In their never ending effort to help murder horse racing, the knuckleheads at Woodbine Entertainment got the gambling illiterate Ontario Racing Commission to go along with the idea of allowing triactor and superfecta betting on very short fields:
For triactor wagering, the required number of separate betting interests has been reduced from six to five. For superfecta wagering, the required number of separate betting interests has been reduced from eight to seven for all races other than stakes races. No change was made to the number required for stakes races, as the required number remains seven.
To be fair, Woodbine and the ORC are not the only morons involved in racing. The California racing board just agreed to the same idea:
The Board authorized for public notice two proposed regulatory amendments to reduce the number of wagering interests that must be scheduled to start at the time the wagering pools open in California for trifecta and superfecta wagering. Rule 1979 (Trifecta) currently requires six wagering interests. The proposal is to reduce that required number to four. Rule 1979.1 (superfecta) currently requires eight wagering interests. The proposal would reduce that number to six. Racing associations and fairs would have the right to not offer these bets.
I know that some readers will say that they like more choice and think this a good initiative. But the reality is that superfectas and triactors have the highest takeouts going. They are bankroll killers to those not cognizant of takeout (which is most people, who, for example, have no clue that Woodbine charges 28.3% takeout on triactors.
I don't blame the average gambler for betting on triactors in 6 horse races. It makes sense that when you gamble you might be inclined to hit what might be the biggest payout available for a certain race. But this new rule, takes advantage of the players in a very big way.
It wasn't too long ago that during the first Breeder's Cup, those in charge decided to put a $5 minimum on exactor bets. Why? Because they were worried about killing their customers bankrolls too quickly. Small players would be forced to stay away from the exotics, and wind up cashing more by being forced to bet only win, place, or show.
Nowadays, organizations like Woodbine are interested in one thing: Getting as much money from the player every single day, without caring if the player comes back because of their gambling experience.
This new rule is guaranteed to tap out players more quickly. The monkeys who run the WEG zoo just don't get it. A regime change is desperately needed. I honestly don't know what is holding them back from charging 28.3% on all bets.
I think they don't even get why slots are so successful. It is the lower takeout. Slot players don't know or care about house edge, but slot operators know that if they raise the edge to more than 11%, people lose too quickly and are prone not to come back so readily. If only horse racing execs would understand the same.
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Daryl Wells Jr. reports that Fort Erie has 500 stall applications already. The track will be open for training early in the week. They need to add more to the bottom claiming races and eliminate allowance races and claiming races above $14,000. If an owner thinks their horse is worth more than that, prove it, and run at Woodbine. By upping the purses for bottoms, they are sure to attract quite a few more horses, especially with Ohio being in the dumper big time right now. Canadian bred claiming races could draw many horses from across Canada as well, plus they would be a good out for many Canadian owner/breeders.
Three Account Betting Companies Given Notice In Maryland Outside of the Preakness, I don't know very many people who even follow Maryland racing. Especially after increasing takeout recently, I don't see the circuit being missed at all. I'm not for tracks closing, but if they must, Maryland is a perfect place for it to happen.
The shift continues from live betting to betting on the internet. The only way for horsemen and tracks to take advantage of the shift (and not continue to lose out on the shift) is to start their own ADWs.
Don't shoot the messenger: I'm totally against the slaughter of race horses
Since Fort Erie has survived for at least one more year, and there is bound to be quite a few empty stalls at the Fort thanks to the late start, I think it is important to inform owners in Ontario and perhaps in the United States what the real costs are to own a thoroughbred.
I did a post last year comparing the difference between training a race horse at Woodbine versus training one at Fort Erie. Prices haven't gone up very much to my knowledge over the past year, so the numbers quoted are most likely very close if not right on. If I'm way off on anything please leave a comment and I will correct it.
Keep in mind that I'm quoting in Canadian dollars, so if you are an American, you can multiply all dollars quoted by .8 in order to put things in a US perspective:
COST OF OWNING A RACE HORSE IN ONTARIO
I'm going to make some assumptions here. Your horse trains for 8 months in the year and races 12 times, for 4 months is your horse is resting at a farm. Also, your horse is Woodbine caliber and runs 11 times at Woodbine and once at Fort Erie.
Training a race horse at Fort Erie could be a lot cheaper for an owner than training the horse at Woodbine. I'm going to go through the pluses and minuses.
Cost of training:
At Woodbine, trainers charge between $60 - $110 per day. 60 bucks and 110 are very rare. The bulk of trainers charge $70-75 a day.
At Fort Erie, trainers charge between $40 - $60 per day. The bulk of trainers charge $50 a day. At Fort Erie, some trainers will offer "the deal." The typical deal is where the owner buys the horse, and the trainer is responsible for all or most of the bills in return for half the purses, and half the equity in the horse once the owner gets his or her purchase price back. For a trainer, this deal is a killer for them unless the horse makes at least $30,000 for the year. Trainers who take deals on cheap horses are usually desperate, and you have to wonder about their foresight. The only way a deal makes sense for a trainer today is if the horse is competitive at a claiming price of $16,000 or greater.
