This One Small Ruling Explains Why Betting "Integrity Fees" Are a Mugs Game

OMG! A trainer bet her own horse (hat tip to Peter) --

• BONGIORNO, JENNIFER L MANALAPAN, NJ YOB 1990 Fhld on 11/18/2017 FINED: $350 IMPROPER BET Ms. Bongiorno placed 3 wagers to win on horses thet were trained by her.Nov. 18, ’18, $2.01 was wagered to MOONLIGHT RANSOM in the 4th race at Freehold Raceway. Jan. 12, ’18, $10.04 was wagered on ALGEBRA in the 2nd race at Freehold Raceway. Feb. 3, ’18, $10.01 was wagered on at Freehold Raceway. Although these wagers were made in compliance with N.J.A.C 13:71-2.4, the wagers were placed through Betfairs Exchange wagering platform. N.J.A.C 13:74c-4.10(C) prohibits trainers from wagering through the exchange on races in which they have horses competing. For the first violation, Ms. Bongiorno received a formal Warning. As a result of the second violation Ms. Bongiorno received a fine of $100. As a result of the third violation, Ms. Bongiorno received a fine of $250.

Now, Jenn isn't exactly a master criminal, unless you think her betting $10 on her own horse is a crime (it isn't). The difference is, it was on an exchange, and horse racing thinks that's a different kettle of fish. She wasn't "in compliance" and received a small fine.

How did the authorities find out about this terrible, awful crime? Because at Betfair there's a paper trail, unlike in the parimutuel pools where trainers have been making bets (some on not their own horses no doubt) for over 100 years. Legal wagering over the internet brings this out of the shadows and into the spotlight. It's the way progress and technology works.

The sports leagues are currently asking for a whopping "integrity fee" from wagering providers (and like most business taxes, the consumer will pay, not William Hill) because they're worried about corruption. I believe that this is always been a cash grab, not about integrity because the market and its systems ensure such a fee is not needed. And I think the above fine proves it.

For over a hundred years sports betting was done in the dark corners - offshore, at a local bar, through websites in the far east - and there was never a paper trail. There was no way to find out who was betting what, through who. Now, with wagering legal, there is. Logically, sports leagues should probably be paying the books a fee for introducing integrity into the system, not the other way around.

Betfair, Gural - Smoke Em if You Got Em

Gural and Betfair pulled the trigger on a deal today where Betfair will provide infrastructure and know how for offering sports betting at both Tioga and the Big M. This comes on the heels of the NJ government voting unanimously to legalize this form of wagering at casinos and racetracks.

I suspect Tioga will take some time (sports betting is not passed in NY yet) but the Meadowlands should be up and running fairly soon, I would guess. And that's clearly the big prize. Its proximity to NYC has always been an edge - in fact, that was the edge that made slots so wanted for so many years.

How well this does or doesn't do is beyond me offering a logically strong guess, but I think it does have potential. Along with the previous geographical first mover advantage:

i) I had some dealings with Betfair (before the merger) and it struck me that their strength was in their technologies. They were always a tech company ahead of a betting company. That expertise is an asset, because betting companies over the next half century will differentiate and thrive on tech, not on a new bet, or super jackpot parlay card that everyone else can copy.

ii) The Meadowlands is in a very tough spot when it comes to the marketplace. Right now it's teetering at an inflection point, where even a small bump in purses can do major good for their long term revenue outlook. This could provide that.

iii) Paddy Power, as per the release, says they took $15B in sports betting wagers last year. That's more than all of thoroughbred and harness racing combined. They know how to take bets.

Gural, quite frankly, hasn't got too many breaks when it comes to the Big M. If this does work out well, and the overnight stock (as well as the betting menu, which clearly needs some work) improves, maybe he's finally on to something.

As for Betfair, I wish them well. They invested time and money to reach this moment in time. They deserve to be rewarded for that.

Regardless, the landscape is about to change in Jersey. It'll be very interesting to see how this shakes out.

Post Drags & Problematic Opportunities

Dave Briggs wrote an extensive piece about post dragging today. Dave, always a good interviewer, got various execs to open up about the practice, and it's well worth the read.

After reading it, Tom LaMarra on the twitter said, "it tells me there is no desire to fix the problem."

When I read it, I had a similar thought, but when I thought about it even more, they weren't talking about post dragging as a problem, but an opportunity.  This, I believe, happens more often than we like to think in horse racing.

Post drags, not a problem. It's not a problem that with them, scheduling races systematically and for maximum reach is virtually impossible; that an industry shares revenue from all bettors, so shuffling them around doesn't grow the pie, it splits it up differently; that it angers customers. It's 'we can make a little more handle than that track if we keep our clock on zero for forever.' Opportunity abounds!

This is nothing new. Takeout hikes in this sport - a sport where for dozens of years people have talked about takeout being too high and sub-optimal for revenue - are never presented as a problem. It's always, "New York's exotics are 25% so we can raise ours to be 24%", "purses will explode", "we can make more money." Takeout hikes are an opportunity!

We're a cross between Baghdad Bob and PT Barnum.

This is a big reason why horse racing's problems never get addressed. The sport doesn't fix problems, they frame them.

Speaking of problems (and not addressing them) and opportunities there's a piece in HRU on the Mel Bount Rule that the NFL implemented in 1979 to open up the offense, and this was looked at from a racing perspective. There the NFL saw a problem (passing offenses were becoming horrible) and fixed it to provide opportunity. Go figure.

Jim Gaffigan, I don't know who you are, but have you met Michelle Beadle? For those who have not seen the comedian making fun of horse racing, here you go.

I didn't find the piece overly funny, and I expect Jason Beem could've done a better job making fun of this sport. But then again, the BARN invites would go unanswered. Jason would probably end up like the PTP Blog - a sad shadowy place read by only a few mistanthropes and Crunk.

Have a great day everyone.