Let's Make Horse Racing Great Again!

President Donald Trump took some time off Twitter to sign 8 executive order specifically having to do with horse racing.

"Horse racing is a great American pastime. Many jobs depend on the game. But tragically, the game has been dying for years. It is so bad, that total handle went down even under Obama when just about everything including how much Americans gamble went up.

I alone can fix horse racing and create many many more jobs in the process. Handle will triple in just two years thanks to these executive orders. Let's make horse racing great again!"

"I know more about track takeout than the whales do. The lower the takeout, the more money that goes back into the gambler's pocket. And the gambler isn't going to spend that extra money on a course at Trump U., because Trump U. doesn't exist anymore thanks to the dishonest media, no, they are going to bet it back on the horses, and because they'll be able to bet more often, they will tell their family and friends how much fun they are having and how easy it is to bet on the races. Soon everyone in America, except the deceased, the illegal aliens and the minority of voters who voted against me, will be betting on the 7 horse in the Kentucky Derby. I saw something on Fox News that the 7 is a lock this year.

As for the international 16% cap, I already have Russia and all their racetracks on board."

"I listen closely to the people, and one of my biggest supporters, I forget the guy's name, told me about this breakage situation. It is so wrong. Gamblers should get back everything they have coming, and once again, the more they have in their pockets, the more they will bet, and the longer they will bet. I ran an extremely successful casino empire, I know all about churn, believe me."

"Horse racing needs stars like the Kardashians. If the Kardashians retired to pop out babies, nobody would watch them. And this order should strengthen the breed too. The reason I'm the President at 70 today is because of great genes, everyone in my family has great genes, you don't see me retiring early, only people with bad genes retire early."

"I know this race day Lasix ban is going to anger the Bernie Sanders supporting Left but it must be done. No Bernie, if a horse bleeds without Lasix, it shouldn't be given the opportunity to be on an equal playing field with a horse that doesn't bleed. Really bad bleeders need to stop racing, and it is only a few horses that really bleed that much and because Lasix drains a horse, without Lasix horses will be able to come back and race more often, field size will actually increase, and I heard that bettors like bigger field size."

"Drugs are killing the game. Super trainers don't even train their horses anymore, they just inject the same drugs illegal immigrants use before they swim across the Gulf of Mexico and land on the shores of Florida and Louisiana. These guys have super endurance, you must have seen them swim on TV like I have. This is bad and must be stopped. It will be stopped."

"We will lower taxes on Americans, and abolishing taxes on racetrack winnings is a great way to start. Once again, the more money that is in the pockets of the gambler, the better off the industry will be in the long run. And I hate Jackpot bets, they are churn killers. My 50% tax will stop players from playing and then tracks will stop offering this silly wager and don't believe tracks who say that Jackpot bets create new players, that is Fake News!"

"With every state now allowing horse racing betting, handle will go up bigly on that alone. And we'll see more states start building racetracks. If Florida had a racetrack I'd be spending my weekends at the track rather than on the golf course, and now they might build one, maybe even two.

I also propose that the residing state of the gambler receives 1% of whatever is wagered by residents online, or 1% of what is wagered at tracks or OTBs. Lets face it, someone from South Carolina could be betting at a track in Pennsylvania but other than the holes in his jeans, how can you tell he is from South Carolina? On the internet it is different, you can tell. But some states are out of control on what they charge, Minnesota recently started charging and arm and a leg on their residents wagers, and now no betting company wants to take Minnesota residents except for illegal offshore bookmakers that help fund ISIS. This stops today."

"I'm an expert on Sweden. If it wasn't for the V75 the only thing they'd have going for them are their meatballs. Most of the blonde women, and I do love women, have left or want to leave because of the daily terrorist attacks. I'd like to sign an executive order that allows a few hundred thousand blonde women from Sweden to come into America as refugees but I was told I could never get it passed."

The Ideal Racing Format

I've been handicapping and betting horses since I was 12, and probably even earlier than that (my memory escapes me as to when I actually began system handicapping). I'm 49 right now, so you can do the math.

Things have definitely changed in the world of horse race betting. Now, more than ever before, tracks are competing against each other for the online and simulcast player. Horseplayers like consistency, not only when it comes to form, but also betting format. Every player knows there is an exactor in every race, and there is a double that begins in the first race. This is true everywhere. But after these consistencies, chaos reigns supreme when it comes to betting formats.

