The much anticipated OMAFRA Report on horse racing's future in Ontario has been completed. It should be public by the end of the month.
Listening to an interview of panel member John Snobelen it is easy to be very optimistic to believe that racing in Ontario does indeed have a future, and possibly a very good future.
It is my understanding that those interviewed by the panel gave the panel an entire picture of how exactly horse racing works in Ontario as well as giving them a very good idea of how much economic impact horse brings to Ontario, and how disastrous it would be if horse racing were left to stand on its own at this time.
Even though Ontario Premier Dalton McGuinty was able to legally coat his Teflon skin with more grease by quitting and proroguing the House, Snobelen made it pretty clear that the report does not need to be voted on. However, McGuinty could easily defer OKing the recommendations until a new leader is voted on, I still think, listening to Snobelen, that the government will rubber stamp the recommendations understanding the sense of urgency here.
The report will most likely not be to everyone's liking. I expect the track owners to have most of the profits that were earned via slot revenues to be cut drastically (I expect rental agreements with slot racetracks to be large enough to pay for real track expenses in most cases). And then you have the entitled horsemen (you know who you are), many who won't be satisfied unless they wind up getting 125% of the former deal.
I did send in a few of my blog posts in lieu of not being asked to advise the panel directly:) I trust they were read and given serious consideration.
Here are my predictions:
In all likelihood, I think it might be realistic to think that we will see something like a three year deal (where the money comes from isn't important only that it will be a true subsidy this time most likely). I think we'll see anywhere between $100 million to $150 million per year go towards purses and breeding.
I think we'll see a focus on money going towards Ontario bred/Ontario sired horses.
I'm hoping to see major incentives to increase handle as well, something sorely missing from the original slots deal.
Although sports betting will likely not be as popular as they think, I do think it will be mentioned as an additional source of revenue (though it on par with slots and can be called a subsidy whenever the government wants to end the deal). Sports betting will be good for a track like Fort Erie, as long as sports betting has the same juice bookies demand, and as long as the US doesn't have legal sports betting.
I also expect to see wagering terminals to pop up in more locations as well as a provincial or national horse racing lottery to be recommended. This would actually turn into a potential windfall for the industry, and create new Horseplayers.
Speaking of Fort Erie, from what I have heard, the panel is well aware of the necessity of having a B racetrack. Hopefully, Fort Erie will be on the list for a stand alone subsidy, even if it means racing only 60 days a year, it will buy some time for the track to be sold to someone who is interested in horse racing as well as it buys time in case the proposed new Speedway is actually built.
I think we'll see a slight shrinking overall, but it might only affect the hit and run outfits who bring in a horse for one big race and then exit stage right.
The reality is the industry (harness and thoroughbred) can handle a 20% shrinkage as long as the remaining 80% focuses mainly on Ontario bred and owned horses, or American outfits that set up shop in Ontario. All good for the local economies.
17 October 2012
3 October 2012
Horse Racing Isn't The Only Game That Can Improve
On this blog, I've been known to be very critical of how horse racing. It isn't because I like to complain, it is because I love the game and want to see it grow. I don't just focus on the problems, but I also offer solutions.
I'm going to diversify my criticism now by identifying problems and also give solutions for the four major sports.
I used to be a sports fanatic. I think I may have missed only a handful of Toronto Maple Leaf games on TV from age 4-21.
I got into baseball too, not so much as a spectator, until the Expos got a franchise and had some TV exposure other than Saturdays when I was usually at the track with at least one of my parents.
I always was an NFL fan, never the CFL (inferior game with with inferior rules). And same with basketball, which was the only sport I actually excelled at (trying not to be too modest).
I started betting on sports in the mid 70's while in my mid teens. It made the games more interesting, and I found it to be a good connect since I was always into stats. My betting on sports and poker probably hit a peak by the time I hit 25. I still bet a little but focused more on just horse racing.
I started losing my interest in 3 of the major sports (hockey, baseball, and basketball) by the time I was in my late 30's. A lot of it had to do with other priorities and being tired of spinning my wheels when I bet the odd game, but it also had to do with the games themselves and player loyalty. The blame shouldn't be on the players, but the system that allows players to be lured to play for other teams.
When the Blue Jays won their last championship and half the team exited for greener pastures, I gave up on baseball. There were other reasons too, which I'll cover.
As for hockey, I gave up on it when the Leafs traded Steve Sullivan. I've always been a big fan of the finesse player and hockey seemed to be focused on size. To me, it lost its personality. The overtime rules also made me grimace.
I lasted with basketball longer. But when Vince Carter whined his way out of Toronto, I gave up on it as well. Again, too many roster changes for my liking all in the pursuit of the green back.
The NFL however has been a staple in my life and continues to be. I don't bet on it anymore, except for Fantasy Football (which is a form of betting), that is. Players can still stick with a team for their entire career, or at least most of it. I'm not sure why that is (I don't look really look at the rules of free agency in each sport or salary caps, etc.), but the other major sports should adopt the same exact policies that the NFL has.
The NFL has never been shy about making changes to appease the fans and also to make the game safer for the players.
I'd say that integrity of the sport is well looked after in all four sports (on a scale of 1 to 10, the NFL would be a 10 and horse racing would be a 1).
Here is how I would improve each of the four major sports (and if implemented, I could be won back as a fanatic):
NHL
Flaw: Player loyalty
Solution: Adopt NFL rules
Flaw: Overtime rules; Giving each team a point after regulation time if there is a tie. This rule makes me sick. It is Far Far Leftist mentality, something that I can't live with. I'm no fan of the Far Right either:)
Solution: No point for a tie. No more ties ever. Play sudden death 3 onto 3 (not including the goalie) until a goal is scored. No friggin shootouts either. 3 on 3 play almost guarantees the game won't go on forever either, which I think is one of the major concerns the league has. It will also force teams to have finesse players in the lineup.
MLB
Flaw: Player loyalty
Solution: Adopt NFL rules
Flaw: The strike zone and the foul lines. I sat behind the plate of a Blue Jay game and couldn't believe how far out to lunch the umpire was. His strike zone was a good foot to the left of the plate. We have the technology available, strikes and fouls should not determined by subjectivity but objectivity. I don't mind beeps when a ball ends up in the catchers glove to determine whether that ball was in the strike zone or not. Laser technology needs to be implemented to win me over.
NBA
Flaw: Player loyalty
Solution: Adopt NFL rules
Flaw: Too many dunks. James Naismith wouldn't even imagine dunking when he invented the sport, and even though it was cool in the early 70's it makes the game boring now.
Solution: My gut reaction has always been to raise the basketball height to 11 feet, but that is just wrong, plus it will discourage young kids from ever playing because the height of the basket will created too much awkwardness when it comes to learning the game. I think a better proposal would be to make a dunk shot worth only one point. I really think that would stop dunking and make the game more pure.
NFL
Flaw: Tough to find a flaw, but I did. Extra points are too easy. So far this year, there has been only one miss (not sure about how many non attempts due to bad snaps, but it isn't more than a handful). It is a scoring play that totally lacks drama.
Solution: Kick the extra point from the 23, making it a 40 yard kick. Sure, most will be converted, but many will be blocked or missed. No more gimmes. As for the two point conversion, yes, it is a little more exciting, but it rubs me the wrong way as it takes the kicker out of the equation. I like the concept of opting for two points, so the simple answer is to give the team the option to convert a kick from the 35 (a 52 yard boot). Oh, and I hate the freezing the kicker nonsense. It makes the game more juvenile than it has to, kind of insults my sports intelligence. Plus, I don't think it is advantageous at all (I think the percentages are pretty constant with or without the freeze). Unless it is to prevent too many men on the field, I would bar the opposing team from calling a time out to freeze the kicker.
I'll take on horse racing in the very near future:)
I'm going to diversify my criticism now by identifying problems and also give solutions for the four major sports.
I used to be a sports fanatic. I think I may have missed only a handful of Toronto Maple Leaf games on TV from age 4-21.
I got into baseball too, not so much as a spectator, until the Expos got a franchise and had some TV exposure other than Saturdays when I was usually at the track with at least one of my parents.
I always was an NFL fan, never the CFL (inferior game with with inferior rules). And same with basketball, which was the only sport I actually excelled at (trying not to be too modest).
I started betting on sports in the mid 70's while in my mid teens. It made the games more interesting, and I found it to be a good connect since I was always into stats. My betting on sports and poker probably hit a peak by the time I hit 25. I still bet a little but focused more on just horse racing.
I started losing my interest in 3 of the major sports (hockey, baseball, and basketball) by the time I was in my late 30's. A lot of it had to do with other priorities and being tired of spinning my wheels when I bet the odd game, but it also had to do with the games themselves and player loyalty. The blame shouldn't be on the players, but the system that allows players to be lured to play for other teams.
When the Blue Jays won their last championship and half the team exited for greener pastures, I gave up on baseball. There were other reasons too, which I'll cover.
As for hockey, I gave up on it when the Leafs traded Steve Sullivan. I've always been a big fan of the finesse player and hockey seemed to be focused on size. To me, it lost its personality. The overtime rules also made me grimace.
I lasted with basketball longer. But when Vince Carter whined his way out of Toronto, I gave up on it as well. Again, too many roster changes for my liking all in the pursuit of the green back.
The NFL however has been a staple in my life and continues to be. I don't bet on it anymore, except for Fantasy Football (which is a form of betting), that is. Players can still stick with a team for their entire career, or at least most of it. I'm not sure why that is (I don't look really look at the rules of free agency in each sport or salary caps, etc.), but the other major sports should adopt the same exact policies that the NFL has.
The NFL has never been shy about making changes to appease the fans and also to make the game safer for the players.
I'd say that integrity of the sport is well looked after in all four sports (on a scale of 1 to 10, the NFL would be a 10 and horse racing would be a 1).
Here is how I would improve each of the four major sports (and if implemented, I could be won back as a fanatic):
NHL
Flaw: Player loyalty
Solution: Adopt NFL rules
Flaw: Overtime rules; Giving each team a point after regulation time if there is a tie. This rule makes me sick. It is Far Far Leftist mentality, something that I can't live with. I'm no fan of the Far Right either:)
Solution: No point for a tie. No more ties ever. Play sudden death 3 onto 3 (not including the goalie) until a goal is scored. No friggin shootouts either. 3 on 3 play almost guarantees the game won't go on forever either, which I think is one of the major concerns the league has. It will also force teams to have finesse players in the lineup.
MLB
Flaw: Player loyalty
Solution: Adopt NFL rules
Flaw: The strike zone and the foul lines. I sat behind the plate of a Blue Jay game and couldn't believe how far out to lunch the umpire was. His strike zone was a good foot to the left of the plate. We have the technology available, strikes and fouls should not determined by subjectivity but objectivity. I don't mind beeps when a ball ends up in the catchers glove to determine whether that ball was in the strike zone or not. Laser technology needs to be implemented to win me over.