The actual cost to a hands off trainer who does nothing in the way of grooming or walking a horse can be broken down like this:
Woodbine Groom $23 Hot Walker $8 Food and Bedding $15 Exercise Boy (4-5 times a week@$15 per day) $10 Total Cost=$56 per day
For Erie Groom $18 Hot Walker $5 Food and Bedding $14 Exercise Boy (4-5 times a week@$12 per day) $8 Total Cost=$45 per day
Remember, these are estimates. Trainers also bring capital investments to the table, some bring a lot more than others. That being said, they could save money by using a hot walker machine, for example, but it cost the trainer to buy the machine. Some have "magical" blankets too. The trainer can also save on feed by buying it off the track in bulk, but they could also add supplements which may or may not appear on your bill as well as over the counter meds. Trainers also incur Workers Comp charges.
I have always contended that the 10% is what the trainer is entitled to. If he or she wants to make money in the morning, then they should rub a horse or two.
Shoeing Charges 8 months of training and 12 races will mean about 8 pairs of shoes. At Fort Erie, the usual cost is $100 a change. At Woodbine it is around $120-$125.
Shipping Charges If stabled at Woodbine, shipping once to Fort Erie from Woodbine would cost $200 for the year. If stabled at Fort Erie, shipping eleven times to Woodbine from Fort Erie would cost $2200 for the year. Shipping to and from your layoff farm total around $200 a year no matter if you have a Woodbine or Fort Erie trainer.
Layoff Period Most farms charge between $15-$25 per day. So lets say the typical owner pays around $600 X 4 months per year.
Stake Monies Many trainers will charge an additional 1% for at least a win on a training bill so that at least the groom will get a stake. Typically, many trainers pay $50-$150 for a second as well to the groom (the owner is usually charged). So a typical owner of a Woodbine horse with a 12 starts a year (lets say 2 wins and a second), will pay an additional $700 in stakes. Stake money differs dramatically from barn to barn.
Vet Bills Expect to pay around $200-$300 per start per horse on average regardless of the track.
Miscellaneous Bills Some trainers will add on tack charges or over-the-counter meds onto your bill. Most don't charge for this.
Environment Some trainers will say that Fort Erie is a much more calming track, especially for a high strung horse. Lots of grass to graze on, and no airplanes coming and going every 2 minutes. But if you are at Woodbine, you have the option to train on the Poly, sort of a home field advantage.
Lets add it all up:
Woodbine: Training (@$70 per day): $70 X 240 = $16800 Shoes : $125 X 8 = $ 1000 Layoff Charges : $20 X 125 = $ 2500 Shipping = $ 400 Stake Money = $ 700 Vet Bills = $ 3000
Total = $24400 This means your horse needs to make around $30500 a year just to break even. And at $75 a day, the owner needs to make $32,000 a year to break even.
Fort Erie: Training (@50 per day): $50 X 240 = $12000 Shoes : $100 X 8 = $ 800 Layoff Charges : $20 X 125 = $ 2500 Shipping = $ 2400 Stake Money = $ 700 Vet Bills = $ 3000
Total = $21400 This means your horse needs to make $26750 a year to break even.
If you own a horse that only runs at Fort Erie, the horse may have a few more layoff days because the season is a little shorter, and of course, less shipping charges, so the total that needs to be earned to break even may be $3,000-$4,000 lower than the amount of $26,700.
Many Fort Erie trainers are just as talented as Woodbine trainers, but they may just like the small track/small town feel. Either way, the owner needs to have a trainer they can trust, and one who doesn't intimidate them. If the owner wants to have a big say, they should have it. It is their horse, and they are the one who is most at risk. Remember, you are the owner, you are doing the trainer a favour by choosing to do business with him or her. Don't forget it.
If any trainers want to quote their exact prices, feel free to email me at cangambleblog@gmail.com and I will add the information on this blog post with your permission.
The following couple of videos basically sum up the deal. The main speaker is Jim Thibert of the EDTC of Fort Erie. Please excuse the shakiness. I was standing while holding a digital camera and I either had too much coffee or not enough coffee (I'm not sure how that works anymore).
A summary of the deal (Letter Of Intent) is as follows:
The EDTC offered $35 million ($33 million of which they don't have) to purchase Fort Erie race track.
A non refundable deposit of $2.25 million was handed over to Nordic Gaming. $1.5 million came from the $2 million the government foolishly handed over to the EDTC last year to do due diligence on the $300 million dollar smoke and mirrors expansion project. They managed to blow half a million of it in almost no time. $500,000 came from the HBPA and $250,000 came from the Town of Fort Erie (lets put it this way, no live racing most likely means no slots which means no $1 million the town gets from slot revenues).
