Post Drags Eventually Wear You Out, But the Racing Can't Fix Itself

The NFL is going through some pretty amazing machinations this year. Viewership is down, as is betting.

Sally Jenkins reported today on the phenomenon, and one area she looked at was the time it takes to enjoy a game on television.

According to this excellent analysis, there is abt 11 mins of action in a 4-hour #NFL telecast. Wearing out viewers. https://t.co/uj743Xe9xZ

— Sally Jenkins (@sallyjenx) November 1, 2016

I have surmised here before about this -- it gets incredibly frustrating to watch a score, a commercial, a kickoff, another commercial, a quick turnover and another commercial. Games which used to start at 1PM and end at 3:49 so you could get ready for the 4PM game haven't been around for awhile.

I've likened this to takeout increases in horse racing. It's not one increase and you leave, it's a drip, drip drip then leave. It took years to turn off viewers, it took years for bettors to say "I have no chance to beat this game".

Racing has the same issue with post drags, though. They are excruciating. Cards get longer, and feel longer, because half the time it's tantamount to watching commercials after seemingly every play during an NFL game. It wears on you.

NFL games have gotten longer because there is revenue attached to adding more commercial time. The more commercials sold equals more money for TV rights; until the house of cards comes crashing down, that is, which might be happening.

I suspect the NFL will probably address this issue. It's fixable, even if it means slightly less revenue.

Disparate tracks notice the same correlation with post drags and revenue (handle). If Pompano Park post drags, they, like the NFL make more money. So does Gulfstream and Santa Anita. But if everyone post drags, the sport suffers, because more and more people get frustrated and leave. This, like a takeout increase, often doesn't show up this week, month, year or couple of years.

Racing, unlike the NFL, can't address this because it can't fix itself.

This tragedy of the commons issue is a plague on the sport in many ways, and this is another example. Tracks are incentivized to post drag because post dragging helps them, but the industry as a whole, like the NFL is seeing, gets hurt.  The fractured nature of racing works for its good in some ways (more points of sale, more consumer choice, etc), but overall it's a real drag on long-term revenues, no pun intended.

Romney was Right

It's been a decent election cycle for Mitt Romney.

He called out the Donald personally very early for what he saw was not a good person, when a lot would not touch it, earning him praise. And of course, he was laughed at and mocked incessantly from the mainstream about his Russia comments in 2012, and now everyone concedes he was correct.

That's a pretty good run for a guy who is not even running for dog catcher in 2016. 

Meanwhile, I had a dabble into some old horse racing policy last week and came across this little gem from Massachusetts in 2003.

This was a plan that 13 years on looks pretty damn good, too.

Blocking money ended up being paid to racing from Atlantic City in Jersey, but that was intrastate, not interstate.

Currently, racinos tend to only benefit the horse racing inside the states themselves, while neighboring ones either move for more market share by passing more casinos, like New York, or pretty much cut out horse racing altogether, like Massachusetts, or are running on fumes, like present day New Jersey.

Those two strategies are counterproductive.

In Ontario, racinos were scrapped but the public didn't want any more casinos. The appetite for them are growing smaller and smaller. Not in my backyard is alive and well. Good luck getting a racino built now. 

Even if you do get one passed, the casino arms race has hurt revenues appreciably. Gross revenue might be higher, but the future looks bleaker and bleaker with government interference, and saturation is the current buzzword.

Years ago, New York would've paid Jersey (they don't want one near Manhattan) racing for a non-compete. So would Pennsylvania, at least Pocono. Casinos in Connecticut and elsewhere in New England would've paid similar to Massachusetts.

Those deals would be alive today and would've likely allowed Suffolk, the Meadowlands and Monmouth to be in pretty decent shape. There'd be no referendum in North Jersey, no issues about Suffolk getting a casino for horse racing. Why bother, they already have the money.

Horse Racing's Grumblin', Bumblin', Stumblin'

Average handle fell at the last Meadowlands meet. Handle was $1.07 million per card, down from last year's $1.24 million.

As MH's article notes, they jockeyed around racedates, and field size was off by a horse, and both were detrimental. But, more broadly, this continues the mid-Atlantic carnage we've seen of late (outside Laurel Park).

Now, the meet was not ugly, per se, and in 2014 the Big M thoroughbred meet did $1.03M per card, and in 2013, only $988,000 per card. So, last year's meet did stick out, and this meet was up from those two most recent years.  But because this coincided with a takeout change, there's some rumblin' and grumblin'.

• While racetrack executives rarely speak out in support of raising or maintaining takeout levels due to fears of public backlash, many privately grumble that supporters of takeout cuts consistently overstate the positive impacts while ignoring the negative effects on a racetrack’s revenue streams.

Oh please.

The Meadowlands meet, way back in 2004 did about $2.5 million per card. In other years, around $2M per card with only $180k or so for purses. In 2016 dollars, this is pushing $3 million per card.

In other words, the business has been circling the drain for a long time. In real terms, handle at the M is down 70%, gross, the last 14 years.

If there's anyone ignoring "the negative effects on a racetrack’s revenue streams" the line is long, and it certainly formed long before anyone was talking about the juice.

Working racetrack pricing is not magic ball that spits out free money. If it was, I'd start PTP Downs, charge 1% takeout and make more dough than Mark Zuckerberg.

It took dozens and dozens of years to destroy customers' betting bankrolls with high juice and lower and lower churn rates. Finding the right price where revenue can increase maybe will never happen, but it sure as hell won't happen overnight. And trying something is a lot better than standing around watching the customer base continue to circle the drain, while waiting for someone to buy the track and turn it into a shopping mall.