Here is my idea of the perfect racing format:

1. 9 races a card. Not 10, not 8, and especially not 7,11, or 12. 9 races is just right when it comes to handicapping. 8 is too few. 10 or more races gets to be a bit overwhelming if you are handicapping by pen and paper as most people do.
Though not carved in stone, there are a few tracks that at least informally look to card exactly 9 races a day, no more, no less.

2. All races must have at least 7 betting interests or the race should just carryover. I realize racing secretaries these days are having a hard time filling some races thanks to a horse shortage brought on because owning a race horse has become less and less economical (especially in bad economic times), however a good racing secretary knows their local horse population, and most realize that if they put 2 or 3 bottom maiden claiming races in the book every day, they can almost be assured to fill 9 races a day.

3. Rolling doubles and pick 3's should be mandatory at each track. Daily doubles give savvy Horseplayers a possible edge over betting two horses to win, pick 3's too often pay much more than a three horse parlay (though the edge isn't as great at most tracks as the takeout is usually higher for pick 3's).

4. Two Pick 4's a day. One starting in the second race, the other in the 6th race. Hawthorne, when they run 9 races a day (which is their usual norm), does this. I know one thing I can't stand, and that is the Pick 4 overlap race. Woodbine often does this with race 7 in a 10 race card. If a handicapper who likes betting pick 4's can't stand the 7th race, he or she might pass the whole card. I think it also causes the late pick 4 to have less money bet into it as many players who are alive may bet less or not bet the late pick 4 at all.

5. Superfectas in every race with 9 or more separate mutuel entrants only. The track takeout is usually highest for supers than any other bets at most tracks, and I realize the public likes them. But having supers on races with short fields really wipes the Horseplayer out much faster. It is kind of like putting a large double cheese pepperoni pizza in front of me instead of a small. I'll eventually eat the large pizza, but it isn't good for me. Superfectas on short fields is not good for the growth of the game.

6. 50 cent minimums on superfectas, pick 4's, pick 5's and pick 6's. $1 minimums on all other bets. The movement towards 10 or 20 cent minimum supers and pick 4's (in Canada) again has a negative affect as it lures small players into high takeout bets that produce very little churn, and this causes players to go broke quicker, and disillusioned faster. The idea of these bets is (or should be) to give Horseplayers the shot at a year changing cash. 50 cent minimums leads to more pool shots and it is the chance of this that will build interest not only from existing players (especially the big bank roll players), but the lottery/slots player as well. Churn will still happen, as there will be more 3 out of 4's or three horses all results for supers. It will also curb the smaller every day player into wagers that produce more churn.

I'll add a few more ideas here that will do nothing but grow the game:

7. A 12% cap on takeout, 10% on WPS. Maybe eventually the powers of racing will get it, but the horsemen need to step aside and let it happen.

8. Eliminate breakage. It is the customer's money. Give it to them. It will get churned back. In today's day and age breakage is simply a way the track rips the Horseplayer off, as the technology is there to pay off in pennies, especially in account wagering systems.

9. Any trainer who is hitting at 25% or greater gets to race from a detention barn until their average drops. If a trainer has at least 50 starts and the field size average is at least 8, there is no way in heck they should be hitting at better than 25% or better without using something that isn't being tested for. That is my story and I'm sticking to it. Drugs not being tested for are bad for the game.


Zenyatta will be on 60 Minutes tonight. Horse Racing Simulation created a race pitting Zenyatta against some of the greatest horses ever:

If it were a true simulation, a race with a field of 10 would produce a different result every time (I wonder if that is the case with this program). I don't think the result of the race will hurt Rachel Alexandra's value as a broodmare.

One thing about this simulation program is that if racing keeps going in the direction it is going, it might be all that is left. The thing is, it could really catch on and attract Horseplayers of today and the future, especially if the takeout was low enough and the possibility of cheating within the program was at least perceived to not exist.


Fort Erie Handle Down 12%
This is worse than the industry average which is between 8 and 9%. And new management was "trying." Imagine if they weren't trying. The reality here is that Fort Erie has the third highest blended track takeout rate in North America. They bleed the Horseplayer, especially the ones that go to the track. The higher the takeout, the less the churn, the quicker the Horseplayer loses interest. It isn't only that, now, more than ever before, Horseplayers are collectively informed and many avoid high takeout tracks when given choice.

The new management is really the old management of Woodbine, and they just don't get takeout. Coupled with being directed by what Horsemen want as opposed to what Horseplayers want or whats best for Horseplayers, Fort Erie's 2010 results were a predicted disaster.

