Budweiser Knows, Big Changes are Boo-Scary, and Weekend Racing Notes

It's Super Bowl week and we all know what Super Bowl week brings - commercials!

Over the past few years I personally have enjoyed the Bud commercials most. Call me a softee, but I absolutely love them. Lost puppies, baby horses, little animals? Are you freaking kidding me, I get misty just thinking about these great commercials.

This year though, Bud is changing it up, because well, puppies don't drink beer.

Anheuser-Busch has announced that the 2016 Budweiser commercial will not feature yet another adorable puppy. Why? It’s simple – as beloved as they are, the ads don’t sell beer.

Budweiser is an old, blue collar, after shift, dirt under your fingernails, hard working American beer and it always has been. Marketing is most effective when your product matches the message and your message matches the market; knowing who you are and being who you are is an immutable law. Budweiser isn't puppies.

So they've switched it up, primarily with a message like below:

That probably fits better with who they are.

Although I like puppies and beer, and spent some time doing blue collar work where we ended shift with a Bud, this is a racing blog, so let's analyze a pretty simple parallel.

Racing marketing is generally about pretty people and big days and booze, and parties and Johnny Weir. I like all those things (especially Johnny, he kills me), but with 40,000 races in this country a year, about 39,943 of them have absolutely nothing to do with any of those things.

Have you ever been to Mountaineer on a Tuesday night in February? What about that racing, the one that pays the bills 360 or so days a year?

I think there's a place for some new 'marketing' ideas in the sport; namely, understanding who we as racing fans and bettors are, and adjusting accordingly. Budweiser is figuring it out, racing should, too.

Notes: 

In harness racing update, EPO positive at the Meadowlands, Jeff Gural gives his fair odds line on everything harness racing (takeout reduction supporters, you're SOL), and changes that have been made by a defacto central body in Australia. Can they be ever done here?

"We often hear that harness racing needs to change. It needs to try new things, be innovative, be more customer-centric, spend money on promotion and marketing. It needs to be more than horses running around in a circle; like they were when Dan Patch was a star. When suggestions like the above are forwarded to improve the sport, all we tend to hear in response is, “yes, I want change, but I didn’t mean that change.”

Well, congratulations to a good fella - Paul Matties - for winning the NHC and grabbing a nice $800,000 check. The NHC sure throws hot water on the criticism it's a crap shoot, because the final table had some great handicappers of all forms and from all walks of life. There needs to be so many games in a series, or holes in a golf tournament so that the best team or player is uncovered. This grueling three days appears to find the best horseplayers.

Congrats to @dinkinc for putting a $20 spot on Paul, too. That's a nice cash, but not as good as Paul's, Dink. Paul has been a regular guest on Dink's Vegas radio show several times when they talk horse racing.

Our pal Charlie Davis came third, and I give my personal congrats to him. Charlie didn't know a lot about horse racing ten years ago, immersed himself in it, and found himself cashing a nice check. Charlie has donated hundreds of hours of his free time for horseplayer advocacy, and despite being hammered at times (tracks, horseplayers who want something done yesterday that doesn't get done, the media, regulators etc that wish adovocacy would go away), he has always taken the high road.

What a scene for the Prix d'Amerique. 36,000 people, $40 million in handle and a great day. Bold Eagle is an absolute superstar. 

The PMU in France has a monopoly of sorts, so it's hard to compare France to Canada or the US, but they do tend to try pretty hard; which, by definition is the opposite of what monopolies do. It seems the whole town knows the race is going, and there is some buzz. That's difficult to do in horse racing, especially in a heavy urban setting like Paris.

Enjoy your day everyone.

Engagement

We speak often of engagement here on the blog, but it's done because in this world it's a big reason something succeeds or fails.

Bob Marks wrote a fantastic article about a typical Friday evening race night in 1979, where harness tracks alone showed amazing attendance. Sportsman's Park in Chicago 16,000, Yonkers 13,500, Blue Bonnets in Montreal, 9,500. In all $42 million in today's dollars were bet.

Those were some engaged people in harness racing.

Today monopoly is only a board game, not the racing business. But there's much more to it. There are thousands of things to spend time on, hundreds of sports or games to be a fan of, and there are still only twenty four hours in a day. Grabbing a slice of that time is what every business or game or league is grasping for.

One way Thoroughbred racing engages is through the Triple Crown, and although most outlets do a good job at it, I think they could do even more. If you're going to throw money at marketing, it's this type, in my opinion, where it works.

I'll elaborate. 

Today in the newly released Horseplayer Monthly magazine (free here), the lead story from Melissa Nolan is about under the radar Derby contenders. She picks a few horses based on the Sheets that are worth watching. It's a fun article, give it a read.

