NYRA Goof Up A Long Term Win For The Industry and NYRA

Lots has been written regarding NYRA's overcharge. They were supposed to drop takeout to 25% on all exotics that had a 26% rate 15 months ago.

The end result is that mutuel payouts were shortchanged by $8 million. And contrary to what many think, NYRA didn't come out ahead by that $8 million. In fact, I'll argue that virtually nobody benefited from the mistake, until now.

Those betting through NYRA or their ADW were shortchanged $1.1 million. The reality is that most, if not all of that money would have been rebet until eventually lost. The game doesn't have very many winners, especially those who pay 26% takeout rates. So what really happened here is that New York Horseplayers didn't last as long as they should have. Most likely, there was little financial loss by the player in the scheme of things, except when players last longer they tend to add more new money (which most inevitably lose). The opposite of course occurs when takeout rates are higher and payoffs are lower.

Since 26% is higher than optimal takeout (a rate we can only speculate on), it only makes sense that bottom line revenues would have been higher had the takeout been
lowered on time. So NYRA probably lost out.

However, NYRA has vowed to pay back those who can prove they were short changed who played on track or with a NYRA ADW. The rate of shortchange isn't 1%, but 1.351% of all cashed tickets for all exotics except exactors, quinellas, and doubles, oh and Pick 6's (75% divided by 74%).

Since the damage has already been done regarding lost churn and gambler satisfaction, when NYRA actually gives the refunds back, much of this money will eventually be churned again, and those getting the refund will have a temporary jump start with a replenished bankroll. And to top it all off, they will be betting into lower takeouts as NYRA is now reducing takeout on the overcharged betting types by 2%.

Now what about the other $7 million that didn't make it to the payout prices?

Tracks sell their signal to ADWs, simulcast outlets and other tracks for a percentage that is lower than the actual takeout rate. The bet taker keeps the difference between the takeout rate and the signal fee which is used to pay track expenses, purses, technology expenses, marketing, tote fees, and wages, and in the case of ADWs that give rebates....rebates.

In the case of tracks and ADWs that either don't give rebates or don't rebate based on specific wager types and tracks, the NYRA mistake wound up with them. Instead of the difference between 25% and the signal fee, these outlets wound getting the difference between 26% and the signal fee.

However, again, gambler satisfaction (which is mostly innate) was damaged as they received less money than they should have, and couldn't churn as much as they should have. So using the same logic as with NYRA in house players, these bet takers probably showed an overall decrease in revenue than they would have had if the error was caught in time.

Regarding rebate ADWs that give specific rebates based on bet type and track, the Horseplayers there most likely wound up slightly ahead. Had the rates dropped by 1%, the rebates too, would have dropped by 1%. So instead of getting back the extra 1.1351% on cashed wagers, these players wound up getting back and extra 1% on all monies wagered on the affected bet types. Pretty much a stale mate. The industry didn't lose on these players overall, nor was gambler satisfaction and churn affected. Exception, of course, to anyone who showed an overall profit on the affected NYRA wager types, and rebate or no rebate, that number is most likely minuscule.

So going forward, this faux pas by NYRA has resulted in a takeout reduction. A forced experiment which may lead to further reductions, not just by NYRA but other tracks as well. Churn will now increase and along with that, player satisfaction is about to rise.

I'm not defending the mistake at all, but I hope NYRA handle starts showing tremendous increases. It will be great for the game if that happens.

This mistake could be the beginning of a brand new phase of growth, a turning point, much like the turning point when the first chimp actually spoke in the Planet of the Apes series. Instead of the rise of the chimp, it is the Horseplayers turn, one can only hope:)

One more thing, on a quasi related note, RIP Cheetah 1931-2011. The 1930's, those were the days, a 10% average takeout....they were onto something back then.

17-20-22

Reducing takeout in today's horse racing environment is a complicated issue. For future growth, it is a must, but tracks reducing rates are bound to feel at least a little short term heat.

The problem is that the majority of track handle, in most cases, comes from sources where that particular track is not necessarily the only focus of the bettor who plays it. Much of the money that is cashed on a track with a lower takeout rate gets bet back on other tracks. The majority of ADW and simulcast players are not price sensitive to the point that they choose tracks that are more Horseplayer friendly in the way of takeout. There is good reason to believe that the majority of players fly by the seat of their pants, starting with a certain bankroll (possibly adding to what they were willing to lose at the start of the day if they don't hit early enough), and they continue playing 2-5 tracks or more until they are tapped, or they actually run out of time or races to bet for the day (which ensures they will have a bankroll for tomorrow).

