28 June 2007

How To Save Horse Racing

I want to first say that I love handicapping horse racing. I also think that the potential for the amount of regulars who potentially would follow the game and gamble, is far from being achieved, and that it has no chance of being achieved either, as long as the race track owners collectively are stuck in a 20th century mindset.

Horse racing allows a person to bet against the public, unlike almost every other form of gambling (which relies on a mechanical house edge), outside of poker. The only thing standing in the way of a savvy handicapper from making money in a sport he loves is the dreaded track takeout. The way things are today, where the game is full of pros, and the sucker money has all but vanished into slot machines or lottery tickets, the only people who have a chance of winning in the long run, cannot bet directly with a racetrack, but with a rebate shop instead, as track takeouts are outrageously and unjustifiably high.

John Q. Gambler only has X amount of dollars he can gamble with each month or year, etc. Since the race track, which makes it impossible for a gambler to actually win money in the long run, and even difficult to make money short term (since there are so many races a day a bettor can play, and a bettor does want the action usually), there are many other ways he can find that gives him as little or even better chances of winning, or at least gives him more bang for his buck (blackjack has a house take of less than 2%, and online poker rakes are much lower than track takeouts).
Lets not forget that handicapping horse races usually requires a lot of skill, and a lot more free time. It takes no time to get a quick pick on a lottery, and you don't have to study ahead of time to play blackjack or poker.
Word of mouth is important. If someone actually makes money, or even comes up with a down payment for a house by gambling, it will attract a lot more gamblers. A person who even wins short term, or doesn't lose that much, is more likely to bring friends to the track and get new people involved, than any horse player today. A person has to be pretty much be the devil to introduce a friend to horse racing the way it is today.

Slot machine revenue is a band aid for the game right now, and instead of counting the profits, race track owners should be using this time to attract new racing fans.
The industry should learn from tracks like Fort Erie, where the owners basically counted the money during a few great years, but did nothing to attract new horse players. Now, as slot revenues continue to decline (due to many external reasons), the race track is swirling down the toilet bowl.

THE SOLUTION

If racing is to survive 10 years from now, ownership needs to change their mindset.
All track takeouts have to be reduced to 10% or less. This will give sophisticated handicappers a chance at winning. It will give John Q. Gambler a bigger bang for his buck, and over time, he will lose more of his gambling money at the race track and not elsewhere. Also, because there is a chance that gamblers can win money in the long run, more people will be attracted to it. The game has a lot to offer, and there are a lot of people who could become players, if conditions were right.

One track won't be able to get the ball rolling on this. It will take either Churchill or Magna to get things happening quickly. For example, Magna has to advertise that their takeout is 10% and they are willing to take clients from every jurisdiction they can legally. They can't worry about the coercion that exists now, where a track won't take a signal because you aren't playing ball. Magna will get enough clients from all over to more than compensate. Large gamblers will only be playing Magna tracks, and the other tracks will feel it bigtime.

Eventually, all smart track owners will reduce their takeouts to 10% as well. This will allow for a Canada/USA central betting hub to form. All member who comply with the 10% takeout will have customer areas, that are calculated by distance from one track to another. For example, Woodbines customer area would be people living within half the actual distance between Woodbine and the nearest 10% race track in all directions. If a multi-track owner wants to do a profit splitting deal for their own tracks, that is their business.

A race track must feature the nearest two racing cards that are active each day on their TV screens and on-line, to keep competition fair. Other than that, a track can choose other feature tracks based on what they think their clients want.

Signal fees must be the same. Whether it is 2%, which still opens to the door to rebate shops, or 5% which should vastly improve the quality of racing (tracks will be forced to try to attract other tracks to feature them) and make it less viable for rebate shops to exist.

This will also lead to consistent betting rules from one track to another, and probably consistent drug rules eventually.

More importantly, this will lead to more gamblers and larger pools.


