Showing posts with label NYRA. Show all posts
Showing posts with label NYRA. Show all posts

28 August 2010

Dropping Track Takeout Sounds Counter Intuitive....But It Will Grow The Business

Lets hope this isn't lip service. It looks like NYRA is starting to get it.

NYRA Chair Steve Duncker from an interview earlier this week:

"Duncker noted the blended rates in New York were 15% in 1960, 17% in 1970, and 19.81% in 2010. Over that period, racing has faced growing competition from other forms of gambling that employ takeout rates of 2%-10%.

“What business people in this audience think that’s the way to increase business?” Duncker said. “We’re being priced out of this market. We need to bring the cost of our product down in a competitive market.”

And on CNBC, NYRA CEO Charles Hayward was interviewed. This is a must see video (not very long) for anyone who cares about the growth of horse racing:


I personally love the use of the description "counter intuitive" that Hayward uses to describe the effects of track takeout.

"We're taking too much out of the customer's pocket.....the more money we put back in the people's hands, the more they'll bet back in."

The interviewer was pretty much representing the intuitive point of view, which is wrong, that the price to "put on the show" forces takeout rates to have to be higher. This is far from the truth. The cost to put on the show is pretty much a constant (except when it comes to cutting or adding dates, or adding or cutting purse money...which is predicated on the amount of betting the track takes in). Using the example of Fort Erie Slots. Lets say it costs $25 million operate the slot side 7 days a week. This cost has no bearing on how much is lost by customers.
The only thing that matters is the price of the bet. Slot operators have found a long time ago that their optimal payback rate (the amount of money that maximizes profits for slots) is around 92-95%). In terms of a racetrack, that equals a track takeout of around 7%. What this means is that if the slot takeout is doubled, for example, to 14%, it would attract less than half the long term betting than at 7%.

It doesn't matter if the operation costs were $2 million or $30 million. What matters in gambling is how much the customer gets in return.

Yes, it is counter intuitive, but that is how gambling works. The longer a player lasts, the more they enjoy it, the more they are likely to return. The more money a customer leaves a gambling establishment with, the more likely they are to come back quicker.

Three more good things happen when it comes to growth by reducing takeout. First, the longer a person lasts, the more likely they are to expose friends and family to their hobby. This potentially creates a new audience.

Secondly, a player who spends more time handicapping and watching races will likely devote more of their entertainment and gambling bank roll to horse racing and less to other forms of gambling.

And third, the lower the takeout, the more likely some visible winners will be created. Visible winners helped poker explode. For the most part, there has to be a good reason for a newbie to begin tackling horse racing's enormous learning curve. They need to be able to rationalize a reason to buy a handicapping book in the first place. If long term winning is impossible (with a 20% chop it certainly is impossible), why even look into betting on horses?

I should also make it clear, that takeout can be reduced to as close to zero as possible. There is an optimum takeout, where tracks and horsemen make the most money, but it differs for each type of gamble. The optimum takeout or house edge in blackjack or poker is lower than the optimum takeout for horse racing wagers. One of the main reasons for this is the frequency of wagers per hour, and the fact that no matter how enticing horse racing becomes, there will still be quite a few players who will only play a little per week, month, etc. Much of their churn will go elsewhere, other than back to the track.

In fact, each type of wager has different optimum takeouts associated with it. Show betting has a lower optimum takeout than win bets for example, and much lower than triactors.

Since, there is no empirical evidence to use when it comes to horse racing (as horse racing as always charged its customers too much), I can only estimate. Right now, I figure the optimum takeout for show betting is around 5-6% with no breakage. Win betting is probably 7-9%. Exactors and doubles around 9-10%, and triactors and other exotics fall in the 12-14% range.

Those Morons In California
Those morons, yes morons, in California are going to learn a very big lesson. It is going to get ugly there very soon. I think this is the first time HANA ever got mentioned in the DRF. Personally, if they do raise takeout in California, I will not even look at another past performance from there (except for Breeders Cup Day). I won't be the only one who will personally boycott their racing. They need leaders there who get it. Those who understand that it might be the intuitive thing to do to raise takeout so purses will grow, but who know that it will lead to a very bad decline in their bottom line.