There is a reason why slot takeout is 8-10%. It is the highest rate slot players will tolerate, and most slot players wouldn't be able to tell you what the rate is, it is all about optimal pricing.

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Woodbine To Reduce Takeout With Future Growth In Mind

Tomorrow, Woodbine will open the doors for their 2010 thoroughbred season, and they've decided to dedicate this year to the horseplayer by dropping track takeouts to industry low levels.

WPS bets will now be offered at 15%. All exotics will be have a takeout of 18%, with the exception of triactors which will have a takeout of 19.5%. The takeouts used to be 16.95% for WPS, 20.5% for exactors and doubles, 25% for Pick 4's and Pick 6's, 26.3% for superfectas and Pick 3's, and 27% for triactors.


The hardest part of making this change was convincing the Ontario HBPA that their contract needed to be changed because their percentages had to be prorated for this to work. It took a lot of meetings, but the astute Woodbine executives team was able to finally convince the horsemen that when takeout drops, players will churn back the extra money they won, so the bottom line will be at least the same. Of course, when horseplayers last longer, and spend more time handicapping, betting and watching races, they may forgo other forms of gambling, and more importantly, start introducing their family and friends to the great game of horse racing, and this potential for strong growth has apparently excited both horsemen and WEG executives alike.

Because track takeouts were being cut to close to three quarters of what they used to be, instead of receiving an extra 2% on all wagers, the horsepeople have agreed to receive an extra 1.5% on each dollar bet instead, and an additional 1.5% on triactors.

In order to get the horsemen to go along with this monumental effort, Woodbine promised to keep purse levels at least the same this year, and next year. An executive stated off the record that "Woodbine was planning to announce a 15% purse cut on the thoroughbred side, just like they did on the standardbred side, by August 1st, if this agreement failed."

The same executive, who stressed she wanted to stay anonymous, said that "Things are so much brighter now that Davey is giving up control. It is like Woodbine finally got rid of the monkey on its back." She then joked, "He'll still be around for a few months doing the only thing he is any good at, collecting his big fat pay check."

The government agencies too had to go along with this plan. It took about twelve meetings but they finally understood the math behind the cuts and what churn means, so it was agreed that the Ontario Government will now receive .385% instead of .5% on each dollar wagered, while the Canadian Government will now retain .615% instead of .8% on each dollar wagered for the provision of drug control, photo-finish, video patrol and audit services.

But that isn't all. Newly appointed WEG Token Racial Minority V.P. Ravi Singh Singhasong stated that "instead of using the term "Take Out Adjustments," which is too lengthy a term anyway, money put into HPI accounts based on how much a horseplayer bets, will now be referred to as "Rebates." We will now be giving out Rebates to all HPI members on every bet they make with no weekly minimum. All bets made through HPI will now receive at least 2% paid out weekly. Those who bet over $5,000 a week will receive rebates of 4% on all wagers, and those who wager $10,000 a week or more will receive 6%. The exception is that there are certain tracks that we can only pay rebates of 2% on because of contractual restrictions, so we be informing our bigger betting customers that it might be in their best interest to avoid playing those tracks."

"We also convinced the horsemen to pay for half the rebate and they seemed to understood that the rebate money would be bet back in almost every case, so in the end they would wind up with at least close to the same, but probably a whole lot more," said Singhasong.

Ravi continued, "We will also now pay our customers whatever the US tracks pay on all bets, and therefore cease taking a cut out of the horseplayers winnings if they hit a triactor on a California race, for example. It is just bad Karma to rip off the horseplayer, really bad Karma. No more bad Karma."

"One more surprise," Singh Singhasong went on, "we are giving our customers their breakage. It is 2010, we had computers that could figure out exact payoffs to the penny years ago. We don't use chalk boards for the odds anymore, and haven't for some time. There is no reason not to give our customer all their money, not just most of it, they earned it. So that is what we are going to do."

Asked what triggered this seemingly new philosophy, Singhasong said, "Besides having a new visionary guiding us, we looked at our business model, and the lack of growth that has resulted. The fact that we have been losing horseplayers and potential horseplayers to Betfair, online poker, sports betting, and offshore ADWs. We finally decided enough is enough, lets bloody well compete for their business.....we know that at Woodbine, we have a very good racing product, but a terrible betting product, the track takeouts rates we had before today were the laughing stock amongst all knowledgeable gamblers."

"What pushed us overboard, though, was seeing the continued growth and success of Tampa Bay Downs with their gradual takeout reductions, and compared it with the awful, rancid, dreadful decline at Calder Race Course. Then we looked at our numbers, and we have the same handle that Calder has today, almost half of what Tampa Bay does daily. Look at our purse structure compared to Tampa, if not for slots, we'd be running for peanuts. We realized our model is broken, so now we will fix it."

