Who Contributes More To Horse Racing? The Horseplayer Or The Owner?

It is maddening when I read a comment by horse owners that reads something like this: "we invest a lot more than Horseplayers!" or "we should have the biggest say because we put on the show!" Both of these statements are untrue, and here is why:

Tackling the second statement. No, the track puts on the show, and the show is gambling. The proceeds from gambling losses by customers make the race track and the purses it gives out tick.

WHO CONTRIBUTES MORE MONEY?
It is estimated that thoroughbred horse owners collectively lose 40% of what they put in ( for some jurisdictions that have slots, this amount may be lower, while owners in jurisdictions that don't have subsidized purse money added to purses may lose more).

In 2009 $1.1 Billion was distributed in purse money. After owners give 10% to trainers and pay the jockeys their share, that leaves around $900 million that goes to the owners. 40% of that is $360 million . Sounds like a lot, but it is pale in comparison to what Horseplayers lose. EDITORS UPDATE: Turns out that the number lost by owners could be closer to $1 billion, but if you take into account that Horseplayers lose after tax dollars, and much of the lost money for horse owners is pre tax dollars, the amount that Horseplayers lose in real money is much greater than what is lost by owners collectively.

$12 Billion was bet (I'll stop short at calling this money invested, though horse owners like to use that term for the money they gamble on owning horses). The blended takeout rate is around 21%, but because of rebates the blended rate is probably closer to 18% these days. This means that over $2.1 Billion is lost each year by Horseplayers.

And if you include the lost money by gamblers at games like slots or Instant Racing, monies that are used to subsidize purses, gamblers/Horseplayers lose a lot more than $2.1 Billion each year.

I'm not even going to add the costs of Forms, data, transportation, admissions, and concessions (much of which owners can deduct, but the 99% of Horseplayers who lose money cannot).

Now, if we dissect the $360 million lost by owners further, almost all of it is lost within the industry, and a good amount of it goes to horse owners who have a horse racing related business on the side (like farms that break horses, etc.), or even a full time business (like a vet who owns horses). Some of it in the form of day pay goes to trainers, which helps subsidize the horses they own or co-own.

Another thing is that in many cases, horse owners only risk a small percentage of their whole net worth, while in many instances, Horseplayers are risking their entire net worth...in some cases, the Horseplayer doesn't have a positive net worth.

So who exactly is more important to the racing industry? Those who lose less than $360 million $1 billion a year (mostly pre-tax), or those who lose more than $2.1 Billion after tax dollars?

Why does horse racing cater to owners and not Horseplayers? That is the bigger question. California is now a disaster thanks to putting the horse owner first. And why again do horse owners have such a major input in the price the track charges the customer?


UPDATE! QUOTE OF THE DECADE SO FAR:

"If there isn't any gambling, owners lose a lot more. If there isn't any gambling, gamblers lose a lot less."

-CJ (PaceFigures.com)


GULFSTREAM PARK: P.T. BARNUM AND HARRY HOUDINI WOULD BE PROUD OF THEIR MARKETING

When reading all the fluff having to do with Gulfstream Park's 2011 opening, one would really get the impression they have lowered their takeout rates. This is from their website:

Gulfstream Announces 2011 Wagering Menu

12/16/2010

Record Low Takeouts, New Wagers To Welcome Fans

HALLANDALE BEACH – Gulfstream Park Racing & Casino announced today a wagering menu for its 2011 thoroughbred meet beginning Jan. 5 that includes:
• A 50 cent Pick-5 with a record low 15 percent takeout.
• Low takeout rates on Bet-3 and 50 cent Pick-4 wagers of only 20 percent.
• An early and late 50 cent Pick-4.
• A 10 cent Pick-6.
• Rolling Daily Doubles, Superfecta’s and Bet-3’s.
Win, Place, Show, Daily Double, Exacta and Trifecta wagers will be a $1 minimum wager.

There was a link in the rest of the article which gives takeout info on Gulfstream. I clicked it.

The first thing that struck me was seeing 26% on trifectas and superfectas. I could have sworn they were 25% last year.

It turns out I was wrong. They snuck in an unpublicized takeout hike of 1% on tris at the beginning of last year. This year, they have snuck in a 1% increase in superfecta takeout.

So what about "record low takeouts" that are being advertised on their site and being bought by the racing media?

The new pick 5 doesn't count as a takeout drop because it is a brand new bet. And it isn't a record low at 15%, it ties the record set by Monmouth Park.

The Bet 3 and Pick 4 rates of 20% are the same rates they had in 2010.

I don't see record low takeoutS, I see one tied record low and that is it.

However if you look at the new Pick 6 which now resembles the Beulah Fortune 6, the nature of the bet has changed, and the takeout has gone up 33%, from 15% last year to 20% this year.

Depending on how successful the Pick 5 bet is, it will be a coin toss as to whether their actual blended rate goes up slightly or down slightly or remains around the same.

Yes, the Pick 6 has a shot of bringing in the lottery/slots crowd if the jackpot grows once or twice during the meeting, but to promote Gulfstream Park as a track that has lowered its takeout is just plain deceptive and wrong.



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California Horse Racing: It Is Only Going To Get Worse

Did any brainiac ever think that the reason California A tracks have such great handle is because they have one of the lowest takeouts in North America? I don't think anyone who voted for the takeout hike that begins January 1 gave it any consideration.

The winter meet began at Santa Anita on Sunday. Optimism was all over the place. I listened to a segment on the Steve Byk radio show and you would think that the move back to the dirt was more significant than if man were to land on Mars. BTW, don't waste your time listening to Byk, I find him to be a nauseating anti-horseplayer cheerleader for tracks and horsemen groups. Roger Stein, on the other hand is well worth listening to each week. He gets it. Byk doesn't.

With all this anticipation and exuberance, handle must have gone through the roof on Sunday. It didn't, far from it. All source handle was off over 21% from the previous year. Granted there were weather issues on the East Coast, and they did have an extra race the year before. However, in 2009, Santa Anita signal wasn't being picked up by the Mid Atlantic Co-Op. That cost Santa Anita anywhere between 5-10% in handle last year. Handle was back to 1992 levels, and that doesn't even take into account inflation.

Things were a little better yesterday. Handle was only off 2%. But they ran an extra race yesterday compared to the corresponding first Monday of the meet last year.

So who exactly was demanding a move back to the dirt? The horsemen and a few existing Horseplayers.

Existing Horseplayers will look for all sorts of excuses as to why they lose money. 99% of them lose. Artificial surfaces in California was just one more scapegoat for some existing Horseplayers. Bottom line, the movement back to dirt didn't create any new Horseplayers. At best it could shift betting money from one track back to California.

Excuses from Horseplayers stem from them losing money or not winning enough on the day. Sure, they are valid, but in the end, the overwhelming majority of Horseplayers will lose. What matters is how long they last. The longer they last, the more likely they are to expose others to the game, the quicker they lose, the more excuses they will make, the more negative they will be, and the less likely they are to expose others to the game.

Sidetracking a bit. My father was a $2 bettor his whole life. Almost never missed a day betting. He used to make $500 to a couple of thousand almost every year. But I remember him going bad for about 3 years (breaking even or losing a bit on the year). He started blaming the cat. "Since I got this cat, I can't win anymore. The cat is a jinx. She is looking at me right now with her evil eyes." Cats or polytrack. If a Horseplayer starts to lose faster, they look for excuses.

Back to California. The timing was bad for this switch as it comes just a few days before takeout is hiked on all exotic bets in California. This has caused talk of a Player's Boycott.

Horseplayers who 1) Understand that takeout is the barrier between winning and losing and/or 2) Care about the future of horse racing, have already stopped playing California tracks. Many more are expected to stop or slow down once the boycott is officially called.

Even without a boycott, handle is going to go down the tubes in California. There is going to be less value on most combinations once takeout rates go up 9-14%. Price sensitive players who still believe they can make money will bet less, and in the meantime, the dummy money will lose quicker and some of it will disappear creating less value.

In the end. No Horseplayer will have a chance at beating California in the long run (not that very many are today).