The bulk of the money being bet by the price sensitive minority. Whales for the most part, but also systematic players who only bet when they get value. Value is enhanced greatly by either low takeout, or through rebates (but generally, from tracks that don't charge high signal fees, therefore keeping net takeout for those tracks to be comparatively lower).

HANA (Horseplayers Association of North America) has done an excellent job in educating the Horseplayer when it comes to takeout and price sensitivity. There has been an awakening of sort, as we've seen tracks that have lowered their takeout and haven't upped their signal fees actually shown increase in handle, even though handle continues to fall overall (thanks mainly to increased signal fees, and increased takeout in California).

There have been enough bettors who have stopped playing California (and even some who recently quit playing Turf Paradise as they too raised takeout rates) and have diverted those betting dollars to more Horseplayer friendly venues.

This minor betting revolt has turned out to be good news for tracks like Woodbine, Hastings, and Zia Park.

Churchill handle dropped a bit, and this is most likely due to higher signal fees and the fact that their signal isn't available at all ADWs.

Again, it is critical that tracks allow their current customers to last longer. Churn is synonymous with gambler satisfaction in most instances. Being able to last, keeping the Horseplayer in the game longer, gives the player more hope.

I can't state this enough: A player who lasts longer is more likely to expose others to the game. But for optimal growth, horse racing needs to produce visible long term winners, and in order for that to happen, it must either embrace rebates and/or lower takeout significantly.

However, because of the fact that tracks with lower takeout rates can get hurt by tracks with higher takeout rates, a little collusion is in order. I don't think it is unreasonable for the entire industry to get together and place a cap on takeout with long term growth in mind.

I think the 17-20-22 plan makes sense for starter. That is a 17% cap on WPS, a 20% max on exactors and doubles, and a 22% cap on all other exotics.

I know that those numbers are still too high, but it is a huge step in the right direction.

At this time, only Keeneland and Churchill Downs are within the prescribed limits. Charles Town recently dropped takeout is extremely close, falling short by .25% on WPS. There are quite a few other tracks that wouldn't have to make too many enemies with horsemen groups in order to satisfy my proposal.

The big problem in getting this to happen is herding the cats that run the racetracks. Who is going to do it?

BUY CANADIAN CAMPAIGN
Harness handle isn't off that much this year. Low signal fees, enabling larger rebates, have kept them close to status quo. Standardbred Canada is trying to up handle by year end by linking to free past performances and giving selections on a new web page. Check it out.

Harness fans, don't forget about the USTA Strategic Wagering page which offer free TrackMaster past performances for guaranteed pool sequences. Good stuff!

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Horse Racing Missed Out Big Time: Is It Too Late?

I watched CNN yesterday morning, and caught a story about the Full Tilt Poker disaster. I know the story is all about the problems facing Full Tilt players who have balances with the suspended company, however one bit of info resonated with me in a large way: 8% of US players make a living playing poker. And that 8% represents 35,000 players. Quick math, and you wind up with almost 4.4 million online poker players.

Here is the clip:


In horse racing there is no discussion, no figures, no studies on how many people make a living at the game. The old line is that 2% of Horseplayers beat the game long term(and this line goes back to the 1960's when collective takeout was much lower and there was oodles of dummy money in the pools).

Nowadays, 2% would be way way way too high, and the industry knows it. The industry also knows that the only long term winners are those who get rebates (and yet there are numbskull racetrack execs who state that rebates are bad for the game).

Horse racing is stuck when it comes to marketing. They can't market the game as a way to make a living, like poker can (even though poker doesn't actually go out and say it, word of mouth and the internet is all poker needs).

I believe that even if the amount of long term winners in horse racing was 2.5% or so, racing would be flourishing, and newbies would be attracted in large quantities. Horse racing has the extra hurdle in that the learning curve is much steeper than poker's learning curve. However, I also believe that horse racing would have much more broader appeal if the game was perceived as beatable.

Horse racing handle doesn't grow despite The Secretariat Movie, Zenyatta, exposure on a multitude of TV shows, and even prohibition on US poker players. There is something wrong. Just like with US congress these days, the system is broken. Even if you throw the bums on the street (the high end racing execs), the system is still broken. The system needs a complete overhaul, and racetracks need restraining orders from the racing execs and horsemen groups who believe that growth is getting a higher bigger piece of a shrinking pie.

And to the horse racing execs who believe rebates are a bad thing, THINK!!!!

