(Somewhere Else) Horse Racing Has "Been There Done That"

The Tinky-Mike Repole King of All Horse Racing battle on the twitter is kind of interesting. 

I guess battle is not the right word, since Tinky's blue checkmark 3,239 character missives are usually met with one word replies. But they're interesting to me nonetheless. 

Tinky

Most of what Tinky and the rest of the horse racing world talks about, in my view, is what Crunk calls "Groundhog Day". We've been through this many times before. It's rinse-wash-repeat. 

And it truly confuses me. 

I got an email today from Microsoft detailing a new feature. Microsoft owns Bing, which is a search engine like google's is, and they have their own ad platform to drive search revenue, just like google does. For 15 years or more, Microsoft tried to create their own "thing" to deliver ads. They spent money, they experimented, they created various iterations of platforms. 

However, over the last six or seven years, their big corporate change is to do whatever google does. If google changes an ad type, they do. If google creates a new set of audiences, a month later they do. 

This change is not because they're lazy or dumb. They realize that google will i) try and maximize their ad serving revenue (it was over $200B last year) and ii) have reams and reams of data and engineering to support the change, so the change is probably right. 

The thing is, horse racing has that, too. 

We argue about fixed odds, like it's something new, like one of those Stanley tumblers everyone wants. Fixed odds for horse racing has been around for three centuries. 

For a dozen years we argued about exchanges. Betting a horse to lose, cannibalization, revenues, margins, blah blah. Meanwhile, it's been running for over twenty years already in several parts of the world for horse racing. 

Fixed odds has been perfected over the years. Sure people can get tossed if they win too much, but it's a vital part of the ecosystem in places like the UK and Australia. It drives reach and revenue, and it's there if people want to use it. It's changed over the years and continues to. It's profit driven, and for the most part taxed on profit so it drives near optimal revenue. 

Exchanges are like some new bogeyman in 2024 in North America, but they happily drive reach and revenue just like fixed odds do. And they innovate and change as well with regards to prices and profits. 

A bunch of years ago Racing Victoria downunder wanted more money from exchanges, so they increased the hold. This brought in less profit, so they reversed their ask and went back to the hold around 7%. How many times have you ever heard a racing jurisdiction ask to lower the takeout to a bet taker with data to back it up?

This goes for a lot of other things in this sport. Field size, driving horse ownership, allocation of purse funds. Many places have "been there done that".  They are more centrally run, they have the data, they have tried things over and over. 

The UK, Australia, Hong Kong are not perfect and everything isn't wine and roses, but they have done much of the work for you. No one is starting from scratch. 

The job of "racing" in North America, whether it be the Jockey Club, or Repole, or the Tinkster, is to create some path that allows the sport to use the work that's already been done by others. 

For Microsoft it's easy. They simply create a platform with an ability to mimic another. 

For racing, it probably is another Groundhog Day moment. But it sure would be nice for them to focus on that side of the issue, than to start from scratch when much of the data is only a google (or Bing) search away.

Have a great weekend everyone!

Interesting Nuggets from the Much Talked About Bloodhorse Wagering Survey

Twitter, or X or whatever, was abuzz with the Bloodhorse Industry Wagering Survey article. It, for those who didn't read it, asked questions about racing to various stakeholders, most of whom have some power in the sport. 

Unsurprisingly, I have some thoughts. 

First, a shout out to the "I don't know much about this topic so I'll just say this" responder, Dr. Dionne Benson. Dr. Benson knows her lane and simply said sound horses and full fields surely help wagering. Kudos!

Most know Dennis Drazin of Monmouth. He's the one who pushed and implemented fixed odds betting through Monmouth Bets dot com. So, we'd expect to hear about fixed odds, right? 

Nope, Dennis noted "we need to increase and expand entertainment opportunities at our venues to encourage live attendance." That probably tells us how fixed odds wagering is going. 

Another Dennis, this time Cornick of West Point, had a great answer in my view. He touched on all the wagering bases including the simple fact the industry has to be responsive to the customer base when it screws up. It's remarkable to me that he was the only one who spoke about this. 

I thought Michael Mulvihill of Fox Sports had arguably the best big picture comment.

• Horses and horse racing are soulful. Online sports betting is frankly soulless. Racing has to emphasize the qualities that are more satisfying than just staring at your phone. Racing can't compete with sports betting on either takeout or volume of betting opportunities, so fan satisfaction has to come from other qualities: the art of handicapping, the unrestrained fun of a day out at a good track, the enjoyment of being around the animals. Horse racing has to build its brand on the unique qualities that make it more than a digital roulette wheel.