NBA
Flaw: Player loyalty
Solution: Adopt NFL rules
Flaw: Too many dunks. James Naismith wouldn't even imagine dunking when he invented the sport, and even though it was cool in the early 70's it makes the game boring now.
Solution: My gut reaction has always been to raise the basketball height to 11 feet, but that is just wrong, plus it will discourage young kids from ever playing because the height of the basket will created too much awkwardness when it comes to learning the game. I think a better proposal would be to make a dunk shot worth only one point. I really think that would stop dunking and make the game more pure.
NFL
Flaw: Tough to find a flaw, but I did. Extra points are too easy. So far this year, there has been only one miss (not sure about how many non attempts due to bad snaps, but it isn't more than a handful). It is a scoring play that totally lacks drama.
Solution: Kick the extra point from the 23, making it a 40 yard kick. Sure, most will be converted, but many will be blocked or missed. No more gimmes. As for the two point conversion, yes, it is a little more exciting, but it rubs me the wrong way as it takes the kicker out of the equation. I like the concept of opting for two points, so the simple answer is to give the team the option to convert a kick from the 35 (a 52 yard boot). Oh, and I hate the freezing the kicker nonsense. It makes the game more juvenile than it has to, kind of insults my sports intelligence. Plus, I don't think it is advantageous at all (I think the percentages are pretty constant with or without the freeze). Unless it is to prevent too many men on the field, I would bar the opposing team from calling a time out to freeze the kicker.
I'll take on horse racing in the very near future:)
5 September 2012
What The New Deal In Ontario Should Look Like
I've written many blog pieces on how to grow horse racing in the past. Now I felt like I need to put together a proposal on how to sustain and grow horse racing in Ontario.
I used the stats in the Horse Racing Industry Transition Panel Interim Report. I trust these numbers much more than I do Dalton McGuinty and Dwight Duncan's numbers, which lowballed those employed in the industry at around 5,000. Hey wait, if they used that number to help make their decision, why isn't there an inquiry sign up?
Back to business. Here are the important numbers (not including quarter horse racing which distributes $5 million in purses, fully funded by slots):
$260 Million goes to purses in Ontario each year.
$170 Million in harness purses.
$90 Million in thoroughbred purses.
$158 Million comes from slot revenues.
Approx. $45 million for thoroughbreds.
Approx. $113 million for harness races.
Approx. $102 Million comes from wagering on horses.
$45 million from wagering on thorougbreds.
$57 million from wagering on harness races.
Included in the above numbers is money that goes into purses through the HIP program. That money comes from slots and betting mainly.
$15 million to thoroughbred purses (another $4 million to breeders etc.)
$25 million to standardbred purses (of which $3.5 million is funded by owner/breeders)
Thoroughbred races per year- 2,150
Harness races per year- 14,400
Quarter horse races- 350
Now for the juicy numbers (from the 2010 OLG annual report and the performance highlights):
Gaming revenues from slots: $1.73 Billion.
Key stat is on page 6 of first OLG link. It shows that after operational expenses and commissions (note: they don't use the term subsidy) at OLG Slots at Racetracks earned a net profit of around 46.5%. This number is very important.
Financial Reasons For Dropping The Slots At Racetrack Program
From a business perspective the move to cut out racetracks was sound and rational, however, the government isn't in business to make moves which are solely profit oriented (the government is elected to weigh in social costs, job impact, etc., all of which were ignored here).
The other thing is that the sound and rational business decision was based on many key false assumptions. For example, the OLG and Liberal government believed it would be a slam dunk to place a casino in Toronto, they also believed that tracks would accept market rent to keep slots in place, they also believed they could do all this without significant public push back, and the numbers used in their studies were absolutely ridiculous ie using 5,000 as the number of exployed by the industry.
One thing the government and OLG is correct about is that they shouldn't be operating casinos. Just like with teachers and other public employees, they let salaries get way out of hand. Using that 46.5% net profit number, it means that operational expenses including promotions, wages, etc. was a whopping 28.5%. And that is just for operating slots. Imagine how much it would cost them to expand to table games and the renovations that go with it. The government has to get out, and they know it.
28.5% for an industry that employees around 4,000 slot workers province wide. Meanwhile tracks and racing outfits employ at least 6 times that amount (not including busineses that have a major reliance on horse racing's existence) and their take was 20%.
To show that this decision was really made in haste though, the OLG has not specified what they want their new cut to be. Should they have figured it out. It seems they are letting the markets decide. It makes it very tough for the horse racing industry to ask for a fair amount going forward.
How appealing would that number be for new operators? 5% will still wind up going to municipalities, and expenses will be on the high side because the rental agreements with racetracks will be much higher than anticipated, as well as the expenses to renovate and expand. Table games take up space and aren't nearly as profitable as slots, yet they will cannibalize the slot players as well.
Online gaming in Ontario is also in the horizon and that will keep a lot of slot players home too. And then there is political uncertainty. Governments can obviously do what they want when it comes to gambling...they own it.
So even though a new operator can cut a lot of government fat out of the 28.5% that is currently on the books, a new operator looking to make a profit is most likely going to ask for at least 40%-50% of the total revenues. Kind of defeats that whole purpose.
NOW THE PROPOSAL
It is important to realize that the Transitional Panel didn't state the SAR program should end because the government needs the money. No, the panel decided that the funds were not being used in a worthwhile enough manner, and that the industry was overfunded (especially the tracks themselves), but mainly that the industry's lack of growth was due to lack of benchmarks. They called the slots partnership a subsidy, yet they realize that once gone, horse racing needs a subsidy to survive. Why they didn't just recommend a 6% for tracks 8% for horsemen solution really escapes me, why the need to invent a new subsidy if that is in fact what the partnership was?
Cutting Race Dates
With Windsor bowing out so far, we can reduce harness racing numbers by 88 race dates (6%) of the total, $6 million in total purses (of which $2 million came from betting and $4 million from slots).
Woodbine thoroughbreds has already cut 6.5% of its dates this year. I think there has to be less racing going forward, but I don't think it needs to be a drastic cut of anything of over 10% to begin with, and then the market can determine the correct number of race dates going forward.
Along with a 10% reduction in race dates, it can be assumed wagering will drop by only 7% (if dates can be given out in a more effective manner). However, it needs to be assumed that purses also are reduced by 10%, though the purse structure will remain close to the same).
How Much Money Is Needed
$236 million is needed for purses to sustain the industry
$93 million will come from wagers
So where will the $143 million needed next year to allow horse racing to keep its head above water?
RENT or allow racetracks to operate casinos at their own tracks (if they can operate a track, they can operate a casino). No need for the government to cut a check. The government just needs to make sure that all tracks hire capable casino managers (many will be available from the former OLG staffs), or tracks can hire experienced gaming management companies.
If it is rent, rent needs to be around 16% of slots revenues (8.5% to purses, 7.5% to tracks, which includes 1% that must be spent on industry racetrack promotions and innovations).
If tracks are allowed to operate the casinos, there could be automative savings by overlapping employees and security. They wouldn't need as much of a cut as a private operator would, which means the government could get more than from an MGM for example. Tracks could operate and expand for something closer to 20%, add 5% to municipalities, 8.5% for horsemen, 8% for day to day racing operations, profit, and horse racing innovations, and the government could get close to 60% of the gaming revenues.
CONDITIONS
Racetracks must justify salaries and bonuses going forward to the government (who will still be the watchdog for horse racing and casino gambling). The government can assess these expenses and give tracks a lower percentage if they feel compensation is too high.
Racetracks must invest 1% of the total gaming revenues towards innovating new products such as a racetrack lottery similar to the V75, paying for kiosks across Ontario to place in variety stores as well as developing sports books.
The HIP program needs to be larger. Ontario bred horses means that more money goes back into the Ontario economy creating even more jobs. Perhaps, too high a percentage goes to foreign breds and foreign owners. Buy Ontario should be emphasized, and that means more Ontario bred races, including claiming races. This will increase the worth of even the lowest least productive Ontario bred, and if their prices go up, so do sales prices at Yearling Sales. Of the $236 Million that will be available in purses, 30% should be allocated to Ontario bred restricted races for all three breeds (this is close to double of what it is currently).
The HIP progam should be paid out from either rent or from gaming revenues. Right now there is a restriction on racetrack's ability to experiment with lower takeout (tracks can lower or increase takeout without a problem, but the way percentages change with respect to what the track gets because of HIP, inhibits tracks from lowering), allowing horse racing to compete with other forms of gambling. This is because HIP monies are mostly funded by a percentage of total handle, at the very least, HIP from horse race betting needs to be determined as a percentage of total commissions made on wagers by the racetracks. The result will also allow tracks to make more money on each wager as a percentage of handle, and it will give them more incentive to grow handle.
As gaming in Ontario expands with the internet and more non racetrack locations, gaming revenues at racetracks are bound to drop. Horse racing needs to expand their product. A weekly lottery with a takeout of 35% (10% going to stores and the government) would help immensely by exposing more potential gamblers to horse racing, and of course raising more money for the industry. These dollars can eventually be used towards marketing and innovations in a separate account. If successful, the government get back another 1% of gaming revenues from the racetracks that were earmarked to this cause.
Horse racing should also get a proper cut on sports betting. In fact, sports betting can be separate from the casino operation and belong mainly to the racetracks done on the racetrack side of the operations.
Purses for Grade 1 races that attract international entries that come in for a couple of days should be capped at $500,000.
25% of the 8.5% (around $36 million) of totals slots revenues for purses needs to be put in a separate fund (for purses only). 5% (approximately $7 million) is to be used to subsidize tracks and fairs that don't have slots (like Fort Erie right now), while the other $20 million is distributed out to track who show specified improvements in total horse race betting handle. This will keep racetracks on their toes looking for new customers, and also it will force them to cultivate customers once they have them.
Best way to increase handle is to lower takeout.
Bigger fields generally mean more handle. Take this years purse for each class, but only give out 70% for field sizes of 7 or less. For thoroughbreds add 10% for each additional betting interest that races. So a 14 horse race with no entries at Woodbine will go for 140% of this year's purse. For harness races, 80% of the purse for 7 horses or less, 90% for 8 horse races, 100% for 9 horse races, and 110% for 10 horse races.
Finally, Fort Erie should get a gaming zone, if not to put slots back in, for table games and especially sports betting. Sports betting in Fort Erie will attract many from NY State.
Edit: A B thoroughbred track in Ontario is a necessity. Owners need an out if their horse can't compete on polytrack or if they can't compete at Woodbine bottom levels. If an owner's only options are to sell an underperformer very cheap, or have to race it in the USA, many will leave the game. It won't be fun, and the downside will be greater. That is why Fort Erie must be looked at as a special case.
I used the stats in the Horse Racing Industry Transition Panel Interim Report. I trust these numbers much more than I do Dalton McGuinty and Dwight Duncan's numbers, which lowballed those employed in the industry at around 5,000. Hey wait, if they used that number to help make their decision, why isn't there an inquiry sign up?
