27 June 2008

THE SADINSKY REPORT REVISED: THE CANGAMBLE REPORT

I agree with WEG's Grand Poobah David Willmot regarding the fact that the Sadinsky Report is unrealistic, and it would be a huge hardship on track owners in todays horse racing environment, especially the smaller race tracks.
The fact that he said Woodbine would go broke just shows how pathetically run that organization is.
Bottom line is that Willmot realizes that if implemented, the race tracks will now only receive 7% of the slot revenues instead of 10%. The horsemen will receive at least 12.3% instead of 10% if this plan goes forward. I still haven't seen a comment on the report from the HBPA (Ontario Division). That impotent organization generally licks WEG's boots, so it will be interesting to see the spin they put on how they dislike the report.
Willmot also is resigned to the fact that under his regime, horse racing has zero growth potential. So taking a cut from the slots may mean taking a personal pay cut inevitably, and I'm sure that is unacceptable to him.

THE CANGAMBLE REPORT

1. INCREASE THE HORSEMAN'S CUT FROM SLOT REVENUES TO 15% FROM 10%, WHILE KEEPING THE TRACK'S CUT AT 10%
Most of my recommendations from here are dependent on the OLG changing the scheme in favour of the horsemen. The 20% when implemented over 10 years ago, was an arbitrary amount. Since that time, we've seen cannibalism by slots over those who used to be casual horse players. Also more and more lottery games have turned up, which has also led to the erosion of potential horse players gambling money that could have been lost at the track instead.
The reality is that if someone loses $200 on slots, the horsemen get $20 of that and the track gets the same. If someone loses that same $200 on horse racing, the track and horsemen split the $200 (minus around $3 in taxes).
The OLG is raking in the cash, while horse racing is dying (and of course, horse racing execs must share much of the blame). It is time to give the horsemen a raise, since most tracks can get by on the 10%, most horsemen and their employees struggle hard to make ends meet.

2. ELIMINATE THE ADDITIONAL 2% (AND 4% ON TRIACTORS) HORSEMEN RECEIVE FROM WAGERING
Growth is badly needed in the game. The only way to grow the game is to make it more competitive with other forms of gambling. The 5% extra from slots will more than make up for what horsemen lose from this gambling initiative, but from everything I know, betting will go up at least by whatever reduction is made in this instance. Though horsemen (depending on their contract with the track) will have to split the increase in betting revenue with the track, if all my ideas are implemented, betting revenues will increase at least 20-50%.

3. THE 5% INCREASE IN SLOT REVENUES GOING TO HORSEMEN MUST BE USED TOWARDS ONTARIO BRED RACING, THE BREEDING INDUSTRY, AND TO SUBSIDIZE HORSEMEN ORGANIZATIONS
Again, this extra amount (5% of slot revenues) is in place of the additional money that is currently tacked onto wagering, except there will be more money to go around under this plan.
Breeding and owner awards can remain at least the same under this plan.

4. AT LEAST 30% OF ALL RACES AND 45% OF ALL PURSES MUST BE ALLOCATED TOWARDS ONTARIO BRED ONLY RACES
This is the boost that will help the Ontario breeding industry immensely. Of course, this means state bred claiming races, something badly needed in Ontario. By running low level Ontario breds for increased purses while facing only Ontario breds, the price of all Ontario breds will increase, as the value of the cheapest Ontario bred will increase pushing up all prices. No longer will we see Ontario breds sell for only a thousand or two thousand at sales, as new owners will have more realistic outs with their risky new investment.

5. ELIMINATE THE THOROUGHBRED RULE THAT PREVENTS CLAIMED ONTARIO BREDS FROM SHARING IN THE FULL PURSE AMOUNT OF UPCOMING NON ONTARIO SIRED EVENTS
I've explained this before. Potential owners feel they are getting undercut if they claim an Ontario bred under the current new rule. It has cause less Ontario breds to be claimed and has actually made American breds more attractive in the claim box by default.
Also, if my fourth recommendation is implemented, there is no need to have the rule in the first place as Ontario breds will run for higher purses than the same level horse will run in an open race. Owners of Ontario breds will have a choice which race to go in. If they decide to go in the lower pursed event against a bunch of potential foreign bred horses, that is their option. They will still get owners and breeders awards in non Ontario bred races.

