1 August 2010

Are Super Trainer's Percentages Going To Drop Thanks To Delahoussaye Indictment?

The Grand Jury is learning a lot about how trainer's cheat and hopefully they will learn how broad the cheating is.  From milk shakes to cobra/snail venom to Red Bull to EPO/DPO to plugging horses in, it is pretty clear that if a trainer like Darrell Delahoussaye, who didn't have tremendous stats, was cheating as much as it is alleged he was, those trainers with stats exceeding 20% have to be using undetectable drugs or illegal methods to keep their stats so high.

I really like the fact that this has now turned into a criminal matter.  It rightfully is.  Not only is the cheating trainer cheating the betting public, but they are cheating the horsemen who are not cheating, by stealing purses using illegal substances and methods.

Hopefully, racing commissions across North America will take this as a wake-up call and become extremely vigilant and aggressive towards the cheating trainer.  I know that as a bettor, it almost sickens me to watch certain trainer's horses consistently run against biases and rebreak when the real running starts even though they exerted much energy early on in the race as well.  Almost like they have an oxygen bottle on their back instead of a jockey.

The heat is on right now.  And I think we will see some nervous super trainers turn it down for at least a little while, probably counting on the heat to go away like it usually does.

In other related news, Anthony Adamo is suspended pending the outcome of a Pennsylvania  ruling against him.


HANA (Horseplayers Association Of North America) was first to put this confirmed rumor out there regarding the proposed takeout hike on exotics at California racetracks.  

Raising takeout works only if the amount bet over the course of a long time remains the same. Anyone who believes that this happens has no idea the way things work.  Though that is the assumption being made and being pitched to politicians.

Gambling is all about churn. The more a horseplayer cashes, the more they wager. The less they cash, the less they wager. This is true of blackjack, slots, horse racing, you name it.

There is an optimum takeout price for every form of gambling, and it differs from gamble to gamble. This is the price where the house makes the most money bottom line long term.

Horse racing has never tried to discover this optimum price. Other forms of gambling have, through trial and error, from blackjack to sports betting to slots.

Double the slots takeout, and the house will make less money bottom line. And all they have to do is have half the betting. Problem is they won't and they know it. Players don't last, and when they don't last long enough, some go less, some quit, and some find other ways to lose their money. More importantly, the less a person lasts, the less likely they are to expose friends or family to their habit. This also helps for growth, and this is why slots gets extra players. Many of us have been dragged to a casino by a friend or family member or many of us dragged a friend there.

Tracks that already have sky high takeouts have seen less and less live players because they simply wiped them out.

A takeout increase in California, no matter how large or small will have the same affect. Some players will lose what they would have regardless of the takeout (a fixed player), but many will wind up losing a lot less over time because they will give up or go a lot less.

Looking towards the future, any track or tracks that hike takeout are just killing the sport even more by taking out more players.

One thing is for sure, more new money won't be lost when you raise the takeout. Collectively existing players only have so much to lose regardless of the takeout. However, by taking out the growth factor and factoring players quitting or going a lot less and finding other things to bet on. California horsemen will wind up with purses lower than ever before over the next couple of years.

Most players don't openly care about takeout, but it affects everyone's play just as it does with slots. Slot players don't have a clue. Why not up the takeout from 6 or 7% to 15%? Won't the casino make more money? Of course not.

The big players who don't look at takeout, will have their bankrolls erode faster, and over time, they will become less enthused about their hobby. It has happened everywhere any takeout increase has occurred. In fact, it has happened to the collective fans, as over the years, more bet types (with higher takeouts) have been introduced, coupled with the fact players can bet a lot more than 8 races a day.

Owners understand the concept that bigger purses (ie more money that is given out for win place and show fourth and fifth) means more owners as owners last longer, and more even make money (more partnerships too, growth occurs, more new owners get in the game). What happens when you lower purse money available? Less owners and less horses. The same thing happens when you give less money to the players, you eventually create less players. Give players back more money and you have a growth scenario.

Roger Stein discussed the proposed takeout increase on his show at the 50 minute mark of yesterday's show (July 31).
Listen here.  Roger and his guests made great points about how negative track takeout increases are.
I wish they would start thinking takeout decreases instead and applying the same logic they were using as to why a takeout increase is idiotic.

Pull The Pocket has a very good post on the contrast between the mentality of horse racing versus those who get it (in this case the California Lottery Corp.)   If you've read my blog in the past, you may have seen the post I made regarding California dropping the takeout on Scratch N Win lottery tickets.  This occurred in the spring.  Sales have been brisk ever since, and players are churning like crazy and they are actually losing more money than ever before because their odds got better.  Revenues have jumped 16%.  The state and the lottery company are making more money bottom line, just by giving back more to the customers.

Tracks that hike takeout despite all this are helping kill the sport even more.  The future will be here soon enough, and if you think it is bad today, it will be worse in a couple of years unless takeout reductions occur.

Even with all the logical points made, it seems like most of us have resigned to the fact that this takeout hike will happen.  Just as it did at Los Alamitos (so far we've seen a 27% reduction in live handle there, and it will only get worse).

Personally, I'm with a few others on this.  Let them do it.  I know what will happen.  And maybe, just maybe, the industry will get it.  My only reservation is that this will prolong the decline and stifle growth for another couple of years until they finally realize that lower prices are DEFINITELY NEEDED.

Rick Cowan Optimistic Fort Erie Can Become Viable 
Interesting article citing many of the obstacles new COO of Fort Erie has to overcome to turn to the track around.

One thing that really caught my eye was this:
Player rewards: While Players Club members earn rebates for their slot machine play, the Ontario Lottery won't allow them to use cards to get rebates on horse bets. However, Cowan said, "We are looking at a rewards system" for horse bettors.

There are two obvious choices here.  One is to have their own ADW servicing the Niagara region.  The second is to simply reduce the track takeout.

The track takeout affects the live customer the most.  The higher the takeout, the less they cash, the less they have to bet back, and the less they last, and the less they desire to come back to the track that quickly.

Those playing Fort Erie at tracks, OTBs and ADWs across North America would play more if takeout was reduced, and Fort Erie advertised it well.  There is a lot more awareness these days regarding takeout than ever before.  Plus, the venues that have Fort Erie's races pay a constant signal fee.  The takeout is really insignificant as Fort Erie gets a set percentage on every bet regardless of whether it is WPS or a triactor.

Lowering takeout will create growth potential both amongst the local on track bettors and those who play from other venues.  It is a win win situation.  Problem is getting it through some of the horsemen's thick skulls.

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