Back to business. Here are the important numbers (not including quarter horse racing which distributes $5 million in purses, fully funded by slots):
$260 Million goes to purses in Ontario each year.
$170 Million in harness purses.
$90 Million in thoroughbred purses.
$158 Million comes from slot revenues.
Approx. $45 million for thoroughbreds.
Approx. $113 million for harness races.
Approx. $102 Million comes from wagering on horses.
$45 million from wagering on thorougbreds.
$57 million from wagering on harness races.
Included in the above numbers is money that goes into purses through the HIP program. That money comes from slots and betting mainly.
$15 million to thoroughbred purses (another $4 million to breeders etc.)
$25 million to standardbred purses (of which $3.5 million is funded by owner/breeders)
Thoroughbred races per year- 2,150
Harness races per year- 14,400
Quarter horse races- 350
Now for the juicy numbers (from the 2010 OLG annual report and the performance highlights):
Gaming revenues from slots: $1.73 Billion.
Key stat is on page 6 of first OLG link. It shows that after operational expenses and commissions (note: they don't use the term subsidy) at OLG Slots at Racetracks earned a net profit of around 46.5%. This number is very important.
Financial Reasons For Dropping The Slots At Racetrack Program
From a business perspective the move to cut out racetracks was sound and rational, however, the government isn't in business to make moves which are solely profit oriented (the government is elected to weigh in social costs, job impact, etc., all of which were ignored here).
The other thing is that the sound and rational business decision was based on many key false assumptions. For example, the OLG and Liberal government believed it would be a slam dunk to place a casino in Toronto, they also believed that tracks would accept market rent to keep slots in place, they also believed they could do all this without significant public push back, and the numbers used in their studies were absolutely ridiculous ie using 5,000 as the number of exployed by the industry.
One thing the government and OLG is correct about is that they shouldn't be operating casinos. Just like with teachers and other public employees, they let salaries get way out of hand. Using that 46.5% net profit number, it means that operational expenses including promotions, wages, etc. was a whopping 28.5%. And that is just for operating slots. Imagine how much it would cost them to expand to table games and the renovations that go with it. The government has to get out, and they know it.
28.5% for an industry that employees around 4,000 slot workers province wide. Meanwhile tracks and racing outfits employ at least 6 times that amount (not including busineses that have a major reliance on horse racing's existence) and their take was 20%.
To show that this decision was really made in haste though, the OLG has not specified what they want their new cut to be. Should they have figured it out. It seems they are letting the markets decide. It makes it very tough for the horse racing industry to ask for a fair amount going forward.
How appealing would that number be for new operators? 5% will still wind up going to municipalities, and expenses will be on the high side because the rental agreements with racetracks will be much higher than anticipated, as well as the expenses to renovate and expand. Table games take up space and aren't nearly as profitable as slots, yet they will cannibalize the slot players as well.
Online gaming in Ontario is also in the horizon and that will keep a lot of slot players home too. And then there is political uncertainty. Governments can obviously do what they want when it comes to gambling...they own it.
So even though a new operator can cut a lot of government fat out of the 28.5% that is currently on the books, a new operator looking to make a profit is most likely going to ask for at least 40%-50% of the total revenues. Kind of defeats that whole purpose.
NOW THE PROPOSAL
It is important to realize that the Transitional Panel didn't state the SAR program should end because the government needs the money. No, the panel decided that the funds were not being used in a worthwhile enough manner, and that the industry was overfunded (especially the tracks themselves), but mainly that the industry's lack of growth was due to lack of benchmarks. They called the slots partnership a subsidy, yet they realize that once gone, horse racing needs a subsidy to survive. Why they didn't just recommend a 6% for tracks 8% for horsemen solution really escapes me, why the need to invent a new subsidy if that is in fact what the partnership was?
Cutting Race Dates
With Windsor bowing out so far, we can reduce harness racing numbers by 88 race dates (6%) of the total, $6 million in total purses (of which $2 million came from betting and $4 million from slots).
Woodbine thoroughbreds has already cut 6.5% of its dates this year. I think there has to be less racing going forward, but I don't think it needs to be a drastic cut of anything of over 10% to begin with, and then the market can determine the correct number of race dates going forward.
Along with a 10% reduction in race dates, it can be assumed wagering will drop by only 7% (if dates can be given out in a more effective manner). However, it needs to be assumed that purses also are reduced by 10%, though the purse structure will remain close to the same).
How Much Money Is Needed
$236 million is needed for purses to sustain the industry
$93 million will come from wagers
So where will the $143 million needed next year to allow horse racing to keep its head above water?
RENT or allow racetracks to operate casinos at their own tracks (if they can operate a track, they can operate a casino). No need for the government to cut a check. The government just needs to make sure that all tracks hire capable casino managers (many will be available from the former OLG staffs), or tracks can hire experienced gaming management companies.
If it is rent, rent needs to be around 16% of slots revenues (8.5% to purses, 7.5% to tracks, which includes 1% that must be spent on industry racetrack promotions and innovations).
If tracks are allowed to operate the casinos, there could be automative savings by overlapping employees and security. They wouldn't need as much of a cut as a private operator would, which means the government could get more than from an MGM for example. Tracks could operate and expand for something closer to 20%, add 5% to municipalities, 8.5% for horsemen, 8% for day to day racing operations, profit, and horse racing innovations, and the government could get close to 60% of the gaming revenues.
CONDITIONS
Racetracks must justify salaries and bonuses going forward to the government (who will still be the watchdog for horse racing and casino gambling). The government can assess these expenses and give tracks a lower percentage if they feel compensation is too high.
Racetracks must invest 1% of the total gaming revenues towards innovating new products such as a racetrack lottery similar to the V75, paying for kiosks across Ontario to place in variety stores as well as developing sports books.
The HIP program needs to be larger. Ontario bred horses means that more money goes back into the Ontario economy creating even more jobs. Perhaps, too high a percentage goes to foreign breds and foreign owners. Buy Ontario should be emphasized, and that means more Ontario bred races, including claiming races. This will increase the worth of even the lowest least productive Ontario bred, and if their prices go up, so do sales prices at Yearling Sales. Of the $236 Million that will be available in purses, 30% should be allocated to Ontario bred restricted races for all three breeds (this is close to double of what it is currently).
The HIP progam should be paid out from either rent or from gaming revenues. Right now there is a restriction on racetrack's ability to experiment with lower takeout (tracks can lower or increase takeout without a problem, but the way percentages change with respect to what the track gets because of HIP, inhibits tracks from lowering), allowing horse racing to compete with other forms of gambling. This is because HIP monies are mostly funded by a percentage of total handle, at the very least, HIP from horse race betting needs to be determined as a percentage of total commissions made on wagers by the racetracks. The result will also allow tracks to make more money on each wager as a percentage of handle, and it will give them more incentive to grow handle.
As gaming in Ontario expands with the internet and more non racetrack locations, gaming revenues at racetracks are bound to drop. Horse racing needs to expand their product. A weekly lottery with a takeout of 35% (10% going to stores and the government) would help immensely by exposing more potential gamblers to horse racing, and of course raising more money for the industry. These dollars can eventually be used towards marketing and innovations in a separate account. If successful, the government get back another 1% of gaming revenues from the racetracks that were earmarked to this cause.
Horse racing should also get a proper cut on sports betting. In fact, sports betting can be separate from the casino operation and belong mainly to the racetracks done on the racetrack side of the operations.
Purses for Grade 1 races that attract international entries that come in for a couple of days should be capped at $500,000.
25% of the 8.5% (around $36 million) of totals slots revenues for purses needs to be put in a separate fund (for purses only). 5% (approximately $7 million) is to be used to subsidize tracks and fairs that don't have slots (like Fort Erie right now), while the other $20 million is distributed out to track who show specified improvements in total horse race betting handle. This will keep racetracks on their toes looking for new customers, and also it will force them to cultivate customers once they have them.
Best way to increase handle is to lower takeout.
Bigger fields generally mean more handle. Take this years purse for each class, but only give out 70% for field sizes of 7 or less. For thoroughbreds add 10% for each additional betting interest that races. So a 14 horse race with no entries at Woodbine will go for 140% of this year's purse. For harness races, 80% of the purse for 7 horses or less, 90% for 8 horse races, 100% for 9 horse races, and 110% for 10 horse races.
Finally, Fort Erie should get a gaming zone, if not to put slots back in, for table games and especially sports betting. Sports betting in Fort Erie will attract many from NY State.
Edit: A B thoroughbred track in Ontario is a necessity. Owners need an out if their horse can't compete on polytrack or if they can't compete at Woodbine bottom levels. If an owner's only options are to sell an underperformer very cheap, or have to race it in the USA, many will leave the game. It won't be fun, and the downside will be greater. That is why Fort Erie must be looked at as a special case.
26 August 2012
Transitional Report: Too Vague To Help The Industry Right Now
On Friday, the much anticipated Horse Racing Industry Transition Panel Interim Report finally was released. I skimmed through it on Friday, and read it again in much more detail this morning.
It is encouraging that the panel is very fact driven, though they are still missing a few pieces of the puzzle which I'll get to later on.
I think a lot of their realizations and conclusions regarding the industry's apathetic attitude towards growing a customer base and that slots revenues were earned without any meaningful earmarks are completely right on the money.
I do take exception with what I believe is a faulty premise, which is being used as the reason why they think the slots program shouldn't be reinstated, and that is that the revenues that went to the industry from slots were public funds (hence a subsidy). They also state that the main reason tracks and horsemen were given 20% was to stabilize the industry. That is only one third of the real reasons. The other two were that slots would cannibalize horse racing (one could argue that because of slots the ability of the industry to attract new Horseplayers over the last 14 years was hindered tremendously as well) and that racetracks would be an acceptable location for slot machines. Referendums on gambling almost always wind up against casinos and the government knew they could smoothly start making money without public uproar by locating slots at tracks. In fact, right now the OLG still believes that tracks are the most acceptable locations for slots as they are negotiating rent deals with many racetracks.
The problem I have with calling these funds public monies is that it is after tax dollars that are being lost by patrons. The OLG even called the money that went to tracks and horsemen "commissions" (see page six here). Much like variety and gas store owners get a commission for selling lottery tickets. Did you know that over $200 million is paid out in commissions to those who sell tickets in Ontario each year? And to throw another curve ball at the panel: Do store owners have prerequisites on how to spend their commissions? Are those dollars received public monies too?
The panel is wrong when stating racing would die out completely if the government sticks to only handing out $50 million over the next three years. Ontario could sustain one thoroughbred track and a couple of harness tracks, whether it is Woodbine, Mohawk, and Western Fair, or if Woodbine decides to exit, Fort Erie, Western Fair and either Rideau Carleton or Flamboro Downs. Wagering, if focused on three tracks would be significant enough to carry three Ontario racetracks, and one would expect to see full fields and lengthy schedules. However, 20-30,000 jobs would be gone, and that is horrible public policy even by the worstdictatorship government.
