Seats at the Table

There was quite a bit of action yesterday on the Fred Pope piece at Paulick. Not coincidentally, Ray informs his readers this morning that he is up in traffic and he is starting to blow away some of the thoroughbred news sites out there. Ray speaks of push-button issues and has grabbed a following. There clearly are not too many puff pieces on his site. People seem to really want to speak about the issues there.

I was thinking a little bit about the Pope piece last night, and how bettors seem to get up in arms about them, while some industry insiders think he makes a good point. There has always been a disconnect in racing between the customer base and the suppliers of the product; this is nothing new. And I truly believe that it is one of our great mistakes in our business. We sincerely need people involved in betting decisions at the highest level, who know betting, and who live betting; at the very least they need a seat at the table. Unfortunately, in our business the people who need to be at the table, don't have a seat.

I think a little bit about the Horseplayers Association of North America. I am a member, and yes it may be self-serving to say, but I look at the experience on wagering that the board and advisory board has. People like William Ziemba (Dr. Z), Cary Fotias, Barry Meadow, Jeff Platt, Nick Mordin, Mike Maloney and several others who can be called wagering experts. They have published dozens of books on betting (racing, poker and otherwise). One has a Phd in statistics and is an often quoted person on wagering economics, one is a computer programmer who makes a living from racing, one is a horse owner and full time bettor, one has a unique perspective by playing and being involved in racing in all parts of the world. In total they have well over a century of wagering experience from all corners of the globe. The board of directors has owned hundreds of racehorses, to boot. They live breathe and eat racing, and they care deeply about its future.

On the flip side we have some racing insiders like Mr. Pope, Barry Irwin, people from horseman groups like Bob Reeves, who is a trainer, and others. They care about racing too, and are extremely bright and passionate, but I would submit most don't place too many bets, and don't have the experience wagering that the other list has.

Let's think about this for a second. Let's say that we are scrapping everything - all the rules, the cross-state restrictions, everything. We are starting racing and wagering on it from scratch with a blank slate.

Who would you want writing the rules, or being heard from to create the new North American wagering system - people like Dr. Ziemba, Nick Mordin and Barry Meadow? Or the people who have a seat at the table now?

In other businesses the board of directors and officers each have their place in the world. One of my oldest friends and smartest people I know is an executive at a major corporation. He is a money man. When a new product is looked at, he runs all the numbers to make sure it can go to market and succeed. His partner is the engineering man. He makes sure the processes to create the product are achievable and firm. He relies on the workers on the line, looking for input on what they do. It is a well-oiled machine. Each person has their expertise, and each person is given respect in their bailiwick. It's the way things work; in fact, it is the only way that they can work.

Right now in racing if a new wagering change was looked at, say a change in the IHA, the people at the table will be as follows:

- A person from a racetrack
- A person from a horseman group
- A person from one of the many, many groups with four letter titles
- A person from a state or provincial office or commission

They will be in charge.

The people who bet, or who take bets and have succeeded in doing so (in betfair's case these folks have turned a start-up into the most successful gambling enterprise the world has ever seen in a short time) have absolutely no say. No say at all. They will not even be invited to the dog and pony reception for crackers and cheese and a glass of Jessvino.

I know getting people to change in racing is easier said than done. I have been to the meetings. I have seen first hand the fingers in the pie and the yelling and arguing. I have seen the grasp of control with no one wanting to let go. But when will the good of the business as a whole trump the needs of each faction in our game? When is enough enough? When is the time to move in a new direction?

From someone who loves racing and wants to see it grow, I hope this time comes soon. I hope one of the factions finally stands up and says, "let's roll and get this thing figured out", regardless to what it does to their slice of the pie. In 2012 or 2013 there is a real chance that Australia will pass North America in gross handle. Australia is a country that is 1/20th the size of North America in terms of gross domestic product. I think it's time we start setting the table to ensure this does not happen. One way to start is letting gambling people make some gambling decisions.

80,000 People at the Track? It's Easy. Just Block all Wagering.

Ray Paulick has run an opinion piece from Fred Pope about a potential match-up and big racing day. The protagonists are Rachel Alexandra and Zenyatta, the two top mares in racing. Mr. Pope has long held the belief that if the tracks take the bulk of the cash from betting, racing will be in good shape.

