2 July 2009

Woodbine Down Lots On Turbo Charged Pick 6 So Far

I know it has only been going for two weeks, but early indications and analysis makes it look like the Turbo Charged Pick 6 will wind up to be a financial disaster for Woodbine Entertainment. They've been unlucky so far, as one jackpot winner emerged in both weeks. And this of course prevents the pool from getting gigantic and growing exponentially. But after last week, it looks like big pool growth will take quite a few weeks, much longer than first anticipated.

Woodbine put in $150,000 into the Pick 6 pool on Queen's Plate Day (June 21st) added to a small carryover of around $3,000 that was already there. Woodbine pools are at least double that specific day compared to other Sundays, so the fact that $140,771 in new money was wagered on the Pick 6 represented a bit of an anomaly.

Though I am not privy to the breakdown, but lets assume that 50% is bet in their home market through HPI, their home market tracks, and teletheatres, and 50% through US tracks, US ADWs, and Canadian non HPI home markets.

When you factor in the US exchange, probably another $8-10,000 can be added to the pool total. So let says the total new money was $150,000 Canadian.

The new $150,000 is broken down as follows: 75% goes into the pool (because of the 25% track takeout), so that means that the new money added $78,000 (70% of $112,500) to the $153,000 carryover, and this now represented a jackpot of approx. $231,000 Canadian to be distributed to those hitting 6 of 6, leaving another $34,000 to be distributed to those hitting 5 of 6. The Pick 6 was hit by one person and it paid $203,499.40. This means the winner was an American and paid in US funds.

But lets look at Woodbine's bottom line: They put in $150,000. The total takeout was around $38,000. About $19,000 was generated on their own platform, but they only get around a third of the other $19,000 (their estimated signal fee). Because they split the takeout and signal fee with the horsemen, that means Woodbine generated back a mere $12,000 (if my math is right) for the track.

Had the Pick 6 not be hit the first week, the $231,000 would have carried over. How much is a gambler more attracted to $231,000 over $150,000? Good question. I don't think it is that much. That makes what happened the second week very disillusioning, I assume, to Woodbine management.

They had to put in another $150,000. This time, it was just a regular Sunday and the bet only attracted $51,388 in new money (let say $56,000 Canadian when factoring US exchange). This time the total takeout generated was only $14,000, and after taking into account their net after non home market share and horseman share, the track only netted around $5-6,000. So after two weeks, Woodbine Entertainment put in $300,000 only to get back $18,000.

To make matters worse for Woodbine, one lucky American in Californian hit the Pick 6, forcing Woodbine to put in another $150,000 this week. But the dim reality is that even if it wasn't hit, the pool would only be sitting at around $172,000 instead of $150,000 that will be initially available this coming Sunday.

One argument is that the Pick 6 will cause players, who weren't looking at Woodbine before, to start handicapping it now and betting other races, but it really didn't show on Sunday as only $2.4 million was wagered on the whole card, which again is pretty close to average for a Sunday at Woodbine.

Before feeling sorry for Woodbine, lets remember that Woodbine is not doing this for the customer, they are doing it for themselves. This is the same Woodbine that recently ramped up the takeout on Tracknet, Magna, and California triactors. The same Woodbine that now gives its HPI customers $730 for a triactor that pays $810 at Churchill Downs.

Question arise. Are bettors avoiding the Polytrack? Or are the bigger bettors staying away from Woodbine's high takeouts (even though they just reduced their takeout on triactors, the new 27% charge still ranks 6th highest in North America). It most likely is a combination of the two, but takeouts definitely need to go lower in order for more players to become interested in Woodbine. That or Woodbine needs to give bigger rebates to their customers, find ways to rebate those who use HPI in non home market areas, and also make their signal available to all rebate shops.

Woodbine did have a very good Canada Day handle yesterday (over $3 million). They raced during the day. Normally on a Wednesday night, they usually have handles of around $1.3 million to $1.7 million (they usually just run 8 races).

