25 March 2010

Woodbine Entertainment Group Announces Purse Cut of 15% For Harness Circuit

Woodbine Cuts Harness Purses By 15%
When you treat a business like a necessary evil what do you think is going to eventually happen?
Looks like slot revenues are softening in the Toronto area too, though Woodbine is blaming the cuts on too much product in Ontario. I don't think that Woodbine/Mohawk are hardly hurt by competition from other harness tracks in Ontario. The harness game is down big time, because there are less horse racing gamblers. And this is due to horse racing's refusal to compete with other forms of gambling.

I'll let John Wood who commented at Standardbred Canada do the explaining from here:

It's funny in every industry in the world if you have an oversupply of product you lower the price so you can move inventory. The last thing that WEG management will do is lower the ridiculous existing track takeout to create demand for the product. They are stuck in a business model that refuses to compete on price. They have an entitlement mentality. Is it any wonder the racing is in a free fall at WEG and will continue to be in a free fall till reduced track takeout gets addressed in a meaningful way? Jeff Gural owner of Tioga Downs and Vernon Downs said it best that the only way the racing industry will change is if racing hits rock bottom. Until that happens expect a declining racing handle and even lower purses.

Lots of Cangambleisms in that comment. John probably reads this blog.

Gilles Rivest also left a very good comment:

Is the decrease in wagering over the past year due to a general softening of standardbred wagering in the market or are you losing bettors to offshore accounts due to your high take out rates and a sadly very low reward system?
I would wager on the later as a sure bet. It is a fact that WEG is losing numerous bettors to offshore accounts but I don't see them fighting back to retain these long time clients.I would suggest that increasing your reward system by 2% would equal to an instant 2% increase in overall wagering. Also why don't you include the smaller bettors in the TOA averaging?
Eliminating the minimum wagering of $1250 would be a good first step to show that WEG appreciates all customers not only customers that wager a larger amount of money each week.
The solution to this problem is not lowering purse moneys but by stopping this exodus of bettors looking for lower take out rates and better rewards.
This is not an easy problem to tackle but if you think that lowering purse money is the solution it won't be long before a total collapse of the horse racing industry.

Woodbine announced that Stake purses would not be affected. In other words, they just spat in the small owner's eyes, as they will be the ones who will be running for much lower prices, and I doubt vet bills and trainer bills are going down to help them out. This will accomplish what Woodbine wants: Less owners. Less owners means less horses, which means less racing, and this means they can keep more profits in the short run. Of course, in the long run, by having less owners, there will be even less newbies that come along and become bettors in the future.

The Woodbine corporate philosophy has killed growth of horse racing in Canada.

I know I predicted that Woodbine would cut purses last year on thoroughbred races. This year it will happen almost certainly.

Good News From Woodbine: Horse Casualties Half The United States Rate
Only .95 euthanized horses per 1,000 starters compared to the 2.04 per 1,000 average.
Is it because the polytrack and E.P. Taylor Turf Course is safer? Is it because of more stringent drug laws? Sounder horses?

According to the stats, deaths are down 40% since the polytrack was installed, so it isn't all because of the surface. I'm sure that weeding out the horses that need lots of bute to run has been a big factor. And many of the sorer horses wind up going to Fort Erie. It brings up a good question though. What is Fort Erie's rate of deaths on the track?

ORC/WEG Starting A Pilot Project: Explanations of Inquiries and Infractions
The article from Standardbred Canada seems to be about harness racing only. But "Stewards" is mentioned, so maybe Woodbine thoroughbred fans will be hearing someone other than Dan Loiselle once in a while.
UPDATE: Brent Stone, Manager of Racing for the Ontario Racing Commission explains the projects on the Norm Borg show.

Is Woodbine and/or the ORC paying attention to the blogs? Less than two weeks ago, HANA had a post called Undercover Bettor:

....But there is an inquiry. Bill and his bettor are trembling – although it appears there will be no change, after all we saw this type of non-infraction be left up 100 times or more – it is never an easy time for a bettor. Then the tote board goes dim, there has been a change. It is announced, with no real explanation from anyone on camera and the prices are displayed.

“What happened”, says COO Bill. “Is your money just gone?”

“Yes, that’s the way it works” says the bettor. “In places like Australia and Hong Kong they have protocols to handle inquiries so the public is better informed, but here it goes from track to track. Most times your money just changes hands without nary a peep. And rulings change from track to track, so it is a bit of a mystery”...

Fort Erie Horsemen More At Ease Thanks To 3 Year Project
Still, no announcement about who will manage Fort Erie from July 1st on, and more importantly who will take on the risk if the track loses money.

I know one thing, if this is run by the horsemen or with the horsemen as the number one priority, they'll be down to 40 days in year three.

Horse racing needs to be run for the bettor. The bettor (and slots player) pays for everything from the track's salaries and taxes to the purses. Fort Erie needs more horseplayers, and that should be their major focus.

The problem with horsemen is that they will agree to the above, but they can't help being horsemen first, and it is a fact that horsemen organizations have hindered growth of horse racing in North America for the past couple of decades at least.

And racing execs haven't helped either. They do things that they "think" horseplayers want. But the best way to attract horseplayers is to ask horseplayers, even better, ask the horseplayers that are playing offshore or are gambling on something else.

Fort Erie is in big trouble as is any racetrack that pretty much maintains the status quo. Betting is down over 10% in North America for the first two months. If this trend continues, it makes Fort Erie's new management up hill climb even steeper.

They need to really think out of the box. And they really need to find or get back more horseplayers to survive. It can be done. But it needs to be done by the right people.

Oaklawn Giving Incentives For Field Size
Hey, they stole my idea here. I thought of this in 2004 or 2005 in a document I wrote called "Saving Fort Erie."

This is the thinking out of the box stuff I mentioned above. Adding purse money to races that have more than 8 horses. This is just basic understanding that bigger fields attracts higher handle.

In Fort Erie's case, they should have a minimum purse for 6 horse races or less for each class, and then add $500 to $1000 (depending on the minimum purse decided upon) for each starter up to 12. This is the kind of thing that horsemen would be against because their ideal field size is one, but the reality is that this is the kind of thing that will increase handle as horsemen will be more likely not to avoid 10-12 horse potential fields.

Taxing Poker Winners In Canada: Still A Grey Area
It is hard to define whether a poker player is playing as a business or for leisure. There is nothing black or white about it in Canada.

Disputed Harness Race At Northlands: Tote Screw Up
Race went official, but because of the foul up, the total money wagered could not be determined, so a refund was declared.......days later.

Horse racing technology reminds me of people playing Pong today.


Anonymous said...

take out is mark up...when most stores reduce their price they advertise a sale...the same thing can happen with horseracing...make the reduction in takeout and advertise it...woodbine...change your billboards...bet it to get it and get more of it...

Anonymous said...

I think the lower than avg death rate per starter in Canada is a result of the large number of horses who take the winters off.