Nordic Gaming is willing to take back a mortgage on the remaining $32.75 million if the deal actually happens, as long as the mortgage is guaranteed by the Government of Ontario.
The Letter of Intent is good for 90 days. In other words, the EDTC has 90 days to convince the government that they can 1) Justify the $35 million price tag (LOL), and 2) Show that they can make mortgage payments while not losing money each year on top of that (something Nordic claims they haven't been able to do for the last 3 years).
At the end of the 90 days, if the mortgage can't be guaranteed, the deal is over, but Nordic must still race to the end of October. In return, they get a free $2.25 million which is probably closer to the $3-4 million in losses they are claiming to lose of late each year.
In other words, Nordic caved because they probably don't lose $3-4 million a year, and they knew that no racing means no slots and that if they lose their racing license, they would have a very hard time getting it back. In other words, the joint would be very close to worthless.
Hats off to Sue Leslie especially, of the Ontario HBPA, for working diligently on getting this project together, and Jim Thibert for at least being whimsical enough to come up with this deal in the first place. It appears that the main politicians Kim Craitor and Tim Hudak did next to nothing really to make this particular deal happen, but somehow I expect them to take a lot of credit.
Meanwhile, the EDTC which has claimed from day one that they don't understand racing very much, though Thibert said his knowledge has increased of late, has hired a consultant firm to look at the Fort Erie books in detail and to make recommendations going forward.
He emphasized that he is not accepting tenders for the consulting firm, so look for nepotism to weigh in heavily in the firm he decided to go with. This isn't good, because what they need right now is a consulting firm that understands both horse racing and gambling, and even the gambler's psyche. Horsemen collectively don't understand the bettor, or that without the bettor there is no business (and yes, bettors can and do go elsewhere). And most business execs have no idea in regard to what makes today's gambler tick.
Thibert did say that it was going to cost a lot for the consulting (where is the money coming from?).
They will be looking to piece off a lot of the unused property to help pay the mortgage, which in the end means they will have less land and probably owe about the same amount more or less when the dust lands.
They are still banking on "lending" Woodbine 200 slots, while expect the OLG to change their payment schedule on those slots (where the track/horsemen, the OLG and Woodbine get 1/3 of the net each. Right now, the OLG gets around 77% of the net.). They don't even know if Woodbine would go for the deal, and extra slots only means more potential money if a patron actually leaves the slots disillusion that he or she couldn't lose money because every machine was taken. More slots for Woodbine, most likely doesn't mean that the bottom line of money lost by customers would increase, even if the slots are at full capacity. People stay and lose what they were going to lose regardless of capacity in most cases. More slots doesn't means more money lost by customers.
In fact, casino gamblers are more eager to play if it looks like a machine to sit at or a table to sit at looks hard to come by.
If the OLG is going to make concessions, the realistic one is to increase the percentages Fort Erie gets from 20% to 30-35%. In return, Fort Erie can easily give up 4-500 machines. Again, a separate case can be made for Fort Erie being Ontario's only other thoroughbred track.
Bottom line, the track isn't worth $35 million. I had to laugh when Thibert calls himself a businessman, and also stated that in these rough economic time, it is a good time to buy. A real businessman takes advantage of these times. Sure it is a good time to buy....IF THE PRICE IS RIGHT! You don't put an offer on the table to satisfy the maximum a seller is willing to accept. With more tracks bound to come on the market thanks to the Stronach fiasco, Fort Erie is worth even less today than it was a few weeks ago. The business allegedly loses $3-4 million a year, and the land isn't worth very much at all.....maybe $35,000 an acre on average TOPS (which means the land is worth $12 million if the right buyers came along). Fort Erie can't even half fill an indoor mall with businesses, and I don't see demand going up in the near future.
In fact, a lower amount was allegedly accepted by Nordic years earlier when the business was breaking even. But the deal fell through because Nordic wasn't doing as well as they originally stated they were doing.
So what will happen?
90 days will come and go. Nordic will get much of the money they originally looked to extort in the first place. At that time, new offers will be allowed to come in for the track. It is to everyone's best interest that this deal doesn't happen, even if the EDTC were to come back in again, the amount offered should be at least cut in half.
The horsemen and the tracks future though will be in doubt for 2010 and beyond, until Nordic decides to sell the track for a fair price.
Fort Erie needs to get rid of allowance races so that they can give more money to lower claimers, so that owners have a chance to make money or at least break even. If a horse is worth over $14,000, send it to Woodbine to race and see if you are right.
They also need to cut track takeout, so that gamblers will last longer, and perhaps start spending more time handicapping and coming to the track, even bringing friends and family.