Some might roll their eyes at that but there's some meat on that bone in my view. 

I think it was Mike Maloney, many years ago now, that said "we can't out casino a casino".  Currently, casinos are not trying to out casino online betting either. To put another "00" on a roulette wheel you better be attracting people with something else. 

After 3,000 posts you know this isn't me advocating for putting another 00 on the horse racing takeout wheel, I am speaking about the top funnel which the sport (and us as bettors) are dependent upon. Differentiating your product in the current gambling landscape is not a weakness but a strength, and exploring that is smart business. 

I thought Elliott Walden made a strong point about bringing "inside racing" to the masses. I've believed in this for a long time. The more open and transparent you are, the more chance you're giving people a new data point, or reason to wager. 

Most of the rest I found frankly wishcasting, which can be prevalent in the business. 

I suppose the underlying point about these stakeholder thoughts should not go unmentioned.

I listened to a podcast recently about tech bloat at Twitter. They over hired, and project managers were paralyzed to do anything because you'd have to speak with so many others to get approvals (for sometimes the simplest of things). This was a privately run, public company with management under one roof. It was a company who just a few years before was smart and nimble. 

So, let's say we wanted to change wagering because we had the Best Racing and Wagering Idea of All Time™. 

Every person on that list. From horsepeople groups to HISA, from NYRA to Stronach, from Dennis Drazin's fixed odds platforms to 1/ST racing's pari-mutuel, from the COO to the Jockey Club to a wife of a trainer who has an idea or two. All of them would have to sign off. 

Wagering ideas are great. Some of the respondents to the survey were quite thoughtful. However, as someone I read somewhere wrote, "you can do anything but not everything". 

Horse racing's structure proves that wanting to do everything with people who are focused on 'their thing' is a ball and chain so big that other ball and chains orbit around it. Fixing that? Maybe we need another committee. 

Have a nice Tuesday and all the best to you and yours in 2024.  

ADW & Distribution "Fixes" Aren't Complex, They're Made that Way

I think Mencken wrote "for every complex problem there's a simple solution that's wrong," and for the most part I think that's pretty sharp, especially when it comes to horse racing. We often, on twitter and elsewhere, reduce the complex to the simple, when the simple could never work. 

However, sometimes the problem itself is not complex, it's the system. And for those, the simple solutions can be the best fixes of all. 

I think most of the distribution problems in racing (i.e. ADW's) are mostly self harm, and for those there are some truly simple fixes.

One, the current practice of signal hoarding or side deals between tracks is a handle killer that's purely self inflicted. 

Big signals like those from NYRA and Churchill can be withheld from ADW's or are priced like a King's ransom for virtually anyone new. This shrinks the distribution end of the business, stuffs players into high cost, no rebate ADW's and the most perverse point - these players subsidize the teams. 

An "easy" fix for this clear - if you are a licensed ADW you should have access to every signal at the exact same price everyone else does. 

This simple solution opens up the market, and gives price sensitive players a place to play. Those players did have choice at one point, until this avenue was mostly closed due to these protectionist, short-sighted practices. 

This doesn't address the fact that the signal makers can still cut side deals with their own slice, but for the casual player it's a start. 

Once all signal fees are placed into an open market, the second fix happens - signal fees based on "blended takeout" goes the way of the do do bird, or for those born in post-Victorian times, New Coke. 

It's absolutely mind-boggling, with disparate bets and takeout rates, that signal fees are not based on these constructs. This fix could also pave the way for harder to hit bets moving up in juice, with lower to hit bets moving down, which would increase churn, theoretically at least. The market would become more efficient.  

Demonstrating more pain for a customer base is the self-harm the hoarding of replays has caused and that brings us to the third "fix" - a clearing house for replays, say via Youtube, is something whose time has come. 

Clicking an Equibase PP to a replay link and needing an account? 

Clicking a TimeformUS past performance for a replay and seeing "Sorry, the track doesn't allow us to show this thing you need for handicapping and to give us money" (I only partially made that quote up)?

Seriously, what are you thinking? The only way this makes sense is if you have a business goal to annoy people. 

Mencken's quote is probably correct in the broad context of horse racing. But why fixes like these aren't implemented isn't because the cookie recipe is too complex, it's that the cooks in the kitchen bake them that way. 

Have a nice Friday everyone.