$500 Million is Hard for Old-Time Racing to Fathom

We have spoken about exchange wagering here for years, and with the topic becoming more and more prevalent in the US, we have read a good deal of hyperbole. Just like in Australia, where for years the old tote (pari-mutuel market) dominated, and permeated all parts of racings decision making, the view on new ways to do things have always been lampooned, demonized or deemed worthy of stopping.

Racing is infiltrated with the classic business demise: "If I don't like to do it, why would anyone?"

Since exchange wagering was passed, it turns out in horse racing betting the opposite has occurred, namely: If I don't like to do it, someone out there probably does, and they are betting their asses off"

Case in point: Peter Webb. He was a computer exec in 2003 where he discovered horse racing. Not like you and I did, but like a modern bettor does - through an exchange. Not long after, he quit his job to concentrate on our sport, and bet it. He bets horses from about 2PM to 2AM - races right across the globe. He finds the most opportunity from horses:

“When I looked at Betfair all I could see was opportunity,” he says. “I dabbled around on several markets, and with several strategies. Horse racing stood out because of the amount of money that went through it"

And unlike what we read from old-time racing here (it's hard to learn, you need to own handicapping books, study everything, spend years and years being a loser before you can win) he knew nothing about the sport.

“My lack of knowledge has really helped. I'm looking at the price of a horse and estimate where the price will go. My role in the market is as an arbiter of value and whatever I do I do before the race starts – I don't believe I'm better at predicting the form than anyone else.”

Peter bets up to $50k per race and plays as many races as he can a day. His trading edge, is his edge. It is estimated he bets over $500 million US a year.

Peter has some advice for old time horse racing:

"My recommendation to incumbents therefore is that they should accept that exchanges are here to stay and their future customers are already heavy users. Those territories or incumbents that feel ‘under threat’ are better off integrating the exchange model somehow in their models; at least you get the chance to do that now on your terms. To fail to do so will only hand the existing players an even bigger hand in the future of your business, whether you like it or not. Yes it means making some difficult decisions, but tough decisions now will lead to easier ones in the future. It is better to embrace change now and lose a little momentum for a better return later, than hand that advantage wholesale to somebody else further down the line. In life, you should only ever regret the things you didn’t do."

Old & New

Here's where we juxtapose.

A Wall Street Journal story on the closing OTB's (wow, those places look just like the last time I was in one in 1992).



And.... a horse racing traders' exchange betting set-up.

Talking Heads

Two or three years ago HPI TV up here in the north went to a rotating racing format with no anchors. On chat boards and at the track I often heard horseplayers opine that this was a good idea. I saw that point and it does make sense; horseplaying is a relatively solitary game, and talking heads (especially if they are not up to snuff) are not welcomed by the hard core.

I noticed this phenomenon as well from our US friends who have HRTV and TVG. If I had a nickel every time I read "be quiet and show the races" on chat boards I would be a very rich dude.

I did something a little different the past week or so: I signed up for HRTV, am paying cash for it, because I actually want to watch some commentating.

Being a hard-core player I am often so into my game, and the racing day, that I barely watch races. But when I am kicking back, working and wanting a break, I find myself wanting to listen and watch others watch the races. If I want no sound, and no commentating, I will log into the track feeds and away I go, which are now very prevalent. Before they were not (that is a whole other crazy racing story we have talked about here).

What say? Does anyone miss Greg Unger up here in the North? Does Gary Seibel or Jeff Siegal provide you with some entertainment? Or do we want the internet feed - no talking heads; just racing.