15 February 2010

John McCririck (Mutton Chops): "Horseplayers Have No Chance To Beat The Takeout In America"

On Saturday around 12:30 PM EST, HPITV aired the Gulfstream Park pre game interview by Alyssa Ali of John McCririck. It started off simple enough, discussing the 6th place finish of a fan favorite English horse (I believe it was Nicconi) and how that isn't good for racing, because racing needs heroes to keep running well (or something like that).

As you can tell by now, I was just able to take mental notes of the conversation. Trying to find the actual video online has been futile so far. After watching it, I knew for a fact that Gulfstream wouldn't have the nerve to put it on their Youtube channel.

Ok, now for the good part. Alyssa and McCririck started discussing the state of the game in America today.

The following points were made by Sir Chops:

*Horse racing is dying because horsemen and racing execs don't make decisions based on what customers (the bettors) want.

*Lack of freedom for bettors has stifled growth. Horse racing needs to allow betting exchanges and even bookmakers to become allowed in America. (Editor's note: I'm not convinced bookmakers are needed.)

*It doesn't matter who you are, you aren't going to beat an average takeout of 20-25%.

*If not for (he pointed to the new Gulfstream Casino) casinos, horse racing would be dead in America today.

As McCririck started telling the viewers the blatant truth about horse racing in (North) America today, I could see Ms. Ali become very uncomfortable. She had a "deer in the headlights" look on her face.

The reality that high takeout hurts growth or that horsemen are hindering growth (and actually helping with horse racing's death) are two facts that the industry does not want to be mentioned in a public medium.

Exchange betting can help grow horse racing in North America because thanks to low takeouts, players have a chance to win. Of course, most players lose, however, visible winners create a buzz and something for all to strive for. This worked in growing poker. Again, most poker players lose, but the few that are visible winners gives the perception that if you are good enough, you could make a living at it.

Betting into a 20% takeout only creates the idea that horseplayers are degenerate gamblers who will gamble on anything and never have a dime to show for it. No wonder that is how horseplayers are treated in North America by many racing execs.

There wouldn't be that much money added to the tracks or horsemen's bottom line from exchange betting revenues directly (Betfair spends a lot on marketing, salaries, and technology, and made only around $50 million USD in net profit last year). $50 million from all types of wagers, not just horse racing, isn't much even if all of it were added to the $1.2 billion that is handed out in purses in North America today. And one could argue that exchange betting may cannibalize some of the parimutuel pool.

However, where exchange betting can be beneficial, is by bringing in new customers who will begin to follow and play horse races.

The fact exchange betting doesn't deal with exotics is a plus, because players who like big priced horses or are torn between two or three horses may rather play exotics into the mutuel pools.

It is very difficult to compare British racing to North American racing because purses are generated from levy's that are placed on bookmakers, exchanges, and parimutuel betting on UK races plus sponsorship usually by companies that take bets on UK races.

Some more facts from Jockey Club stats:
Purses are 1/4 betting handle in Canada (thanks to slots).
Purses are about 12% total handle in the US.
Purses are about 1% the total handle in the UK.
Per capita though, UK residents bet around 6 times as much on horses as US residents do.

No matter how you slice it though, horse racing is in a tailspin in North America, and bets being overpriced are the main reason why.

Isn't This What I've Been Talking About?

In an article in Gaming Today, the point being made is that casino customer's satisfaction is at a new low, and it all has to do with the casino operators shifting from what used to work to what looks like the typical horse racing exec's attitude and it coincides with a higher rate of player dissatisfaction (survey says 88% of players are dissatisfied at local casinos):

In his presentation at last month’s Casino Marketing Conference, Meczka (Michael Meczka, president of Los Angeles-based MM/R/C Inc. and a 30-year member of the American Marketing Association) said that today’s casino marketers are constantly asking each other, "How can we extract more revenue from our customers?" rather than the questions they should be asking: "How can we provide service?" or "How can we give our customers what they expect?"

Meczka said the casinos’ "short sighted" solutions to the burning desire of getting deeper into the customer’s pocket include the following:

• Reduce playing time by speeding up the games (electronic and table)

• Increase the number of coins required to play

• Remove the popular 3 and 5 coin max games

• Eliminate the slot machine’s "arm" and replace with a button (increased speed, less playing time)

• Shorten the video reel spin cycle to reduce playing time

• Increase the hold percentage by 1 percent, which decreases the playing time by 17.5 percent

• Use table games with high holds and multiple side bets, as well as the lowest pay tables in order to force players to lose quicker and more often.

Meczka said the "short sighted" result the casinos are seeking is to "get the money fast … and get the player out of here."