6. REDUCTION OF TRACK TAKEOUTS TO A MAXIMUM OF WHAT KEENELAND'S TRACK TAKEOUT IS
In order to grow, horse racing needs to give bettors a chance (even a remote chance) to win or break even. Right now, in Ontario, that is an impossible task, as outfits like WEG have takeouts that are close to the highest in the industry.
John Q. Gambler only has so much money he can afford to lose each year. He can choose to lose some on lotteries, some at casinos, some on sports betting, some on online poker, and some on horse racing.
Horse racing, by far requires the most research by the patron, and right now by far is the most expensive way of betting. It offers the least bang for the gambler's buck (except for lotteries). And the betting public has realized it.
By lowering track takeouts to more realistic levels, bettors will last longer (inevitably over any period under a year, they will lose exactly as much as they would have lost with higher takeouts, so the track get at least exactly the same amount but probably much more), and may be inclined to wager a higher percentage of their gambling money on horse racing.
Of course, if they are close to breaking even, they may become more of a fan, and get their family and friends involved. This is something that may create more potential players down the road.
But most importantly, if the game becomes beatable by a few outspoken individuals, this BUZZ will lead to others trying to duplicate the feat of the winners.
This said, total track takeouts should be reduced to Keeneland's takeout levels:
Win, place, and show: 16%
Pick 3, 4 and 6: 17%
All other wagers: 19%
A case can be made that Pick 7 and any other new lottery style horse racing bet could have a takeout of 22-25%, as the winner could be taking a lot of betting money out of the pools forever.
If WEG wishes, they can can rid of their rebate program because of the lower takeouts they will now be charging. It is up to them.

7. MANDATE RACE TRACKS TO SPEND AT LEAST 10% OF THE MONEY THEY RECEIVE FROM SLOT REVENUES ON LOCAL PROMOTIONS AND ADVERTISING, INCLUDING EDUCATING ONTARIO CUSTOMERS ABOUT HAVING THE LOWEST TRACK TAKEOUTS IN NORTH AMERICA.
Horse racing needs to be promoted more. It needs more advertising. Most visitors to Niagara Falls don't even know there is a race track in Fort Erie, for example.
By stressing having the lowest takeout rates in North America, Ontario bettors will in all likelihood have more incentive to play Ontario race tracks as opposed to betting USA simulcast racing.

8. ALLOW POOLING AGREEMENTS IF WANTED
Pooling agreements should not be forced on any tracks. However if Windsor and Dresden, for example want to pool their betting or slots revenues, allow them to do so. However, no agreement can be in place for more than 2 years at a time, so as to not hinder potential new track owners.
Agreements between tracks are to be entirely up to the individual tracks involved.

9. MANDATE HPI TO SHOW UP TO AT LEAST THREE ONTARIO RACE TRACKS AT ONCE, IF THREE ARE CURRENTLY RUNNING
Ontario racing needs to be promoted as much as possible. Viewers will get used to it.
Also, on weekends on THE SCORE, Fort Erie should be shown with Woodbine, not Belmont or Churchill.

10. ONTARIO SHOULD OPEN UP A BETTING EXCHANGE RUN BY THE RACE TRACKS
It should have nothing to do with the OLG. It is time that the horse racing industry started cannibalizing the OLG, in fact.
There should be a stop exchange funded by Ontario race tracks. There should be exchange betting available on all Ontario races run. Races outside Ontario can also be included but this is not mandatory.
Most importantly, to compete with Betfair, commission rates should be very similar to what Betfair charges.
Poker and sports betting can also be featured as well depending on demand.
Accounts should be allowed from just about everywhere in the world.
After taxes, revenues should be distributed based on a combination of immediate home market, amounts bet on individual Ontario tracks, and races run per year by individual tracks (giving tracks some incentive to strive for more races and dates so they will get a bigger cut).