Let me explain why this is a 9-14% increase in takeout and not a 2-3% hike that those not in the know are preaching:

Takeout is increasing on exactors and doubles from 20.68% to 22.68%. So if $100,000 is bet in a double pool, the track is now takeout $22,680 instead of $20,680 which represents an increase to the track of 9.7%.

Now lets look at it from the bettor's long term perspective. If the bettor makes $100,000 in double bets over a period of time, the bettor has to overcome $22,680 being taken out as opposed to $20,680. That means they are expected to lose collectively close to 10% more than they lost previously. That is if handle remains the same. It won't because that extra 10% lost will do a lot of wear and tear on the existing Horseplayer's bankroll.

It is is greater on other exotics which shoot up from 20.68% to 23.68%.

If you still don't get it. Lets say you have a $100,000 line of credit and you are paying interest only. If interest rates go up from 3% to 4%, you are not paying an extra 1% per year, but an extra 33%, as your yearly payments just rose from $3,000 to $4,000.

Personally, since Los Alamitos rose takeout early last year, I bet one card there. I felt very dirty afterward even though I broke around even. I won't do it again. And I'm not about to feel dirty by betting on any California thoroughbred track until California does the right thing and the takeout is at least rescinded.

I'm not alone here. There are a lot of pissed off players who are passionate about the game willing to treat California racing as "entertainment only."

I don't bet on Family Guy, Dexter, Two and a Half Men, and now California racing. I only watch them for entertainment purposes only. I have to tell you though, California racing gives me the least entertainment value of these four "shows" by a very good margin.

I'll watch Tampa Bay, Hawthorne, etc. for gambling purposes. Oh, and I bet as much as I did when I was playing California. It just goes to other tracks.

Oh, and blaming the weather on Sunday?

Turf Paradise a year ago last Sunday: $1,212,049
Last Sunday: $1,552,112

Hawthorne a year ago last Sunday: $2,297,748 (10 races)
Last Sunday: $2,311,654 (9 races)

Both tracks started just a half hour earlier than Santa Anita.

Even Golden Gate was up a little. Apparently, HANA forgot to tell its members that Golden Gate is in California:) Actually, the Boycott still hasn't been called yet, and the takeout hike doesn't happen until January 1st. All I can say is look out below.

I'm sure the handle numbers from the first day are helping those horsemen on the fence who were thinking about sending a few horses to California, make up their mind.

Field size looks like it will remain on the weak side in California, and there just won't be any value in the majority of races thanks to the hike.


VOTE HERE FOR THE THOROUGHBRED BLOGGER'S ALLIANCE PHOTO CONTEST


Canadian Horseplayers Advocacy Group founder Eric Poteck now has a regular article up at Down The Stretch Newspaper Online. In the current issue he tackles the integrity issue of promoting fictitious payoff prices. For example, when there is only $35,000 available in a superfecta pool at Woodbine, and someone has the pool for 20 cents. The price promoted is $175,000 (which is the dollar price). It is blatant false advertising.

In a related topic. Does anyone proof read the HPI Quarterly?

Though the WEG Pick 4 has a 21.7 per cent takeout, Martin (Jamie) said the track now honours lower takeout rates for other tracks’ Pick 4 wagers, some as low as 15 per cent.

“So, we’ve made it attractive for people not only to play our own, but to play all the other ones,” Martin said.

“I think it’s a good bet,” Hamilton said. “It’s better than the high-percentage takeout we have with superfectas (23 per cent),...”
*********************************************
Note to editor: Takeout on superfectas at Woodbine is 26.3% and it is 25% on Pick 4's. The 2% that is tacked on for the Horsemen, and the 1.3% to the government on each wager is still part of the takeout.

Note to Dave Briggs: For future articles involving takeout, please refer to this chart.

Note to Jamie Martin: How about honouring all lower takeout rates, including triactors and superfectas as well? Woodbine has no right to partner themselves with winning bets made by their customers.


In 1968, horse racing in Toronto was in its glory days. People were in the stands, and they came back for more because takeout was lower and you could only bet WPS on most races. Bankrolls lasted. There were even some known winners. The public was addicted. Great stories from that time. Here is one. Just remember, this story is not supposed to endorse the concept of hidden ownership. It was hip in the 60's. It can be costly today.

Fort Erie By The Numbers So Far

It is way too early to figure out if Fort Erie is going in the right direction, but it seems, so far, they are going in the same direction despite a publicized new attitude and new management.

On the bright side, total handle is up 3% from $2,543,865 to $2,627,135 according to Equibase numbers. They have had one extra race this year as opposed to last year (why they added the race on a Sunday, their worst handle day and not Monday or Tuesday, is a complete mystery to me), so per race handle is only up 0.7% ($64,076 vs. $63,596 last year). There is a trend right now as bigger rebated horseplayers are starting to shift some of their action from high distribution fee tracks (like Tracknet tracks) to tracks that sell their signal for a more reasonable rate, and Fort Erie is in a position to at least hold their own thanks to that.

Live handle is pretty lousy right now (down 12.6%). Only $284,390 has been bet live this year versus $325,520 last year at this time, despite the one extra race this year. To be fair, live handle is down just about everywhere, but in Fort Erie's case, live bettors are extremely important, and they have a huge impact on sustaining current race days and purses, as horsemen get a much bigger cut on horseplayers who bet live (whether it is Fort Erie or another track on the simulcast menu).

Field size has been a problem at most tracks this year as well. Keeneland dropped to under 8 horses a race this spring compared to over 9 the year before. Fort Erie's field size average is down from 7.87 horses a race last year at this time to 7.48 horses a race. Horseplayers generally bet more, the bigger the field size. They got hurt a bit on Tuesday, as 3 horses were vet scratched in the last race, reducing the field size to 5. Their last two races on weekdays, are their money makers, as they run up against the least competition at that time.

It wasn't a great move to move post times to 1:30, instead of 1:45 last year (if anything, it should be 2 PM post times on weekdays), especially if they are only running 8 races on Monday and Tuesday. They need every edge they can get. That is why they should run the first race on Saturday at around 12:20 so as to get the horseplayers first betting dollars from across North America.

Field size and handle numbers tend to increase considerably as the year goes on. Last year, field size average at Fort Erie wound up at 8.22 a race, while they averaged $85,439 in handle per race.

Lets Compare Fort Erie To Finger Lakes, Shall We?

There were three dates that apples to apples comparisons to Fort Erie can be made this year (Kentucky Derby Day and the past Mondays and Tuesdays). Unfortunately, Finger Lakes doesn't readily publish live handle so I can only compare total handle.

In the three comparison days, total handle at Finger Lakes was $3,887,701 this year compared to $3,488,672 last year (an increase of 11.1%). $143,989 has been bet per race compared to $129,210 for the corresponding days from last year. Finger Lakes appears to be benefiting as well from the shift in wagering being done by rebate players.

Field size has rose from 7.22 horses per race to 7.51 horses per race. For those three days, Fort Erie's field size dropped from 8.16 to 7.46 (still around Finger Lakes new number).

Last year, Finger Lakes averaged $113,308 a race in handle for the year with a 7.79 field size.

When comparing the per race handle, one has to ask what Finger Lakes does differently than Fort Erie.

As a handicapper who uses speed figures, if anything, Fort Erie has the same or even slightly higher quality on average than Finger Lakes does.

Finger Lakes runs a lot of State Bred races, including State Bred claiming races. These races do attract horses with lower speed figures most of the time. However, as a horseplayer, I find these races to be really good races to handicap, and I tend to bet more on them, especially if the field size is 7 or greater. Usually there are a couple of standouts, but there are usually fringe longshots, who lose by double digits in open races but have a chance against the lesser competition.

The median average purse at Fort Erie was $10,422 versus $9,500 at Finger Lakes, but average purses given out per day at Finger Lakes was $122,564 versus $105,103 at the Fort. Finger Lakes runs an extra race per day than Fort Erie, and it has more allowance and Stake races, though I have never seen any evidence that B Allowance and B Stake races attract any more handle than claiming races with good field size.

Finger Lakes is probably simulcast at more places than Fort Erie, including all the NY OTBs. This gives Finger Lakes a big edge if true.

