Betfair Buys TVG; Canadian Implications

First things first, I didn't do any reporting on the Eclipse Awards, there are plenty of thoughts by my American counterparts within The Thoroughbred Bloggers Alliance who are more into that stuff than me. Those who read this blog know I'm more into pointing out the cynical side of horse racing, while give suggestions, and predicting which way the industry is going.

I wanted to get more detail regarding the Betfair purchase of TVG which I reported as a strong imminent rumour in my January 23rd post. To date, I can only go with what a rep told me he thinks will happen, which coincides with what I think as well. Canadians will soon be able to make wagers on American tracks through TVG at the Betfair site.

Again, betting offshore from Canada is not illegal. If it was, there would be arrests made. Simple, either something is legal or it isn't. From my understanding, unless Betfair had a server in Canada while having no license to operate here, then Betfair would be doing something illegal.

In the USA, arrests have been made against principles who own offshore houses. Laws were passed making it difficult for Americans to transfer funds to and from offshore betting shops. Betfair isn't stupid. They deem the laws in the US powerful enough that they don't take American bettors.

I've written about the legalities of betting in Canada before. Read it.

Ok, so now about the acquisition. TVG with all their content will soon be available to Betfair players. This will be a huge boon for tracks on the TVG menu. What will happen happened in Australia when Betfair went into expansion mode. Betfair customers will mostly play low commission exchange bets, but will take advantage of betting directly at the track if they see better odds there. Also, players may be torn between a couple of horses, and then bet a few exactors or triactors, directly into the America pools.

I also expect TVG to start rebating more and more, because Betfair understand how to get customers to play. Finally, I expect this change to finally change the betting landscape in North America. Exchange betting with low costs to players will become accepted in most US states.



Sure, the best thing is for the dysfunctional North American racing industry to start their own exchange. But track jurisdictions can't even agree with each other on what drugs should be legal. Because they are so dysfunctional and so behind the times in their mentality, horsemen and tracks will get somewhat punished, as Betfair will get some of the profits that horsemen and tracks could have got if they had an ounce of foresight.

The game will finally grow, and more and more households will have betting accounts and be up to speed on North American racing. Which is fantastic.

Who will suffer the most? Woodbine will. And they deserve it. With slots, they've kept takeouts to the moon, giving customers no hope to make money in the long run. From what I understand 1 in one thousand HPI accounts show a profit in any 365 day span. How can you beat a triactor takeout of 28.3%? And betting has gone down, despite populations and availability going up. Woodbine has tried to bully a monopoly status by signing collusive deals with US ADWs trying to prevent Canadians from betting through them.

The tide has turned, and Woodbine is caught with its pants down, if Canadian Betfair customers can bet through TVG. And I see no reason at this time why that won't happen.

TVG doesn't have Woodbine in their menu, and is likely to never have it now. But who cares? There are enough tracks on the TVG menu to keep the Canadian gambler very busy, and lasting much much longer, while giving him or her a chance to make money.

Business of Horse Racing has reprinted an article that was written in 2004. The Woodbine brass along with racing execs everywhere must have closed their eyes to it:
Racing's Response To Betting Exchanges.

At the end of the day I think there are six possible responses to the challenges posed by betting exchanges.

1. Racing might do nothing.

2. Racing could form a committee.

3. Racing could rely on the “competition is illegal” response and pin its hopes on the Wire Act.

4. Racing could take Jack Ketterer’s advice and try to find ways of lowering the consumer price of its product.

5. Racing could change its business model by adding new lines of business that are unrelated to horse-racing–VLTs, for example.

6. Or racing could enter the market with a competing betting exchange–or with some as-yet unthought-of method of supplying competitively priced wagering on U.S. races to the emerging global horse-race betting market.

Pull The Pocket has lots of thoughts on the acquisition of TVG. Check it out.


Speaking of a dysfunctional game. Tracknet has indeed cut off signals to Las Vegas.



The ORC wants comments on proposed changes.