IN THE MEANTIME

Horse players, stop being suckers. There are alternatives right now that give you a chance of making money, or at least prolonging your gambling resources. Race tracks know full well about the alternatives, and have been know to strike private deals with big bettors to keep their action. They also realize that many savvy players have set up accounts elsewhere, and that they might as well get at least the signal fee they charge.

BETFAIR

Based in the UK, Betfair allows exchange betting, where the bettor actually bets against individuals. And you only pay a "takeout" when you win, and that amount is only between 2-5% depending on how much action you give. It takes about a day to get the hang of it, but it is tremendously fun, and you can pretty much bet a horse race every 5 or 6 minutes if you are so inclined. No exotics though. Win and place or show is what you are limited with. The savvy player can usually get higher odds than the track offers, and even for example, book a horse at 5-1 with 6 minutes to post and then bet the same horse at 9-1 with 1 minute to post, thus giving the player a chance to win money with no risk. Problems with liquidity are common, as some races are run too close together, and players on focused on one race over the other. The favorite usually is very liquid though, but if you like a horse at 9-1, you might have to take 7-1 in some cases to ensure you have a bet on the horse.

They also offer in-play races occasionally where bettors can bet during the race. They do this with NFL football as well. Oh yes, you can bet on just about anything there. The house is never at risk, because a bet is only made when another player matches your bet on the other side. Note: I don't think they accept US customers, but they do take Canadians.


PREMIER TURF CLUB

These guys are a new rebate shop out of North Dakota. Their list of tracks on board with them is growing, but I don't think they'll get Magna or Churchill tracks. However, their rebates are great. For exactors, triactors, and other exotic bets an average bettor can expect a next day rebate of 6-13% depending on the track, and 6% on win bets (on average). Yes, they actually put money in your account the very next day before racing commences.
They recently signed on Woodbine, but Woodbine has a stipulation with them to not allow Canadians to wager on their Woodbine or Mohawk races. But there are plenty of Canadian and American tracks to choose from. Woodbine wants to have a monopoly on Canadians. Woodbine already does have a monopoly: on arrogance, short sightedness, and stupidity.
Getting back to PTC (Premier Turf Club), it is very easy to open an account, and their online betting interface is very simple to use. HPI has a good interface too, but PTC also tracks profit and losses for specific types of bets over the short term or long term. It allows horse players to learn from their mistakes.
I get the impression that PTC wants its clients to win. The more they win, the more they bet, and the more PTC makes, because they make the difference between their signal fee cost and the rebates they give their clients.
Their is no withholding tax for Canadian clients and you get track odds with no limits. They can't do business with residents of some states.

Here is their contact page.


Pinnacle Sports

I know a few people who have an account with these guys, based in Curacao. They offer a 7% rebate on all bets and take action from just about anywhere. They do have profit limits. I don't like this. I want to be able to get paid fully if I hit a home run. But if you are win/place/show and exactor player, an account with them is better than an account with HPI. There are risks because they are offshore, though they seem minimal. They also book bets which is also a minimal risk to them.
Pinnacle also has casino games and a sports book.


Compare the above three options to HPI for example, where in order to realize a maximum of approximately 3% rebate in a week, you have to bet over $18,750 on their own products (2% on simulcast tracks). If you ONLY bet $3750-$7499 a week, you get ONE PERCENT in rebates. All HPI and other race tracks offer is a quick way to see the money, if you are lucky enough to see the money. Personally, I don't mind waiting a few days.

The thing is, I'm confident that if Woodbine gave back 10%, their bottom line would improve dramatically. But race track owners aren't willing to take any chances, they expect their patrons to be the only gamblers.

Smart players know that race tracks are rip offs, and are either staying away or gambling elsewhere.

If more people took their action elsewhere, my 10% solution will become a reality quickly.

See also: Bill Finley preaches to the choir: Reduce Track Takeouts

and

Thoughts On The Track Takeout

2 comments:

shank1090 said...

I agree with everything you said in your blog. I hope the powers that be in racing hear you and others that love the game,but hate the way it's run.

Cangamble said...

Yep Shank, racetrack owners keep thinking it is 1935.