Finger Lakes is not surrounded by gambling competition like Fort Erie is, but since I don't know the live handle figures, it is difficult to analyze the impact.

I find Fort Erie races in general to be more exciting, and less predictable most of the time. This can be a good thing, but also can be a bad thing when you start talking takeout.

Comparing track takeouts

Fort Erie WPS 16.95%, Triactors 28.2%, All other bets 26.2% (including exactors and doubles.....yes, including exactors and doubles.

Finger Lakes WPS 18%, Exactors and Doubles 20%, All other bets 25%.

Finger Lakes wins this comparison hands down. You can't take 26.2% on exactors and doubles especially, and expect people to come back so quickly, if at all.

In the old days (1960's and 70's) when there was no simulcasts, hardly any exotics, a live horseplayer could only play around 8 races, and mostly had to play WPS (at takeouts of less than 16% back then, I believe). Plenty left the building with money on them to go the next day. This kept the crowds in the game. There were even some winners around, and there was a buzz that the game could actually be beat.

What Fort Erie does, with their high takeouts is make it impossible to get gamblers enthused or motivated to come back the next day. It is almost like they've given up. They also underpay customers on simulcast wagers. This is not good, and it gives punters even less of a reason to come to the track.

They still assume that the focus is on a mindless crowd, and the key is to just bring them to the track. Great. Get them to the track, but you have to try to let them leave with something too, so that they might just come back.

Horseplayers are not typical gamblers. Horse racing attracts thinking gamblers. And when it becomes over apparent that one has no chance gambling, they move on to other types of gambling that have much lower vig.

Back to the comparison. Finger Lakes does not race on Sundays. Sundays are horrible handle days for Fort Erie, but they need to run at least one weekend day so as to allow the 9-5ers and their families a chance to make it to the track, including of course small owners. However, with the high takeout, and the hit and run mentality that is prevalent at most tracks these days, getting newbies or casual players to become more than that is futile. Might as well scrap Sundays for Wednesdays.

I really want Fort Erie to survive, but they have to do things differently in order to attract their bread and butter: THE HORSEPLAYER.

I don't see too many of the suggestions I wrote about in Fort Erie, The Future Is Now, being implemented as yet.


Rick Cowan Hired To Supervise and Manage Fort Erie
The biggest piece of the management puzzle has been filled at Fort Erie. Rick Cowan, who brings a vast amount of experience with him, will now be running the joint.

He ran Woodbine back in the early 80's, at a time when they didn't have slots, and were experiencing enhanced competition from the Blue Jays, lotteries, and finally charity casinos. The crowds were ample during Cowan's reign.

I think a really good choice was made.

Just a couple of things though. Fort Erie needs anyone who wants to bet to bet, including employees, and ties are not condoned by most Fort Erie residents:)


HANDICAPPING FORT ERIE

A certain racetrack analyst at Fort Erie likes to stress a certain angle: Give horses a race before you bet them at Fort Erie if they are coming from Woodbine. It just didn't seem right to me, so I had Pull The Pocket get me some data using Jcapper software.

Here are the key finds:

When a horse ships in from another track to Fort Erie, and they have the top rated speed figs, they win at a 25% clip. The win rate is good, but the return is horrible, as these horses are vastly over bet and return 55 cents for every dollar wagered.

If you bet all shippers making their first start at the Fort, you would lose over 26 cents on every dollar bet with a 14.5% win percentage. This is a strong loss considering takeout should only cause a 17 cent loss on the dollar.

If the shipper came from Woodbine, the first race at Fort Erie produces a 15% win rate, and if you bet them all, you would lose over 28 cents for every dollar wagered.

There is a slight increase when a horse makes its second start at Fort Erie. Win percentage goes up to 14.8%, while the return on investment (ROI) goes up to 75.6%. Still, losing 24 cents on the dollar is no way to beat the game.

What this tells me is that value is to be had by ignoring Woodbine horses who wound up becoming Fort Erie horses. First start, second start, hardly a difference.

They do OK on their fifth start (you only lose 10 cents for every dollar wagered), and you can actually show a profit if you bet them on their 11th start at the track after they shipped (a profit of 4%).

The Future Is Now At Fort Erie

"We all are aware that if we do the same as last year, we'll fail," Jim Thibert, CEO of The Fort Erie Live Racing Consortium said last week in a press conference.

Actually he could have picked out any year since Fort Erie Race Track first opened the doors in 1895.

Fort Erie season begins on May 1st, and already, they are getting in the batter's box behind in the count as horse racing handle is off over 10% this year in North America.

Handle at Woodbine is off over 15% so far this year, and Santa Anita just announced their handle was down 11% during their latest meet.

Field size might have something to do with it. Also, tracks with higher signal distribution fees like Woodbine and Santa Anita, and Tracknet tracks, have been getting whacked a bit more because price sensitive players have been shifting their action to where they can get the best net takeout after rebate. If the latter is true, that could be a plus for Fort Erie.

I was looking back at my notes pertaining to improving the betting handle at Fort Erie. When I first moved to Fort Erie back in 2001, I co owned quite a few horses. I had major interest in keeping the then high purses high, and approached Eddie Lynn, Nordic's GM at that time, with a list of close to 25 things they could do to attract more bettors.

The lack of interest I received was mind numbing, but then again, it was hard to blame him. Nordic was rolling in profits from the casino back then, and horse racing was and still is to them, a necessary evil.

I even mentioned competition from Buffalo which will most likely cause slots profits to go down, to which Lynn laughed, saying something like Buffalo can't do anything right, that they are inept across the border.

I saw I was getting nowhere, so after around 8 items on the list, I shook his hand and left his office.

Fast forward to today, and the days of giving away $175,000 a day in purses and running 120 plus days a year are long gone.

Of the items on my list, only one was realized. Last year, Fort Erie changed post times to 1:45, though that isn't exactly what I would have suggested.

So here is a revised list of what I believe Fort Erie needs to do to not only survive but to prosper for many years to come:

1. LOWER THE TRACK TAKEOUT: Fort Erie cannot realistically expect to survive unless they lower their takeout rates. Fort Erie ranks 67th out of 69 tracks when it comes to takeout rate. Did you know that 10 of the 14 tracks that have the lowest takeout rates, do not have alternative forms of gambling? Tracks with slots should have the lowest takeout rates in order to compete with the slots side.

If Joe Gambler loses $200 at slots (meaning he bet over $2000 on average), the track gets $20, and the horsemen get $20. If the same gambler loses $200 at the track on average (meaning he bet around $1000 on average), the track gets over $90, as does the horsemen.

Here are the rates Fort Erie should use (and I'm being reasonable and conservative): WPS 16.5%, DD EX 20.5% (just like Woodbine), Triactors, supers, pick 4's 24-25% tops. And it wouldn't hurt to drop the Pick 3 to around 16%. This bet generally doesn't attract large pools at Fort Erie anyway, and at this rate, it will attract many players from across Canada and the USA to play it, and once someone handicaps a Pick 3, making picks leads to the temptation to bet win or other exotics. Oh, and start the Pick 3 in the first race, not the second. I can see Woodbine throwing a hissy fit if the Pick 3's takeout was lowered to 16% though, but this isn't about Woodbine, it is about saving Fort Erie.

Lowering the takeout will attract price sensitive players from other jurisdictions, and will only increase Fort Erie's bottom line, as the bulk of their money comes from off track wagers where profits aren't related to takeout but only volume.

On track though, could be temporarily affected, however, studies and empirical evidence has shown that by lowering takeout, horseplayers last longer, and eventually will churn back the extra money won. The more they go home with, the more likely they are to return quicker, and the more likely they are to become regulars. This does not happen overnight, but it is something almost every track in North America has refused to experiment with. In today's environment it is a must, especially for a track like Fort Erie which is hanging on by a nose hair. It is the best way by far to create future regulars.

In Fort Erie's case, you can't continue to have a track takeout of 26.2% on doubles and exactors, and actually publicly state you are trying to improve the bottom line.