Harness racing betting Ontario may be close to bottoming out. Harness racing really needs to use exchange betting to avoid extinction.


South Carolina courts will be making a monumental decision next month regarding the legality of Hold em Poker.
"Is poker a game of chance or one that involves skill and therefore legal under the law?" Simple answer is that it is a game of chance that involves skill to be successful. But more to the point, a skillful player will win more or lose less over any significant period of time than a less skillful player. Luck will even out.



Interesting. Virtual horse racing creates a real millionaire.

The millionaire's stats:PillButt 74588 races 12078 wins 35545 seconds and thirds $1013306.05 (real money earned)

74588 races over four years? That is over 53 races a day. But at a quarter million a year in income, I guess it as good a job as any. Mind you, I don't know how much it has cost PillButt to play either.



And don't forget to go to the HANA blog as the countdown to the number one bettor friendly race track continues. Today's feature is Del Mar, which comes in at number 14.

Exchange Ideas

The biggest problem facing horse racing growth today is the fact that they fail to compete to gain new customers while also failing to compete to keep old customers.
The racetrack isn't the place to be anymore for the gambler and internet has made the world a lot smaller.

Gambling is growing worldwide, but gambling on horse racing has been on the decline, not just due to the global recession, but prior to that, betting on horse racing has dropped in real dollars, despite the fact that one can gamble from anywhere anytime today.

I expect 2009 to be way worse than 2008 when it comes to parimutuel horse racing. The economy is in the pits, more and more players are being turned off horse racing as it is perceived as strictly a losing proposition by the masses (at least those who don't bet at rebate shops), and credit card deposits are going to become scrutinized by card companies, while more and more addicted gamblers have no more room to deposit to an ADW. The other factor is that horsemen groups are demanding more of a cut, reducing the amount players receive from rebaters. More price sensitive players, who account for a large percentage of the handle, may just either cut back or continue to leave.

Horse racing is in dire need of a major pricing change. It needs to show the masses that the game is beatable in order to attract new young blood to play.

I've often said that horse racing needs a poster boy in North America, a big winner who bets horses and consistently wins.

Poker has quite a few, and new heroes are made every now and then as well. Like Poorya Nazari, a Canadian who recently won $3 million by becoming the PokerStars Caribbean Adventure Champion. How many gamblers reading this right now can't help but think "this could be me?" Anyone thinking of gambling will be attracted to poker and not give horse racing an afterthought.
And poker is easy on newbies as well, because the game has a relatively low rake (or takeout). The cost to become a poker addict isn't all that great. And the low rake gives the player much more time for the bankroll to last, than does horse racing.

Poker is a lot easier to grasp as well. Not nearly the high amount of nuances are needed to become good at poker. Horse racing takes a lot of work in order to become good at it. And even if you are good at, it is highly unlikely you will win. You'll might only lose 5-10 cents on every dollar bet, instead of the average 20 cents. Why would anyone new be attracted to bet horses under current conditions?


Horse racing does have poster boys though...say what?
Thanks to Pull The Pocket for discovering the fact that there are at least a couple of players doing more for horse racing than every marketing department in North America put together can. The problem for North American horse racing is that these players are exchange bettors.

First Poster Boy: Adam Heathcote. A 23 year old from across the pond in London, England. He has a goal to make 150,000 pounds (around $300,000 Canadian) in 2009 betting through Betfair. He has only been playing for around a year and a half. He has a blog (Horse Racing Trader) that he updates regularly regarding his quest. As of January 14th, he was up over 8,000 pounds on the year, which is slightly higher than needed to achieve his goal.

Then there is Betdaq and Betfair Racing Trader This anonymous player had a goal to make 100,000 pounds, while starting with 1,000 pounds in 2008. By mid December, the gambler went over the revised goal of 120,000 pounds.

Sure, we have the odd blog touts in North America, who give out their selections and bets almost daily, but what is sorely missing are anything that resembles goals with actual dollar amounts. Why? Because nobody wants to make a complete fool out of himself or herself. Every bettor knows that thanks to 20%+ takeouts, a goal of breaking even would be a difficult enough feat.