Even if a $50 a day bettor gets an extra $2 or $3 bucks the next day, that player is still in the game one day more than he or she would have in many cases. The longer they are in the game, the more likely they are to keep horse racing in their head and the more likely they are to expose others to horse racing (friends, sons, daughters, coworkers, etc.).

However, horse racing execs and racing jurisdictions do almost everything possible to knock these people out of the game.

First, you have States that make it impossible to rebate because they charge a fee on every bet made within the State. Some as high as 10%.

Then you have some tracks and signal distribution companies that limit content, some tied in with ADWs, (so they attempt to limit the content of competing ADWS). If a track isn't available at a Horseplayers favorite ADW, the result is that it sours racing's every day customers. Sure, some may come over to the ADW with more content, but the result is racing ends up losing more aggregate customers in the long term.

And then there is Texas, who has written into law that internet horse race betting is amongst Texas residents is now illegal. At first I thought the horsemen groups were stupid enough to think it would bring more people to the track (and they would get more money from it in theory...in actuality, it will kill horse racing in Texas as Horseplayers will become less and less interested, and follow less even if they were used to going to the track a few days a week, the fact it is now illegal to wager when they can't make it to the track will cause them to just give up...the same thing happened in Arizona 4 years ago. HINT Yavapai is bankrupt and for sale). It turns out that the one to blame is probably Presidential candidate Rick Perry. When horse racing is dead in Texas within the next five years, try to remember his name.

Texas has 8% of the US population. Sure, part of the population is very religious, but there are many gamblers in Texas too. And tracks are sporadic. Nationwide handle could drop 5-6% thanks to the new law.

And now you have Kentucky looking to charge ADW customers an extra fee for bets made by Kentucky residents. This will result in lower rebates for all Kentucky residents which will hurt handle even more.

So racing is chasing away Horseplayers who already know its a bad bet to begin with. Tremendous logic. And the ones with all the power are the ones who are looking to get a bigger slice from a shrinking pie.

REALITY: ADWs and rebates (as long as takeout rates remain above 12%), and exchange wagering represent racing's only chance at growth going forward. We need visible winners to attract poker players and other potential young gamblers. Horse racing needs to understand and embrace this fact. But racing seems bent on increasing the cost to the rebated player while also limiting distribution.


EQUINOMETRY (Horse Racing For Intelligent Horseplayers) has some great posts about takeout and handle.

There is even a post about the growth of handle in Fort Erie's Pick 4 pool thanks to a reduced track takeout.


Jen Morrison is rightfully pissed at the lack of transparency in horse racing when it comes to information available to the betting public. Her focus was the complete form reversal by Flip Of The Coin last week at Woodbine.


For Canadian TV viewers, there is documentary on OMNITV Friday morning at 9 EST called For The Love Of Horses. It is all about the Attard family. I missed it on Sunday because Sunday is my horse racing break night (Animation Domination, yeah baby!!!!....that and I haven't figured out how to record on Blue Ray yet).


One more thing. Back to Full Tilt Poker and their "not a Ponzi scheme plea." Sorry, but the funds were not segregated (they weren't required to be segregated but that is besides the point), and at the time the plug was pulled, there was not nearly enough cash to pay the customers, yet the owners were pulling funds out that really represented possible future profits...uh, I'm going with Ponzi scheme. They are not a bank that has enough cash on hand to meet daily withdrawals with the rest invested more or less, but they acted like a bank without the collateral.

In the gambling world, that is no no. ADWs based in Oregon, for example, must segregate gambling funds. That is the way it should be. Too bad that isn't enough (nor should it be) to attract poker players to horse racing....again, VISIBLE WINNERS, VISIBLE WINNERS, VISIBLE WINNERS....

15 Million Young Viewers Get Exposed To Horse Racing: No Bettors Created

A week last Thursday I watched on of my favorite show The Big Bang Theory. The show gets around 15 million viewers a week on the first run episodes. Mostly young viewers too. At 50 I'm still counted in the 25-54 crowd:)

Leonard, one of the main characters was shown playing an interactive video horse racing game:

Exposure like this would actually create more players....if it was poker instead of horse racing.
Too bad horse racing is known to be unbeatable (thanks to mindlessly high takeouts which makes the prospect of being a long term winner impossible unless one is receiving decent rebates...and still it is near impossible in that case).

Instead, this free advertising for horse racing will most likely only create more sales for the Kinect Xbox 360 Bundle and the Champion Jockey game that Leonard was playing.