2. Introduce the Fort Erie Five, a jackpot bet that is identical to the Beulah Fortune Pick 6. The takeout rate isn't that important, so 25% would be OK. It has to be a $1 minimum in order to attract US bettors, who can't bet fractional amounts from US tracks or ADWs on Canadian tracks. Give out 50% of the new money (after takeout) bet each day to those who have the most winners in the Pick 5, and have the other 50% go towards a jackpot that is only won if a lone winning ticket picks all five winners.

This may only build up significantly once a year, but as it does, handle will go through the roof for the days leading up to the jackpot being hit.

Most importantly is when this pool gets up over $100,000, it will start attracting lottery and slots players to make their way to the racetrack and hang out on the horsey smelling side of the grandstand for at least a little while.

If Fort Erie wants to get aggressive, they can seed it or guarantee a $5,000 payoff, which probably will wind up costing them next to nothing if anything.


3. Re-introduce the Breakfast Club. I used to really enjoy it when I was a kid spending my summer holidays at the Fort. Canadian bacon on a bun for a buck, while watching horses workout in the morning. It might mean Daryl Wells Jr. having to wake up early on a Sunday morning, but sacrifices need to be made.

Eddie Lynn told me that they stopped it, because they were attracting too many "mooches" looking for a cheap breakfast. Again, times have changed, and the main purpose of this would be to try to entice some of the slot players to come out for some fresh air, and they might find a jockey or trainer being interviewed to be somewhat educational and maybe even fascinating.

Luring them out with a free quick pick on today's Pick 4 or a voucher to buy an early daily double might work wonders.

Again, tracks make more from gamblers who bet on the horses over slots dollar for dollar.


4. Change post time on Sundays to 12:15 or 12:30. Sunday handles suck. Fort Erie should compete for the first dollars bet across North America on that day. It might get more people handicapping Fort Erie. Starting at 1:45 or even 1:00 puts them in competition with too many A tracks, and Woodbine too. Plus if Fort Erie does the Breakfast Club at 9-10PM, it makes it easier for the slot player to use their double voucher. Never race more than 8 races on a Sunday. Run extra races on Monday or Tuesday always.


5. Pay more purse money the larger the field size. Field size is one of the biggest handle drivers there is. Fort Erie averaged 8.24 horses per race last year, which ranks them 33 out of 69 tracks.
In order to maximize field size and handle, I strongly believe that 6 horse fields for the same class should not run for the same purse that a 12 horse field runs for.
Horsemen won't like this idea, because their ideal field size is 1, but since we are talking about keeping their plant open, they might bend.

Fort Erie has a budget to give out around $100,000, which gives them an average purse of around $12,000. Obviously, $4,000 claimer should run for lower than $14,000 claimers, but it is also key to remember that it costs exactly the same to train a 4 claimer as it does an allowance horse. So lets look at the average race for Fort Erie, a $7500 claimer for non winners of 3. The average purse for that race should be $12,000. However, in order to reward races that have higher non coupled entrants, it would pay to change the minimum purse to $9,000 for this race if it attracts only 6 or less starters. For each additional starter, $1,000 should be added to the purse. This means an 8 horse race will run for an $11,000 purse, and a 12 horse race, for example, will run for a $15,000 purse.

If this does in fact lead to bigger fields, handle will rise causing purses to start to rise, and the base can be increased, as a win win situation is created.


6. Forget the idea that quality horses will come to Fort Erie, or are even needed to be attracted. First off, when you have just $12,000 a race to hand out, you can't reasonably believe quality will show up. Secondly, historically, small field races that give out bigger purses at Fort Erie produce very low handle.

There is really no reason to have allowance or even maiden allowance races at Fort Erie. If a horse is perceived to be worth more than $16,000, let the local connections of that horse prove it at Woodbine, and hopefully they can enhance their year with the bigger purses Woodbine has to offer, and conversely, why entice a superior Woodbine horse to come to Fort Erie to steal purse money in a short field of horses next to nobody bets? Fort Erie is a niche track, that is now getting extra government benefits. It should do everything it can to give purse money out to local horsemen whenever possible, plus betting comes from bigger fields not horses running for higher tags or no tag at all (the exception being, obviously, The Prince of Wales).

6a). I'm not sure if they are doing this or not, but when putting a race card together, the Racing Secretary should give preference to field size over purse size, with the only exception being Stake Races. Also, carryovers should be treated equally with races in the book. If they have attracted a bigger field than the race in the book, it gets preference.


7. The second biggest asset Fort Erie has right now, outside of the existing horseplayer, is the existing horseman. Keeping owners and trainers in the game is critical. Most owners don't expect to win, but the closer they come to winning, the more likely they are to stick around, and maybe even increase their stable. The small owner is likely to bring in partners, and they in turn, bring family members to watch their horses and hopefully get their picture taken in the winner's circle. This can create more potential horseplayers over time.

It is key not to keep the minimum purses for cheap claimers to be as high as possible, even if it is at the sacrifice of limiting the higher end races in purse money. Most tracks get this already, and Fort Erie has been improving in this area.


8. Write Canadian bred or Ontario bred claiming races. Again, it is important these races fill for the sake of handle, so this needs to be implemented on a trial basis. These races can boost participation from a few sources. Many Fort Erie horsemen have locally bred horses who are forced to compete with US breds. This is generally a disadvantage. By having Ontario bred claiming races, it entices local horsemen to buy them. It will also draw some Woodbine horses who could be running at Fort Erie at bargain (for local Fort Erie horsemen) prices, which could eventually increase the horse population at Fort Erie as these horse change hands.

It also gets the interest of more breeders from across Ontario to watch races at Fort Erie, where the horse they bred has a better chance to win. Breeders have families and friends, and they might bet a few bucks on the race as well.


9. Call every local business in the Great Niagara region and Buffalo and offer a $12 all you can eat buffet for groups of 6 or more. I don't know if they do this, but it should be done.


10. Outsource the food stands in the main grandstand to affordable fast food places that Fort Erie is lacking, like a KFC, Arby's, Swiss Chalet/Harveys, and/or Burger King. Put a Swiss Chalet, and my wife might even make a few bets. Worse case scenario is that people come for pick up only....at least they realize what the inside of a track looks like, and may gamble in the future.

The parking lot is huge. A Ponderosa like steak house would go over nicely there.


11. I can't mention number 11 on this blog, as it will enrage Woodbine, and I know quite a few Woodbine execs read my blog. But it is huge. It actually should be number 2 on this list.


12. Interview the trainer of one of the favorites right after the post parade for the live crowd and possibly the simulcast crowd. Maybe interview the winning jockey and/or trainer after the race. Pre race interviews though, are better to generate wagers.


13. Elissa Blowe has enough experience when it comes to noticing if a horse is either acting up, sweaty, or looking great in the post parade. It might be a good idea to have her Tweet an observation or two each race to the at home bettor. Follow Fort Erie on Twitter here.


14. Hire me as a consultant. I don't care about the money that much, though a little compensation would be expected. I would love to be part of this turnaround. I can only give Fort Erie around 20 hours a week of live time anyway. But it would benefit Fort Erie tremendously as I would come in handy in supervising and implementing my suggestions, and more importantly refining them if needed, and coming up with more as time goes on.

I have a few other suggestions but they are minor right now.

After 6 Racing Days, Woodbine Handle Off Around 20%

Woodbine started up on Good Friday this year as opposed to the first Saturday in April last year, so a total apples to apples handle comparison can't be made because we've seen 6 cards this year versus 5 cards last year, but there is no doubt that Woodbine's management team is in panic mode right now, as they should be.

Last year after 5 dates, average handle was $2,264,082, and this was without being featured on TVG. This year, the average handle is only $1,815,093, which represents a drop of 19.8%. And if you take out the first Friday, the average now becomes $1,755,417 (a drop of 22.5%).

If you want to look at it another way, last year after only 5 days of horse racing at Woodbine, they did $429,853 in total handle more than they did in total handle after 6 racing days this year.

Last Friday, the total handle had to be embarrassing. Only $1,032,283 was wagered. In fact, Turf Paradise (whose purses equaled less than the featured allowance race at Woodbine that day), had a handle of $1,234,840. Mountaineer had a handle of $1,403,809. Incidentally, Tampa Bay Downs did $3,926,932 in handle on Friday.