They also need their own ADW, so that they can market racing to their home market of 400,000 people. In the real world, there has been a shift which will not change, bigger bettors are betting mostly from home.
From the Buffalo News "Details of an agreement between horsemen, track owner Nordic Gaming Corp. and the Town of Fort Erie's economic development arm are scheduled to be announced at a news conference at 9:30 a.m. at Bridgewater Country Club."
Excitement was in the air today when rumours started to swirl big time thanks to the new posting on the Ontario HBPA site: March 11, 2009 4:30pm
Attn Horsepeople
Please check the HBPA website Thursday morning March 12, 2009 at 8:30am regarding the status of live racing at Fort Erie in 2009.
Thanks
Sue Leslie President, HBPA March 11, 2009
To All Horsepeople,
Please find below a media advisory for your information.
Please check back with our website, frequently, for more information.
Yours truly,
Sue Leslie President, HBPA
Fort Erie Economic Development & Tourism Corporation
MEDIA ADVISORY IMPORTANT INFORMATION REGARDING STATUS OF OFFER TO PURCHASE FORT ERIE RACETRACK
DATE: Thursday March 12th, 2009 TIME: 9:30am - Press Conference LOCATION: Bridgewater Golf & Country Club 700 Gilmore Road Fort Erie, ON
******************************************* Before reading the Buffalo news, one could only think there was going to be a positive announcement, after all, they have until March 16th to negotiate. And why make an announcement at a Golf Club if it was going to be negative?
According to the Buffalo News story, Fort Erie will run 78 days, which means a full season like last year.
A lot more questions will be answered tomorrow morning, and then I can analyze the deal for my readers:)
Interesting. OLG in Fort Erie has advertised for a Customer Relations Manager. It comes with a one year contract. I'm wondering if the contract is automatically terminated if there are no customers. Nordic has until March 16th to announce whether or not there will be racing at Fort Erie in 2009. Their ability to run as a racetrack terminates March 31st if they state there will be no racing. As stated previously on this blog, I can't see how the slots will be allowed to operate without live racing. It would be a terrible precedence where a track can say they lose money overall because of live racing. This opens the door to many tracks in Ontario to shut down their track operation and keep the profits made on slots. So is the fact that a Customer Relations Manager is being sought a positive, do they expect live racing to continue? Or does this mean that the former CRM left the ship and the OLG is filling the position by law? Or does it mean that the OLG will keep slots going regardless of whether live racing in Fort Erie takes place? Nordic would love it, if they just had slots. They would be making a profit.
Ongoing negotiations are still going on. It is approaching the 11th hour however. Nordic is impossible to deal with it seems. And the government hasn't helped because they've put Nordic in a power position by not announcing that slots would officially close without live racing.
Is Woodbine waiting in the lurk? Is it possible that they can come in and lease the business operation for at least 2009? Maybe Eugene Melnyk can come in and buy the place, and change the name to some street in the Bahamas.
Of course, the OLG can get racing to go for the foreseeable future by upping Fort Erie's take from the slot revenues.
Don't think for a second this move has nothing to do with HANA, and especially the top 20 racetrack list where Kentucky tracks received prominent ratings (thanks to their lower takeout rates compared to the rest of North America). Of course, Keeneland was number one. They put a quick 15 second promo on TVG up mentioning this:
Beyer article on Magna bankruptcy. Stronach might have had good intentions, but he was a terrible visionary. And now he left the racing industry in a carpet bombed state (my words, not his).
Another chain reaction that wiped out most of the field occurred yesterday at Aqueduct in the second race. Only two of seven horses in the field wound up crossing the wires for parimutuel purposes, which mirrors what happened in a harness race at Woodbine Monday night (see my last post). Private Details, a three year old filly broke her left front cannon bone at the quarter pole, and landed on her side causing the chain reaction. Amazingly, only one jockey was taken to the hospital (Eddie Castro), and he ended up with a bruised shoulder. Like I said, it looks way worse than it was:
I hate looking at these things. I can only watch them once, and barely once. But most people want to see these things at least once. Morbid curiosity perhaps? The same reason many people watch stock car races? I took psychology in university, but I forget why we seem to need to look at this stuff. As for me posting it, I had second and third thoughts about it. This definitely doesn't do the sport much good, even though there is an old saying that any advertising is good advertising. The Eight Belles tragedy proves that statement wrong. I'll admit, I want this blog to be read. I don't make much money on the blog, but I do want my main message about dropping takeout and growing the game to read by as many people as humanly possible. This is the main reason I decided to post the video. It is the main reason I set up a new Youtube Channel as well. In fact, by putting up the harness accident from Monday night, I have so far received over 10,000 hits at Youtube. I'm not thrilled with many of the comments that criticize horse racing for being cruel, but it is better to know what the industry is up against so that it can be dealt with.
