7 July 2008

WILL ELLIS PARK SIGNAL DEAL INFLUENCE ALL FUTURE SIGNAL DEALS?

WILL ELLIS PARK SIGNAL DEAL INFLUENCE ALL OTHER FUTURE SIGNAL DEALS?
Racing at Ellis Park lives on. All thanks to track owner Ron Geary and the fact that he completely caved into the horsemen's major demands.
In the new one-year deal, Geary is giving up a portion of his percentage to the purse in order to bring the horsemen's cut from 2.5 percent to six percent.

"I've negotiated with 10 ADW's between five and eight percent," Geary said. "I've given the whole six percent to the horsemen's purse fund, then I'm going to try to make it up through other items. But it allows us to have good purse money. Hopefully we can raise our purses, and we can race a lot."

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5-8% for signal fees is much higher than most tracks are willing to pay just to put another track on the menu. They are used to buying signals for 2-4% in most instances.
I know that if I had a track and had to pay 6% for Ellis Park's signal, I would only sell to Ellis Park for the same price, and my guess is that Ellis Park would have to comply if they expected anyone to take their signal.

But more importantly, this is a huge win for the horsemen, who will now demand 5-6% in almost every jurisdiction.

And how many tracks are going to sell their signal just for the benefit of the horsemen, where the track does it for free like Geary did? Not many.
What it looks like to me is that signals will be sold for 8-9% in the near future.
And this is not very good incentive for the host track to have their player betting simulcast tracks as they will make a lot more money if their clientele only bets their own product. How will tracks deal with this? What kind of incentives can a track offer to get their players to bet most of their money on their own products?
Lower takeouts could be an option, but then again, if another track is paying 8-9% for the signal, a lower takeout will probably take out potential buyers of the signal.

Increasing the takeout will sound like a reasonable answer to racing execs almost everywhere, but all that would happen is that they will make a lot less money in the long run, because many players on the bubble looking for one more straw to break their backs, will just say goodbye to horse racing. And higher takeouts do not attract new money to be lost regardless, it just eats away at the track's existing players much quicker, turning them off more.
I know the solution, but I'm not saying......yet:)

Anyway, my guess when it comes to who negotiated the lowest signal rates of 5% would be Woodbine. For one thing, there is no way Woodbine would put Ellis Park on the menu if they had to pay a higher fee, and more importantly it seems that horsemen groups and racing execs seem to think that WEG/HPI and offshores like Elite represent complete bonuses to their pools, so they aren't held to the same standards and demands that are placed on American domestic tracks and ADWs. Woodbine/HPI was not affected by the Calder blackout, as they had Calder on their menu I believe.

BTW, Ellis Park has crappy track takeout rates, and without a good rebate I'm not interested in playing there at all:

Win, place, and show: 17.5%
All other exotic wagering: 22%


Their win bets are higher than even WEG, the exactor takeouts are higher as well, but the triactor and superfecta takeouts are lower. So on average, Ellis Park's takeout are probably equal to WEG's rip off rates. At least Ellis Park doesn't have slots so they have a bit of an excuse, and they did experiment with a 4% Win 4 last year. Woodbine of course, jacked up the rate to at least 25% for their valued customers.


WEG spokesman Jane Holmes On The Push To Legalize Sports Wagering
"Along with the push by the Ontario Government, a group consisting of the Woodbine Entertainment Group, Great Canadian Gaming Corporation, Attractions Hippiques and Horse Racing Alberta have come together to lobby the Federal Government," Holmes, WEG vice president, Corporate Affairs, told Trot Insider....For the past handful of years, officials from the Woodbine Entertainment Group have pleaded with the Government to deal with the illegal online wagering explosion which has seen up to $200 million a year in racing handle funneled offshore.

"Woodbine Entertainment simply wants a level playing field -- it is indisputable that the status quo is just not working," said Holmes. "Woodbine Entertainment either wants the laws on the books enforced or legislation to be passed which would allow us to compete."

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Again, the laws on the books allow Canadians to bet at their own risk offshore. It is illegal though for a sportsbook or rebate shop to have a server in Canada if they aren't licensed here.


Secondly, what does WEG know about competing? Seriously? Does anyone think that if sports betting became legal in Ontario or Canada, that WEG would allow their customers to bet on sports at competitive takeout rates (juice)? One would probably still be able to get much better returns at places like Betfair if either the government or WEG were in charge of delivering the betting product.

WEG has a philosophy of entitlement, and competition for customers is not in their current regime's vocabulary.

And doesn't WEG complain about rebate shops and Betfair, stating they don't have to incur the costs that the racetrack does in order to put on a show and that they shouldn't be able to free ride and take gambler's monies bet on their product? And yet, they have no problem free riding sports games. Last time I looked, athletes get paid an awful lot of dough. Who pays to put on the show? It won't be WEG.


The Paulick Report is getting better and better each day. It is starting to catch up to Equidaily very quickly as a number one source for news on horse racing.

Horsemen Say Calder's Issues Resolved
I doubt they are getting the Geary deal though, maybe something close.

ORC Exonerates 6 Trainers On Aminorex Charges
...the Ontario Racing Commission announced that trainers Annette Lorentzon, Karen Cooper, Mitchell Sahely, Garry Merner, George Peters and Kenneth Duncan have been exonerated from Aminorex charges... The basis of this decision is that the horses did race with a prohibited substance; source unknown.


For anyone who missed it. Tom Durkin's musical stretch call:


H/T Pull The Pocket, who linked it first.

6 comments:

Jessica said...

Hi CanGamble, thanks for posting the link to Self Appointed Fan Committee over in the PaceAdvantage forum. I lurk there and was delighted to see the site get a mention.

Anonymous said...

ANYONE NOTICE WOODBINE AND FORT ERIE RACE TRACK HAS BLOCKED BETFAIR'S PHONE NUMBER,BOTH ON CELL PHONE'S AND PAY PHONE'S.

Anonymous said...

This is in regard to your comments on Ellis Park's deal.

Your argument misses the point. Mr. Geary said he'd negotiated with various ADW's up to 8%. He said nothing at all about what fees he was charging to exchange with other brick and mortar racetracks.

Cangamble said...

Anon 12:29, Good point. But I just can't see the horsemen not wanting just as high levels in the near future even for racetrack to racetrack exchanges. Lets face it, take Woodbine for example, they are a racetrack, but they are an ADW too. It is a fine line.

Anon 7:13, I think it is in their rights to do it. They let their patrons in for free, it isn't public property.

Jessica, maybe you should attend the cyber meeting on Wednesday.

Anonymous said...

Hey, Woodbine had not been showing Calder, but I noticed it on their menu this week.

The market on betfair for Woodbine is so tiny, why do they even care?

As for a WEG operated sports book, I cringe at the thought of 40 cent baseball lines.

Cangamble said...

Why Woodbine hates Betfair? Because they think they are entitled to most Canadians horse race bets, and all online bets for that matter, including poker, blackjack, and sports betting.