Woodbine announced a 15% purse cut for harness races recently, and in a stunned move, took it out on the every day purses and left the Stake races alone. It was stated that after 4 days of racing this year, it was evident that betting on standardbred was off enough that a purse drop was inevitable.

Thoroughbred horsemen better brace themselves because it looks like Woodbine will have no choice but to drop purses soon if betting doesn't pick up significantly.

But why is betting off so much?

People playing catch up from last year's recession? Possible. There could be less disposable cash lying around these days from even a year ago. However, Vegas just announced that gross revenues were up over 13% in February over the previous February.

Credit crunch. It is harder, especially for Americans to get credit to play the ponies, and many horseplayers are stretched to the limit in Canada as well.

More horseplayers are leaving for Betfair, offshore betting, poker, etc. Again, Woodbine has done nothing to compete for the business of existing gamblers. From taking a cut from horseplayer's winnings on exotics at many US tracks (which disgust horseplayers) to having a high average track takeout on their own product that ranks 58th out of 69 tracks according to a recent study by HANA.

Existing horseplayers are more aware than ever before about track takeout as the main excuse for why they lose and can't last. More articles about horse racing, blogs and forums are bring up track takeout each and every day. Rebates, too are getting lots of ink.

It can't be the polytrack because Keeneland is grooving. On their opening day, they did over $7.5 million in handle. But then again, Keeneland is tied with Churchill Downs for having the lowest track takeout average in North America.

Woodbine remains being a stubborn corporate entity, and if they think that they can replace $1,000 a day bettors with $2 bettors, and keep purses where they are, they are kidding themselves.

It is too late to be proactive. It is time to panic, and time to think about the future. The HBPA also needs to play ball as well, or horsemen will wind up being like a deer in the headlight as purses will continue to drop if changes are not made immediately to the way Woodbine treats their customer, the bettor.

Takeout must be reduced significantly on all exotics outside of exactors and doubles. The practice of taking a cut of the horseplayer's winning on US exotics must be stopped as well. And if purse cuts do occur, they need to try to keep the lower end claiming purses as high as possible, because the biggest asset Woodbine has right now outside the existing horseplayer, is the existing owner and breeder. It has to be economical for them so that they stay in the game with as many horses as possible.


Fort Erie isn't budgeted for a 20% decrease in handle, but to date, have not made any announcement about keeping existing horseplayers or attracting more gamblers. They really need to address their high takeout rates. Fort Erie was rated 67th out of 69 tracks when it came to track takeout. Give the horseplayer back more money, they will last longer, and if they go home with a little more money, they are more likely to come back quicker.

Speaking about Fort Erie, here is an article about underrated jockey Krista Carrignan. Carrignan is represented by agent Scottie Lane this year. Fort Erie's season begins the first Saturday in May, which falls on the 1st this year.



Quebec only will race 10 days this year because of alleged red tape. Better than nothing. And Woodbine gets access to the Quebec betting market, who are used to betting into high takeouts. Not to say that many in Quebec gamblers have stopped playing ponies, at least in Canada.


Down The Stretch put out an edition less than two weeks ago. There is an interesting article on owner/breeder/former teen icon, David Cassidy by Perry Lefko.


I'll finish up with one of my favorite Partridge Family songs:

Map Of USA and Canadian Harness Racetracks

I had a few requests to make a map of standarbred tracks in the USA and Canada, since putting together the Thoroughbred Racetrack Map. So I decided to get behind the computer and focus. Again, please be patient, it loads a bit slow. In the meantime, check the left sidebar:

View Harness Racetracks in a larger map
Zoom in to view overlapped tracks. Left click and hold to move the map in any direction.

You'll notice the pinkish red icons on the map and green icons. Click the green icons and you will see confirmed takeout rates, while the other rates are non confirmed or simply missing (you'd be amazed at how difficult it is to find takeout rates on many standardbred tracks, especially accurate rates). If anyone knows of any mistakes, please leave corrections in the comment section.

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Takeout Map Of Thoroughbred Racetracks InThe US & Canada

Be patient, it loads a little slow, but it is worth it:

View Thoroughbred Racetracks in a larger map
To zoom in on a specific track: click the + sign in the top left, then left click (hold) and drag the map, moving the map to the track you want to look at. If the horse icons still overlap, you need to press the + sign some more or the track represented by the horse in the background will not highlight.


How To Try To Get Some Good Relief From Takeouts From Around Two Thirds Of The Tracks On The Map? See Below:

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If California Wants Bigger Purses

There is a strong rumour that California is strongly considering increasing takeout at their major tracks (even in light of the fact that Los Alamitos is suffering since increasing their takeout rates). The horsemen are in panic mode right now. Let me try to settle them down with some legitimate suggestions:

Increasing takeout is not the answer. Every study out there concludes that the optimum takeout (the takeout where tracks and horsemen make the most most money bottom line) is maximum 14%, according to studies done. Most suggest 10-12% the optimum is 10-12%. The farther a track is away from the optimum rate, the more it is costing both the horsemen and the tracks.

Why is a lower rate more profitable? It is a matter of horseplayers lasting. The same concept is true of slots. Slot operators have found that they make more money (the public loses more money collectively) at 8% instead of at a 16% takeout, for example. If a slot player has a hundred bucks to blow, and say they only last 2 hours on average, they go home more discouraged than if they last 4 hours. The longer they last, the more likely they are to believe the game is beatable too. What happens is that when they are discouraged, they are less likely to come back so quickly. On the other hand, the more they come back, the more likely they are to focus more of their expendable entertainment money on slots, and the more likely they are to expose friends, family and even coworkers to their hobby. This is true of horse racing too.

California already has some of the best takeouts in horse racing. But they are not promoting this fact very well. Promote it. In fact, drop takeout on WPS to 15% and tell everyone. Drop takeout on exotics by a half a point to a point too, and promote it.

Secondly, California could benefit from an ADW owned by the horsemen to capture a bigger percentage of the bets made by Californians. But they need to do it right. Offer rebates. Attract back the Californians that are betting offshore. Get the money back into your pools. Promote the ADW. Get people at the track to sign up. Again, rebating will attract these players too. White Label solutions are available. They don't even have to invest in the technology. The state laws may need to change though, regarding rebates.

Third, sell your signals to whoever wants them. Horseplayers with accounts at ADWs that don't have California content, don't play California. Online horseplayers generally play where their money is.

Fourth, more tracks to bet on at tracks. California limits their on track customers to something like 32 races a day from all over the country to choose from. Give horseplayers their choice back. If takeouts are lower, players will bet more, and show up more often, and churn more.

High signal fees also hurt California. There is a trend out there now to increase these. What is happening is that price sensitive rebate players are shifting to tracks that charge lower fees. This is a reality. Dropping these fees would most likely increase the bottom line as well.

Follow the advice above, and betting and purses in California will go up substantially.


Another thing that California and other tracks can do to increase handle is to stipulate in their simulcast agreements with Woodbine (HPI) that Woodbine pays actual track odds on all exotics to prevent them from jacking up the takeout on exotics that have a takeout of less than 25%. Pull the Pocket stresses the point here. An example from a few nights ago: The 15% pick 4 paid this at the Meadowlands:

$1 Pick 4 (Pool $101,888) (1-1-6-10) $4,605.90
At Woodbine for the same bet:
$1 Pick 4 (1-1-6-10) $4,064.05
The money bet through HPI or at Woodbine is commingled. It goes into the pools.
There is no good reason for this. Stating the takeout is too low doesn't cut it. Don't take the signal if you don't want to compete fairly. And the excuse makes no sense, because Woodbine pays off track odds on many WPS pools that have takeouts of 16% or less. Quit ripping the customers.

What ends up happening, and California or The Meadowlands, if you are reading this, is that many Canadian players avoid playing these type of races at Woodbine, and have very few options to play them anywhere else. And I know this for a fact, that not only do they stop playing the triactors, they stop handicapping the races altogether.


Nick Eaves Has It Upside Down

Nick Eaves is doing a wonderful job of alienating industry members and he isn't even the head cheese yet.