I just wonder how many new players have been inspired by the two exchange bloggers cited above. I'd say many.

Exchange betting doesn't mean people will win, even if they become good, but the possibility is really there, and that is what is important. Lets face it, most exchange bettors will lose. Betfair keeps around 3.5% of what is bet on average, and Betfair cannot lose, much like a track cannot lose taking a bet (except for the odd minus pool which I don't think happens at Betfair). Still, because of low commission and churn, players get a huge bang for their buck and are highly likely to continue to play, and tell others about it.

North America needs to do two things. Reduce the takeout to 10-12% everywhere. And secondly, it needs to set up their own exchange, where the tracks that get action get the bulk of the 3.5-5% commission lost by players.

See also, Interesting Winning Bettors-At Racing!



The North American Horse Racing Industry Can Blame Itself for It's Demise...
Good article, read it. Especially something us Toronto born horseplayers can really relate to.
Horse racing is a gambling product not an entertainment one. Racing execs either want to pretend this isn't the case or still "think" they can dupe the public into believing it isn't the case.

Here is an excerpt that is further proof that Woodbine Entertainment could do itself a favour by cleaning house:

In 1996 when Woodbine was to host the Breeder's Cup, the union that represented the ticket takers went on strike. David Willmot, the President of Woodbine Entertainment, considered withdrawing his bid to host the Cup. Upon hearing this I contacted Mr. Willmot and told him that if he did so he would pass up a golden opportunity to win a new generation of fans, and once again reclaim the families that would witness the great racing of the championship day. He in turn invited me to the offices at Woodbine to discuss the issue, telling me that he is indeed interested in the fans that became disenfranchised and that my demographic was exactly what they were trying to win over (20-30 something families with young children). We discussed numerous concerns, from lack of things for families to do, small field sizes, high takeouts, disassociation of the horsemen from the fans, lack of perks for larger horse bettors and many other issues. I mentioned about 20 issues, and he agreed with every single comment I made. In fact he told me of his grand plan to make Woodbine into the ultimate Entertainment complex. He envisioned family areas, slots for the single women who didn't want to attend the races, new betting options, perks for the regular attendees, lower takeouts for those who bet more and a better form of entertainment for all who come to the track. While off-track betting and racing on TV were starting to grow, Willmot agreed that the only way to get the next generation and those afterwards interested in horse racing again was to woo them back to the track. Only seeing the product live would win over those who aren't familiar with it. He listened to my arguments and comments, agreed with all of them, and implemented none. Yes, slots were added to the track, but those were already in the works prior to the meeting. Parking and admission prices, were dropped, but that was only because they couldn't charge people to play the slots. New betting options were added, but only ones that weren't winnable. I was talking about ideas such as horse matchups, and Woodbine instead opted for pick 7s and superfectas. As far as a place for women and children to enjoy themselves, Woodbine offers little; and on my travels to other tracks throughout the U.S., I noticed there was nothing for families there either. Plus, for the loyal race goer there are still no perks for them. In fact the only perks offered are for those who bet at teletheaters or by phone. Betting at the track gains the bettor nothing.

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Things have changed further since 1996, making the idea of attracting newbies by getting them to the track even more difficult. It is so easy to gamble on more competitive forms of gambling from home, lotteries have been growing in popularity, and slots has made the idea of family outings a near impossibility, as one of the parents is likely to be attracted to the slots, thus breaking up the family experience that was once found in the 60's and 70's.


New Horse Racing Time Waster from Addicting Games
A new easy to play horse racing game has appeared at addictinggames.com; Racehorse Tycoon. I like the part where you get to choose the horse's diet. Your choices include beers, cakes, burgers, or cheese:) I usually choose beer since vodka injections aren't on the list.
And the best part of the game is that you can play and after an hour or two, you haven't lost a dime.