27 March 2011

Woodbine Is Heading In The Right Direction

Woodbine just announced that they are lowering the takeout on thoroughbred triactors to 25% from 27%. This is definitely a step forward and an attempt to keep the positive momentum Woodbine has been achieving, relative to the rest of the industry, mostly since the departure of David Willmot early last year when Nick Eaves took over.

This isn't champagne cork popping news though. Even with the drop to 25%, Woodbine is now only tied for 27th when it comes to lowest triactor takeout rates out of 69 tracks.

Woodbine still has a way to go to be number one. Keeneland and Churchill Downs have the lowest blended takeout rates in thoroughbred racing with a 16% takeout on WPS and 19% takeout on all other bets.

Amazing that back when Secretariat ran, Woodbine has a takeout of 17% on everything. Horse racing was very popular, and was pretty much a gambling monopoly back then. I still don't get how when an industry loses monopoly status, that they would even think about increasing prices to the consumer (track takeout). That goes against every economics book ever written, but it explains why horse racing is in the state it is in right now.

Lowering takeout increases churn and allows Horseplayers to last longer. The longer they last, the less likely they are to play other forms of gambling as much, and the more likely they are to eat and breathe horse racing more, and therefore get family and friends exposed to the game, which could lead to more growth.

I would say that racetracks benefit the most by giving their live patrons (and in Woodbine's case, their own ADW customer) the biggest breaks, whether that be lowered takeout or increased rebate. That is how to grow your customer base. I'm not sure that Woodbine has begun to successfully build their business that way, yet.

This lower triactor takeout, like I said previously, appears to be looking towards building on the momentum Woodbine has right now when it comes to US bettors.

Constructive Criticism
Woodbine needs to stop bean counting when it comes to specific wagers. Pay track odds no matter if the takeout at the host track is 12% or 30%.

I have had quite a few private conversations with Horseplayers who admittedly bet less or have gone offshore (with Betfair etc.) at least partly because Woodbine pays less on certain type of wagers than host tracks pay out (eg. Keeneland and Churchill Downs triactors and superfectors).

The amount of money Woodbine grabs off the customer when doing this isn't worth losing the customer over. Let alone the fact that most Horseplayers will bet back the extra money, and even if they don't because the hit was "too big," the positive vibes of coming home with money is worth more than spending money on advertising.

Good vibes go a long way. Gulfstream Park is experiencing this.

Canada is full of gamblers and Woodbine would love to grow at the same pace gambling is growing in Canada, but bad vibes go a long way too, especially in the information age. If you don't believe me, check out the California Handle Massacre. Updated handle numbers out of California are atrocious.

I think the TOC and CHRB deserve this for increasing takeout (not me in the video):

The track owners are scrambling to figure out how to stop the bleeding, but I don't think band aids like introducing a low takeout bet will work at all. The takeout hike needs to be rescinded, and even with that, California tracks are going to have to really work at trying to get back the customers who have simply stopped following their tracks. The longer the takeout isn't rescinded, the harder it will be.

Fort Erie still hasn't announced any takeout reductions. Do they see what is happening around them? More and more tracks are announcing lower takeout bets or are reducing takeout on a few wagers. I am expecting Fort Erie to have an especially brutal year if they don't grab the bull by the horns. Fort Erie is ranked 67 out of 69 when it comes to blended takeout rates.

There are three types of people in this world, those who make things happen, those who watch things happen, and those who say what happened? When it comes to takeout rates and competing with other tracks, Fort Erie's management right now are in category 2, but sooner or later Fort Erie management and horsemen will be in category 3.

This is pretty funny. Even slot operators are talking in terms of takeout and competition. A casino is being reopened in Omaha:

In addition to adding new machines, (CEO Bill) Walsh said officials checked out the competition and set the takeout on the CasinOmaha machines one percent lower than other casinos.

“We feel that by setting the machines lower, people can leave here with a little money,” Walsh said.

HANA adviser and bettor extraordinaire has written a piece with solid solutions that the industry would be foolish to ignore.

The last thing we need is to waste time with another study. The problems are evident. High takeout, drug integrity, signal availability, and tote integrity. The first two problems are racing's biggest, but high takeout is number one, as Daryl Wells used to say, by a good margin.

I do disagree with Fotias about having too much racing. We need grass root tracks as owners and trainers bring in new potential players and tracks are needed within major town limits to expose newbies to the game. Nothing makes a Horseplayer a Horseplayer than the live experience does, but once they are a Horseplayer, the live experience isn't so much needed....but we desperately need new Horseplayers right now.

At this minute though, there is too much racing and too many wagering types because there are not enough bettors or betting dollars to go around. Lowering the blended takeout in North America will solve that problem.