First, he was nonchalant when it came to knowing the Fort Erie situation when it looked like there might not be racing this year at the Fort and he seemed to not care and be OK with its closing, yet he seemed concerned about Quebec harness racing.

Now he is pissing off many Ontario harness horsemen with his "Too Much Product, Not Enough Demand" stance. This is a dangerous way to think, but it is typical of what happens when tracks receive monies from other forms of gambling other than racing. Horse racing becomes a necessary evil.

The reason there isn't enough demand needs to be dealt with, not the too much product. Livelihoods are at stake here. You don't cut jobs before you try cutting prices first. And by prices, I mean the takeout. Woodbine's culture and failure to compete, contagious in all of racing I might add, has caused the lack of demand by failing to compete, or even try to compete with other forms of gambling.

Economics 101: When demand drops, the price of the product (takeout) should drop.

Cutting dates before cutting takeout is a band aid solution, and it will not help create any more demand. Cutting takeout will create more demand.



Barry Irwin Calls For A 12% Takeout Across The Industry As Well As Other Suggestions

I disagree with Irwin that contraction is needed. It might be needed, but lets reduce takeout or embrace rebates first. I also disagree that selling horse racing as a sport over a place to make money will do much. Horse racing is not NASCAR, and never will be.
Horse racing must focus on the winners, the owners and partnerships that make money, especially the smaller outfits, and it should focus on winning horseplayers as well, which at a 20% collective takeout rate is an impossibility right now.


Popular Horse Thorn Bird Is Dead or Is He?
The thing is that he supposedly died months ago, and his now bankrupt owner, Ahmed Zayat, collected lots of insurance money on him.

Bizarre is the fact that trainer Mike Mitchell said "It's a small chance" that Thorn Bird could have been entered in the Breeder's Cup, apparently after the horse was put down, or maybe he wasn't.


Horse Racing In Alberta In Terrible Shape
The economics of owning a horse in Alberta just don't make sense. With 1000 thoroughbreds in training and 500 standardbreds in training, there just isn't enough money to go around. Less than $11 million is given out in purses there, and the horses aren't good enough to ship in order to race all year round.

The article says it costs $20,000 a horse to train. That is possibly on the high side depending on how many horses are trained by the owners there. But lets say it is $15,000. After paying the jockey, only $10 million is distributed in Alberta, and the total cost to own horses in Alberta is between $22-30 million.

Unless you have a real good horse, it makes no sense economically to own a horse in Alberta. The odds are stacked way too much against you.

Alberta is another victim of a jurisdiction that failed to compete for customers with other forms of gambling. High takeouts created less and less players over the years.



Sad News: Woodbine Icon Michael Burns Sr. Passed Away At 84
He started taking pictures at Old Woodbine (Greenwood) in the mid 1940's. A picture from last year won the Sovereign Award a couple of weeks ago. He is also in the Canadian Horse Racing Hall Of Fame as a builder.

Time For Horse Racing Industry To Put Up Video Archives

Partymanners Youtube account suspended
Most racing enthusiasts know by now that Partymanners recently had his Youtube account suspended.

Over 1500 videos of historical stake races are no longer accessible to the general public. Why? It appears that some egotistical maniac had a hissy fit sent Youtube a false claim that at least some of the videos were owned by him. Of course, this is not the case. These videos belong to the racetracks, and as far as I know, most if not every racetrack has to be aware of Partymanners Youtube channel for quite a while, and obviously had no problem with what he was doing. This channel definitely was free advertising for horse racing in general, and I think racing execs would be foolish if they filled out a form crying copyright infringement.

Partymanners has issued a counter claim, which will probably win out if the other guy can't prove he has the copyright to the videos. I'm pretty sure at least the first move by Youtube was simply an automated response. It is actually illegal to claim that you own the rights to a video you don't own the rights to.

This situation has now started to get many horse racing fans to ask why is it that a fan (Partymanners) of all people had to be responsible for bringing great historical races to the general public and not anyone directly involved in the horse racing industry? There is obviously demand for these old races, but the horse racing industry seems to never miss an opportunity to miss an opportunity.

Many tracks now are putting up racing videos on a Youtube site. This is a good start. Woodbine just began doing this a few months ago. It would be nice if Woodbine could take the time and add old stake races to their channel. I'd love to be able to see races that featured horses like Momigi, Tiny Tinker, and Northern Dancer (I wonder if anyone has a video of Northern Dancer's maiden win at Fort Erie in 1963).

Going forward R2Collective gives a very good assessment of the current situation and a some good ideas for the future regarding race replays and with respect to its relationship with the internet in general.


Bill Finley's newest article: A look at 2010, through a crystal ball
Horse racing satire at its finest.
Here is a taste:

July: NYRA is able to re-open after Jess Jackson lends the struggling racing organization $50 million in return for them renaming the Travers the Plastic Tracks Suck Stakes. New York racing resumes with opening day at Saratoga.

It is at least on par with my last April Fool's Day post.


Speaking of Stronach
Doesn't it rub most people the wrong way that Frank Stronach was able to have a deal cut where he still winds up with Santa Anita, Gulfstream Park and Golden Gate Fields?, despite the fact that Magna Entertainment shareholders got totally screwed as did unsecured creditors. He proved he can't run a race track, never mind many racetracks. His vision of horse racing was completely out of touch with reality and those who believed in him got the shaft.

And this just feels so not so right: Adena Springs buy Miss Isella for over a million bucks. I guess life goes on for Stronach, and he must have got out of the Magna Entertainment mess OK. Maybe Bernie Madoff should have used his legal team.


Support From Horseplayers Wanted

CHRB Meeting this Friday - Let your thoughts be known via email

This Friday there is a CHRB meeting in California. One of the items on the agenda is the following:

"Discussion and action by the Board regarding an increase in the take-out on conventional and exotic wagers on races conducted by quarter horse racing associations as permitted pursuant to Assembly Bill 246 (Price), Chapter 226, Statutes of 2009."

We believe that any takeout increase, for any wagering is not a good thing in, as takeout increases have been proven time and time again to lower handle, and lower interest on horse racing. Jeff Platt, HANA President will be at the meeting and they have allowed him to speak on some of the studies which show takeout increases hurt, don't help racing.

If you agree and want your voice heard we need your help. if you cut the following and place it in your emailer.

Send it to "BonS@chrb.ca.gov"

You will be registering your displeasure with takeout increases.

Please use this in the subject header: "Please say no to any takeout increases"


Shameless self promotion: Someone who read my last blog piece had a lot of good things to say about it on a Harness Racing Forum.


If you missed the jockey fight during a race at Philly Park, check out Thoroughbred Chat. The Partymanners Youtube debacle is also touched upon.

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If You Want Horse Racing To Grow You Need To Market Winning Horseplayers

R2Racing has a very good post up "Positioning Racing Perhaps For The First Time." The author of the post asks racing to try top down marketing with a simple message: "Horse racing is a game ……. and you will have the time of your life playing it."

I agree with the main points being made in the article, but the reality is that marketing horse racing will not work to attract a substantial amount of new horseplayers until there is a real reason for players to flock to the game.

Horse racing is a thinking persons game, and this fact is something that can be used as part of the marketing campaign. However other thinking games exist, and they don't cost nearly as much when it comes to giving the thinker the opportunity for victory. I don't know for sure, but I get the same euphoric fix winning a poker hand on the last card, as I do winning a Fantasy Football league, as I do catching an exactor at Tampa Bay Downs. I even get a feeling of satisfaction playing free games on the internet, where winning means just winning and has no financial rewards whatsoever.

Horse racing needs winning horseplayers, and it needs to market them along with the new reality (hopefully) that the game can be beaten with a combination of luck and skill.


This type of marketing scheme has been proven very successful in growing online poker and Betfair. Every young person wants to be that online poker player who wound up moving out of their parent's basement and into a mansion, thanks to being one of the best. And what young person wouldn't want to gamble successfully for a living?

Of course, there have been a lot more losers created by this form of marketing but that is the growth component, something dreadfully lacking in horse racing today. But as long as the carrot is there dangling in front of the player, where perhaps just a little more patience, knowledge and luck can turn a loser into a winner, the player's entertainment needs become fulfilled as an offshoot, and there is nothing wrong with horse racing getting more of the public's entertainment dollars.

