Wednesday Notes - Those Dreaded Customer Conversions, Free Publicity and Hogtown

Jarod Dinkin has a really good article up on the HANA Blog about Summer Meets and the barriers to entry. Racing has tremendous issues converting customers and I believe it's a systemic issue caused by a moribund industry that was raised on not having to ever convert customers. There is no easy fix and it will take some time, and very much effort to shake this mindset.

The bottom line is, if you spend $10,000 to get 1,000 people in your door, 90% of them don't bet, 98% don't repeat and only 10% of the remainder open up a betting account you just paid $5,000 to land one customer. With a cost per acquisition that high, you better be able to have them play for years to break even, and at 22% takeout, good luck with that.

Speaking of shaking a mindset, there is much talk in Jersey about sports betting. Mention sports betting or poker in racing and the powers that be perk up. I have no idea why. Would the only car lot in town be happy when three other car lots move beside them? Racing seeks carve outs on new competition, when new competition should never be embraced, ever. As JD notes in the above piece, the infrastructure is not in place to compete with them. In the long run, unless racing completely changes their thinking, sports betting and poker will hurt, not help racing.

Roxy noted on twitter today that sports betting will be taxed 2% on betting volume. This is another snafu when governments get involved in taxing betting. In gambling jurisdictions - like the UK where its had hundreds of years to perfect systems - taxes are on gross profits. This way the bookmaker, or what have you, has incentive to increase handle. A 2% tax on a football bet makes an 11/10 odds game 44% more expensive. That will be passed on to customers and is not profit maximizing for anyone.

Note that racing does the same thing: Everything is taken out of handle, not profit. This decreases customer margins, and horse racing is back to the state house begging for purse money.

Some free publicity happened at an Ohio casino recently. Everyone was winning jackpots! I bet the free press they get, along with the word of mouth that the casino was giving away money, help it as much or more than the glitch hurt it.

This weekend's Canadian Trotting Classic at Mohawk only attracted 7 entrants. That's weak, but it's what might be expected when one barn - Takters - controls the three strong favorites.

Kentucky Downs goes again today. Best takeout in racing, and deep, full fields that adds value. There are races there that are giving away money like a casino. It's the closest thing you are going to find to a positive expectation racetrack in North America, and its a strong reason handle has gone up from less than $900,000 a day a few years ago.

Scott Jagow of the Paulick Report checked out Toronto and documented this via video today. He's at Woodbine and I think the grand pooh bah (Paulick, not Cummings) might be heading up here as well. When I speak with my American friends who have not been to Woodbine, the often used reason is that it's "too far", but that's not really true. It's within an eight hour or so drive of tens of millions of people south of the border, including those in NY or Chicago.

Woodbine is a lovely track with the nicest turf course you will ever see. Toronto is crazy busy, especially the highways and downtown, but it's a lot of fun. If a small town kid like me could come down here to University at 17 and live downtown for 20 years, it's not a stretch to visit.

If you have not downloaded and saved the Horseplayer Monthly yet, you can here. 25 pages of handicapping and commentary from some neat folks (I even have an article in there, but don't hold that agin em.)

Enjoy your day everyone. Happy Wednesday.

Back in the Fold

After a week or so with no posts (no applause please) I'm back in the fold. I hope everyone is enjoying the extended summer here in the north east. It sure is nice considering August was in the dumper for most of us.

Anyhow, here's a quick recap........

I decided I needed a little break from wagering and working the last week so I traveled around a little bit. We truly are fortunate to live in such a nice set of countries. Working through Maine I was struck by its reserved beauty, 75 mile per hour speed limits south of Houlton, and its laid back people. I didn't make it to a racetrack (Scarborough Downs) but did see the casino. I guess nowadays we all see casinos instead of racetracks.

People in Maine probably have little time to bet horses. I figure half of them hunt, fish and camp (judging by the license plates) or shop. In fact, I think outlet malls have taken over the Earth. One of them, in a place called Freeport, was quite nice, except for a non-shopper like me it was hellish; people shopping everywhere. It felt like I was in the middle of an ant hill, but the ants were people from Maine, and I was a little stick they wanted.

New Hampshire is another kick butt state I spent some time in. It's a place where you can get a 66er of Jack for $33 and fill up the car for $65. In Canada that costs us a mortgage payment. New Hampshire has outlet malls, too, but near one of them there's a machine gun shooting range, which probably can pass the time for non-shoppers.

Vermont is a state I had never been in. It was pretty and very sparse. I wiki'd it and found out there are barely 700,000 in the entire state. I think I saw about 11 of them, and traveled most of it. Maybe they all live in Burlington, or in the hills, probably near an outlet mall.

Maine, New Hampshire and Vermont all voted for Obama, but from the four people I spoke with who were talking local stuff (n=4), they don't like him now. So I will conclude New England does not like Obama anymore. Racetrack execs do that when they talk to three old ladies in the stands who "don't even know what takeout is", so I'll throw my statistical hat in the ring.

I'm probably the only horse racing person on Earth that goes through Saratoga two days after the meet ended, but that's what we did. It just worked out that way.  I wanted to make it to Tioga for the Cane on Monday, actually, but I didn't even time that right.

I can't believe that in New York, where taxes are prolly as high as Canada, it costs you $12.95 to get from Albany to Buffalo on the Thruway. New York state is pretty much as I remember it. I had not been there for awhile. I was a bit bummed I could not stay in Schenectady because I would've liked to have hooked up for a beer with Mike MacAdam (@Mike_MacAdam), but it was early, so Syracuse was the target.

Back towards Hogtown, traffic gets worse, gas goes up. You know the drill. Southern Ontario is an absolute sea of people; people going nowhere in particular but a lot of them doing it.

I spent a day at Woodbine, and have not done that for quite some time. I am so used to playing on the computer, I forget what the place is like. It is such a nice racetrack and the crowd (on a cooler, slightly overcast day) was large. The finish line bar was busy, as was Champions upstairs (there was no cover, or you did not have to show your ORC to get in). For those who do go to Woodbine for the first time, check out Champions and sit outside if it's nice. It's a super spot to watch the races.

I ran into Keith McCalmont (@tripledeadheat) who does Woodbine's marketing on the web (among other chores) and chatted for a bit. I have always liked Keith but had never met him in real life.  If Jamie Martin is reading this, Keith did not stay long because he was busy with work. Give the man a raise!

I also ran into Normie (@normf66) at the rail with his camera. Nice to see Norm again.

I had an awful betting day and they were off the turf with the thunderstorms the night before, but it is so nice to enjoy a day at a beautiful racetrack like that. I did not make it out to Mohawk that evening for a double header, which is what I do like to do when I am in live racing mode. Maybe because I didn't cash anything but a place ticket on a (hanging) 14-1 shot at Gulfstream. I still can't believe that horse didn't win.

I hope everyone had a good week. I'll be back spewing some racetrack drivel on the blog this week.

Have a nice Tuesday everyone.

Kentucky Downs Opens & Some Excellent Handicapping Literature

Kentucky Downs, one of the most unique and bettor friendly tracks in North America, opens today. Most of my friends who enjoy the art of handicapping are stoked. I am hoping to play some today as well.

Speaking of handicapping I was really impressed with the New edition of the Horseplayer Monthly. As someone said on twitter, "I can't believe it's free."  I didn't have anything to do with putting it together this month, so great job folks. Enjoyable.

Have a nice weekend everyone.