Let me lighten things up a bit. I did not see this hilarious commercial/promo for the series Jockeys until I found it doing a search on Youtube. It is a must see for anyone who handicaps horse racing:
It definitely doesn't take away anything from the intimidation that a newbie watching the video might have when it comes to thinking about giving horse racing a chance:)
NY Lawmakers Trying To Prevent Track Takeout Increase I don't want to beat my chest too hard, but I'm sure HANA has had some sort of influence in this decision, though the reasons cited makes sense as well. I still think the law will go through though.
February handle down 11%. The game is dying, but the racing execs are starting to get it I think. They know they have to change the pricing of betting, but will they, and is it too late.
Luckily, it looks much worse than it was: Accident Marred Ontario Boys Final yesterday at Woodbine (the video is 10 minutes, but there is little in the last 6:00 other than an inquiry sign):
No horses were put down. For an update click here. I just have one question though. There was at least one horse that could have crossed the wire third. I'm not sure if he did, but why didn't he get a third placing? They wound up paying the triactor off using the first two finishers with an all. And since it was a $55,400 purse, the third horse would have stood to make at least $5,500 (I'm not sure what the jugheads payout to the third finishers exactly).
Bill Finley Chimes In On California Anti-Rebate Rule Change
Bill Finley has a great article out called It's About Time, where he, like me, points out that one of the stupidest restrictions ever appears that it will be history in California very soon: the banning of rebates:
"Horse racing needs to find ways to build its business and needs to take a harder look at things like exchange betting, proposition betting and rebates. Times have changed and they are tough. The game needs every betting dollar it can get its hands on. Rebating works, and it needs to be supported."
Woodbine came in higher than I would have liked. Going by takeout alone, they wouldn't have cracked 50, but because they offer all sorts of wagers, and their field size is on the high side, they wound up in the middle of the pack. Fort Erie, mostly thanks to their ridiculously high takeout on exactors (over 25%), wound up next to last. Their field size last year wasn't the greatest either. If availability was factored in, Fort Erie could have scored higher. Also, Fort Erie is one of the only tracks that makes their live videos free to everyone.
HANA also has pins available for members: Donate a minimum of $20 here and you'll get a pin sent to your home, or you can send a check here: Horseplayers Association of North America 1926 Abbey Rd, #95 Charlottesville, VA 22911
Make all checks payable to: "Horseplayers Association of North America"
'Money is needed for basic necessities such as having a website hosted, printing business cards and letterhead, postal services, and applying to the .I.R.S. for 501(c) tax exempt status.'
FORT ERIE UPDATE-nothing new It is less than 2 weeks before the official sign goes up on no racing at Fort Erie in 2009. Hopefully, the government will not let it happen. They can easily stop it by changing the amount that Fort Erie gets from slot revenues if a sale can't be worked out.
The main argument is why should California horsemen and tracks care what an ADW does with the money they bring in after they pay for the signal? They were perceived as either protecting non rebating ADWs or protecting major off shore ADWs, or both, all at the expense of dissing price sensitive bettors.
Rebates are here to stay. It is apparent that tracks will not drop takeouts, at least in the near future, so the way they have to compete and grow at this time, is to allow ADWs to rebate to their heart's content.
The tide is turning, as racetrack execs have at least taken notice of their customers. That is one of the goals of HANA. Click here to join for free.
Speaking of rebates. Ian Meyers has left Premier Turf Club. The unofficial reason cited was that the other partners wanted to take the ADW in another direction (huh?). Does this mean that they will give lower rebates? Are they shopping around to be bought out? I guess we will find out. Ian was a hands on man. He genuinely seemed concerned about his customers. And many PTC customers did business there because of Ian. Mind you, the rebates offered were outstanding (probably thanks to Ian). I wonder if they still will be. Also, it is rumoured that Joe Riddell has left the company. They were the only two partners I knew about. Obviously, there are another couple of partners now running the show.
Brothers Charged in IRG Investigation IRG was an offshore ADW owned by Youbet (they bought it in 2005). Allegedly, the Jalinsky brothers were laundering money as well as deciding what bets to book and what bets to lay off.
The Walls Are Caving In At Magna Entertainment Magna has received its first notice. This one from PNC Bank: “failure to comply with certain financial covenants relating to the financial position and results of operation of MJC and related entities.”
The bank reserves the right to come in for the kill at any time. I don't think this should be looked at as an opportunity for Stronach to try to get himself out of this mess though. I think the PNC didn't act yet because they are waiting to see what the Bank Of Montreal does on March 6th.
The resignation of three directors in the last week or so has made MEC non compliant to be trading on the Toronto Stock Exchange. The stock will be headed to the pink sheets from NASDAQ very soon as well. In other words, future financings are completely out of the question, and the company continues to bleed money. As each day goes by, there will be less and less for creditors to collect, so it is just a matter of weeks before we see a full fledged bankruptcy. I can't see it going Chapter 11 either, because of continuous operating losses. This means that tracks will be put on the selling block very quickly. But are there buyers out there?