The "success" of these policies, however, will eventually doom the casinos, Meczka said. "Ultimately, customers will have less satisfaction with the casino experience," he said, adding that customers will eventually reduce their frequency of visits, cut back on the amount spent and, eventually, stop coming to the casino altogether.

When customers cut back, some will leave altogether, some will find other things to gamble on, and most importantly when it comes to growth, when a customer is not going, they are not going to bring others to the casino...or racetrack. Conversely, the longer they last, the more likely they are to come back quicker, and the more likely they are to expose friends, family, or coworkers to the game as well.

For more, read The Big Squeeze, over at HANA's blog.

Bold Executive Named Leading Ontario Sire by CTHS
Trajectory ranked 2nd and Mobil was named leading new sire.

This just didn't get enough press in Canada. The exercise rider who died a few weeks ago in a very unfortunate training accident at Tampa Bay was a former jockey who rode in Ontario. From the the DRF Letters to the Editor:

Exercise rider a pro right to the end

This letter is in regard to the Feb. 4 article "Exercise rider dies at Tampa." I just would like you all to know that Robert Shields, better known as Ted or Teddy, was a very talented rider. Ted had ridden and worked with horses all his life. It was truly his passion and something he thoroughly enjoyed. He had a racing career as a jockey for many years, having a trainer in Canada named Carl Chapman hold his apprentice contract. His first win was at Bowie racetrack in Maryland in the late 1960s. He had the pleasure of working for many outstanding trainers, including Woody Stephens and Mack Miller. He had ridden races and exercised horses up and down the East Coast, from Woodbine and Fort Erie in Canada, to Saratoga, Belmont, Aqueduct, and Finger Lakes in New York, to Calder, Gulfstream, and Tampa in Florida, as well as many racetracks and training centers in between.

Any trainer or groom I had ever spoken to about Ted had always said what a "good hand on a horse" he was, and that he "had a good clock in his head," which is why he was always sought out to breeze horses in the morning.

I have been assured that he had galloped the horse who ultimately would be his last several times before Monday's accident, so he was familiar with this particular horse. Although Ted was 60, he was still a very capable rider. This accident could have happened to any rider at any time or anywhere. At least he was doing what he loved, and he did not suffer.

He is survived by his ex-wife Linda (me), our 15-year old daughter, Claire, and his younger brother, William.

Linda Shields - Fort Lauderdale, Fla.

Another Tracknet Track Underperforming In A Bad Market: Golden Gates Trims Purses By 7 1/2% and Drops 3 Stake Races Is it because of the Big Squeeze?


The_Knight_Sky said...

Cangamble wrote:

(Editor's note: I'm not convinced bookmakers are needed.)


But it can't hurt having on-track bookmakers that are fashioned in the same manner as done in the United Kingdom. It is obvious that the parimutuel system may never be "fixed" to the satisfaction of the wagering public. Why not give the customers the alternative to do business that allows for wagering in a "fixed odds" format.

If it cannibalizes the parimutuel pools, so what? The pools are already being reduced by 5 to 10 percent every year. How long will it be before it cannot support its own weight.

The time to start offering the option of legalized on-track bookmakers is before the serious bettors start to worry that they are going to affect the odds.

Horse racing must find a way to make the live racing product attractive. By clearing out the grandstands of America to wager from home invites casino operators to dictate the precise timetable for horse racing's death.

Railbirdbrad said...

I watched the interview with Mutton chops.it was great he told it like it is and hammered his point away.if you bet into the Horse racing pools with these prices,it doesnt matter how good you are at picking winners,you will lose,end of story,without Bet fair i would quit betting all together,Cheers mutton chops!

Anonymous said...

You have dropped to an all time low. Quoting Mutton Chops. For years I watched him on ATR bad mouthing US racing as it was being imported into the UK. He hated that it was being imported because he felt it was going to be the demise of UK races becuase the races were more exciting and most horses raced more tru to forum in the US opposed to the UK - or so he thought. Now that this did not happen he is now bad mouthing it as a bad bet. The guy is a gambling degenerate who is flat broke and who is no longer wanted in or on the UK airways. He has lost all respect in the UK. BUT people like this will always have a place on the blogs of the world. Once again "someone else" is doing it better. Yeah that is it, let's look to the UK to see how to run racing and take care of its fans. Are you kidding me?

Cangamble said...

Mutton Chops happens to be right here. He like me was dead wrong about Zenyatta in the Breeders. But that was about handicapping.
He is correct about nobody being able to beat the game at 20-25%. He is right about the lack of growth, and the reason behind it.
I'm sure he has been wrong in his life before, but not this time.

Anonymous said...

without rebates or lower take the bettor has no chance. It's been this way for a good while now .