I'm with the panel, $50 million is not nearly enough to give horse racing an opportunity to become self sufficient and save most of the full time jobs.
I think the panel underestimated economic impact because money that goes to horsemen, track employees, etc. go into the local economies and could make the difference whether places like hardware shops and restaurants make a profit or not.
Another thing the panel missed the boat on is that most owners lose money. Less tracks, less horses, less race dates means less owners. Owners do get the majority of purse monies, but by the time they pay the jockey, trainer and vet, they wind up going into their own pocket. This is actually another funding source that the panel overlooked. It is important because much of this mad money might be invested offshore or in investments that have low multiplier effects associated with them. If someone earns 40k a year, all the after tax money is going into the local economy for the most part, but for someone making $150k a year, well that money could get locked into long term investments or again, go outside of Ontario.
Another problem with the report is that it states the SAR program should end, but that another source of subsidy needs to be established, or even a "new" partnership when it comes to sports betting should come about. What makes being a partner in sports betting any different that being a partner is slots? Slots can't be your partner, but a sports book can? Sounds like something Jackie Mason could do a skit about.
And another thing that irks me is that the panel failed to discuss the OLG's plan to privatize going forward and compare it to the SAR program. Are the profits that the new operators going to make "public funds?" Will they have to be accountable to the government regarding these profits? I think not. It appears that public funds will now become casino operator profits. Should this be a major focal point as to whether the slots at racetracks program should end? We obviously cannot trust the government (very faulty, as Dwight Duncan insists there are only 5,000 industry jobs) or OLG numbers, as much as changed since they were put together in March (ie a slam dunk casino in Toronto).
The panel also doesn't realize that the HIP program, the way it is set up now, it detrimental to growing a customer base. Reason being, it is a percentage of the handle currently. It needs to be a percentage of the takeout commission instead. The reason why takeout decreases aren't tested in Ontario is because of the current set up, and in order for horse racing to compete with other forms of gambling and experience customer base growth, takeout rates need to drop, probably significantly.
Unfortunately, although there is a compelling argument to reverse the slots at racetrack program decision, and reimplement it with much needed earmarks, the government is unlikely to reverse things now. The problem right now is that even though there are probably very good legal reasons to go after the government, and some are still being pursued like MPP Lisa McLeod taking the case to the Auditor General, or the Ombudsman's possible recommendations when they come out, the horse racing industry can't afford to wait any longer. The industry needs to work with the government in order to have even a slight chance at transitioning. But getting the industry to work together with the government will most probably more difficult than herding cats in 15 separate locations around the world at the exact same time.
The report that came out should have at least hinted at how many dollars would be needed to sustain the industry. In light of the financial vagueness, I see no point in having the September Sales for either harness or thoroughbreds. The right thing to do is to move the sales to November or December.
Next piece will be on where to go from here.
Check out Pull The Pocket's take on the Interim Report.
Also check out A View From The Grandstand's take.
It is encouraging that the panel is very fact driven, though they are still missing a few pieces of the puzzle which I'll get to later on.
I think a lot of their realizations and conclusions regarding the industry's apathetic attitude towards growing a customer base and that slots revenues were earned without any meaningful earmarks are completely right on the money.
I do take exception with what I believe is a faulty premise, which is being used as the reason why they think the slots program shouldn't be reinstated, and that is that the revenues that went to the industry from slots were public funds (hence a subsidy). They also state that the main reason tracks and horsemen were given 20% was to stabilize the industry. That is only one third of the real reasons. The other two were that slots would cannibalize horse racing (one could argue that because of slots the ability of the industry to attract new Horseplayers over the last 14 years was hindered tremendously as well) and that racetracks would be an acceptable location for slot machines. Referendums on gambling almost always wind up against casinos and the government knew they could smoothly start making money without public uproar by locating slots at tracks. In fact, right now the OLG still believes that tracks are the most acceptable locations for slots as they are negotiating rent deals with many racetracks.
The problem I have with calling these funds public monies is that it is after tax dollars that are being lost by patrons. The OLG even called the money that went to tracks and horsemen "commissions" (see page six here). Much like variety and gas store owners get a commission for selling lottery tickets. Did you know that over $200 million is paid out in commissions to those who sell tickets in Ontario each year? And to throw another curve ball at the panel: Do store owners have prerequisites on how to spend their commissions? Are those dollars received public monies too?
The panel is wrong when stating racing would die out completely if the government sticks to only handing out $50 million over the next three years. Ontario could sustain one thoroughbred track and a couple of harness tracks, whether it is Woodbine, Mohawk, and Western Fair, or if Woodbine decides to exit, Fort Erie, Western Fair and either Rideau Carleton or Flamboro Downs. Wagering, if focused on three tracks would be significant enough to carry three Ontario racetracks, and one would expect to see full fields and lengthy schedules. However, 20-30,000 jobs would be gone, and that is horrible public policy even by the worst
I'm with the panel, $50 million is not nearly enough to give horse racing an opportunity to become self sufficient and save most of the full time jobs.
I think the panel underestimated economic impact because money that goes to horsemen, track employees, etc. go into the local economies and could make the difference whether places like hardware shops and restaurants make a profit or not.
Another thing the panel missed the boat on is that most owners lose money. Less tracks, less horses, less race dates means less owners. Owners do get the majority of purse monies, but by the time they pay the jockey, trainer and vet, they wind up going into their own pocket. This is actually another funding source that the panel overlooked. It is important because much of this mad money might be invested offshore or in investments that have low multiplier effects associated with them. If someone earns 40k a year, all the after tax money is going into the local economy for the most part, but for someone making $150k a year, well that money could get locked into long term investments or again, go outside of Ontario.
Another problem with the report is that it states the SAR program should end, but that another source of subsidy needs to be established, or even a "new" partnership when it comes to sports betting should come about. What makes being a partner in sports betting any different that being a partner is slots? Slots can't be your partner, but a sports book can? Sounds like something Jackie Mason could do a skit about.
And another thing that irks me is that the panel failed to discuss the OLG's plan to privatize going forward and compare it to the SAR program. Are the profits that the new operators going to make "public funds?" Will they have to be accountable to the government regarding these profits? I think not. It appears that public funds will now become casino operator profits. Should this be a major focal point as to whether the slots at racetracks program should end? We obviously cannot trust the government (very faulty, as Dwight Duncan insists there are only 5,000 industry jobs) or OLG numbers, as much as changed since they were put together in March (ie a slam dunk casino in Toronto).
The panel also doesn't realize that the HIP program, the way it is set up now, it detrimental to growing a customer base. Reason being, it is a percentage of the handle currently. It needs to be a percentage of the takeout commission instead. The reason why takeout decreases aren't tested in Ontario is because of the current set up, and in order for horse racing to compete with other forms of gambling and experience customer base growth, takeout rates need to drop, probably significantly.
Unfortunately, although there is a compelling argument to reverse the slots at racetrack program decision, and reimplement it with much needed earmarks, the government is unlikely to reverse things now. The problem right now is that even though there are probably very good legal reasons to go after the government, and some are still being pursued like MPP Lisa McLeod taking the case to the Auditor General, or the Ombudsman's possible recommendations when they come out, the horse racing industry can't afford to wait any longer. The industry needs to work with the government in order to have even a slight chance at transitioning. But getting the industry to work together with the government will most probably more difficult than herding cats in 15 separate locations around the world at the exact same time.
The report that came out should have at least hinted at how many dollars would be needed to sustain the industry. In light of the financial vagueness, I see no point in having the September Sales for either harness or thoroughbreds. The right thing to do is to move the sales to November or December.
Next piece will be on where to go from here.
Check out Pull The Pocket's take on the Interim Report.
Also check out A View From The Grandstand's take.
24 August 2012
Cancellations And Pool Manipulation
Last night in the 6th race at Emerald Downs there was a sudden drop in odds on number 2, Lonely and Free, from around 13-1 to 1-9. It appears that a $10,000 win (correction: it was a $100,000 wager) bet did the trick. The seven, Zippin E., was the prohibitive favorite from the time the odds opened to around 3 or 4 minutes to post (might have been 5 or 6 minutes to post) when the big wager on the two was made. The exactor pools, and the place and show pools on the two horse were reflective of a medium long shot.
The large bet wasn't pulled until the horses were in the gate. This had to lead to many other ticket cancellations. Who wants 1-9 on a long shot? And by looking at the final pool numbers, it is pretty clear that the two wound up taking a higher percentage of place money instead. The 1-9 scared off any other new bettors on the two except in exactors and probably triactors for when the bet was cancelled and the race went off, Lonely and Free went off at 52-1, though he was probably around 12-1 or so in exotics.
The thing is, the horse almost won, leading throughout the race, only to get caught by the number 4 horse in the last few strides. The winner, Have N A Wild Time, went off at 6.5-1, but wound up paying more to place than the two, who went off at 52-1.
Was this manipulation intentional? Well, you have to figure that if someone is placing a $5,000 or higher wager, they are going to try to make sure they buy the right ticket at the right track, whether the wager was made online or at racetrack or simulcast center. Also, the fact that the bettor had $10,000 either on them or in their betting account leads one to believe that the bettor was a sophisticated Horseplayer (this is assuming it was one person and one wager). However, keeping the wager in until the last moment was risky in case the cancellation couldn't be made in time.
Whatever the intent, whether it was a mistake or manipulation, this type of thing flies in the face of the integrity of the game and can turn bettors off. Unless a teller made a mistake, you can't blame the bet taker unless it is a known repeat offender, this kind of "mistake" can happen at any track or through any ADW or simulcast center.
So what is the solution? Stop cancellations? I don't think so. Real mistakes do happen, and tellers need to be protected. As long as cancellations are allowed for certain instances, cancellations have to be available to all.
How about this? On any win, place, or show wager of $100 or greater, or any exactor or double wager with a $10 base or greater, allow 90 seconds to cancel whether it is on track or online. And to avoid any temptation to manipulate, these wagers do not show up in the pools until the 90 seconds are up or the bell rings to end betting, whichever comes first.
I realize that this gets us away from real time odds even more, as late odd fluctuations are already upsetting to many Horseplayers, but it might actually lead to less fluctuation, as big bettors using robotic programming to wager as late as possible will have less real time info to make decisions, which means they will have to speculate stressing other factors than current odds. I do believe they'll still wager the same amounts they do today, they will just be more creative and will probably spread out their wagers more.
I imagine the hard part of my idea is to get the racetracks on board with it, and then get the tote companies to implement it. If it is too costly, you can just about forget about it.
One more thing, cancellations do not matter to the integrity of the game when it comes to blind pools like triactors, superfectas, Pick 3's, Pick 4's, etc. so they can be unlimited without any worry, and not subjected to time constraints. Late scratches having to do with a horse being used in a triactor or super by someone with a limited bankroll create a need to be able to cancel, so that another horse can be subbed in by the Horseplayer.