The infighting continues as some of California finest imbeciles like the takeout increase but are dead set against exchange betting. If I didn't know better (and I don't), it appears that bill AB 2414's sponsor, Assembly speaker John Perez, has screwed up by seemingly being bought off by nincompoop's who believe that upping the takeout will benefit California tracks and horsemen, and Betfair at the same time. Politicians sometimes do things that street whores wouldn't do when it comes to campaign contributions and other perks. I don't expect Perez to be different, but he really messed up by attaching both exchange betting and a takeout hike on the same bill.

DISINGENUOUS QUOTE OF THE WEEK

"I would accept that an increased take out of any kind would be unpalatable. However, as that same horseplayer, I want to see a healthy sport that has the chance of a long-term future and people with much more knowledge than me of California racing believe this will help the sport. It is worth noting that other states already have take outs that exceed California. In the UK, there is a healthy Tote industry and some of the most successful bets have a take out of 30%.
To me, we should be looking at how to rebate price sensitive customers so that skilled horseplayers who put a lot of money into pools are given a loyalty bonus or rakeback. I struggle to understand why US racing is so willing to cooperate with offshore rebate shops that suck the life out of the sport. We should be exploring ways of bringing that business back onshore and, at the same time, rewarding regular players with rebates. It should be the operator that stands the price of those rebates and not the sport but they could only do that if working out the right pricing formula all round. Irrespective of what happens to AB2414, I hope that issue will be explored by the industry."

-Stephen Burn TVG CEO(via Paulick Report)

I find what Burns said to be disingenuous to an enormous degree based on his comments.

He of all people should realize that rebates or lowering takeout isn't about appeasing price sensitive and big players, but giving all players an opportunity to last longer, spend more time betting on horses, and opening the door to the chance that some can win which will create a whole new market of wannabes (this has been the key to Betfair's success).

Andy, I agree, he is full of it. He isn't a stupid guy.

He realizes that the higher the takeout in California, the more likely people will turn off parimutuel and bet on the exchange.

Secondly, he realizes he needs to invent reasons why a takeout increase makes sense so as to support the bill, which will get Betfair in the door.

Now, I'm not saying exchange betting is bad for the industry, in fact, parimutuel wagering has risen wherever Betfair has shown up. But Burns is playing with the media right now.

There is no way he believes that the increase in takeout will add to the health of the racing industry in California. I'm not buying it for a minute.



Delaware Park Doing Something Good
Delaware Park is doing a two month "experiment" starting September 4th. They are lowering the takeout on exactors for those who bet live at the track from 19% to 10%.

It isn't a huge thing. Not a lot of money is wagered on exactors per race on track at Delaware (most of their handle is from other tracks and ADWs across North America). However, it is a small step in the right direction.

They are hoping this will bring some extra people to the track who would normally bet through one of the bigger ADWs. And they will hopefully get bigger wagers on their product live.

What will happen is that Horseplayers will get more money to play with if they hit an exactor. That money will be churned back almost automatically either on the next few Delaware races or simulcast races. Players will last longer, but the reality is that they will quickly lose that money back into high takeout bets for the most part.

Reduction in takeout to work, needs to be long term, and needs to be an industry wide thing if you want to measure total success.

The Delaware promo will be successful, but it won't be huge. But when it comes to horse racing, baby steps in the right direction are better than standing in your excrement, something horse racing seems to be famous for.


Bruno Schickedanz denies temporary stay at Woodbine by ORC
Some emotional quotes by other trainers and his former trainers didn't help Bruno's case. No reasons yet have been given as to why Schickedanz can't race or stable at Woodbine, other than Schickedanz did something against the good of racing.

I think they need to revise the rule books at the ORC so that a case like this will be clearly against the rules, and should never happen again.

I don't know how that ORC can justify a Woodbine ban, but allow Schickedanz to continue to race and stable at Fort Erie.


BEYER LIKE SPEED FIGURES GIVE TRACKMASTER PAST PERFORMANCES A BIG EDGE

Good points are made in this TrackMaster blog post about the harness game and why there is good value in using their past performances.

22 September 2009

Stewards Shouldn't Have Thrown Out Marsh Side

Stewards Flipped The Coin And Got It Wrong In Northern Dancer
Unfortunately, on this Youtube video you don't get to see the head on (you can if go to Cal Racing or HPI replays), but the disqualification of Marsh Side was a bad call. There was no apparent bumping between Marsh Side and Quijano, and both jockeys were hitting with right hand while moving to the inside in tandem. If anything, Quijano would have squeezed Champs Elysee regardless of whether Marsh Side was in the race or not. Again, if the Stewards have to look at a race for more than two minutes, they should let the results stand.

