only 0.66778 of a mile. And you guys complain about run up. 

ITP is about to release his new e-book titled "It's More Important than Ever for Canadians to Listen to Me Over Andy Serling About Ticket Structure."

Ray Cotolo is taking advantage of the strong Yankee dollar (like the rest of Hollywood, he's gone corporate) and he's making a new film in Vancouver. He plays a drifter who spends the entire Kentucky Downs meet underneath a trackside tent that they raised takeout to pay for. The film is only slightly less confusing than 12 Monkeys, and he did a good job making Hastings Park look like Kentucky Downs. 

There's a rumor Philadelphia Park has found a way to increase the takeout for Canadians based on the new tariffs. Starting tomorrow, when you hit a superfecta at the storied Pennsylvania oval you will owe them money. 

Everyone on the twitter knows I built a new shed in the back a few years ago after mispunching a superfecta and scoring a couple of K ($CDN). I've invited Bucky and Beem to come up this summer and they accepted at the low price of $1,000 CDN shed rent for the week. I'm happy to report that I just photoshopped the original email and changed the currency to $US and I'M FREAKING RICH. 

California horse racing is short on horses and short on time. On Friday they signed a deal with Canada to import racing stock to get those field sizes up (and possibly find Baffert his next Derby winner). Now the horses cost way more, and border security is holding them until things become clearer. Lisa Lazarus just held an emergency meeting and it looks like the Kentucky Breeders Fund might have to step in. 

Well, late breaking news - the above could all be knee jerk. The Donald is apparently meeting with Trudeau today, which is kind of weird since JT resigned because of approval ratings that were lower than Belinda Stronach's. But if something comes out of it I'll report the good news. 

Which reminds me, I better get that $1000 US from Bucky and Beem right now just in case. 

Have a nice Monday everyone. 

Prediction Market Dominoes

It was announced this week that federally regulated prediction market Kalshi has entered the sports betting market. 

For those who are not as familiar with these mediums, they generally mirror what one can bet on a sports betting website, but you receive lower vig, and are able to cash in and out of a bet pretty seamlessly; should liquidity be available, of course, because you need someone to take the other side of your bet. 

Anyone who has played a betting exchange, or similar markets (that are currently available) will find them old news. 

I was involved with a peer to peer loans exchange start-up years ago that ran into a regulatory morass. Other exchange or market medium changes, like California racing given the go-ahead to legally offer horses in this way back in 2012, got stuck in a bog of craziness. 

• "The company’s regulator, the U.S. Commodity Futures Trading Commission, has a new acting chairman, Republican Commissioner Caroline Pham, who announced additional leadership changes on Wednesday. Those departures include that of the CFTC’s general counsel, Rob Schwartz, who recently argued against Kalshi’s election contracts before a panel of federal appeals judges. The leadership changes and the more approving view of Trumpworld toward prediction markets suggest companies like Kalshi could be free to launch even more event contracts like the sports-related ones."

This definitely looks to be shaped much better for success. 

There's still political risk - so many states get paid so much money for sports betting deals with the Fanduels or DKs of the world and they take that revenue stream seriously. But for bettors who are serious of getting great prices and not having to pay ridiculous cash out fees, it's certainly welcome. 

I guess another item is the bettor him or herself. 

In Canada, for example, the previous government deregulated the phone, internet and banking space, providing competition to the monster companies that held sway over consumers. This opened up cheap deals and better banking outlets, but consumers were married to the old way, and were infiltrated with "bundles" and special deals where they didn't move on from the old guard in any big numbers. 

Despite better prices, better cashouts and a great interface, I suspect similar occurs in this space, should these markets proliferate. DK and Fanduel (plus their branding) and SGPs, special offers and all the rest will probably do just fine. 

This always brings me back to what folks who read the blog have heard before, and you may be tired of hearing it. But Kalshi is new. From being new they have entered a betting space with new technology. They've got regulation on their side. They have an in. There's a non-zero chance they could be huge. 

Horse racing had this "in" more than 14 years ago. They had the ear of pols. They already worked with regulators. Exchanges were approved. 

People shouldn't be diving in to bet Kansas City Chiefs Super Bowl futures, or Kentucky Derby futures or whatever other futures that are or will be offered in the Kalshi market. They should be betting already into an horse racing industry owned or led market. It was given first-mover on this over a decade ago. 

Have a nice weekend everyone. 

In the Horse Racing Casino Revenue and Land Asset Bubble, All KPI's Lead to Bad Places

Bacon is covering the Gulfstream Park mess, and he provided an excellent summary here.  