The large bet wasn't pulled until the horses were in the gate. This had to lead to many other ticket cancellations. Who wants 1-9 on a long shot? And by looking at the final pool numbers, it is pretty clear that the two wound up taking a higher percentage of place money instead. The 1-9 scared off any other new bettors on the two except in exactors and probably triactors for when the bet was cancelled and the race went off, Lonely and Free went off at 52-1, though he was probably around 12-1 or so in exotics.
The thing is, the horse almost won, leading throughout the race, only to get caught by the number 4 horse in the last few strides. The winner, Have N A Wild Time, went off at 6.5-1, but wound up paying more to place than the two, who went off at 52-1.
Was this manipulation intentional? Well, you have to figure that if someone is placing a $5,000 or higher wager, they are going to try to make sure they buy the right ticket at the right track, whether the wager was made online or at racetrack or simulcast center. Also, the fact that the bettor had $10,000 either on them or in their betting account leads one to believe that the bettor was a sophisticated Horseplayer (this is assuming it was one person and one wager). However, keeping the wager in until the last moment was risky in case the cancellation couldn't be made in time.
Whatever the intent, whether it was a mistake or manipulation, this type of thing flies in the face of the integrity of the game and can turn bettors off. Unless a teller made a mistake, you can't blame the bet taker unless it is a known repeat offender, this kind of "mistake" can happen at any track or through any ADW or simulcast center.
So what is the solution? Stop cancellations? I don't think so. Real mistakes do happen, and tellers need to be protected. As long as cancellations are allowed for certain instances, cancellations have to be available to all.
How about this? On any win, place, or show wager of $100 or greater, or any exactor or double wager with a $10 base or greater, allow 90 seconds to cancel whether it is on track or online. And to avoid any temptation to manipulate, these wagers do not show up in the pools until the 90 seconds are up or the bell rings to end betting, whichever comes first.
I realize that this gets us away from real time odds even more, as late odd fluctuations are already upsetting to many Horseplayers, but it might actually lead to less fluctuation, as big bettors using robotic programming to wager as late as possible will have less real time info to make decisions, which means they will have to speculate stressing other factors than current odds. I do believe they'll still wager the same amounts they do today, they will just be more creative and will probably spread out their wagers more.
I imagine the hard part of my idea is to get the racetracks on board with it, and then get the tote companies to implement it. If it is too costly, you can just about forget about it.
One more thing, cancellations do not matter to the integrity of the game when it comes to blind pools like triactors, superfectas, Pick 3's, Pick 4's, etc. so they can be unlimited without any worry, and not subjected to time constraints. Late scratches having to do with a horse being used in a triactor or super by someone with a limited bankroll create a need to be able to cancel, so that another horse can be subbed in by the Horseplayer.
18 August 2012
Time To Change The Claiming Game
The new California rule that gives the new owner an out if the horse claimed is euthanized on the track just hits me as wrong, mainly because there might be occasions when a horse might be put down even though there is some ambiguity to the extent of the injury. In other words, it may not have been put down if the rule didn't exist, or if the claim wasn't made.
It got me thinking of a solution, and I think I've come up with one, not only one that will save the lives of some horses but one that will fire up the claiming game possibly bringing in new owners, something the game desperately needs.
Claiming races are very important. They allow horses to compete against their equals, and allows owners to either try to lose their horses or buy horses whom they think they can do well financially with in the future. The claiming element allows for racing partnerships to exist which means those with little racing background can get involved in the game for a commitment of a few thousand dollars. Some of these newbie owners wind up buying more horses, and even get into buying yearlings and even get involved in breeding (it happened to me, though I had a more than a little racing background).
New owners are likely to bring newbie friends and family to the track the odd time to see their horse run, again, this is good for growth, as new gamblers and owners can come out of it.
General claiming rules haven't changed much over time. Owners either talk themselves into claiming a horse with potential or a trainer talks the owner into a horse with potential to claim. The claim slip is dropped prior to 15 minutes to post time in most jurisdictions, and if you are the only claim in on the horse, or if you win a shake when 2 or more claims are in on the same horse, the horse becomes yours.
Technically you own the horse after the race is official, but in reality you bought the horse when the gate opened. This means that the purse money earned in the race goes to the former owner. It is really an odd way of doing things, if you think about it. In most instances in the real world, you own it when you buy it. Take stocks for example. I guess, you can compare the current system to buying a home in a fluctuating real estate market, the only difference being, the home doesn't have much of a chance to be worth nothing by the time the deal closes.
It is 2012, and Ebay is still hot. Why not change the claiming game to reflect the times and save the odd horse as well? My idea is to have an auction after the race is official. This could rejuvenate the claiming game and bring in a brand new clientele as well, as an auction would increase buyer confidence in a big way, because the new buyer is now buying in real time.
The way it would work is pretty simple, horses are still put in claiming races with the same tags that exist today, however, after the race, any of the horses can be "claimed" by auction. The owner has the option to place a minimum price on the horse below the claiming price or use the claiming price as the minimum bid. The old owner is not allowed to bid on their own horse, nor can the trainer of that horse.
For example, a conditioned non winner of two $10,000 claiming race is over. The winner ran hard and the time was decent. The second place finisher was only beaten a neck, but still has the non winner of two condition. The third place finisher was beaten another 3 lengths as the favorite. The rest of the field was back at least another 3 lengths.
The owner of the winner, knowing that the horse will have to go against non winners of three next time, and that the horse has a pretty high vet bill puts a minimum price of $7,500. Bidding starts, the horse goes for $9,000. The owner of the second place finisher really doesn't want to part with the horse because it is next to a cinch to win for $10,000-$20,000 next time out, so the bidding starts at $10,000. The horse sells for $14,000. The old owner is disappointed that he won't be in the picture next time out, but getting an extra $4,000 for the horse is acceptable. The third horse had good form but showed he belonged for $10,000 only. Because horses have to move up 25% of the auction price, in order for the new owner to run for $10,000, a price of more than $8,000 can't be paid. The old owner knows the first and second horse can't run in the same class race next time out, so he puts a minimum price of $9,000 on the horse. The horse doesn't sell.
As for the rest, some owner might just want to get rid of a horse and put price of $1,000. These horses can easily be bought by new owners looking to run for $5,000 or less if they think the horse could win for that next start.
One other thing this auctioning process will do is to prevent outfits from stealing. For bettors, they can make better inferences as to the wellness of a dropper, and will become more confident when making selections.
I believe that auctions after the race would bring more people to the track, mostly potential buyers. Trainers will required to make decisions on the horses action during the race, and even try to determine soundness by the way the horse jogs back to the unsaddling area. Trainers with good eyes will get more business.
I also think there is room to do both, keep the pre-race claiming (EBAY Buy It Now!) and also have the auction afterwards. Of course, if a horse is claimed, it is up to the new owner to put the horse in the auction or not. If claimed though, the new owner does not have the option to put down the horse to void the claim.
Speaking about voiding the claim, all auctioned horses get tested. If a positive occurs, the new owner has the option to void the claim as well as get compensated at a rate of $100 a day by the old owner. This could help deter those taking a chance on pre-race concoctions.
It got me thinking of a solution, and I think I've come up with one, not only one that will save the lives of some horses but one that will fire up the claiming game possibly bringing in new owners, something the game desperately needs.
Claiming races are very important. They allow horses to compete against their equals, and allows owners to either try to lose their horses or buy horses whom they think they can do well financially with in the future. The claiming element allows for racing partnerships to exist which means those with little racing background can get involved in the game for a commitment of a few thousand dollars. Some of these newbie owners wind up buying more horses, and even get into buying yearlings and even get involved in breeding (it happened to me, though I had a more than a little racing background).
New owners are likely to bring newbie friends and family to the track the odd time to see their horse run, again, this is good for growth, as new gamblers and owners can come out of it.
General claiming rules haven't changed much over time. Owners either talk themselves into claiming a horse with potential or a trainer talks the owner into a horse with potential to claim. The claim slip is dropped prior to 15 minutes to post time in most jurisdictions, and if you are the only claim in on the horse, or if you win a shake when 2 or more claims are in on the same horse, the horse becomes yours.
Technically you own the horse after the race is official, but in reality you bought the horse when the gate opened. This means that the purse money earned in the race goes to the former owner. It is really an odd way of doing things, if you think about it. In most instances in the real world, you own it when you buy it. Take stocks for example. I guess, you can compare the current system to buying a home in a fluctuating real estate market, the only difference being, the home doesn't have much of a chance to be worth nothing by the time the deal closes.
It is 2012, and Ebay is still hot. Why not change the claiming game to reflect the times and save the odd horse as well? My idea is to have an auction after the race is official. This could rejuvenate the claiming game and bring in a brand new clientele as well, as an auction would increase buyer confidence in a big way, because the new buyer is now buying in real time.
The way it would work is pretty simple, horses are still put in claiming races with the same tags that exist today, however, after the race, any of the horses can be "claimed" by auction. The owner has the option to place a minimum price on the horse below the claiming price or use the claiming price as the minimum bid. The old owner is not allowed to bid on their own horse, nor can the trainer of that horse.
For example, a conditioned non winner of two $10,000 claiming race is over. The winner ran hard and the time was decent. The second place finisher was only beaten a neck, but still has the non winner of two condition. The third place finisher was beaten another 3 lengths as the favorite. The rest of the field was back at least another 3 lengths.
The owner of the winner, knowing that the horse will have to go against non winners of three next time, and that the horse has a pretty high vet bill puts a minimum price of $7,500. Bidding starts, the horse goes for $9,000. The owner of the second place finisher really doesn't want to part with the horse because it is next to a cinch to win for $10,000-$20,000 next time out, so the bidding starts at $10,000. The horse sells for $14,000. The old owner is disappointed that he won't be in the picture next time out, but getting an extra $4,000 for the horse is acceptable. The third horse had good form but showed he belonged for $10,000 only. Because horses have to move up 25% of the auction price, in order for the new owner to run for $10,000, a price of more than $8,000 can't be paid. The old owner knows the first and second horse can't run in the same class race next time out, so he puts a minimum price of $9,000 on the horse. The horse doesn't sell.
As for the rest, some owner might just want to get rid of a horse and put price of $1,000. These horses can easily be bought by new owners looking to run for $5,000 or less if they think the horse could win for that next start.
One other thing this auctioning process will do is to prevent outfits from stealing. For bettors, they can make better inferences as to the wellness of a dropper, and will become more confident when making selections.
I believe that auctions after the race would bring more people to the track, mostly potential buyers. Trainers will required to make decisions on the horses action during the race, and even try to determine soundness by the way the horse jogs back to the unsaddling area. Trainers with good eyes will get more business.
I also think there is room to do both, keep the pre-race claiming (EBAY Buy It Now!) and also have the auction afterwards. Of course, if a horse is claimed, it is up to the new owner to put the horse in the auction or not. If claimed though, the new owner does not have the option to put down the horse to void the claim.