One more thing. The centralized ADW idea is a bad one. Look at what has happened in Canada with HPI. They chased big Horseplayers offshore and to Betfair because they thought they were a monopoly (not to mention the fact that they don't even pay track odds sometimes as cited earlier in this post). If there was healthy competition in Canada (like rebate shops), horse racing handle and profits for purses would be seeing much stronger growth. A centralized ADW in North America would lead to negative growth as rebate players (the only thing in horse racing that is growing right now) would fall off the map, and new players would never be created. The problem is that Horsemen and tracks to a certain extent have a "right now" approach. A long term approach as been sorely lacking in our industry.

Until takeout is 10-12% everywhere, the idea of a centralized ADW with no competition will only help destroy the game over time. If takeout were reduced to 10-12% everywhere, rebates would not be needed to compete, the game would be beatable by enough players to create a buzz, and a centralized ADW would work just fine.

19 March 2011

Tracks Starting To Compete Against Each Other, Good For Horse Racing

A great realization is starting to occur in horse racing today. Tracks are starting to compete with each other for a larger piece of the pie.

More and more tracks are starting to reduce takeouts on at least one type of wager, some are reducing takeout on more than one. This is an attempt to get the existing Horseplayer to divert funds to that track, that would have been wagered at another track.

The tactic seems to be working. Tracks bucking the industry trend of lower handle have been experimenting with takeout gimmicks. Meanwhile, tracks that have had stagnant takeout rates continue to see handle declines for the most part.

Unlike what happens when Horsemen compete for a larger piece of the pie (which usually comes at the expense of the Horseplayer ie California), when tracks attempt to compete for a larger piece of the pie, there is a chance for actual industry growth to result.

Today's Horseplayer is more sophisticated than ever before. Partly because the dummy money has left the building, but mostly because those who are left playing have been exposed to mounds and mounds of statistics. Statistics lead to the most important stat of all: The ROI. And of course, ROI is very much tied into track takeout. Tracks are starting to understand that a good percentage of their existing customer are cognizant of track takeout.

Just in the last few weeks, harness track Northfield Park has announced a takeout reduction on Pick 3's, Pick 4's, and Pick 5's to 14% beginning April 1, Hastings Racecourse has dropped WPS and Pick 4 takeout to 15%, and introduced a Pick 5 with the same 15% rate, Lone Star Park has joined in too as they have introduced a Fortune 6 with a 12% takeout (this one is strictly a gimmick, and a lower takeout isn't important as it won't appeal to most hardcore players, Lone Star would have been better off introducing this as a 22% takeout bet, while reducing other wager types instead, but that is another story).

Part of the realization tracks are dealing with is that the easiest player to cater to, is the existing player, one who might be hundreds or thousands of miles away from them.

The end result is that Horseplayers will last longer as the overall blended takeout rate starts to drop. The longer they last, the more likely they are to expose others to the game.

Hastings, of all the tracks that have reduced rates recently (add Tioga Downs to the list), actually is tackling the track patron growth problem by reducing WPS bets. They are appealing to both the simulcast/online player and the live player with the recent reductions they made.

"We are trying to reengage the horseplayer that we might have lost, not only locally but throughout the marketplace," says 29-year-old Hastings Regional General Manager Raj Mutti.

They are hoping for a 10% increase in handle. I think their handle numbers will go up more than that. Personally, I'm going to begin doing my own track variants for that track this year, instead of relying solely on TrackMaster numbers (they are good, but in order to make money betting, you pretty much need to have something the rest of the public doesn't have).

If bucking the trend continues to work for those tracks lowering takeout, it is expected that A tracks join in and start reducing takeout rates. We could be witnessing the beginning of a paradigm shift that could eventually cause tremendous growth, as significant drops in takeout will lead to horse racing competing with other forms of gambling (something the industry has all but given up on).

Don't think the industry isn't watching the California Handle Massacre that is happening right now (down another $2 million in handle yesterday alone). Racetrack execs are beginning to think about this approach very seriously:

8 March 2011

Chantal Sutherland Not Only Not Guilty, She Was Innocent Too

There is a similarity between the OJ Simpson trial and the Inquiry result of the 2011 Santa Anita Handicap, both OJ and Chantal Sutherland were proclaimed not guilty. However, unlike OJ, Chantal Sutherland was innocent as well.

It took Chantal Sutherland winning the biggest race of her career for me to watch an entire race from California this year (ahem the takeout hike), though I didn't watch it live, I was still interested enough to view it on Youtube after the fact.

My first reaction was to side with DQing Game On Dude because Sutherland whipped the horse with the left hand at the time of the alleged foul. But thanks to Youtube, and the ability to stop the video frame by frame, you can clearly see, that although Game On Dude carried the competition a little wide around the turn, during the stretch run, Game On Dude did not even move out an inch. Don't believe me? Check the distance between the horse and the rail, or check the tractor tracks on the race course. It was Twirling Candy who came in ever so slightly, knocking Game on Dude off balanced. This made the second bump, which was more noticeable during the race, a non factor.