Maybe Woodbine should consider racing Wednesday during the day. There isn't a lot of competition as California is now dark on Wednesdays. In fact, Woodbine should maybe think about running Mondays and Tuesdays instead of the Thursdays and Fridays to avoid competition. Today (Thursday), they will be lucky to do $1.4 million in handle.

On a personal note, I had a cheap thrill on Sunday. I bet $24 on the Pick 6. I used 2 horses by 3 horses (left out the 3-5 shot who ran up the track) by 1 horse by 1 horse by 1 horse by 2 horses.

I hit the first five legs. But I didn't have the chalk in the last leg, and the chalk romped. The good thing is that I didn't finish second or third in the last race either, and what would have been worse would have been second beaten a neck or less. I did receive over $300, having 5 of 6 twice, but it would have been real nice taking home over $170,000 Canadian, if one my horses would have taken the last race.

I though for sure that more people would have hit the Pick 6. The last four legs were chalk, and the first winner was only 5-1 (though the race was admittedly tough). The second leg must have knocked out the masses, and to me, the favorite, Retraceable, was at least 3 lengths inferior to my three top selections.

The logical horses won the 3rd through 5th legs, but the fields were excellent in size. I used singles in those races and had the natural Pick 3.

I tried to beat the favorite in the last (one of my live horses finished behind her in her last race), and it cost me $80,000. But I'm good at turning the page.

The bettor who did hit the Pick 6 spent $576, more than 1% that was put into the pool as new money.

One more thing. Note to Jeff Bratt: Don't say things like "lets hope no one wins it this week so that the pool will grow." I know you work for Woodbine, but you were talking to those who bet the Pick 6 on the day you said it. Basically you were telling Woodbine's customers that you hope they rip their tickets up.

Professional handicapper Cary Fotias has written a bang on article called If Tracks Had Access

"thoroughbred racing will not prosper until takeout rates are significantly reduced."
Where did I hear that before?:)

He goes on to make a very good comparison between the Old Boys network that used to control the stock market to the Old Boys network that still keeps horse racing behind the times.

He also echoes my concerns about the negative perception customers have regarding past posting, and offers the same solution I do: Cut off betting 1 minute to post.

I'll disagree with him regarding liquidity, because if takeouts are reduced significantly, liquidity will never be an issue again.

And finally, he mentions HANA in a big way:

If we horseplayers have enough passion to make our voices heard, we CAN make a difference. That’s why I encourage all if you to join the Horseplayers Association of North America (HANA) if you haven’t already. There is a link to the HANA homepage on the Equiform web site. I am on the HANA advisory board as I feel HANA has no other agenda except to improve our collective well being. I think the HANA “buycott” or “pool party” is a great way to enhance our bargaining power. Check it out - I think the only way we will be heard is to employ strategies that impact the tracks’ bottom lines.

HANA also was mentioned in a Yavapai press release:

(Yavapai) Downs Names Boomer Racing Director

As a horseplayer, (Greg "Boomer") Wry brings a unique perspective while also serving as racing director. A handicapper tied closely to the racing community, he is a member of the Horseplayers Association of North America (HANA), whose 1,100 members put $41 million through betting windows last year.

Making a horseplayer a racing director? Now that is what I call progress in a big way. I remember the old Ontario Jockey Club used to frown up their employees even making bets. They looked upon any bettor as being a degenerate, and unfortunately WEG is being run by someone who grew up with that attitude.
Incidentally, HANA is approaching 1250 members fast and we expect good growth this weekend as Hollywood Park is going the extra mile to promote us. By the way, our next Pool Party will be Hollywood Park's American Oaks on SUNDAY (race 8). *****FREE HANDICAPPING INFORMATION INCLUDING PAST PERFORMANCES CLICK HERE

To join HANA click here, it is free and it will take just a minute. The more members we have, the more clout we have.

Next week, we are moving to a smaller venue for the Pool Party. Woodbine was mentioned as a possibility, but we are too worried that we would lose too many members if we went with them:)

1 comment:

Anonymous said...

Turbo P6: Nice idea, execution needs work so they don't take a bath.