To make a statement for all racehorse owners about the upside-down, off-track revenue model that bled $500 million out of purses this year, the owners of these two magnificent fillies have a timely opportunity.

For the big event, the fillies’ owners would agree the race would have no set purse amount, but instead they would get 100% of the takeout from on-track wagers on the race. In effect, the racehorse owners take the risks.

By locking out all off-track wagering and televised coverage, if we can get a crowd of 80,000 and drive the on-track handle to $20 million, the takeout for the purse would be $4 million gross. If we paid back to 6th place, there is a huge incentive for the owners of other good fillies to enter the race and drive the handle higher.

Protectionism at its finest. And it never works.

Somehow we are supposed to get 80,000 people to a racetrack. And they have to leave any handhelds, phones, or computing devices at home. They also have to bet about $200 or so, or about 1000% more than on-track patrons bet normally on a whole card, but do it on one race. How many people are going to bet $250 on one race, which probably is not a good betting affair to begin with ($4.40 ex and a $6.60 ex respectively with the two chalk). The answer is: Not very many.

I recently returned from Xtreme horsepower at Georgian Downs. It was a great day. Thousands of people attended - race fans and new fans from everywhere. The line-ups for concessions were twenty deep. The tarmac was fairly full, the rides and games attended and the weather was good.

That crowd bet $200,000 on 12 races.

Mr. Pope should realize that on-track patrons, or fans, or new fans don't bet much. The real betting is done at home, or off-track. That is where handle comes from.

What will end up happening if such a day ever would occur (and it won't) is the following:

Offshore pirates will reap all the rewards. You can not watch the racing day on TV, but you will be able to bet it. Money lines will be placed up all over the world so people can stay at home and bet. No revenue will go to racing, and even if people wanted to travel many miles to bet the race, pay fees for parking, walk miles to the track, stand in line to bet into 22% takeouts and spend hours at the track - they won't have to. The offshores love this idea.

People will bet what they generally bet on track. They won't get 80,000 people for a horse race, but if they got 40,000 (which would be great for an event like this) they would bet the usual $20 a head. Handle would be about $800,000 tops. If you do not distribute the signal, handle falls. It is a modern truism.

We are supposed to march to a drum that raising prices on bettors, making them come to a track and bet, make it more difficult for them to bet, and inconvenience them will result in a raising of revenues and be a good thing for the sport. Ouch.

The constant barrage of old time thinking that permeates us in racing is flat-out mind-boggling. This is not 1938, it is 2009. The internet is here, racing is being distributed far and wide and people are playing it in other ways. We have kids, two parent working households, traffic snarls where a drive to work takes two hours instead of ten minutes, and many things to do with our time and money. People are not going to the track like they used to, just like they are not going to see minor league baseball, or junior hockey like they used to. It is never coming back. Without bringing racing to the masses, we are finished.

I spoke to a bettor yesterday. He was watching and betting an Irish race. There were horses he never had heard of, in a place he could not find on the map. There were a few people watching the race live - and the kicker was, it was a race that was being run on a beach. Yes, not on a track, but on a beach. A race on the beach, in the middle of nowheresville attracted $300,000US of betting on Betfair from at home players. What is the handle without them? Peanuts, that's what.

Yes the world has changed. And it can change for the better in racing if we place ideas like Mr. Pope's where they belong - back in 1938. They have absolutely no business being proposed in this century.

New Whip Rules and Old Rules Broken

The new whipping rules come into effect in Ontario today. Jock's are now using the light tough whips and can not whip as much as they used to, and drivers must not beat the heck out of their mounts, one-handed.

What strikes me is with the lack of leadership in racing, the rules are taken as some sort of nebulous thing that can be broken. Why is that? Some quotes:

Reactions are mixed in the thoroughbred world on the new rules set out for urging a horse, with some riders brazenly stating they will break rules if they think it means the difference between winning and losing

"If I am down in the heat of a race, how do you start counting?" said Kabel. "People know I am an aggressive rider, that's why they hire me." "The penalties are too severe," said Kabel.

in Australia strict whipping rules were introduced along with the crops.

That has led to a mini-revolt Down Under, where jockeys say paying attention to winning a race is their first priority, not counting how many times they strike a horse.