The main deterrent to growth is undeniably the track takeout. For the horseplayer, the game has become much more difficult to beat than ever before (and it was hardly a game that could be beat in the past either, though there was a shot).

A Quick History
From the 1930's to the 1960's horse racing was much more mainstream. In many instances, it was the only place one could legally bet outside of Las Vegas. It was part of the cinema and then TV. Many movies and TV shows had references or were about about horse racing. Not that it was all a rosy portrayal, it was a mixture of either/or larceny and getting wealthy (with luck and knowledge).

Stands were packed. The main reasons being, it was the only game in town, it was inexpensive to play (there were only 8 races, and few if any exotics, so players were very likely to leave with cash in their pockets, enough to play the next day, and many left the track with more money than they came in with, even a couple of times a week sometimes), and there was a carrot: The game was perceived to be beatable. There was the legend of Pittsburgh Phil and others, along with the idea that inside info could actually help one make a huge score (a $2500 score in the 60's could get one enough money for the down payment on a home that today is worth $400,000).

By the late 60's to the early 80's handicapping books became popular. Real life stories like Andrew Beyer's My $50,000 Year At That Races, and new books based on empirical statistics like William Quirin's Winning At The Races became must reads for anyone serious enough to try to beat the game. Nowadays if Beyer's were to put out a book about actually winning, it would have to be called, My $50,000 Year At The Races After Receiving $100,000 In Rebates, and Quirin's book would have to be renamed Breaking Even At The Races If You Are Exceptionally Lucky.

Here is a telling quote from Richard Eng's book Horse Racing For Dummies: "Here's the skinny on getting shut out; in the long run, you save money." The statement is very true, more true today than it was in the 70's. You can't make that statement if you have even a chance to win long term.

So what happened? When did the possibility to win all but vanish? It really didn't take all that long, and it was mainly due to competition. First from lotteries starting in the 70's, and then slots and casinos in the 90's. Horse racing didn't even try to compete or lose their culture of entitlement perspective. In Toronto, the Blue Jays hurt Woodbine and Greenwood a lot in the mid to late 70's.

Most businesses can identify their customers and do everything they can to attract them. Not horse racing. Their customers it seems has always been execs and horsemen. Their customers of course, are the horseplayers. When business gets slower due to competition, the first thing a business does to attract customers, is LOWER PRICING. That is Economics 101.

In fact, pricing started to go up, because racetracks in their infinite wisdom started to increase the wagering types offered every race at much higher takeout rates in most cases. Sure, existing players wanted a chance at bigger scores, and what did they care about takeout? Most players, even today have no clue about how it affects them.

But it does affect them. The game got too expensive to play every day. More players went home broke more often, they spent less time handicapping and watching races, or taking their families to the track (growth potential was dead). They stopped looking forward to the next day of racing. And most importantly, they started to figure out that the game was not beatable by anyone they knew.

This wasn't all. Back in the 70's, maybe one in four at the track bought a Racing Form. The pools were filled with lots of dumb money, players just picking names and numbers off the program, or betting the favorite because it was favorite. Competition took care of these people who lost very quickly at the track and were willing and eager to waste their dough on lotteries and then lotteries and slots.

And if the higher collective takeout rate wasn't enough, horseplayers by the late 80's were now being seduced by having other tracks available to them. All this really did, was make it so the existing bettor could lose their money even faster than before. It didn't create new money to be lost. It had the opposite affect, as more people than ever before became discouraged, even if they didn't know the exact reason (which was a higher collective takeout and more available races each day which made it very probable that players would go home broke). They stopped bringing their friends and family and they talked less and less about horse racing.

And then the biggest kick in the groin for bettors who were either beating the game or coming close came right around 1990. Beyer figures showed up in the Racing Form, virtually taking away one of the most profitable and consistent angles in horse racing (speed handicapping using track variants). The playing field was equaled, and horses who ran 1:12 on a dead track running against horse who ran 1:10:0 on a fast track would now pay $8 instead of $15 to win.

Finally though, opportunity came along which caused some growth (but could have caused enormous growth), and that was phone and internet betting. Now, horseplayers could bet races from their home or work. For awhile, existing horseplayers could now play countless races as day without traveling up to 50 miles or more to go to a track.

It did add more money from existing players for at least the short run, but it didn't create more players, or at least not very many.

If they would have had a 10% takeout along with phone betting and internet betting, horse racing would have exploded like Betfair and online poker did.

There is just no incentive for new players to start betting horses today. First, almost every bettor looks at some sort of past performances, speed figures, or has a computer program that spews out all this information. The dumb money is bye bye. Now it is good thinkers versus great thinkers. And for what? The ability to pretty much guarantee that you will lose, and lose a lot if you play a lot.

Secondly, it takes years to learn the nuances of the game, from trainers to jockeys to what speed figures mean, etc. Nobody learns how to read a Racing Form in a short period of time.

So how can racing grow, or is it just going to stay flat or die? That is up to the racing industry. Right now, winners do exist, but the industry treats them like should be in an undisclosed bunker somewhere in Area 51. Why? Because these are the players who receive rebates. You know rebate? That ugly word that racing execs don't want the masses to know about.

If you bet enough money and you start asking the right people enough questions, you could get the average takeout reduced to something like 10 or 12%, and sometimes even less.

So do rebates create more players? Yes and no. They can bring back players who were betting offshore and not in actual pools, and they allow horseplayers to last longer which might get family members and friends involved but not to a great extent because newbies don't normally get rebates. Rebates probably have stopped many players from throwing in the towel too. But horse racing will not publish the fact that the only significant winners these days receive rebates, because that would mean they would have to admit their game is vastly overpriced.

Another reason why rebates is a dirty word is because of horsemen who collectively live for the short term. It is not just the racing execs to blame here. The horsemen, instead of embracing the idea that winning horseplayers are needed for growth, whine that if there is their is money left over to rebate, their track is selling the signal fee too low. And guess what? Today, signal fees are on the rise and what that means is that there is less money left to rebate. So racing is starting to kill the only potential growth component they have.

Remember, by giving less rebates, the player getting them will become disenchanted quicker. Horse racing will begin to lose their biggest bettors, and again, this will not create new players, it will just cause the pie to shrink even further.

OK, so rebates most likely won't get embraced. What is left?

The only way to grow racing is to create winners that racing can talk about, and that will only happen if takeout rates are cut to 10-12% everywhere. Smaller takeout cuts will create some growth (anytime players last longer they will expose the game to more people), but if racing wants significant growth they need a few winners who are out there in everyone's face.

At 10-12% players will last. The longer they play the more likely they are to expose newbies to horse racing. By lasting longer they will end the day or week with hope (even though it might be the delusional hope for most that slot players have). Most will lose more than they already lose today, but the winners will be the carrot stick racing is sorely lacking today.

You can take all the technological advances and throw them down the drain. Without incentive to play (and horse racing makes its money from GAMBLING and it needs to attract more GAMBLERS) horse racing is simply spending techno dollars just to try to keep their existing customers happy, it causes zero growth, in fact, innovation makes it easier for existing customers to lose quicker, so I could easily argue that the way technology is being used in horse racing today, is actually creating negative growth, as existing players become discouraged faster.

The industry needs to get their collective head out of the sand and they need to stop pretending that there are other issues which are hindering growth. Once takeout is reduced, the other issues will be forced to correct themselves as well because there will be a huge horseplayer base demanding it. Wouldn't that be wonderful?

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.

Bettors Want Bigger Fields Over Higher Quality Fields

Cool poll over at Pace Advantage: Which would you rather bet on? High quality horses in races with short fields or low quality horses in races with full fields?

At the time of this posting, over 88% of voters chose full fields. I'm not surprised full fields is preferred, but the margin is a bit of a shock.

Takeout and track surface are also factored in big time by bettors, and that explains why Woodbine, with their big fields, fails to attract significant betting.

