16 October 2009

The Price Of Betting Horses Is Way Too High

John Pricci has been working overtime writing articles about what came out of the recently concluded simulcast conference.

Hopefully, the articles aren't falling on deaf, dumb and blind eyes.

In A Simulcast Manifesto, Pricci writes about changes that bettors want and need, from accurate data to a standardized payoff format that all tracks should use:

Post payoffs faster and with greater consistency, maybe utilizing a pop-up window. Standardize payoffs. Post all $2 minimum wagers: the Pick Six, Magna Five, W-P-S, etc., in $2 increments.

Post all fractional wagers--Dime Supers, Fifty-Cent Trifectas and Pick 4s--at the minimum offered. Horseplayers can do math. Stop trying to con newcomers by dangling big payoffs. Not sure I know anyone who’s ever hit a $2 superfecta.

And he ends the article with this:

three words: takeout, takeout and takeout.

Figure out a better split between tracks and simulcast venues and pass the savings along to the customer. The principle of churn is quite simple: The more money returned to players, the more they bet in return.

The Pricci piece inspired a Bloodhorse piece by Tom LaMarra; Are the Voices of Horseplayers Voices Being Heard?:

“Every time there was a lower takeout experiment in New York, handle went up,” Pricci said. “Small-minded bet-takers say they understand churn, but they don’t understand churn. This industry has a vested interest in keeping the player liquid.”

Pari-mutuel takeout has been a sticking point for many years. Impediments to change include regulations that vary by state and arguments between exporters and importers. Tracks that have experimented with takeout reductions have had their signals pulled from some wagering outlets.

When Laurel tried their 12% takeout experiment, Woodbine refused to put it on their menu. That is just one example I know about.

At least one racing exec admittedly gets it:

On Oct. 13 at the simulcast conference, Jeff Gural, who owns Tioga Downs and Vernon Downs, two New York harness tracks with video gaming machines, said because slots provide about 90% of the purse money, he’s willing to experiment with takeout even though wagering pools are small...“Tracks would drop our signals."

Not all tracks and ADWs would drop his signal though. And I know HANA would support this type of effort big time. Even me, someone who hasn't bet a harness race since I remember, would play his tracks.

Pricci outdid himself this morning with his piece: Gambling Consultant: “Amount of Money Taken from Bettors Is Not Sustainable”

Betting menus have expanded, popular because it gives customers more choice but problematic because betting pools become diluted. With new wagers having a higher degree of difficulty, coupled with high takeout, players are busting out at a faster rate. Times being what they are, they’ve been voting with their feet.

Even breakage is tackled in the article:

Today’s technology allows players to bet $2.43 to get back $9.17 if they wish. Pay the winners in full. There’s no good reason for breakage to exist in the modern era. The industry should have been fighting local governments for those pennies on behalf of their customers, instead of piling on.

Eugene Christiansen, gambling consultant gets it more than almost every racing executive and horseman put together:

He was asked: “If racing could correct just one problem, what should it be?”

Said Christiansen, without hesitation or equivocation: “Pricing is a threshold issue.”

How and why lowering takeout will grow the game?

The fact that the mainstream bettors will last longer. They will expose more friends family and coworkers to horse racing. For example, I had my sisters family over at my house recently, but I was on a good winning streak, and I was spending most of the day at the computer making bets. This got the interest of my brother-in-law, and my nephew and niece. Not saying that this turned them into gambling addicts, but it did perk their interest.

Conversely, they were at my place 6 months ago when I was temporarily not betting because I was having a bad streak. Horse racing wasn’t even mentioned that weekend.

If takeouts are reduced, the likelihood of regular players like me missing a day or a weekend become close to non existent.

Also, if takeout is reduced to 10-12% the idea that the game is unbeatable will be taken out by actual winners who will draw more newbies into the game (just like it works with Betfair and online poker who make their money because there are a few winners, but obviously a heck of a lot of losers who think they have a chance to win).

Excellent Proposal In California: Voiding Claims If A Horse Can't Make It Soundly Back To The Barn

This will take away the incentive to drop a really sore down with the purpose of getting it claimed:

He (Dr. Rick Arthur) cited one instance of a trainer and owner at Hollywood Park last fall "high-fiving" in front of the horse ambulance after a horse that had been claimed from them broke down in a race.

In Ontario, if a claimed horse is put down within 24 hours of the claim, the new owner gets half the claim back as a rebate. I like California's plan much better. It actually might protect more horses from dying on the track.

Quebec Horse Racing Firm Goes Bankrupt
The government didn't allow slots to bail out the dying industry in this case. Nick Eaves was asked if Woodbine will be pursuing Quebec racing: "Absolutely not," Eaves told Trot Insider on Wednesday. "It's terrible what Quebec is going through, but we have our own problems that we have to deal with here."

Dang right, Woodbine has their own problems here. But they have been self inflicted. Yesterday they had a total handle of just over $1.2 million in a week that they are promoting their biggest racing day of the year. It is disgusting what Woodbine's brass has done to horse racing's growth potential in Ontario by drastically overpricing their game to the consumer. Absolutely disgusting.


Will Ontario's government bail out Fort Erie? The question still remains if there will be racing next year, but that was easy to predict. Next year may be a lot more difficult because the EDTC has run out of funny money to pay Nordic off to keep the track alive in 2010.

Meanwhile, Fort Erie may have a car racing track by 2011. I am doubting this will happen, but who knows?

With the Canadian International coming up, this video sure does bring back lots of memories. I was 12 when Secretariat raced at Woodbine. I sold racing forms prior to the first race that day, got cleaned up and spent the rest of the day at my mother's table in the dining room:

HT Jen's Blog

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