Since AI is the new fancy version of Cliff's (Coles in Canada) Notes, the AI version of the above is that Gulfstream will probably be no more come 2028 (or sooner). 

In a presentation made by Keith Brackpool (there's a blast from the past in California takeout hike lore; these people seem to just move around), it was detailed the land was worth over $1B, which is a lot of scratch. Stronach bought the track for $95M in the late 1990's. 

Further to that, and this is most interesting to me, is the casino revenue. 

Look who tops the list - Pompano Park. The old time historic track that closed a (de)couple of years ago. Yes, the one with purses that rivalled a county fair, with horses (no offence) to match. 

Unpacking that disconnect: The entire sport of Florida harness racing (including the breeding industry in the state) was at a track that brought in $132M of revenue and no one could save the place. Even as it was receiving what many would consider scraps. 

If the sport of horse racing mattered to important people, Gulfstream would be racing, along with Pompano (with some of the highest purses in the world), Hialeah and Calder. But it doesn't. 

If your racing venue brings in tons of casino money it doesn't matter. 

If your racing venue is a storied track patronized by Andy Williams, Ed Sullivan or Colonel Sanders himself, it doesn't matter. 

If an entire industry, including racing and breeding, depends on your track, it doesn't matter. 

If your track has Pegasus races, and Pegasus statues, and is a staple of the sport's wagering make-up for the entire continent, it doesn't matter. 

This is nothing really that new. Balmoral Park in Chicago was quite a successful place in year's past and the home for Illinois racing. They'd do over a million a night, with purses most nights totalling less than $40,000. If we add $20,000 in cost to run a card, their handle revenue to cost ratio was probably in decent shape, but it went the way of the dodo bird, too. 

Casino revenue, check. 

Good horses, good trainers, a good place to watch a race, check. 

Storied races, historic venues that host Breeders Crowns and Breeders Cups, check. 

Big handles, check. 

You can have all of those things and still end up a parking lot or a strip mall. It's sadly the state of the sport.

Do the CRW Teams Have Body Language Covered?

There was an interesting discussion on the twitter recently with Chris asking, "we all know about the advantages for the CAW teams, but what are some advantages for the human player?"

There were some good suggestions, one of which was inside info which is a human trait, and I agree with that completely. We've seen some sharp fair odds computer players look dumbfounded when a horse they didn't figure runs off the screen where on-track they know. 

But intuitively, I suspect the answer to this question is frankly "not much". If you're going to bet hundreds of millions of dollars and have any skill in setting up an organization, you're probably going to have most bases - whether computer or human - covered. 

One area the teams try to cover is body language, but I'm not convinced they are particularly excellent at it (yet). 

First off, if a horse looks sore, it's pretty hard to change a line on the fly, especially with the extent of the soreness. Sore horses who are 8-5 on paper can be 5-2 fair odds, or 520-1 fair odds. Lame horses for me, you and many are an auto-pitch; we're not guessing degrees. 

Second, (and I'm the first to admit this could be anecdotal and I miss things like everyone else) I see little adjustment in the late betting when I personally see a lame or sore horse. 

Just in the past week there was a race where a horse came out looking horrible (who usually looks okay), and in my view should've been scratched. The multi-race wagers (wagers bet before you can see the animal on the track) indicated a strong betting team horse: odds of about 6-5 in the win pool. 

The betting opened hard with an even money win price, but after the parade the horse moved like we'd expect from sharp people noticing the soreness; he closed at 9-5. But it was only 9-5. If the teams were that sharp, wouldn't we expect a higher price? (The horse ran 8th).

I don't know exactly what goes on inside the "team room" but I have been around the block a little outside of it. 

Back before the word "CAW" was a thing, many sharps were betting on Betfair; but by sharps I mean some of the human folks Chris alludes to in his question. I'd often see movement after a post parade at the exchange based on how a horse looked. 

I particularly remember a stakes race at Saratoga where I faded a horse for more than I ever have, based on stiffness. She was from a top barn, and was 7-5, but not long after the parade she was 5-2 on the exchange, then 3-1. She finished at 3.9-1 and ran out of the money. Who were myself and others getting filled by on the buy end? From the betting bots. 

It's dumb to think we'd know more than a well-capitalized, well-run team of sharps. But to Chris's point I do believe there are avenues where we can be better than they are. We see it on the tote board each and every day. 

Have a nice Tuesday everyone.