The eventual winner had the common sense to get away from the rail as his jockey anticipated the tight quarters. Champs Elysee did get shut off, but I have a problem blaming Marsh Side for it.
I am pretty sure that this call will be overturned, and the bettor who picked the best horse in the race, will wind up getting screwed.

Also, Andrasch Starke, who rode Quijano must have forgot about the new whipping rule in Ontario. There were actually quite a few violations in both the Northern Dancer and Woodbine Mile. I wonder if fines have been handed down.



Steven Crist kisses Woodbine's butt, disses horseplayers in the meantime by failing to mention Woodbine's high takeouts.

Crist likes that Canada doesn't run that many Grade 1 stakes. The fact is that we can't, even if we wanted to. They do their best now to schedule these events at times when there is not that much competition to compete against. Whenever Canada was forced to compete, they drew sub par fields.


Crist is not all bad. At least he wrote an article that slams horse racing for still allowing breakage in today's computer age. How much does breakage cost the horseplayer? Read this.


Assiniboia Handle increases 38%. Most likely due to increased exposure at ADWs that offer rebates. Many bettors are avoiding the bigger tracks that try to prohibit their signal from going to rebaters. The smaller tracks are winning this war.

Woodbine had a $5 million handle day on Sunday. But lets not forget Friday when they couldn't even crack $1.5 million. They wrote a race specially for Jambalaya's return. The purse was over $90,000 and it attracted $61,766 in betting. They sure know how to run a business, don't they.


Slots in Ohio just took two steps backwards.


NYRA At It Again
NYRA has yanked live signals from ADWs like HPI and NJBets. For the real dirt behind the move, read this thread on Pace Advantage.


Horse is somewhere between a girl and a boy
Caster Semenya, Tuscan Abbe, and Arizona Helen. I wonder if Rachel Alexandra has been checked lately:)


Is it me, or does it appear that the morning line oddsmaker at Fort Erie doesn't give many Daniel David and Nick Gonzalez close to enough credit? There seems to be a few horses that went off at pretty low odds that have been 12-1 or 20-1 in the program that are either ridden by David or trained by Gonzalez. And most of them looked like they should be one of the top three program selections.


"Slots and OLG In Their Own Little World" according to Fort Erie of the Fort Erie EDTC. Listen to him here, as he discusses the proposals he dropped off to the Ontario government.


Justin Stein Appealing Large Suspension and $2500 Fine For An Outburst That Would Have Helped "Jockeys" Ratings Soar
I first read about this on Jen's Thoroughblog in the comment section:
On September 7th' seventh race Justin Stein's mount, Sincerely A to Z, was clipped at the head of the stretch causing Stein to fall off. He was in a sandwich position, and to me it wasn't Chantal Sutherland's mount (Diplomatic Impact) that caused the clip. A long inquiry ensued as Chantal finished second or third, but the results stood.
After the race, allegedly Stein called Sutherland all sorts of very rude names.

The Stewards decided to suspend Stein 25 days and fine him $2500, which he is currently appealing.

After the suspension was announced, three days later on Saturday, in the 9th race, Sutherland was on the favorite on the grass (Soul of Nataka), and patiently waited for room. Meanwhile Stein was on a long shot (Caledon) who seemed to be waiting for Sutherland to try to get by. He came over on Sutherland's mount at the head of the stretch, and Sutherland's mount then came out causing some of the field to fan out. Sutherland's even money shot wound up romping, and there was no inquiry, which I found weird.

It is dangerous to be a jockey. Emotions run high, as does jealousy. Chantal Sutherland is the best thing that has happened to Woodbine in years, but she shouldn't be over protected either. I'm sure male jockeys call male jockeys some pretty ugly names at times, so I don't see why a female jockey should get special treatment here or that male jockeys should get an excessive punishment over something that happens during the heat of battle.

Replays are available at Cal Racing and HPI.