Tragic News Fort Erie owner/trainer Gordon Cowie died suddenly yesterday. He was only 44.
Cowie amazingly won an allowance race last fall with El Gran Brett, a horse that was getting beat up at Fort Erie in 5,000 claiming races. A private purchase for Cowie, the horse ran 2nd for him first time out in a 4,000 claiming race Sept. 7. He won on November 28th in an 8,000 open claimer with one week to go in the season. Cowie decided to run him back December 6th in a non winners other than maiden or claiming. He won. The purse was $76,000. And because he was a private purchase, and not a claim, and was Ontario sired, Cowie got the full share of the winners portion.
Fountain Of Youth Free past performances for the race. I don't do much handicapping for this blog (and after you see the results of the following picks, you'll probably see why). This is a very interesting race. The controversial This Ones For Phil makes his first start in over a month. I just see "bounce, bounce, bounce" today for Phil. The undefeated Taqarub also has over a month between races, and he definitely ensures that there will be a hot pace. The best horse in the race could be Capt. Candyman Can. He looks like he has good tactical speed, and the mile looks to be a piece of cake for him. Two longshots could wind up in the exotics. Break Even Edison, second race off a layoff. Last year he produced a very good speed figure for a mile at Aqueduct. Also, Take The Points had a real good late pace number going today's distance at today's track 4 weeks ago. And besides, I really like his name.
* Investigative files of police officers, regulation agents, and civilian investigators, including interview reports, notes, and background checks; * Veterinary records, such as reports, x-rays, samples, and invoices; * Photographs; * History before administrative tribunals and in court, including decisions, findings and orders.'
There is absolutely no way that slots can remain open if Fort Erie were to not race this year. The reason is pretty simple. It creates a horrible precedence.
What is to stop Windsor or other tracks from cooking their books a bit (or maybe legitimately having losses), showing a loss, and then stating they won't run races because they are losing money???????
Even Woodbine can get in on the action and move some numbers around to show that Mohawk loses money. What could the government do to prevent them from closing the racing operations, if Nordic can close the doors on horse racing but continue raking in the dough from slots?
It wouldn't take a lot for bigger corporations like Great Canadian Gaming or WEG to be able turn their tracks into bottom line losing operations. How much of a loss would it take for them to halt racing thanks to this potential precedence? How about a dollar or more.
The government needs to tell Nordic like it is. Without live horse racing there can be no slots. Right now, Nordic is using the non commitment by the government as a negotiating tool. The fate of the slots needs to be addressed now, before any further negotiations take place.
The government doesn't want to lose out on the slots revenues. They also don't want to be responsible for another 300 casino employees being out of work. But they have no choice because we could easily see another 10 tracks feint overall losses in the near future, and that would tread completely against why slots were put into tracks in the first place.
The government must make a stand NOW! By not giving a definite as to whether the slots remain open, the price of the track is also a big question mark. Nordic says they lose money even with the $4 million they get from slots each year. A company that loses money isn't worth much. Especially with the realistic little upside that the track has as is (the land can't be worth that much because Woodbine sold the place to Fort Erie over 10 years ago for $10 and assumption of $3 million in debt). But a company that nets $2-3 million a year (and this would be the case for Nordic if it can operate without live racing), is worth anything from $16 million to $25 million.
The least the government needs to do is to fine any racino owner their entire slots cut if they do not have live races. Then Nordic would be forced to be the ones to decide to cut off the slots. This would be due the fact that their property taxes would remain high if the slots operate, but would go down immensely if they were not operating any business on the property.
The breakdown of negotiations yesterday regarding the purchase of Fort Erie Racetrack from Nordic was disappointing, but not entirely a surprise to all of us involved in the process.
For Clarification:
* The HBPA has been fully apprised and engaged in all negotiations. * The HBPA fully supports the steps and position taken by the EDTC. * The rhetoric coming out of Nordic is at best, misleading. * The EDTC did NOT withdraw the offer. The offer made to Nordic had an 11am on Monday February 23rd deadline. Nordic failed to respond by that deadline. * The Province is the key to the ongoing success at Fort Erie. The Province & our regulator, the ORC, are fully apprised of the developments. * Negotiations among all parties will continue and are ongoing as we speak
We, the horsepeople, and particularly, right now, the Fort Erie horsepeople are amazingly committed. You are resilient, proud and dedicated to both our industry and especially to the horses. Now, you have also demonstrated incredible patience.
We can’t promise the final outcome of Fort Erie, but we can promise the effort to save Fort Erie will be fought to the bitter end. I personally, will not be deterred or intimidated by criticism, public posturing, or set backs such as yesterdays.
Please continue to refer to our website.