Ravi and the rest of the WEG decision makers must have figured out that during their 2002-2003 meet, Tampa Bay did $2,550,096 per day in handle, and after a couple of takeout reductions, now appears to be averaging over $4,000,000 a day this meet, while Calder did $397,369 in handle per race back in 2003, and only did $235,000 per race in handle in 2009. Calder foolishly increased takeout early in 2008.

Instead of a gradual decrease in takeout like Tampa Bay has done, Woodbine has decided to grab the bull by the horns.

"Gradual Shmadual," said Singh Singhasong, "2010 is THE YEAR OF THE HORSEPLAYER AT WOODBINE, oh and one more thing, APRIL FOOLS' DAY."

What If The Mob Ran Horse Racing?

I'm a huge Sopranos fan. I miss the show. And I wasn't happy with the ending. But that is another story.

What if Tony Soprano was the racing czar? How would racing look today?

He might charge the mooches (horseplayers) a vig (takeout) of 20% or greater.

He might allow his mob friends and his best clientele to have access to gamble at a reduced vig, as long as they keep it a secret.

He might start up a side business where he can negotiate fees track's charge for their signal. Of course he would expect a good cut for his service, at the expense of the mooches and even the good clientele.

He might turn a blind eye to people who might bet once a race starts.

He might expect and demand a cut from bets that aren't made on horse races.

He might take an extra cut from gamblers who cash winning tickets.

He might make it difficult on tracks that don't want to pay what his side business is asking and then exclude them from the mainstream until they wised up.

He might show a loss on race tracks that have close to $10 million in handle a day, and then give the Feds a hard time when they want to look at the books.

He might charge a higher vig to certain people than the track actually charges.

He might give high percentage trainers a slap on the wrist if they get caught with a positive.

He might give trainers a two to five year head start to use performance enhancing drugs that aren't being tested for.

He might make it easy for customers to bet on credit, who would be charged 20% plus if they don't pay back on time.

He might complain publicly that anyone competing against him his acting illegally, even though they are not.

Horseplayers Don't Get Any Breakages; FORT ERIE UPDATE

What Is Breakage?

Breakage is what the track makes due to the rounding down of what a horse should actually pay versus what the track ends up paying to the winners.

Most jurisdictions allow tracks to "break" to the dime (Canada and New York state break to the nickel). In other words, after the track applies their track takeout to the total money bet, they round down what they pay to the bettor to the nearest 20 cent interval per $2 wager. In Canada and New York state, the payoff is rounded down to the nearest 10 cent interval per $2 wager.

Here is an example how it works:

There is a four horse race. $100,999 in the pool. Number 1 has exactly 21,000 bet on him, number 2 has 18,500, number 3 has 23,500 bet on him, while number 4 has 37,999 bet on him. Takeout is 16%, and number 1 wins.

$100,999 times .84 (1.00 minus 16% takeout)=$84,839.16 to be divided to the winning tickets. There are 10,500 winning $2 ticket. This means that each horse should pay $8.07992, but of course, it only pays $8.00 The track just made 839.16 in free money (breakage). In fact, they charged takeout on their own money (the $999 that wasn't going back to the customer if number 1 won the race).

Now lets look at the cumulative effect it had on the players with the winning tickets:

Simply take the 84000 and divide by 100,999 which equals .83169, subtract that total from 1 and the takeout in this case was 16.83% instead of the published 16%.


The higher the cashed ticket, the less significant is the effect on the real track takeout the player is up against. Show bettors will see a much higher real takeout than win player, and much much higher than exotics players.



Here is an extreme case:

Lets say you were betting some hick harness track that has very little money in its pools. You like a longshot, and you decided to take a shot and bet $200 to win. Your bet $200, but no one else bet the horse to show. The total pool is $299. Your horse wins, but it turns out you were the only person who bet the horse.
Track takeout is 20%, so your payoff should be $2.392 (299 times .8), but because the track breaks to the dime, your horse only pays $2.20 to win.
The track makes an extra $19.20 in breakage. And it cut your potential profit by 49%. Interestingly, the effect on track takeout isn't as high as you might think. Instead of 20% it works out to be 26.42% in this case (220 divided by 299). Goes to show how high takeouts cost us lots and lots of money in the long run.


