26 September 2010

Terminator 6: Death Watch

It is official the takeout increase bill has been signed, California Gov. Arnold Schwarzenegger showed he either doesn't understand basic economics, or he set his common sense aside to appease a group that doesn't understand basic economics.

The takeout hike will most probably go into effect the day after Christmas this year. Although the WPS takeout remains relatively low at 15.43%, daily double and exactor takeout will rise to 22.68%, placing Hollywood Park, Santa Anita, Golden Gate, and Del Mar in a tie for those betting types at around 57th out of 69 tracks according to HANA's up to date takeout data. Triactors and other exotics will go up 3% (which is really 15%) to 23.68%.

HANA reports on the takeout increase here.

Again, I understand the Horsemen who went along with this increase. Why? Because the entire 3% will go into purses. If handle were to remain stagnant, which it won't, monies available for purses would go up 15%. So handle could drop significantly, and the Horsemen will still end up ahead.

Here is an example (using many guesstimates). For every million bet, lets say $300,000 is wagered on WPS, $300,000 on doubles and exactors and $400,000 on all other wagers. Also lets assume that California exports its signal for 5% and 50% of handle is generated from exporting. Also, I believe the Horsemen get 50% of takeout revenues to fund purses.

Using these numbers, prior to the takeout hike, for every million bet, Horsemen receive around $58,000. Assuming signal fees increase on exotics (see Understanding Signal Fees), under the new arrangement, Horsemen will receive around $67,000 per every $1 million.

All source handle would need to drop off 13.5% in order for Horsemen to be worse off.

Any drop in handle up to 13.5% will be absorbed entirely by the racetracks. Which makes me shake my head here at the track owners who have put a huge "Kick Me" sign on their backs by going along with this.

I also doubt very much that the signal fees will go up that much. I can't see Twinspires and other major ADWs or tracks going for such an increase. If signal fees only go up by half the increase on exotics, it will be closer to a 10% decrease that will cause purse accounts to have less collective money.

Handle will drop. The question is how fast, and by how much?

The total effect of takeout increases or decreases normally take time to assess. If a hike occurs, Horseplayers receive less on each bet than they did before. They last less, they go home quicker, they come back less often. Some quit, some find a new hobby or a new game. These players will expose friends and family to horse racing as well. In other words, negative growth is created. Horseplayers collectively won't bet more and reload more just so they could have the same action as before (I believe that there are actually people who were in on this decision that assume Horseplayers do react this way).

I just want to note, that the opposite occurs if a takeout decrease happens.

There are other factors out there. Thanks to HANA and the internet in general, the public is much more aware of track takeout than ever before. There are some really pissed off Horseplayers out there over the action by California, and many of them vow to quit betting California racing. I believe them. I know it would be much harder for someone in California to boycott their own state's product because of familiarity, but for those outside of California, it isn't hard at all.

Personally I stopped playing California the day the bill was signed. Though I will play on Breeder's Cup days. Just keeping it honest. I want horse racing to grow, I love the game, but this move by California racing just really upsets me, and it just tightens the noose around horse racing's neck right now.

And finally, there is one major factor. An estimated 15% of all handle is generated from computer program bettors or sophisticated value players. Not only will increasing the takeout, create less value situations for these players, but increasing the signal fee, even it is half of what the takeout increase will be, will also come into play as to whether an astute rebate player makes a bet or not.

Despite, the flawed argument that bigger purses will lead to bigger field sizes in California (it is flawed because horse racing is experiencing negative growth thanks to not recognizing that the Horseplayer is the customer, and new owners generally get started on a smaller scale, many are Horseplayers first, and the day rates in California are just way too high regardless of the purses), I will predict that within 6 months of the takeout increase, California handle will drop 15-20% regardless of what happens anywhere else.

I originally stated that no good could come out of this in a previous post. Perhaps I jumped the gun a little. Portland Meadows has announced that they are dropping their takeout on Pick 4's from 22% to 14%. Delaware has also decreased their on track takeout on exactors from 19% to 10%.