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2 August 2009

Belmont Handle Down Over 13% And I Know Why

NYRA President and CEO Charles Hayward can blame the weather all he wants. He can also blame the economy too. Sure, these factors could have contributed to the fact that betting on Belmont live was down over 17%, and that handle from from all other sources was down over 13%, but I think it goes deeper than that.

I think that over the last year especially, existing horseplayers are starting to wise up. Organizations like HANA (Horseplayers Association of North America) have helped educate the player immensely. Hopefully, my blog has as well. The betting public is becoming more aware each and every day of two words that make racing execs cringe: takeout and rebate.

The reality has become totally apparent now; the only way a horseplayer has a fighting chance to even think about turning a profit long term, is by getting a substantial (5-10%) rebate. And most serious players have now adopted a rebate only philosophy, where over 90% of their bets are on races they get a rebate on.

NYRA and every track out there should be selling their signal everywhere. Again, it is just more evidence that horse racing is probably the most dysfunctional business in the Western Hemisphere.

Personally, I bet on two races at Belmont this year. The Belmont and another race that was part of a handicapping challenge that I handicapped and felt compelled to bet on because I was having a good day that day.

NYRA doesn't seem to let their signal go out to many rebate shops, especially the ones that give rebates to the small to medium player. Foolish move. Very foolish.

I haven't even handicapped a race at The Spa this year, and I don't plan to. But I do handicap and wager on around 5-7 tracks a day. I'm not alone.

To put things in perspective though, Belmont still did over $9 million a day in handle which is around 4 times what Woodbine averages a day. Mind you, the public is very aware of Woodbine's high takeout rates by now, and a lot of players just can't stand the Polytrack.


Woodbine Stewards Goofed

I think the Woodbine stewards have done a very good job this year, but on Friday, they blew it.

Taking down Carrtowns Katie in the 8th race was a terrible call. Yes, she was lugging and jockey Chantal Sutherland knew it as she was whipping the horse with her left hand, but she was clear and had momentum when she was passing Spend Now And Save at around the sixteenth pole in the stretch.

Carrtowns Katie was definitely the best horse in the race, and the fact that it was a relatively long inquiry means that the stews were having a hard time deciding what to do. I think I can speak for most horseplayers when I state that if the stewards are dealing with a tough decision, the results should stand.

I realize riding horses is one of the most dangerous jobs on this planet, but it sure looked like a phantom check to me. Not sure if it was the horse who shied away, or if it was Emma-Jayne Wilson, but I've seen a lot worse happen without an inquiry.

Were the stewards compelled to appease the betting public by putting up a 6-5 shot? Public perception may say that had a lot or at least a little to do with it.

If the owners of Carrstowns Katie appeals, I think they win. But those who bet on the best horse still lose.

If Chantal gets days for the ride, it would be an injustice.



$40,000 Raised For Chad Beckon
Good job by Robbie King and Gus Schickedanz to make it happen.


THE BREEDERS STAKES
The Breeder's Stakes goes today at Woodbine. It brings back memories from my early teens, as two of my all time favorite horses, Momigi and Tiny Tinker, won this race back to back. Both of these runners would pretty much come from last and fly in the stretch.
Tiny Tinker, especially, sporting the bright orange colours of Beasley, was a thrill to watch. He was known to trail the field by many lengths before taking off and passing horses one by one.

How about Mensch to upset today? This is one of Fieldstone's three runners in the race, and to me, at a mile and a half, I can see it coming down to stretch closers.
Still a maiden, Mensch ran a good one going a mile and three eighths last time, losing to entry mate Guipago, who I think had a better trip and took advantage of the slower pace, which probably compromised Mensch.

Eye of the Leopard is definitely the horse to beat here. Last time he ran completely against the bias, and Mark Frostad would probably have worked the horse over Fort Erie if he could turn back the hands of time. According to my form, Eye of the Leopard has not worked on the turf, and has never raced on the turf. Despite his breeding, this makes him very vulnerable today.

In the co feature today, I'm giving Elated Moon one more chance. She obviously didn't hurt herself last time out, when she embarrassed me for publicly picking an even money shot who got basted. But something else went wrong, and I'll bet Steven Asmussen's team is bright enough to have corrected it. I'm going to predict she wins the Nandi Stakes easily today.


Forget GO BABY GO and BET IT TO GET IT. This should be used in a campaign to get people to go to the track:


Speaking of betting. Check out new ADW Horseplayersbet.com.


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