Speaking about voiding the claim, all auctioned horses get tested. If a positive occurs, the new owner has the option to void the claim as well as get compensated at a rate of $100 a day by the old owner. This could help deter those taking a chance on pre-race concoctions.
11 August 2012
Problem Gambler Lawsuits: No Wonder OLG Wants To Privatize
Michele Mandel wrote an article in the Toronto Sun that probably has the execs at the OLG cringing because of the timing. It has to do with a potential $3.5 Billion class action lawsuit on behalf of more than 11,000 problem gamblers who self excluded themselves yet were able to get by casino security and continue to feed their habit.
Now, I want to make something clear, I do realize that for some, gambling is an uncontrollable addiction much like drinking for some and biting nails for others. However, the liability should fall squarely on the individual gambler when it comes to their falling off the wagon. However, in the case of the OLG, because it is a branch of the government, they wound up going too far, and basically signed a check their butt couldn't cash. They put perfume on the fact they were gambling enablers by starting a self exclusion program that did put the onus on themselves to do impossible things in order to keep problem gamblers out of their gambling dens.
It is obvious that the way it was set up, the OLG was completely liable for problem gamblers who got through the front doors of casinos. Why? According to Mandel, they settled 9 lawsuits with an average payout of $167,000. This is a bad precedent when it comes to future lawsuits and especially the $3.5 Billion pending class action suit. If it is allowed to happen, it is very likely that the OLG will be forced to make a huge settlement.
The timing of this hitting the media might make the OLG's quest to find new operators very difficult. Even though technologies have improved, and self excluded gamblers have a much harder time getting into a casino today versus 5 years ago, the precedence set in Ontario may not be worth the risk of operating a casino. The OLG, by ridding itself of operator status is attempting to clear itself of future liabilities, but they will be forced to impose major sanctions against those operators who allow problem gamblers to slip through the cracks as their role to govern casinos will expand. The new operators will most likely take on the liability of future lawsuits, and even though they will argue that they did their best in keeping problem gamblers out, and that they, as private operators, shouldn't be held as responsible as a government operated casino should be, precedent is still precedent.
Rumour has it that things are not going swimmingly in the OLG's quest to find suitors to operate casinos. Political uncertainty, potential referendums, bad press, and tremendous backlash from the horse racing industry has turned Dwight Duncan's Golden Mile into a Sewage Plant.
Speaking of Duncan and his ruthless web of deceit, it appears that he did have a plan to put a casino at Ontario Place and misled (umm lied perhaps) when pulling the plug on the Ontario landmark. Duncan at the time probably "thought" it was a slam dunk, and probably promised some cronies that they were going to get very lucky.
I have to say that Dalton McGuinty and Dwight Duncan give me the creeps. I'm half tempted to move to Kitchener, just so I can vote against the Ontario Liberals in the upcoming by-election.
Now, I want to make something clear, I do realize that for some, gambling is an uncontrollable addiction much like drinking for some and biting nails for others. However, the liability should fall squarely on the individual gambler when it comes to their falling off the wagon. However, in the case of the OLG, because it is a branch of the government, they wound up going too far, and basically signed a check their butt couldn't cash. They put perfume on the fact they were gambling enablers by starting a self exclusion program that did put the onus on themselves to do impossible things in order to keep problem gamblers out of their gambling dens.
It is obvious that the way it was set up, the OLG was completely liable for problem gamblers who got through the front doors of casinos. Why? According to Mandel, they settled 9 lawsuits with an average payout of $167,000. This is a bad precedent when it comes to future lawsuits and especially the $3.5 Billion pending class action suit. If it is allowed to happen, it is very likely that the OLG will be forced to make a huge settlement.
The timing of this hitting the media might make the OLG's quest to find new operators very difficult. Even though technologies have improved, and self excluded gamblers have a much harder time getting into a casino today versus 5 years ago, the precedence set in Ontario may not be worth the risk of operating a casino. The OLG, by ridding itself of operator status is attempting to clear itself of future liabilities, but they will be forced to impose major sanctions against those operators who allow problem gamblers to slip through the cracks as their role to govern casinos will expand. The new operators will most likely take on the liability of future lawsuits, and even though they will argue that they did their best in keeping problem gamblers out, and that they, as private operators, shouldn't be held as responsible as a government operated casino should be, precedent is still precedent.
Rumour has it that things are not going swimmingly in the OLG's quest to find suitors to operate casinos. Political uncertainty, potential referendums, bad press, and tremendous backlash from the horse racing industry has turned Dwight Duncan's Golden Mile into a Sewage Plant.
Speaking of Duncan and his ruthless web of deceit, it appears that he did have a plan to put a casino at Ontario Place and misled (umm lied perhaps) when pulling the plug on the Ontario landmark. Duncan at the time probably "thought" it was a slam dunk, and probably promised some cronies that they were going to get very lucky.
I have to say that Dalton McGuinty and Dwight Duncan give me the creeps. I'm half tempted to move to Kitchener, just so I can vote against the Ontario Liberals in the upcoming by-election.
7 August 2012
Australia Racing: Organized Crime and Corruption Today And Yesterday
Here is a documentary spurred on by the current murder investigation of Australian trainer Les Samba.
29 July 2012
Maybe I'm Just Stupid, But...
Maybe I'm just stupid, but it appears to me that in OHRIA's recent proposal, Plan For The Future, that in lieu of losing $165 Million a year in slot revenues that went towards purses and breeding, they want funds to be set up by the government (an actual subsidy) totalling $210 Million a year, while being alright with cutting race dates and racetracks. Um OK, I must be idiotic in believing that the government will laugh their heads off at this proposal, though they'll like the cutting of race dates and tracks...less gambling competition is cool with the Ontario Liberal Party.
Maybe I'm just stupid, but in OHRIA's recent proposal they seem to be content with the end of Fort Erie. To stupid me, if OHRIA is conceding that racing can exist without Fort Erie, it makes it next to impossible to make a case to the government that Fort Erie Race Track should exist after this year.
Maybe I'm just stupid, but OHRIA seems to believe that Woodbine can race B horses. Sure, they can write $5,000 claiming races, but at a rate of $80 day pay, which owners are going to stick around to fill those races with their horses? There is a very good chance that if Woodbine is the only thoroughbred track running next year, owners of horses who run for less than $12,500 or who can't handle polytrack will send their horses away to Finger Lakes or Ohio. Some may run for the Woodbine owners there, but many will be sold for next to nothing. Once, this happens to an owner once or twice, it will take the fun out of the game, as well as taking away much of the chance that the owner can make money in the game. I know this might sound stupid but owners will dry up very quickly, leaving only wealthy trainers and owners with more money than brains to race. Maybe I'm just stupid, but I would think that OHRIA would understand the economic necessity of having a B racetrack in Ontario.
Maybe I'm just stupid, but Tim Hudak's attempt to appeal to the horse racing community and its supporters, to make sure that the Ontario Liberals don't wind up with a majority government by winning the upcoming Kitchener-Waterloo election, sounds almost pointless. The Liberals didn't need a majority government to end the Slots At Racetracks program. How will a Liberal defeat in Kitchener help horse racing in Ontario?
Maybe I'm just stupid, but the Minister of Agriculture, Ted McMeekin, comes across like a pompous A-hole when he says, “Simply put, the model that is currently in operation and is scheduled to end March 2013 is not viable, is not sustainable.” Is EHealth, ORNGE, moving the Mississauga Power Plant, or full day kindergarten sustainable? Sustainable? The SAR program was a partnership, and it is not going to mean much more money, if any, to the government bottom line, once the new operators (mostly foreign owned conglomerates most likely) take their cut of the slots profits.
Maybe I'm just stupid, but whenever I read that Bingo Halls are going to get a better deal than racetracks did because they are only going to give the government 47% of gross gaming revenues (before expenses to the Bingo Hall), while the government received 75% of slot revenues from Racinos (before expenses to the government), I either believe that the writer either doesn't understand Business 101 or is being totally disingenuous. That being stated, I know I'm stupid for even thinking that Bingo Hall owner Larry Tanenbaum is getting preferential treatment for being a Liberal Government Crony.
Maybe I'm just stupid, but I really like the idea that Finance Minister Dwight Duncan got ambushed by Marty Adler:
What bothers me is when Duncan stated that the number of jobs affected by the end of the SAR program is "not 60,000," Adler didn't come back asking "well then how many jobs will be affected?" Truth is that Duncan has no idea, and that, to a stupid person like me, shows that the decision to end the slots at racetrack program was done without the proper due diligence.
Maybe I'm just stupid, but in OHRIA's recent proposal they seem to be content with the end of Fort Erie. To stupid me, if OHRIA is conceding that racing can exist without Fort Erie, it makes it next to impossible to make a case to the government that Fort Erie Race Track should exist after this year.
Maybe I'm just stupid, but OHRIA seems to believe that Woodbine can race B horses. Sure, they can write $5,000 claiming races, but at a rate of $80 day pay, which owners are going to stick around to fill those races with their horses? There is a very good chance that if Woodbine is the only thoroughbred track running next year, owners of horses who run for less than $12,500 or who can't handle polytrack will send their horses away to Finger Lakes or Ohio. Some may run for the Woodbine owners there, but many will be sold for next to nothing. Once, this happens to an owner once or twice, it will take the fun out of the game, as well as taking away much of the chance that the owner can make money in the game. I know this might sound stupid but owners will dry up very quickly, leaving only wealthy trainers and owners with more money than brains to race. Maybe I'm just stupid, but I would think that OHRIA would understand the economic necessity of having a B racetrack in Ontario.
Maybe I'm just stupid, but Tim Hudak's attempt to appeal to the horse racing community and its supporters, to make sure that the Ontario Liberals don't wind up with a majority government by winning the upcoming Kitchener-Waterloo election, sounds almost pointless. The Liberals didn't need a majority government to end the Slots At Racetracks program. How will a Liberal defeat in Kitchener help horse racing in Ontario?
Maybe I'm just stupid, but the Minister of Agriculture, Ted McMeekin, comes across like a pompous A-hole when he says, “Simply put, the model that is currently in operation and is scheduled to end March 2013 is not viable, is not sustainable.” Is EHealth, ORNGE, moving the Mississauga Power Plant, or full day kindergarten sustainable? Sustainable? The SAR program was a partnership, and it is not going to mean much more money, if any, to the government bottom line, once the new operators (mostly foreign owned conglomerates most likely) take their cut of the slots profits.
Maybe I'm just stupid, but whenever I read that Bingo Halls are going to get a better deal than racetracks did because they are only going to give the government 47% of gross gaming revenues (before expenses to the Bingo Hall), while the government received 75% of slot revenues from Racinos (before expenses to the government), I either believe that the writer either doesn't understand Business 101 or is being totally disingenuous. That being stated, I know I'm stupid for even thinking that Bingo Hall owner Larry Tanenbaum is getting preferential treatment for being a Liberal Government Crony.