Looking at Woodbine's recent pathetic handles I have to wonder if they just need to go back to the drawing board and start over. With the fabulous purse structure they have, the near monopoly on horse race gambling they have in Canada as well, it is inexcusable to have handle numbers that range between $1.2-$1.6 million on Wednesday's and Thursdays. Even $2.5 million on Saturdays isn't anything to brag about either when compared to A tracks like Keeneland.

If not for slots, Woodbine would have been bankrupt a long time ago. Their leadership needs to go. They have killed a great game.

What good do $1 million dollar races at Woodbine do? They do have a couple of $5 million handle days thanks to them, but when you analyze things, they actually lose money on those days.

Are those days good for the Canadian economy? Not really. Most of the purse monies are grabbed by non Canadian outfits shipping in horses and the money leaves the country.

Does it help the Canadian/Ontario breeding industry? Nope. The horses that end up with the big money rarely have an ounce of Canadian blood in them.

How about creating more bettors? There is absolutely no evidence that new bettors have been created. Since Willmot took the reigns, very few new bettors have been created in Ontario. In fact, many older bettors have either died or took their business elsewhere. And if one looks at the handle numbers right before or after the big races, there is no apparent change when it comes to creating new business.

Besides drastically lowering takeout, Woodbine would be best advised to knock it off with the extraordinarily high purse paid out in their biggest races, and use their resources to attract and sustain Canadian outfits. Woodbine gives out too much to allowance runners as well (5 horse fields running for $100,000 purses aren't worth it as they attract little to no betting).

Woodbine should give out more money to lower end claimers, allowing new local owners/partnerships (Ontarians) a shot to make money and build a stable. Inevitably, these new owners will come to the track more, expose more friends and family to horse racing (taking them out to the track when their horses run). They will also be more inclined to buy yearlings (thus helping the local breeding industry). Like bettors, owners are more apt to play a lot longer the more money they receive each time they are victorious.


Delaware Bucks Downward Trend In Racing
Delaware ran 27 less days this year, but their total handle (not daily, total) was up.

See what happens when you allow your signal to be available to everyone, make your video available to everyone, and have half decent field sizes (close to 8 horses a race average), and have slightly lower than average track takeouts (19% on doubles and exactors). See also, Pull The Pocket: Less Races, More Betting

Speaking about those who don't give out their signal to everyone and also withhold their video, where are Belmont's final numbers? My guess is the that the boys at NYRA are scurrying around looking for viable excuses so they have a shot at keeping their jobs.



Fort Erie handle drops on par with the industry drop in 2009

Fort Erie handle dropped around 10% this year. Field size was up from last year to 8.2 horses a race from 7.7 a race last year. They gave out 5% less in purse distribution in 2009.
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There was no mention regarding whether they ran significantly less races in 2009. I do remember quite a few 10 race cards last year on Mondays and Tuesdays, and I'm inclined to think that the 5% drop in purse distribution is in line with 5% less races.
This would account for some of the drop off.

Fort Erie is very good about distributing their signal to all tracks and ADWs, so exposure isn't the issue. And players like races that have bigger field over quality, so that definitely isn't the issue.

The biggest factor could be public awareness of takeout. Thanks to HANA and blogs like mine, the public is becoming more and more educated as to why they aren't lasting long when they play the ponies.

Fort Erie, like Woodbine have ridiculously high takeout rates. See the HANA takeout chart here (it is not 100% up to date, but it is close). Fort Erie, has the highest takeout rate in North America for exactors and doubles. It is 26.2%. Besides educated players avoiding the track because of this, rates like this kill off people who don't even have a clue about takeout. When you send players home with less money, they are less likely to come back anytime soon.

Slot operators generally payout around 92%. In Ontario, slot operators are allowed to payout between 85-98%. They generally payout around 90-92%. Why not 85%? Because, slot operators have historically found that anything over 90% has a negative impact on future slot earnings. Players don't last long enough to make their experience enjoyable enough. They go less, and when they go less, they are less likely to bring friends or family along the odd night, possibly creating a new slots customer.

Here is a pretty current slot payback chart by state.


If Fort Erie doesn't open next year, the Welfare Offices could be getting a lot of extra business.
There is no doubt that Fort Erie's closure would have a tremendous negative impact in Fort Erie and its surrounding area. The more I think about it, Ajax Downs can't be the solution when it comes to where B horses will race next year. Without a backstretch, it would be just too impractical. Costs to ship to race or workout, coupled with the cost to train a horse off a farm (which also makes it difficult to get a horse to 100% race fit, and gives Woodbine shippers a insurmountable edge), will probably cause many owners to leave the game.

GOVERNMENT BAILED OUT FORT ERIE 17 YEARS AGO: PRECEDENT HAS BEEN SET

This isn't the first time, Fort Erie needed a government bail out. Back in the early 90's, the Ontario Jockey Club was making it known that Fort Erie was losing a couple of million a year. I happened to run across this yesterday: Ontario Jockey Club Study of the Impact of Casino Gambling on the Ontario Horse Racing industry
September 21,1992. It is important to note that back then, the government was making around 9% on every dollar bet (this has now been reduced to 1.3%, probably with this study in mind, as it was known in advance that slots would cannibalize horse racing).

On page 6 of the report:

In particular, smaller operations have been hit very
hard as shown by the plight of the 95-year old Fort Erie racetrack owned by the OJC. Fort Erie has been losing $2 million per year for the last five years.

The OJC was able to sustain these losses for a period of time as its other operations produced sufficient revenues to subsidize these losses.

They were forced into a position, however, to close the Fort Erie operation unless assistance was received from other participants.

An arrangement with the provincial government was reached at the end of July which is expected to provide the OJC with an additional $1.5 million by way of a tax rebate scheme.

It has recently been announced that smaller operations will receive a proportionately larger tax-rebate from the government in order to survive in the current recessionary environment.

If the government increases competition for these tracks by introducing new forms of gambling, it is likely that further government assistance will be required if significant track closures are to be avoided.

It was estimated by the OJC that closure of the Fort Erie track would have meant a loss of 4,500 jobs and a loss of payroll for the community of $38 million.

Bottom line, precedence has been set with respect to the government bailing out Fort Erie.


Fort Erie Trainer Gets A 9 Month Ban
Trainer Michael Osborne was caught by Woodbine security in the receiving barn with a loaded syringe. After analyzing the substance, the "liquid in the syringe to be n-butanol and ethanol both alcohol, a Class 2 medication."

This brings up at least a couple of concerns. I doubt that this mixture shows up on a test, yet it a Class 2 medication, so why don't they test for it?

I'm always of the mindset that when someone gets nailed like this, whether it is a trainer will an illegal substance or a drug dealer getting nailed by the RCMP, there are thousands of instances when the trainer or drug dealer is not caught. Some are never caught.

In my view, Osborne was just unlucky he got nailed. The odds were totally against him getting caught.

So this boils down to one key question: Are the penalties in place right now enough of a deterrent to stop the cheating?

My answer is NO. 9 months definitely will hurt anyone financially, but the time goes by pretty quickly. 3 years, would probably do the trick. I don't know if any trainer would risk that? Of course, if these drug violation were treated as they should be by the courts, and criminal charges were laid (defrauding the betting public), we might find a lot more honest trainers in the backstretch.

Trainers will adapt. But with so many trainers getting away with drug concoctions in the backstretch, even the honest ones need to compete to stay in business and they are tempted to cheat as well.

Give almost any trainer a blue pill, and tell them it won't test and you can expect an enhanced performance from the horse, and 99% of the trainers would be giving the horse the pill...at least that is how I see it.

EQUIBASE IMPROVES THINGS AGAIN FOR THE HORSEPLAYER
Equibase just unveiled a consolidated horse search. This allows anyone to type in the name of a race horse, and then view, for free, any of the race charts for that horse all the way back to 1999. Or you can view it 5X Pedigree for free as well. It also links to pay services as well. Simply go to the Equibase home page and you'll find the box that will get you going. You can also look up a broodmare's race record, and if she raced from 1999, see her actual charts race by race.

Equibase also recently did the horseplayer another great deed with a new and improved way for players to get up to the minute scratches, jockey changes, and surface changes. Every player needs to bookmark this page. It is an excellent resource.

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