Sports Betting Growth : Plenty of Room Left, Right?

I saw this tweet today RT'd on my timeline:

As you may remember, there was a time the headlines screamed, "Vegas might do $5 billion in sports betting handle one of these years". New Jersey is near that figure only one year after inception.

Here is some of how they've accomplished this -

Holds are around 5%, and bettors are able to reload with alacrity

Mobile betting is fairly seamless. Want to get a bet down, you get a bet down

The market is pretty wide open, with decent tax rates. Barriers to entry are not overly prohibitive.

Dozens of companies are pushing the product, because they can make margin with the product, resulting in more gross product

Here is what they have not done -

Wiener Dog Racing

A Bus Filled with Kids Partying

Jackpot Bets

Charging for stats

Lifestyle marketing (e.g. @buckswope sitting in his underwear in his basement betting games in running while firing at the Pomp)

Scott Daruty being mad at someone for selling the product

Asking patrons at the sportsbook to watch the games behind a paywall

I kid, but only a bit.

Sports betting has done, so far, much better than I imagined it would. For one, I expected massive tax rates, taxes on volume, and as a result, terrible lines that no one would want to bet. They surprised me to the upside.

When you offer a good betting product, people bet; as smarter people than me have told you, "today the product is your marketing."

For sports betting in Jersey, I congratulate them for not messing these simple gambling truisms up.

Have a nice Tuesday everyone.

Business of Racing : Pairing Metrics & Profit Motives

Andy Grove, the late CEO of Intel, used to speak quite a bit about metrics and decision making. Although he believed (like just about everyone) you needed sound measures, according to him it wasn't near enough. You had to measure the effects of something, but you also had to measure the counter-effects (consequences) and model the two together.

Most businesses today achieve paired and even multi-variate metrics because data is easier to access and mine and model, and of course: because of the profit motive. If you're not getting better you're losing market share and getting worse.

Where Grove's single metric malaise is most often noticed is where the profit motive doesn't really exist. As an example, Marc Andreessen talks about setting time to service targets for EMS drivers and measuring only that (something commonly done); of course the drivers stick close to urban centers and the numbers are hit, but service suffers.

In horse racing - not an EMS or government business but one we'd think should work on profit motives - we see the lack of paired metrics often, do we not?

• That Jackpot pool is huge right now - but what about the long term effects as bankrolls are kept out of play?
• Lowering minimums can give us a short term handle bump, sure, but what happens to payoffs and long-term gross handle?
• It's great to attract that power barn to your track with tons of stock, but what's the effect on *other* entries and field depth as trainers avoid competing against 25% win drop and pops?

It might be easy to argue horse racing has dropped the ball big time on this, and there certainly is some validity in that, in my view. However, the bigger question to me: Is horse racing a real business; is it driven by a profit motive?

For a hundred years it was a monopoly. It was built on government partnership in a sheltered industry. Since then, the metrics managed to have not changed much. In fact, just this week the Meadowlands announced their gross handle metrics in the lens of more horses and foals, because it's what they need to do to show the subsidy is still working. California isn't looking at handle, it's looking at political survival. We can go right on down the list. 

For those of us who adhere to the Grove principles in business we find racing is lacking. But, perhaps it never had a shot in the first place. 

Have a great Thursday everyone. 

Exclusive: "Three Host" Eclipse Awards Was Last Second Move

By now you've seen the announcement that not one, not two, but three will host the Eclipse Awards in Florida on January 23rd, but in an EXCLUSIVE, we have the skinny.

"This was a late change, just decided today. Perhaps due to that big Awards show with the stars last weekend," Cub Reporter told me.

"The back story - TVG was trying to get the ratings up so they could sell commercials to big Pharma and the My Pillow Guy so they hired Twitter's Inside the Pylons to host. But, they received his monologue this weekend. It was Africa hot," Cub relayed.

As most know, ITP is warm and cuddly, but he does share a barb or two on the twitter, and it can cross the line.

"What was too hot to handle?" I asked Cub.

"The dude had some seriously sharp bits. On condition of anonymity, an NTRA organizer sent me the Cliff's notes. I'll share them with you, but for gosh sake, do not post them on that silly blog of yours, even if no one reads it."

So, below are anonymous's notes:

• For ITP's opening monologue he wanted to invite dozens of horseplayers into the room. They'd sit beside each attendee and consume 25% of their Foie Gras while he recited Parx takeout rates. 
• He wanted the Reporter of the Year Eclipse to be presented by Jeremy Balan.
• He had a joke about it being the last year for the Eclipse Awards due to the rule change that a horse had to make 8 starts to qualify for an award.  
• He wrote a bit about the America's Best Racing team going on vacation and asking Serling to manage their twitter feed and when they got back their 18,347 followers were blocked. 
• He wanted the in-memoriam segment to be presented by the CHRB. 
• He had a joke that if you wanted a pdf of all award winners you'd have to go to Equibase.com, log in, and pay $14.99.
• There were liability issues. He wanted to hire a Pat Cummings lookalike and have him run through the hall knocking everyone over while screaming "no foul, category one!"
• He wrote a joke about the only thing a trainer fearing more than a Bob Baffert chalk in a Grade I is a backstretch worker with an accountant. 
• He wanted the Ortiz brothers to play Trump and Putin in a collusion skit. 
• His bit with a chart illustrating "purses per country per human rights violation" was a complete non-starter. 
• He talked about a new sitcom he created for late night on TVG. It'd be a spinoff of the Brady Bunch where Marcia tries to get her dad Rob committed and take his architecture business for herself. We weren't sure what he was getting at, but it felt too hot. 
• He wanted to present the Innovation Eclipse to a ghost. 
• He had a bit where he showed pictures of the nation's former great racetracks as shopping malls. If that wasn't bad enough, he wanted it to be sponsored by CDI. 
• He made a joke that in 2019 handle was down but purses were up. We nixed it because before he said a punch line it might draw applause and make us look out of touch.

If I may add some personal commentary: I'm as tough on racing as many, but I think they were right to keep ITP floating on his floaty in his pool, playing Delta Downs on his iPad next Thursday. Some things are too hot, and right now, ITP is way too hot. 

Have a nice Tuesday everyone, and enjoy the ITP-less Eclipse Awards.