Respectfully yours,
Sue Leslie President
****************************************** Good for Sue Leslie and calling Nordic liars. If they lie in press releases, imagine what they do with their books. There is no way they are losing the kind of money they claim legitimately.
I have a feeling the government is trying hard, and they thought Nordic was going to accept the deal on Monday.
.... 'the province provided $2 million to the Fort Erie Economic Development and Tourism Corporation to assist with negotiations to save the Fort Erie Race Track and the Niagara Economic Development Corporation has also received more than $1.9 million to apply to business initiatives.'
"The government has to act now and as quickly as possible, we're investing literally billions of dollars...."
(In an interview with This Week, Bryant said the province is continuing to work on keeping the track in Fort Erie open and residents can expect an announcement as early as next week.) Note: It looks like he was expecting a positive outcome, but obviously that was not the case.
"Fort Erie and potential opportunities with the race track has the government's full attention."
So what are the options?
Fort Erie closes and the slots close. Fort Erie becomes a ghost town. Nordic is stuck with a lot of real estate that will become more and more worthless each day. The Ontario thoroughbred industry will also suffer more. Breeders will have less of a market to sell to. Owners with horses not capable of running at Woodbine will be forced to race in the states. Less owners, less interest in racing overall.
Fort Erie closes but slots remain open. Again, the precedence this would bring with it would cause many tracks in Ontario to at least think about closing the racing side of their operation.
Nordic sells the track. Realistically, it won't happen because Nordic has historically wanted too much money. If the government is intending to buy though, it is to their own best interest to state that without racing there will be no slots, as this will force Nordic to sell at a more realistic level.
Nordic decides to race in 2009 and absorb another year of supposed losses. And pigs can fly.
The government makes an exception for thoroughbred border tracks (ie Fort Erie), where Nordic and the horsemen are to split 35-40% of the slot revenues instead of the usual 20%. This seems like a no-brainer. If the government sincerely wants to keep Fort Erie open, this is what they must do. The government needs to pressure the OLG in changing the slots revenues arrangement NOW!
As for precedence. Again, Fort Erie is an exceptional case being the only other thoroughbred track in Ontario, and the government can deem its existence crucial to the entire thoroughbred industry in Ontario. End of story.
Breakage is what the track makes due to the rounding down of what a horse should actually pay versus what the track ends up paying to the winners.
Most jurisdictions allow tracks to "break" to the dime (Canada and New York state break to the nickel). In other words, after the track applies their track takeout to the total money bet, they round down what they pay to the bettor to the nearest 20 cent interval per $2 wager. In Canada and New York state, the payoff is rounded down to the nearest 10 cent interval per $2 wager.
Here is an example how it works:
There is a four horse race. $100,999 in the pool. Number 1 has exactly 21,000 bet on him, number 2 has 18,500, number 3 has 23,500 bet on him, while number 4 has 37,999 bet on him. Takeout is 16%, and number 1 wins.
$100,999 times .84 (1.00 minus 16% takeout)=$84,839.16 to be divided to the winning tickets. There are 10,500 winning $2 ticket. This means that each horse should pay $8.07992, but of course, it only pays $8.00 The track just made 839.16 in free money (breakage). In fact, they charged takeout on their own money (the $999 that wasn't going back to the customer if number 1 won the race).
Now lets look at the cumulative effect it had on the players with the winning tickets:
Simply take the 84000 and divide by 100,999 which equals .83169, subtract that total from 1 and the takeout in this case was 16.83% instead of the published 16%.
The higher the cashed ticket, the less significant is the effect on the real track takeout the player is up against. Show bettors will see a much higher real takeout than win player, and much much higher than exotics players.
Here is an extreme case:
Lets say you were betting some hick harness track that has very little money in its pools. You like a longshot, and you decided to take a shot and bet $200 to win. Your bet $200, but no one else bet the horse to show. The total pool is $299. Your horse wins, but it turns out you were the only person who bet the horse. Track takeout is 20%, so your payoff should be $2.392 (299 times .8), but because the track breaks to the dime, your horse only pays $2.20 to win. The track makes an extra $19.20 in breakage. And it cut your potential profit by 49%. Interestingly, the effect on track takeout isn't as high as you might think. Instead of 20% it works out to be 26.42% in this case (220 divided by 299). Goes to show how high takeouts cost us lots and lots of money in the long run.
Overall cost to bettors:
When breaking to the dime, breakage has an equal chance of being zero, one cent, two cents...10 cents...14 cents.....18 cents, 19 cents. So adding all the numbers up from zero to 19 and dividing by 20 yields a 9.5 cent average. This means that over enough time, you donated 9 and a half cents for every $2 ticket cashed. If you bet $20 tickets, on average you get back 95 cents less per bet cashed thanks to breakage.
In Canada and New York state, breakage only costs the player 4.5 cents per every $2 bet cashed on average.