Maybe I'm just stupid, but I really like the idea that Finance Minister Dwight Duncan got ambushed by Marty Adler:
What bothers me is when Duncan stated that the number of jobs affected by the end of the SAR program is "not 60,000," Adler didn't come back asking "well then how many jobs will be affected?" Truth is that Duncan has no idea, and that, to a stupid person like me, shows that the decision to end the slots at racetrack program was done without the proper due diligence.
23 July 2012
How OLG Slots At Racetracks Termination Will Affect Many
Here is a video by Joe Scully, a rodeo MC, shot at Fort Erie Race Track:
Many good points are made. This move has economic disaster written all over it. Slots are racetracks partnerships is a winning deal for jobs and the province. It is a program that the USA is following, even where casinos are being allowed for the very first time. Ending the program will have long enduring sweeping consequences.
One thing Scully is wrong about is that there will still be revenues for the municipalities (perhaps not as much), but some will lose them altogether, and some will start seeing them for the first time.
Finally there is some noise about Public Cost Benefit Analysis. This should have been an issue before the budget was voted on, especially after Dwight Duncan doubted the 60,000 jobs number. The fact he doesn't know if it is 10,000, 20,000, or 60,000 proves that this decision was done without due diligence.
I don't know about you, but I've never cared much about Ontario politics. I think Ontario politicians rely on voter apathy. Being a social liberal who believes in separation of church and state, I took a stance a few years ago against John Tory because he wanted to fund religious schools, but other than that I really didn't give a rats butt about politics. Now, I'm becoming fascinated by it, and the more I learn, the more I've become disgusted by the Liberal Party of Ontario. They seem to take deception to brand new levels.
I believe that their ending of slots at racetracks program will kill the party in the future. They won't be able to overcome losing many voters for life. Politicians like Kim Craitor are done if Fort Erie does close. He couldn't even get Fort Erie a gaming zone. If I were him, I'd cross the floor ASAP.
The Liberals aren't only to blame for this. They only have a minority government, Tim Hudak has not come out and stated what he would have done, or what can be done to rectify things, and the issue wasn't important enough to Andrea Horwath to either vote against the budget or demand a Cost Benefit study first.
I really don't know what is going to happen in the end here, but I'm not very optimistic, despite the 3 man committee, the Ontario Ombudsman and the work of Dennis Mills (Racing Future). I can't see the corrupt Ontario Liberal government bending, but I hope I'm wrong.
On Twitter check out @racing_future,
@Ont_Ombudsman, and @HonestDwight.
Many good points are made. This move has economic disaster written all over it. Slots are racetracks partnerships is a winning deal for jobs and the province. It is a program that the USA is following, even where casinos are being allowed for the very first time. Ending the program will have long enduring sweeping consequences.
One thing Scully is wrong about is that there will still be revenues for the municipalities (perhaps not as much), but some will lose them altogether, and some will start seeing them for the first time.
Finally there is some noise about Public Cost Benefit Analysis. This should have been an issue before the budget was voted on, especially after Dwight Duncan doubted the 60,000 jobs number. The fact he doesn't know if it is 10,000, 20,000, or 60,000 proves that this decision was done without due diligence.
I don't know about you, but I've never cared much about Ontario politics. I think Ontario politicians rely on voter apathy. Being a social liberal who believes in separation of church and state, I took a stance a few years ago against John Tory because he wanted to fund religious schools, but other than that I really didn't give a rats butt about politics. Now, I'm becoming fascinated by it, and the more I learn, the more I've become disgusted by the Liberal Party of Ontario. They seem to take deception to brand new levels.
I believe that their ending of slots at racetracks program will kill the party in the future. They won't be able to overcome losing many voters for life. Politicians like Kim Craitor are done if Fort Erie does close. He couldn't even get Fort Erie a gaming zone. If I were him, I'd cross the floor ASAP.
The Liberals aren't only to blame for this. They only have a minority government, Tim Hudak has not come out and stated what he would have done, or what can be done to rectify things, and the issue wasn't important enough to Andrea Horwath to either vote against the budget or demand a Cost Benefit study first.
I really don't know what is going to happen in the end here, but I'm not very optimistic, despite the 3 man committee, the Ontario Ombudsman and the work of Dennis Mills (Racing Future). I can't see the corrupt Ontario Liberal government bending, but I hope I'm wrong.
On Twitter check out @racing_future,
@Ont_Ombudsman, and @HonestDwight.
15 July 2012
The Last Prince Of Wales At Fort Erie?
There really is no optimism going on regarding a 2013 season at Fort Erie. However, I don't think there is anyone who believes that the fight to stay open is over either. In fact, the whole horse racing industry in Ontario still are clinging on hope that the decision to end the slots at racetrack program will be overturned. It isn't like the current clowns who are running Ontario into the ground haven't done about faces before (but usually for political gain only) Take the cancelled Mississauga power plant, which will cost Ontario tax payers over $180 million for example. That about face was all about saving Liberal Party of Ontario seats, the problem with the slots program is that even if the Liberal Party were to reverse the decision, they would not be able to gain any future votes out of it. They've lost many votes for life over the decision to end slots. I still believe that either way, there are going to be a lot more large embarrassment in store for the Liberal Party when the Ontario Ombudsman starts blowing the whistle.
Back to Fort Erie. The track was already on life support before the announcement to end slots was made. I believe the only hope for The Fort is if a new buyer comes along and without slots or other forms of gambling, the likelihood is very remote. It does have the possibility to become a training centre, but with the anti-horse racing minority government that is in place, there is a major possibility that too much harm will occur and a never go back situation may result.
At this time, I can't see the track being plowed down to rubble either. It costs money to do that, and upon losing its number one employer, Fort Erie industrial or residential land won't be sought after when it comes to new developments. So there is a possibility that Fort Erie will stand empty until the next election, when hopefully, the new government will come in and help reopen the joint.
Anyway, it is a shame that a minority government can come in and kill an industry. It is hard not to blame the other parties for allowing it to happen, but the reality is that neither cared enough to make it a worthwhile issue.
History time:
Did you know that 61 years ago, Fort Erie Racetrack was involved in a huge race fixing scandal? The majority of the jockey colony was either ruled off, suspended or fined. There was even a Lady In Black, a Mr. Fix It, and a Mr. Big Money. Sounds like movie material.
Interesting that back then a jockey, Robert Wankmueller, was arrested for defrauding the public. Imagine that? When did the rules change that defrauding the public by trainers now results in a $300 fine and/or a warning?
Handicapping Time:
I threw some mud against the wall this morning, in an attempt to find the Prince Of Wales winner. I like Dixie Strike. She came back nicely to run a decent troubled and wide third in the Queen's Plate. I think the switch from poly to will not bother her as much as some of the others in the field. My long shot contender is Ultimate Destiny, a horse who seems to be peaking. You can't discount the bottom horse either, Roger Attfield trained Colleen's Sailor. Corey Nakatani must have felt some potential in the Plate for him to take another plane ride and dust off his passport for the Prince of Wales. As for the probable favorite, Irish Mission, her breeding screams out grass and poly, she has also run quite a few good races in a row. Breeding and bounce factor and lack of betting value makes her a very good pitch this afternoon.
Back to Fort Erie. The track was already on life support before the announcement to end slots was made. I believe the only hope for The Fort is if a new buyer comes along and without slots or other forms of gambling, the likelihood is very remote. It does have the possibility to become a training centre, but with the anti-horse racing minority government that is in place, there is a major possibility that too much harm will occur and a never go back situation may result.
At this time, I can't see the track being plowed down to rubble either. It costs money to do that, and upon losing its number one employer, Fort Erie industrial or residential land won't be sought after when it comes to new developments. So there is a possibility that Fort Erie will stand empty until the next election, when hopefully, the new government will come in and help reopen the joint.
Anyway, it is a shame that a minority government can come in and kill an industry. It is hard not to blame the other parties for allowing it to happen, but the reality is that neither cared enough to make it a worthwhile issue.
History time:
Did you know that 61 years ago, Fort Erie Racetrack was involved in a huge race fixing scandal? The majority of the jockey colony was either ruled off, suspended or fined. There was even a Lady In Black, a Mr. Fix It, and a Mr. Big Money. Sounds like movie material.
Interesting that back then a jockey, Robert Wankmueller, was arrested for defrauding the public. Imagine that? When did the rules change that defrauding the public by trainers now results in a $300 fine and/or a warning?
Handicapping Time:
I threw some mud against the wall this morning, in an attempt to find the Prince Of Wales winner. I like Dixie Strike. She came back nicely to run a decent troubled and wide third in the Queen's Plate. I think the switch from poly to will not bother her as much as some of the others in the field. My long shot contender is Ultimate Destiny, a horse who seems to be peaking. You can't discount the bottom horse either, Roger Attfield trained Colleen's Sailor. Corey Nakatani must have felt some potential in the Plate for him to take another plane ride and dust off his passport for the Prince of Wales. As for the probable favorite, Irish Mission, her breeding screams out grass and poly, she has also run quite a few good races in a row. Breeding and bounce factor and lack of betting value makes her a very good pitch this afternoon.
2 July 2012
Statistics Point To A Dying Game That Needs To Change
NYRA's Oversight Board Member Richard Aurelio recently stated "The sport is dying. Every time you look at the obituary page you’re losing a racing fan.” This made DRF's Mike Watchmaker very mad.
Though Watchmaker brings up good points, like the stands have always been full of older people, which, because of the lack of younger people in the crowd, leads to the false conclusion that when the older players die, it is over for horse racing. The reason this wasn't true in the past is that 45 year olds and up have more disposable cash and more time to finally embrace the game that hooked them when they were younger.
Watchmaker doesn't address why things might be different this time around: A much smaller amount of the new 45 year olds today were bitten by the race track bug at an earlier age, and going forward the percentages will even be smaller.
A brief history is needed to explain this. Back in the 60's, horse racing was mainstream, many sitcoms on TV had at least one episode devoted to a racetrack theme. Outside of Vegas, it was the only game in town. You had to go to the track, or by the early 70's an OTB, to place a bet (except for those who played with bookies, but even these players went to the track often). The stands were packed, not only with 45 plusers who were regulars but their kids as well. The Horseplayers were limited to WPS bets most races, as there was maybe one double and a couple of exactors tops for a typical card of racing.
The fact that WPS wagers were predominant meant that collective takeout back then was in the 15-16% range, which meant more churn, and more gambling satisfaction as a limited 8 race card ensured that most patron would leave the track with at least some money, which for a gambler lead to one thing: Looking forward to the next day that the track was open and/or the next day they can make it to the track....and who needs to pay for a babysitter when you could bring your kid in for free.
The game was beatable by a few too back then. Those who made their own track variants had a huge edge (this was taken away gradually, as the DRF provided some archaic variants culminating in 1990 when Beyer figs were in every Form). There were visible winners, thanks in part to a lot of dummy money, as there was pretty much no other gambling competition, which meant that there was a lot of money in the pool that came from guessers (only 1 in 4 or 1 in 5 players actually bought the Form).