Here is the race with the full inquiry film:

Admittedly, I've always been a Chantal Sutherland fan. But I am not being biased here at all. The Stewards got it right.

I'm also a strong believer that if the Stewards can't make a conclusive call within around 3 minutes, the results should stand.  I also now think that their results should never be overturned, even if new evidence is presented.

I read a comment, by a knowledgeable horse racing enthusiast (it might have been on The Paulick Report), that stated calls like this should be deemed no different than calls made by the referee under the hood in an NFL game. If there is not enough evidence to overturn the play or the race, the result on the field or track should stand. Even though referees have been known to blow the call under the hood, the results of the play still stand forever, as does the score of the game, etc. And there is probably a lot more money on the line during some of these calls than any horse race, even if it has a million dollar purse.

Back to Chantal. She is back on Twitter (JockeyChantal). Her Tweet the night before the big race:

So excited to ride for Baffert tomorrow in the Big Cap! Watched the re-plays and I'll be tuff.....put your running shoes on :*) 8:17 PM Mar 4th via Twitter for iPad

Her last Tweet, she compared herself to Charlie Sheen:

Felt a little like Charlie Sheen when the crowd was booing me during the post race interview...but "I'm a winner" 11:23 AM Mar 6th via Twitter for iPad

Up to the big race, Chantal has been a little off this year. I checked her stats last week, and she was only hitting around 5%. She is definitely more of a Poly or Turf jock.

Oh, and if you still haven't had enough of Ms. Sutherland. She does have her own website: Chantal Sutherland Jockey/Actress/Model.

Too bad Two And A Half Men (Chantal's favorite show) looks like it is toast. Imagine Charlie Harper (Charlie Sheen) picking up "actress" Chantal Sutherland (playing herself as a jockey) at the track and then taking her home. The jokes would write themselves. It might not be realistic though, because at 35, Chantal is too old for Charlie.

Her age doesn't seem to hinder her true fans though. I still get a lot of blog hits on my Chantal Sutherland Nude...Not Yet post from a couple of years back.

Pull The Pocket has a very good post up "Will We Ever Have Customer-Focused Policy In Racing?"

The Thoroughbred Times has a free preview of their new Canadian horse racing edition. There is an article on Fort Erie by Perry Lefko. The Editor (at the start of the issue) states Fort Erie is located in Eastern Ontario. Could be worse. He could have said it was located in Eastern Canada. For those who don't know where Fort Erie is located, Sarah Palin could say she could see Fort Erie from her backyard (if she lived in Buffalo NY), and she wouldn't have got any flak for it.


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1 March 2011

Hastings Gets Serious About Growth

Hastings Racecourse has announced that they are reducing their takeout rates on Win, Place, and Show to 15%, which is now the lowest in North America for thoroughbred racing.

They are also reducing takeout on the Pick 4 to 15%, which now ties them with Monmouth in having the lowest takeout rate for that specific bet.

Also, they are introducing a Jackpot Pick 5 (where did I read about that before?), which will most likely be like Gulfstream's Rainbow 6 and Beulah's Fortune 6. Though exact details aren't out yet, I would think they went with the Pick 5 instead of 6 for reasons I've cited before: In order to allow US bettors to play the bet they would need to have a one dollar minimum because US Horseplayers cannot make fractional wagers on Canadian tracks unless they are in Canada playing at either a track or simulcast center.

They are experimenting with new post times as well.

Hastings realize two important things. They are in competition with other tracks for existing customers, and that in order for horse racing to be viable in the future, new Horseplayers need to be created. Lower takeouts and this new jackpot bet are definitely the best way to grow.

I almost forgot to mention that they also increased purses by close to 20% on average. Hopefully, these initiatives will work and Hastings will reduce takeouts on other bets as well, while purses continue to climb.

Here is a comparison of Woodbine, Fort Erie, and Hastings:

WPS 16.95% 16.95% 15.00%
DD. 20.50% 26.20% 21.80%
Ex. 20.50% 26.20% 21.80%
Tri 27.00% 28.20% 27.80%
Sup 26.30% 26.20% 26.30%
P3. 26.30% 26.20% 22.80%
P4. 25.00% 26.20% 15.00%
P5. Not Ap Not Ap 15.00%
P6. 25.00% Not Ap Not Ap

Here is an up to date map of thoroughbred tracks in the US and Canada complete with takeout rates:

View Thoroughbred Racetracks in a larger map

Hollywood Mardis Gras Greyhound Racetrack in Florida has reportedly cut takeout on WPS to an industry low 9%. Wow. To be honest though, I've never bet on a dog race in my life, but if you are so inclined, this is fantastic news.