How now brown cow?

In the NHL they instituted a crease rule long ago. In the pre-season if a skate was in the crease (even a millimetre) it was no goal. In the NFL they initiated a no horse collar rule last year. If you touched a players collar and brought him down it was 15 yards, no questions asked, and if it was particularly brutal, it was a fine.

Within weeks the skates in creases and horse collar tackles were almost non-existent.

What there was was no whining about them while they were testing it. The players knew that this was a league rule, and they are getting paid a good sum to play in the league. They abided by the rules. We never would hear "If there is a puck loose and I have to go into the crease to get it, I will no matter what". Why would they say that; if they went into the crease to get the puck, the goal would be disallowed. Why bother?

Why in racing do we hear all the criticism and sometimes the brazen "I don't like it and I will break it" mantra when a new rule comes in? No respect for the authority of racing or the penalty does not fit the crime, in my opinion.

If the ORC really wants to make this rule work, the first time after the grace period they see something happening untoward, they fine the participant, and suspend the participant. Take a lesson from the big leagues and leave no grey area, leave no shred of doubt that they are serious. People will abide by the rule by mid-October, if so.

Speaking of rules, we have a funny in harness racing. The owner of All the Weapons raced and won the Gold Cup and Saucer a couple weeks ago. There was a problem. The horse was claimed in Ontario and shipped out to race before the 60 day jail time was over. No good. They were fined the purse money. What is funny to me is that the ORC was like a mother chasing a teenager to make sure they knew if they entered the race they would get hammered - yet they still entered. Some snippets:

They call him to make sure he knows the rule, which they don't even have to do, but they did anyway:

On August 17, 2009 at approximately 6 p.m., prior to the horse making his first start in the Gold Cup & Saucer trial, the trainer of ALL THE WEAPONS Ken Oliver, contacted the Judges at Mohawk Racetrack at their request. Rule 15.09 was explained to him at that time. Furthermore, he was also informed of what the policy relating to penalty currently is.

On August 17, 2009 at approximately 7 p.m., trainer of ALL THE WEAPONS Ken Oliver called back to the Mohawk Judges and asked that rule 15.09 be read to him for clarification. Also, the policy relating to penalty was again relayed to him.

He still raced, and won. He made the final, which of course, will also have the purse (whatever he makes) going right into a fine:

Having seen “ALL THE WEAPONS” in-to-go in the Gold Cup & Saucer final set for August 22, the Judges at Mohawk attempted to contact Ken Oliver on Thursday August 20 by calling his cell phone, his home phone, and we even spoke with Roger, a Charlottetown Judge, and asked him to have Ken Oliver call. No call back was received by us from Ken Oliver and nor did the owners make an effort to contact us for clarification. We did receive a call from Ken Oliver's wife as she wondered about our number coming up on her call display.

Subsequent to those calls being attempted, the Judges at Mohawk called the only number listed under Standardbred Canada for owners Kerry and Shirley House. A message was left on an answering machine also on Thursday August 20.

I remember chasing around an old girlfriend once like that whom I was sure was stepping out with my buddy Dave. I was around 15 years old I think.

So the horse won, and they were fined. End of story. For some reason this is a debate that they should not have to give back the purse money. Only in racing.

We do strange things in our sport, because it seems we just don't care much about the rules. Jockey's want leniency even before they break a rule. People know they can't enter a horse out of province but still do, then some rally around them, for some strange reason. We saw this in the thoroughbred's this summer when Jeff Mullins brought a substance with a non-needle syringe into the detention barn. A two year old with a learning disability knows not to do that, yet some rallied in defense of Mullins. In football have you ever seen people rally around a guy who rips a facemask off another player and gets a one thousand dollar fine, knowingly breaking a rule? Of course not. After the play is over, it is forgotten, and the player (and fans and all players) know not to do that anymore.

Imagine if this occurred in the real business world? Would the EPA call your home fifty times to tell you that you can't pour toxic waste into a river? Then when you do it anyway, all the other business leaders protest the fine for you?

Some say that the ORC treats us like children. But maybe it is because we act like children. I swear we are going to see an industry wide notice next, telling us to not nail horseshoes to our foreheads because if we do, it'll hurt.

Only in racing.