This is a great time for a track with enough brains and guts to take advantage of the California takeout rate hike by lowering their takeout rates and attracting to begin with, the disgruntled soon to be ex California bettors.

I'd like to think that NYRA, Tampa Bay Downs, and even Woodbine could benefit immensely if they were to do the right thing within the next month or two.

Finally, takeout increases no matter where they originate hurt the game's total growth potential. They kill off the player, albeit slowly and provide zero potential for growth. A player at Hawthorne, for example, receiving $2 less for a $100 exactor he hit at Santa Anita won't feel it immediately, but slowly but surely it takes away his incentive to believe the game is beatable, and besides either coming home with less money than before, or churning one less race because of it, the player eventually becomes more disillusioned though he doesn't really know why.

If that is hard to believe, ask a slots operator what happens to the bottom line if hold is increased by a couple of points.


“(If there isn’t growth in handle), we could end up with two-bit racing and virtual racing. The competition is smart, and it is giving the customer what the customer wants. Racing is still giving the customer what racing wants.

UPDATE: About the movie Terminator 6. The year is 2029, and there has been no horse racing in California for 12 years. The Terminator's assignment is to go back in time and destroy Arnold Schwarzenegger the day before he signs the takeout hike.

16 September 2010

Is ITPP The Super Trainer's Drug Of Choice Today?

Andrew Cohen a columnist for Harnesslink has left best for last. His last regular column is all about a fairly new drug that is not being tested for by any jurisdiction in North America called ITPP, which is short for Myo-inositol-trispyrophosphate (NormOxys).

According to Cohen, the drug, developed in France in 2005, "makes the hemoglobin in blood release more of its oxygen, enhancing physical performance in a swift and powerful way."

This probably explains why certain trainers have unusually high win percentages. The horses that race for super trainers run out of their skin often, putting up very fast times in relation to their class. Another thing that I've observed is the ability for super trainer's horses to rebreak in the stretch, even on the poly track where the average horse has only one real run.

Cohen asks, what now? That is a great question. If I was a trainer or owner, I'd be tempted now to buy some of this stuff and try to even the playing field. There is nothing in the article about ITPP being harmful to a horse. In fact, it might be beneficial.

This new class of drugs can be potentially developed in a broad range of clinical indications where therapeutic benefit can be obtained through an increased, regulated delivery of oxygen to hypoxic tissue. Potential clinical indications include cancer, cardiovascular diseases, anemia, stroke and diabetic retinopathy. NormOxys’ lead compound, OXY111A, is currently in Phase I clinical trials.


When given by direct injection to mice with damaged hearts in a recent experiment, it turned these couch potato mice into treadmill lovers - exercise levels rose 60%.

According to Jean-Marie Lehn of the University of Strasbourg in France, hemoglobin only releases about 25% of its oxygen during one trip through the body. But when ITPP binds to hemoglobin, it releases 35% more than usual.

One choice is to make the drug legal, something I doubt racing commission's would even consider. The other alternative is to create a test for this drug as soon as possible, and in the meantime, levy huge fines and suspensions for anyone caught using this drug or possessing it at the track or at a farm or training center.

Do I feel better knowing that there is possible solution has been found out for why super trainers exist? Yes. But it does nothing for my confidence when it comes to betting horses. One good thing about this is that reality deniers and cheaters can stop with the BS excuse "the horses are spotted well."

The second biggest problem (takeout is number one by a country mile) horse racing has is drugs. Unfortunately, like with EPO and DPO, super trainers can get away with using them for years, and when a test is finally discovered, many have moved on to the next undetectable drug.

The real solution is to have a limited list of drugs that horses can use (all other drugs would be considered illegal). Most importantly, fines and suspension need to be extremely high, and if only possible jail time could be added to the equation (it is all about defrauding the public), maybe that would enough deterrent so that potential cheaters wouldn't cheat anymore.


Well at least some of the extra money Woodbine takes from winning bettors on certain exotic bets with low takeouts doesn't go to complete waste. They have spent some dough on their new website to make it more customer friendly. Now you can see how badly you beaten in a photo at Woodbine.