Melissa, and others - maybe newbies who read it - add those horses to a stable mail, watch a replay, or look at the running lines. The next prep the horse races in, is watched. If there's something horseplayers (or anyone for that matter with movies, music, hot draft picks etc) like doing is finding a horse few are looking at.

That one little thing, that one little article and others like it, can keep people engaged in a three or four month Derby season, culminating, of course, with the Derby itself.

Other sports do this as a matter of course. You follow your team to the Stanley Cup, you pick a longshot of 64 teams in the NCAA's and follow them to the end, you play fantasy football keeping engaged right through to your championship. Horse racing, as a rule, does not work like that, and as Dana noted here, it's not the be all and end all. However, having it for the Triple Crown is a different animal, especially for getting new people hooked and keeping them watching. For many people the Triple Crown is horse racing.

There will be hundreds of tweets and stories and articles on Derby preps from here until the first Saturday in May. For some who handicap the week before the Derby they can be referred to as silly season. For others, they mean a lot, and for those racing wants to reach - to keep engaged in the product - they're an important part of the racing ecosystem.

Notes:

An 18 horse field of trotters are set for the Prix d'Amerique. Over here 18 horse fields would probably be boycotted. Our horsemen and drivers like those about as much as having an appendectomy.

“The abuse of medication and the perpetual search for a supplement that has the same effect as a potent doping agent, but is somehow legal, is a problem for all sporting codes,”

Barry Meadow is a successful gambler and his words are always well worth the read. His article in this month's Horseplayer Monthly is no exception. Every bet, every type of bet, all has to be looked at through an edge lens. If not, beating 20% juice is impossible.

Racing Needs to Work With Its Betting Partners. They're Not the Enemy.

In the summer of 2012, Australian racing (in this case Racing Victoria) had the bright idea to raise fees on exchanges (I wrote about it here on the blog when it happened). They began charging an obtuse and horribly short-sighted "turnover tax", which made backing and laying on an exchange a thing of the past, for the most part. Those who still tried to trade the horse betting markets this way were subjected to a "premium fee", which pretty much wiped them out.

This replaced the "gross profit" model that had been working; Betfair had been paying 10% of bettors profits to racing. 

Bettors responded by doing what they do when they have no shot to make money - they curtailed their handle on horse racing. 

Without giving figures, my turnover with them dropped by 90% on the punting side, and I used the Fair for laying only which was NOT subject to the tax. RV got nothing, and the Fair lost out on the commission I was paying on the punting side, which was substantial even though I was on a low rate.

Since that time, the racing commissions did some learning. In effect, Racing Victoria was not making more money, they were making less money, because fewer people were betting.

They did what's not often seen by horse racing. In 2013 - only one year later - they decided to take less money and let betfair revert to the old system. The customer got reduced fees, and handle went up in Victoria.

Since 2013, they did even more learning. At the Warnambool Carnival, with betfair having full access to the meet, pari-mutuel, non-exchange handle was up 17% and 15% year over year on the two days they were running. On the third day, Betfair had a power outage and could not offer their races. Total handle among the other operators was down 6%.

In response to this value-added proposition, Racing Victoria changed the fee structure again, and punters are receiving even more money back to bet. The fee charged by betfair on a bet dropped from 6.5% to 6%.

It should astound and amaze us - ok, maybe it should not - that here across the pond the exact opposite tactic is happily in practice.

A few examples:

i) Signal fees keep going up, taking money from resellers, who pass that on to customers. As handle falls, the response is not to correct things, but to raise them even more.

ii) ADW taxes on resellers, which were first implemented in Virginia (I think racing is defunct there now) were broadened to other states. This tax is passed on to customers.

iii) Takeout hikes.

iv) Resellers like Derby Wars are something to be sued and crushed, not worked with.

The above is all done with hundreds and hundreds of millions of slot subsidies, and in a jurisdiction that takes the most per bet for purses than any major one in the world.

In North America, if you asked Magna or the HBPA or the TOC or Chris Kay to raise signal fees on resellers to 100% of revenue, giving them and punters nothing back, they'll gladly take the money. If you ask someone to sue a website where there's evidence that it - like betfair at the carnival above - is driving eyeballs and helping your handle, they'll say sure, "they're stealing". Takeout hikes to "raise purses", sign me up, it's a great idea. Take that evil reseller Twinspires behind the woodshed, like they tried with betfair in 2013? Grand, can o' corn.

It's bad enough these policies are encouraged and happening, but when they don't work there is no one to say "whoa, we made a mistake, let's revert back" like they did in Victoria.

No one is saying racing has to give away their product; give everything to a reseller, or bettor. That's ridiculous. What I am saying is that racing here in North America has to work with their resellers, and through them take care of their customers, encouraging them to grow the bet, and in turn, to grow the sport. Resellers are your partners, not your enemy.