I spoke to a former racing exec who told me that he factored in .5% of the total expected handle to come from breakage, when making his yearly budget. This means that Canadian tracks and New York tracks expect to make .25% from the total handle, thanks to breakage. Again, the effect on the player will vary widely depending on whether you play exotics or mainly you are a WPS bettor. The more bets you cash, the more it will cost you. If your average win mutuel at a certain track is around 9 bucks, and the published track takeout is 16% for that track, thanks to breakage, the real takeout is closer to 17%.
One has to ask, that in the computer age we live in, why don't bettors get back what we are supposed to get back from the tracks and ADWs? Anyone who has cashed a 20 cent superfecta at HPI knows that their accounts often have odd pennies in it thanks to a super that, for example, paid $1,546.35 for a buck (for 20 cents you wind up with $309.27 put into your account). So the technology is there to give us what we are entitled, we just don't get what is entitled to us.
Nordic Gaming Corporation / Elad Canada, the owner and operator of the Fort Erie Race Track, has been working with both the Town of Fort Erie and the Province of Ontario, as well as other stakeholders, for the past several years to move forward with a proposal to revitalize the Town of Fort Erie as a major tourist destination and in so doing, generate sufficient population to operate a profitable racetrack.
More recently, Elad has been working with the Town of Fort Erie , in addition to the Province and other stakeholders, to ensure that live racing would continue in Fort Erie for the 2009 racing season. It was within this context that a proposal was made by the local Economic Development and Tourism Corporation (EDTC) to work with the Province to purchase the Fort Erie Race Track.
On Friday, February 20, 2009 the EDTC presented Elad with a very lengthy offer that contained a myriad of conditions that from both an economic and performance perspective were non achievable and unacceptable. In addition, the only condition that Elad had previously placed on an offer, which would have ensured live racing for 2009, was not fully satisfied. While Elad was prepared to continue negotiating with the EDTC to arrive at an agreement on both the shortfall and the conditions that the EDTC attached to the offer that it presented on Friday afternoon, on Monday, February 23, 2009, Elad Canada was informed by email that in fact, the EDTC was withdrawing its offer to purchase the Race Track.
While it is unfortunate that there will be no agreement to purchase between the EDTC and Elad, Elad and Nordic continue to believe in the importance of the Fort Erie Race Track both to the local community and the Province as a whole. In that regard, the Company will continue to work diligently to try and find a commercially viable solution to ensure the Race Track’s long-term survival.
********************************************* Nordic was only being offered $2.25 million, one million short of what they say they needed to break even. The EDTC offer fell short on Nordic's extortion demands.
"EDTC general manager Jim Thibert said his agency did not withdraw its offer to buy the track for $35 million."
The offer obviously came up short as Thibert said the fundamentals of the new offer were the same that were proposed about a month ago: "except for the value of the offer and who was carrying the mortgage." *********************************** Basically, Nordic does not want to go into their pockets for one dime, and will not sell Fort Erie for anything close to what it is worth.
This is a coup for Nordic, as they can reap the estimated $4 million in profits from the slots and not have to operate their losing side of the business (horse racing). Nordic will have security guard expenses, still have to pay property taxes, but all in all, will be profitable.
It seems that the only solution right now to save Fort Erie for 2009 is that the OLG gets pressured to give Nordic a bigger cut from the slot revenues. Hopefully, Smitherman, McGuinty, Tory, Hudak, and Craitor can get together and make this happen.
Bloggers know that Google searches for "Chantal Sutherland" are responsible for many daily hits, even if we just mentioned her name in our blog a year ago. Pull The Pocket even joined the Club. Over 21,000 match results on Google for "Chantal Sutherland." To put things in perspective, "Woodbine Entertainment" only yields 17,000 match results. "Horseplayer Interactive" only has 5,880 match results. "Patrick Husbands" only yields 5,100 match results. I know that he has been a jockey much longer than Chantal, but I doubt he looks as good as her in Victoria Secret lingerie.
Handride posted this video first, so I'll give him credit. All About Chantal:
Looks aside, Sutherland is a really good jockey. Especially on the turf, and the Woodbine Polytrack. I wonder about her longevity though. At 33, her biological clock might be keeping her up at night these days. She seems like the type who would like a family of her own.
Keeneland made a 15 second Promo congratulating themselves for being HANA's number one racetrack:
Now the TSE is reviewing Magna Entertainment. It looks like a delisting of the stock is imminent.
A big question gamblers who have accounts with XPressBet should be asking is that if Magna goes bankrupt, are their account funds protected? Will they have to wait for bankruptcy proceedings to wind down? Will they only then get a portion of what was in their accounts at the date of bankruptcy? I don't know the answer yet, but it isn't for lack trying.
Fort Erie Update? "Time keeps on ticking, ticking, ticking, into the future" In other words, I got nothing.