TrackMaster may just have the most superior past performances of the Big 3 (DRF, TrackMaster and Brisnet). As I mentioned in another post, they have a product that give actual speed figures for harness racing, and apparently they are very accurate.

Personally, just over a month and a half ago I switched from Brisnet to TrackMaster Premium Past Performances for thoroughbreds (I'm an pen and paper handicapper), and I've seen a huge improvement when it comes to cashing tickets.

Check out what TrackMaster has to offer.


Horse racing isn't about to lower takeout collectively anytime soon. It is a good thing that many astute Horseplayers have some options.

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9 September 2010

Betting Scandal Is Worrisome

After a pretty lengthy investigation three Canadian harness horsemen have been given lengthy suspensions and large fines for allegedly fixing races at Windsor and at Michigan harness tracks.

Receiving suspensions and fines are:

Brad O. Forward, Woodstock, Ont. - 5 years, fine of $5,000
Gene T. Piroski, Cottam, Ont. - 10 years, fine of $100,000
Kevin W. Wallis, Maidstone, Ont. - 12 years, fine of $100,000

In addition, Arthur McIlmurray, (not currently licensed by the ORC) of Northville, Michigan is hereby ruled ineligible to be licensed in Ontario until such time as he appears before the director.

These fines and suspension were handed out before the parties received an ORC hearing, so with that in mind, I'm pretty sure that the evidence is pretty damning.

What I find worrisome is that Windsor and Michigan harness tracks have very little handle to begin with. These horsemen had to be selling out for only hundreds of dollars unless bookies were involved. But how many bookies would be willing to take too many hits on harness races? I don't think the bookie route could yield more than a few thousand dollars before the bettors were cut off.

So if a few horsemen will sell their souls for a few hundred, how many would sell out for thousands? I'm talking of course, tracks that have larger pools. Drivers only receive 5% of the purse, and harness horses can race once a week if they are fairly sound, so stiffing for a price isn't out of the question. Plus if you watch a harness race, it can be simple to stiff a horse, and it can also be easy to fix a race by just getting the top three contenders to play ball. Many drivers also train and even own which makes it easier to get a syndicate going.

It is more difficult to fix a thoroughbred race though. Jockeys are not the trainer, and the trainer is very often not the owner. From a trainer's perspective, horses may only race 6 or 7 times a year, so to not try when the horse is in peak form is pretty silly unless the purses are really inadequate.

Jockeys could conceivably get together to fix a race though, as they only get 10% of the winning purse, and whether a horse is ready to fire or not, is not of as much consequence, as they'll hop on another horse in a race or two in most cases.

Trainers who bet probably take advantage of their knowledge of how much vet work was put into the horse for the race combined with how the horse is really doing.

Again, like with cheating drug trainers to race fixing drivers, I think criminal charges need to be handed down. It is defrauding the public, plain and simple. Putting a violator or two behind bars is probably the best deterrent there is.

In related news, Doug O'Neill gets nabbed for his fourth TCO positive in California.

Is it me, or are we starting to see super trainers starting to slump in the last few weeks. Does their undetectable stuff work best during hot weather, or has someone come up with either a procedure or test that can nail them? Does it have something to do with the recent eight positives in Illinois for the drug etodolac?

Bob Summers, The Happy Handicapper, passes away. It is tragic to lose such a racing enthusiast who was part of the media. The worse thing is that there isn't a lineup of replacements. For more on Bob Summers: Jen's Blog and Pull The Pocket wrote tributes.

Canadian jockey Alan Cuthbertson succumbs to cancer. He rode his last race at Hastings last year, at 63. He had his first win at Woodbine in 1964.

Down on all counts: CTHS Sales numbers show the continued downward trend for horse racing, in Ontario too.

Woodbine needs to give more money to the lower end horses so that more owners will break even or make money, and this will attract more owners into the game. Stop kissing the elite's butt, it is no way to grow the game. Partnerships usually buy cheaper stock to begin with. Give them a chance to grow.

Ontario sired or Canadian bred claiming races need to be written too. It will help the breeding industry immensely, as demand for Canadian breds will rise, not only at sales but in the claiming game as well.