18 August 2010

Will Online Gambling Hurt Ontario Horse Racing Badly?

The OLG announced that they are going to enter the world of online gambling (though they like to use the word "gaming").

First to clarify. Online gambling has been gray area legal in Canada for years. Canadians can openly bet through places like Betfair. Everything from poker to horse racing to sports betting has been but a mouse click away for every Canadian.

So now with the OLG entering the picture, what changes? The main change will be convenience (getting money in and out of your accounts), advertising (it will be in the face on most Ontarians), and the increase of locations to make wagers (I assume you will be able to bet sports at convenience stores in the near future much like Pro-line but with better odds).

Speaking of odds, if the OLG does not compete with bookies and other online casinos when it comes to payouts, this endeavor will fail miserably, at least the revenues will not even come close to its potential, nor will they be able to lure the big money away from offshore houses. This is the same problem Woodbine racetrack has (though it is self inflicted).

I expect the odds to be very competitive, and if that is the case, we will see slots get clobbered, and we will see a dramatic drop in horse racing in Ontario.
Deer In The Headlight Syndrome
Horse racing reacts like a deer in a headlight. Instead of being proactive and dealing with their biggest problem, which is a product that is too highly priced (so high, it not only prohibits growth, it actually promotes negative growth), horse racing looks for subsidies to exist, looks to cut dates, and if these two things don't work, purse cuts are inevitable.

Is horse racing looking for a cut from the OLG from the proposed online betting platform? Of course they will. Will they get it? Most likely not. The only thing they might get are more table games and the ability to take in sports wagers on track (and possibly through HPI, in Woodbine's case).

Sports wagers are a gamble for the house because it is not parimutuel. Though in the long run, the house usually does OK.

But more people betting sports will most probably mean less people showing any interest in horse racing. More people betting online poker, for sure, less people will be interested in horse racing.

Again, if prices are competitive with everything else that is out there, horse racing will get hurt plenty.

They had a very good window with the internet, and with the convenience associated with it, to attract a bigger crowd and grow horse racing. And their lack of foresight and their lack of tackling their pricing problem has now put Ontario racing in Deer In The Headlight mode. And we have only started seeing it. It will only get worse.

Northlands Park Doing Something Really Smart

Who would have thought that a Prairie Province racetrack would come out with a what looks like a fantastic marketing scheme? On Saturday they have a $2 Pick 10, and if anyone picks all ten winners, $1 million dollars will be awarded. Now, there is no way the pool will even come close to a million, and I believe that Northlands Park has the bet insured (I would love to see the math behind the insurance policy especially since the entries haven't been drawn).

I know one thing, I'm handicapping Northlands on Saturday, and I'll most likely be playing the $50,000 Pick 4 at least (now that pool will most likely be over $50,000).

Canadians can bet on the Northlands card through HPI. Most Americans can bet the Northlands card here, as well as many other ADWs.

Cal-Expo is also doing something good. They are lowering the takeout on their Pick 4's Saturday nights. Why just Saturday nights? A small step in the right direction is better than nothing.

ORC Acknowledges No Rules Broken By Schickedanz

When I did some minor research on the subject, I kind of thought that Bruno Schickedanz didn't violate any rules in the ORC rulebook. Though perhaps in the near future, what happened with Wake At Noon will create rule changes that make what intuitively should be wrong, a real violation.

Schickedanz's appeal is still not over. It continues next Thursday. It has yet to be determined if he violated Woodbine's own track rules.

My guess is that he will be reinstated. It is kind of like the building of the Mosque near Ground Zero, that the majority of Americans are against. The majority may want Schickedanz banned for life, but laws of the land override what the majority wants sometimes. Laws need to change so it doesn't happen again.

Craig Walker at the TrackMaster Blog asks if peer to peer betting is good for racing
My answer is yes. But it would be more profitable for the industry if it isn't done through Betfair. Winners are created thanks to the lower takeout rates exchange betting has to offer. Players last longer as well. Younger players are easier to introduce through exchange betting than the regular parimutuel betting racing has to offer right now.

As Craig points out, betting during the race opens up a brand new niche market. And those who handicap races looking for winners to back or loses to bet against may also find exotic bets throughout the day to dabble in.

More Deer In The Headlights Syndrome: Suffolk Downs Slashes Purses By 26%
I actually like handicapping Suffolk Downs, but it does have one of the highest takeout rates in North America. HANA ranks Suffolk as having the 2nd highest takeout rate, just below Assiniboia Downs. Fort Erie has the 3rd highest takeout rates in North America.

I find it amazing that tracks cut dates and/or purses yet they don't consider cutting the takeout....the price of the product. Good luck with that.

1 comment:

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