Overall cost to bettors:

When breaking to the dime, breakage has an equal chance of being zero, one cent, two cents...10 cents...14 cents.....18 cents, 19 cents. So adding all the numbers up from zero to 19 and dividing by 20 yields a 9.5 cent average. This means that over enough time, you donated 9 and a half cents for every $2 ticket cashed. If you bet $20 tickets, on average you get back 95 cents less per bet cashed thanks to breakage.

In Canada and New York state, breakage only costs the player 4.5 cents per every $2 bet cashed on average.


I spoke to a former racing exec who told me that he factored in .5% of the total expected handle to come from breakage, when making his yearly budget. This means that Canadian tracks and New York tracks expect to make .25% from the total handle, thanks to breakage. Again, the effect on the player will vary widely depending on whether you play exotics or mainly you are a WPS bettor. The more bets you cash, the more it will cost you. If your average win mutuel at a certain track is around 9 bucks, and the published track takeout is 16% for that track, thanks to breakage, the real takeout is closer to 17%.


One has to ask, that in the computer age we live in, why don't bettors get back what we are supposed to get back from the tracks and ADWs? Anyone who has cashed a 20 cent superfecta at HPI knows that their accounts often have odd pennies in it thanks to a super that, for example, paid $1,546.35 for a buck (for 20 cents you wind up with $309.27 put into your account). So the technology is there to give us what we are entitled, we just don't get what is entitled to us.


Track Thieves makes a great case for eliminating breakage.

See also About Horse Racing's page on breakage.


FORT ERIE UPDATE

H/T Jen's Thorough-Blog

Nordic's Press Release:

Nordic Gaming Corporation / Elad Canada, the owner and operator of the Fort Erie Race Track, has been working with both the Town of Fort Erie and the Province of Ontario, as well as other stakeholders, for the past several years to move forward with a proposal to revitalize the Town of Fort Erie as a major tourist destination and in so doing, generate sufficient population to operate a profitable racetrack.

More recently, Elad has been working with the Town of Fort Erie , in addition to the Province and other stakeholders, to ensure that live racing would continue in Fort Erie for the 2009 racing season. It was within this context that a proposal was made by the local Economic Development and Tourism Corporation (EDTC) to work with the Province to purchase the Fort Erie Race Track.

On Friday, February 20, 2009 the EDTC presented Elad with a very lengthy offer that contained a myriad of conditions that from both an economic and performance perspective were non achievable and unacceptable. In addition, the only condition that Elad had previously placed on an offer, which would have ensured live racing for 2009, was not fully satisfied. While Elad was prepared to continue negotiating with the EDTC to arrive at an agreement on both the shortfall and the conditions that the EDTC attached to the offer that it presented on Friday afternoon, on Monday, February 23, 2009, Elad Canada was informed by email that in fact, the EDTC was withdrawing its offer to purchase the Race Track.

While it is unfortunate that there will be no agreement to purchase between the EDTC and Elad, Elad and Nordic continue to believe in the importance of the Fort Erie Race Track both to the local community and the Province as a whole. In that regard, the Company will continue to work diligently to try and find a commercially viable solution to ensure the Race Track’s long-term survival.

*********************************************
Nordic was only being offered $2.25 million, one million short of what they say they needed to break even. The EDTC offer fell short on Nordic's extortion demands.

Meanwhile, someone is lying (my guess is that it is Nordic):

"EDTC general manager Jim Thibert said his agency did not withdraw its offer to buy the track for $35 million."

The offer obviously came up short as Thibert said the fundamentals of the new offer were the same that were proposed about a month ago:
"except for the value of the offer and who was carrying the mortgage."
***********************************
Basically, Nordic does not want to go into their pockets for one dime, and will not sell Fort Erie for anything close to what it is worth.

Update: Crystal Beach Strand is stating that it is Thibert who is "saving face" aka lying. They report that allegedly the government said no to using the remains (around $1.5 million) of the money that was allocated for the feasibility study of the laughable $300 million expansion project.



And now Nordic seems to be in the driver's seat as Liberal MPP Kim Craitor is hinting that even if the track were to close, the slots may wind up staying open.

This is a coup for Nordic, as they can reap the estimated $4 million in profits from the slots and not have to operate their losing side of the business (horse racing).
Nordic will have security guard expenses, still have to pay property taxes, but all in all, will be profitable.

It seems that the only solution right now to save Fort Erie for 2009 is that the OLG gets pressured to give Nordic a bigger cut from the slot revenues.
Hopefully, Smitherman, McGuinty, Tory, Hudak, and Craitor can get together and make this happen.