The 70's came along and so did lotteries and also a lot of sports franchises began to pop up. The Toronto Blue Jays had a noticeable negative affect on the attendance numbers at Woodbine, especially on weekends. Dummy money was still out there, but exotics started to become available in every race, and this drove up the collective track takeout and it reduced churn as well. Players were going home with less money, and they also needed a bigger bankroll to enjoy the card. This weeded out a few more, and stands started to see a drop off in kids (today's 45 year olds).
The 80's saw even more exotic wagers, collective takeout continued to creep upwards, and intertrack wagering came into play. You didn't have to go to the live venue to place a bet. It is very tough for a regular to bring a kid to an intertrack without looking like a complete degenerate. Kids could not have any fun in that setting, it is light years away from the live racing experience. Still, kids became scarce at racetracks, as gamblers were starting to go broke much faster, as they now had a lot more races and betting types to play on any giving day. Horse racing had more plays an hour, the takeout should have dropped in the direction of blackjack and slots, but went the other way instead.
With the 90's came Charity and Indian Casinos. More bang for the buck for gamblers, as casino games have much lower holds. Handicappers were starting to get discouraged as dummy money started disappearing quickly, it was good handicappers versus good and great handicappers. The playing field was equalized too with the track variant adjusted speed figure. Horseplayers were losing more quickly, many didn't realize why, but enjoyment started to drop, however, the fact that more tracks were available meant that those who did play, played with a bigger bankroll. Lets not forget that those who were playing in the 90's, were mostly got the needle in their arm as a kid in the 50's to early 70's. However, there were less and less visible winners as the Century turned.
In the early 2000's, there was still a nice spike up as the majority of people in Canada and the USA could now play at local restaurants, intertrack locations, and finally from home. Except for those who reside in States like Arizona and Texas, a Horseplayer can now pretty much play a race from anywhere anytime. If Watchmaker's 45 year old theory is true, handle should be soaring today. It is not.
Lets look at some cold hard facts:
Between 2000-2010 the population of 45-64 year olds grew 31.5% in the USA
Total North American handle dropped 25% from 2000-2010.
Is it the economy or increased competition? Vegas should be a good barometer as competition from all other locations and a bad economy should mean that Vegas would have experienced a drop off as well. Wrong.
Vegas total handle increased by 11.7%.
In real money terms though, Vegas is off, as inflation rose 26% from 2000-2010. But again, with more and more casinos popping up across American, they still fared quite well.
So lets look at horse racing one more time from the angle of 45 year olds or greater. Handle in 2000 was 15 Billion, multiply that by the Vegas increase which takes into account inflation minus competition and the bad economy (11%), and multiply that by the increase in population for those demographics (31.5%). Horse racing handle should be hovering around $21.9 Billion instead of $11.5 Billion.
The game is dying. Increased takeout caused by actual hikes to a shift in higher takeout wagers available is a main cause. Another cause is the increase in signal fees that ADWs have been seeing of late, cutting into rebates available to every day players, which creates less churn. Also, protectionism from signal hogs, to States not allowing internet wagering, to States that have implemented home market fees, have all added to less churn and have turned many existing Horseplayers to give up on horse racing.
But the main reason is a diminishing amount of today's 45 year old, as they were not weaned on horse racing. And because of that, it is hard to convince them to play a game that nobody beats long term, and that has a very big learning curve. Why learn a game that is perceived to be unbeatable?, when there are games like poker that are perceived to be beatable by a few, the same is true of sports wagering, and to a lesser extent, blackjack which has a very low house edge.
Drugs aren't the problem either. They've been associated with horse racing even prior to the inception of parimutuel wagering. Sure, a movement to integrity will help, but only if there is a growing customer base.
It isn't over for horse racing, but there needs to be visible winners created.
Takeout needs to reduced to the 15-16% percent range by all tracks, and if this is successful, further drops need to be made. Until that happens, rebates for all needs to be embraced by the industry.
Low takeout Pick 5's don't work. It doesn't create churn, it doesn't attract new bettors. The same is true about Jackpot bets. If a Jackpot bet can't get new people right from the start, all it does is take a lot of churn money out of the bettor's hands.
Exchange wagering needs to be a reality. Getting families to go to the track as regulars is a dead deal. Horse racing needs to get with the times. The only way to cultivate the 20-35 year old crowd is to give them a high churn fix, one that some can actually win at, which will create a buzz.
In the meantime, a nation wide lottery type bet (a Pick 9) similar to the V75, that is available to be bet at lottery kiosks and every track and ADW, will certainly help get more horse racing exposure from 45 year old plusers.
The time has come to let the market decide the price of the bet, not the Horsemen or self serving Racetrack owners, if racing is to grow.
Though Watchmaker brings up good points, like the stands have always been full of older people, which, because of the lack of younger people in the crowd, leads to the false conclusion that when the older players die, it is over for horse racing. The reason this wasn't true in the past is that 45 year olds and up have more disposable cash and more time to finally embrace the game that hooked them when they were younger.
Watchmaker doesn't address why things might be different this time around: A much smaller amount of the new 45 year olds today were bitten by the race track bug at an earlier age, and going forward the percentages will even be smaller.
A brief history is needed to explain this. Back in the 60's, horse racing was mainstream, many sitcoms on TV had at least one episode devoted to a racetrack theme. Outside of Vegas, it was the only game in town. You had to go to the track, or by the early 70's an OTB, to place a bet (except for those who played with bookies, but even these players went to the track often). The stands were packed, not only with 45 plusers who were regulars but their kids as well. The Horseplayers were limited to WPS bets most races, as there was maybe one double and a couple of exactors tops for a typical card of racing.
The fact that WPS wagers were predominant meant that collective takeout back then was in the 15-16% range, which meant more churn, and more gambling satisfaction as a limited 8 race card ensured that most patron would leave the track with at least some money, which for a gambler lead to one thing: Looking forward to the next day that the track was open and/or the next day they can make it to the track....and who needs to pay for a babysitter when you could bring your kid in for free.
The game was beatable by a few too back then. Those who made their own track variants had a huge edge (this was taken away gradually, as the DRF provided some archaic variants culminating in 1990 when Beyer figs were in every Form). There were visible winners, thanks in part to a lot of dummy money, as there was pretty much no other gambling competition, which meant that there was a lot of money in the pool that came from guessers (only 1 in 4 or 1 in 5 players actually bought the Form).
The 70's came along and so did lotteries and also a lot of sports franchises began to pop up. The Toronto Blue Jays had a noticeable negative affect on the attendance numbers at Woodbine, especially on weekends. Dummy money was still out there, but exotics started to become available in every race, and this drove up the collective track takeout and it reduced churn as well. Players were going home with less money, and they also needed a bigger bankroll to enjoy the card. This weeded out a few more, and stands started to see a drop off in kids (today's 45 year olds).
The 80's saw even more exotic wagers, collective takeout continued to creep upwards, and intertrack wagering came into play. You didn't have to go to the live venue to place a bet. It is very tough for a regular to bring a kid to an intertrack without looking like a complete degenerate. Kids could not have any fun in that setting, it is light years away from the live racing experience. Still, kids became scarce at racetracks, as gamblers were starting to go broke much faster, as they now had a lot more races and betting types to play on any giving day. Horse racing had more plays an hour, the takeout should have dropped in the direction of blackjack and slots, but went the other way instead.
With the 90's came Charity and Indian Casinos. More bang for the buck for gamblers, as casino games have much lower holds. Handicappers were starting to get discouraged as dummy money started disappearing quickly, it was good handicappers versus good and great handicappers. The playing field was equalized too with the track variant adjusted speed figure. Horseplayers were losing more quickly, many didn't realize why, but enjoyment started to drop, however, the fact that more tracks were available meant that those who did play, played with a bigger bankroll. Lets not forget that those who were playing in the 90's, were mostly got the needle in their arm as a kid in the 50's to early 70's. However, there were less and less visible winners as the Century turned.
In the early 2000's, there was still a nice spike up as the majority of people in Canada and the USA could now play at local restaurants, intertrack locations, and finally from home. Except for those who reside in States like Arizona and Texas, a Horseplayer can now pretty much play a race from anywhere anytime. If Watchmaker's 45 year old theory is true, handle should be soaring today. It is not.
Lets look at some cold hard facts:
Between 2000-2010 the population of 45-64 year olds grew 31.5% in the USA
Total North American handle dropped 25% from 2000-2010.
Is it the economy or increased competition? Vegas should be a good barometer as competition from all other locations and a bad economy should mean that Vegas would have experienced a drop off as well. Wrong.
Vegas total handle increased by 11.7%.
In real money terms though, Vegas is off, as inflation rose 26% from 2000-2010. But again, with more and more casinos popping up across American, they still fared quite well.
So lets look at horse racing one more time from the angle of 45 year olds or greater. Handle in 2000 was 15 Billion, multiply that by the Vegas increase which takes into account inflation minus competition and the bad economy (11%), and multiply that by the increase in population for those demographics (31.5%). Horse racing handle should be hovering around $21.9 Billion instead of $11.5 Billion.
The game is dying. Increased takeout caused by actual hikes to a shift in higher takeout wagers available is a main cause. Another cause is the increase in signal fees that ADWs have been seeing of late, cutting into rebates available to every day players, which creates less churn. Also, protectionism from signal hogs, to States not allowing internet wagering, to States that have implemented home market fees, have all added to less churn and have turned many existing Horseplayers to give up on horse racing.
But the main reason is a diminishing amount of today's 45 year old, as they were not weaned on horse racing. And because of that, it is hard to convince them to play a game that nobody beats long term, and that has a very big learning curve. Why learn a game that is perceived to be unbeatable?, when there are games like poker that are perceived to be beatable by a few, the same is true of sports wagering, and to a lesser extent, blackjack which has a very low house edge.
Drugs aren't the problem either. They've been associated with horse racing even prior to the inception of parimutuel wagering. Sure, a movement to integrity will help, but only if there is a growing customer base.
It isn't over for horse racing, but there needs to be visible winners created.
Takeout needs to reduced to the 15-16% percent range by all tracks, and if this is successful, further drops need to be made. Until that happens, rebates for all needs to be embraced by the industry.
Low takeout Pick 5's don't work. It doesn't create churn, it doesn't attract new bettors. The same is true about Jackpot bets. If a Jackpot bet can't get new people right from the start, all it does is take a lot of churn money out of the bettor's hands.
Exchange wagering needs to be a reality. Getting families to go to the track as regulars is a dead deal. Horse racing needs to get with the times. The only way to cultivate the 20-35 year old crowd is to give them a high churn fix, one that some can actually win at, which will create a buzz.
In the meantime, a nation wide lottery type bet (a Pick 9) similar to the V75, that is available to be bet at lottery kiosks and every track and ADW, will certainly help get more horse racing exposure from 45 year old plusers.
The time has come to let the market decide the price of the bet, not the Horsemen or self serving Racetrack owners, if racing is to grow.
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