11. INCREASE THE AMOUNT A PART TIME FARMER (HORSE OWNER) CAN CLAIM AS LOSSES PER YEAR TO AT LEAST $15,000
Outside of the fact that it is not fair for someone to write off an amount that was determined more than a decade ago, by increasing the amount, there will be more incentive for more owners to get more involved in horse racing.
Horse race ownership is risky to begin with, it isn't right for the government to compound the risk.

12. ELIMINATION OF MOST DRUGS INCLUDING RACE DAY MEDICATIONS
Right now perception is everything, and the public believes that vets are training the horses. There is also a perception that drugs are masking many injuries that allow very sore horses from running, and then breaking down on the track.
The public doesn't want drugs in horses racing. Steroids included.
Same day Lasix amounts need to be immediately halved and over two years, it needs to be totally eliminated.
Lasix apparently does little but mask other drugs during tests. It needs to go.

13. TESTING FOR ILLEGAL DRUGS NEEDS TO BE AT LEAST DOUBLED
The cost has to be absorbed by the track, but over time, the track will win over quite a few more patrons.
Fines and suspensions also need to be very severe. If someone violates the rules, they hurt the game immensely. Slaps on the wrists are no longer acceptable.

14. HORSE SLAUGHTER FOR THOROUGHBREDS AND HARNESS HORSES MUST BE BANNED
I'm not even going to bother explaining this one.

15. IF A BORDER TRACK WANTS TABLE GAMES, THEY SHOULD BE ALLOWED TO HAVE THEM
If Fort Erie or Windsor want to go to the expense of expanding their operation to attract more people, they should be able to. Table games do not offer the same profit potential as slots do because they require a lot more staff, so I can't speculate on how card game revenues should be split between the track and the OLG.

16. FOLLOW ANY UNIVERSAL DRUG OR BREEDING LAWS THAT ORIGINATE IN THE USA
If any rules are adopted that every USA jurisdiction must follow, Ontario should follow suit.
For example, if my idea that a horse cannot stand as a sire until they reach the age of 6 ever got implemented in the USA, it should automatically be implemented in Ontario as well.


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OK, I'm whacked out now. This took me a long time to put together. Not months and months like Sadinsky and his contributors, but for a horse player like me, 3 or 4 hours is an awful long time.

4 comments:

Horse Racing in North America said...

I was interested in finding out if you would be interesting in swapping links. I would add you to my site, and you would do the same for me.

Thanks,

The Tout

Cangamble said...

I added you, but I have to tell you that you aren't the only place to go for racing news. I think Equidaily is also a real good place to go.

Anonymous said...

Really have to disagree with you here on the showing of Ontario tracks. I'm guessing you mean HPITV, something I complain about a lot. Saturday was great, no Fort Erie. I know its your home track and all, but nobody wants to bet a 5 horse field featuring 5-4k claimers. It really is horrible racing. What would be the 3rd? Are you suggesting they show Flamboro downs, or Grand River on a Saturday afternoon?

Cangamble said...

Anon, yes I meant HPITV. And this was what I think, my weakest recommendation on the list.
But I do think that more promotion of racing in Ontario to attract Ontarians to bet Ontario race tracks is needed.
And yes, it would have to be a small harness track or even Ajax Downs to be the third track. I guess the rule can be changed for weekend days to two tracks.
But Fort Erie isn't bad racing, and I think the majority of Ontario bettors agree.
The fields aren't that small this week either.
I do think that many breeders, trainers, and other horsemen would rather watch and possibly bet on horses they are familiar with than racing at big tracks (at least when it comes to non stake events). At least it might be a close call to what most prefer.