I am seriously thinking of getting one myself (I'll probably wait until Boxing Day). Looks like a way I can get into exercising. And outside of forking over around $400, there is no track takeout. I can see my actual handle dropping off if I make the purchase as it looks like so much fun it might cut into my handicapping time.

Movies like Secretariat, the fan base created during Zenyatta's quest, and the new comedy movie (And They're Off) about a down and out trainer, and the upcoming HBO series Luck are wasted because there are no visible winners who beat the races long term.

Great to Caroline Betts get a seat at the table at the upcoming Race Track Industry Program Symposium in Arizona early next month. She will be giving the facts on optimum takeout.

I still don't get why Arizona is the meeting place. You can't even bet over the internet in that state. I know the weather is probably good, but why not a racing friendly state in the south instead?

Free Stuff For The Breeders' Cup

Do you want free Breeders' Cup past performances?, simple, go to the Breeders' Cup website (bottom middle) and download Friday and/or Saturday's card.

For just about everything else free, go to About Horse Racing's Breeders' Cup page and you can link to videos of prep races, news coverage, handicapping info, and much more.

You can also check out Breeders' Cup Youtube page.
There is even a video about Chantal Sutherland who rides Game On Dude in the Classic (as she tries to become the first woman jockey to win that event). She is considering Playboy (as long as it is tasteful...personally, I've never seen a Playboy spread that wasn't tasteful):

She better hurry up and do Playboy as she is getting up there in age:)

Free past performances are very important to an industry that is plummeting while trying to keep old customers, and attract new ones.

Thoroughbred Bloggers Alliance has a free past performance feed that picks up around a third of all the races in the USA and Woodbine.

Many harness tracks in Canada have free past performances: Flamboro Downs, Fraser Downs, Georgian Downs, Kawartha Downs, Mohawk/Woodbine, Rideau Carleton, Western Fair, and Windsor Raceway.

Another decent initiative is one called USTA Strategic Wagering. Partnered up with TrackMaster, free past performances for specific guaranteed pools each day are available.

And for my Breeders' Cup Classic pick, I am going with So You (Never Been On The Dirt Before) Think on top of Stay Thirsty, Prayer For Relief, and Ruler On Ice. I can't see Uncle Mo at all. First, the mile and a quarter seems way too far for him, and secondly, there is too much early pace. I can see him packing it in and finishing in the bottom third very easily.

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Horse Racing Needs Rats To Help Clean The Game Up

Former backstretch employee T.Y. Faulkner wrote a piece on The Paulick Report, A Bounty For Cheaters, that seems to have struck a nerve (judging by many of the comments).

He pretty much sums up his proposal in one paragraph:

"The racing organizations should step up with some serious monies to "bait" this information from within the backside. I would like to see posters offering $10,000 or more for information that leads to catching cheats. This information would have to be represented to the authorities and the bounty paid only if and when we could identify by testing the substances being used. Someone held that horse for the injection or saw a veterinarian in the barn in the middle of the night."

As I pointed out in the comment section, his idea has already been implemented in Ontario:

Horse Racing Community partners with Crime Stoppers

Call 1-800-222-TIPS to anonymously report information on any crime

In order to maintain the honesty and integrity of horse racing, the Ontario Racing Commission (ORC) maintains an official partnership agreement with Crime Stoppers. Crime Stoppers is a not-for profit community-based charitable program involving the co-operative efforts of the community, the media and the police in the fight against crime.

With the financial support of the industry-funded ORCEquine Medication Control and Drug Task Force, there is now a program in place to give Ontario’s horse racing community an anonymous, confidential way to report any illegal activity related to horse racing.

With the Crime Stoppers program, Called ID is never in place, callers are never asked to identify themselves, nor will they ever be asked to testify or be named. Cash rewards are offered to people who call the program and their information assists in an investigation.

By far the majority of people who work in horse racing are honest, dedicated professionals who care about the horse and play by the rules. If you witness or know of any illegal activity, don’t hesitate to take a stand. Report the activities anonymously. It’s your future. It’s your business.


Call Crime Stoppers 1-800-222-TIPS (1-800-222-8477)

This program began over 4 years ago. The obvious questions are How many cash rewards have been given out? How many suspensions has this initiative led to? and How reliable have the tipsters been?

Ontario might be one of the cleaner jurisdictions in North America, but there are still many horses that rebreak in the stretch (which to me is an indication of extra oxygen...I could be wrong, but on polytrack, I doubt I am wrong more times than not).

The biggest problem with Faulkner's idea and the ORC initiative is that there needs to be a huge fine and huge suspension associated with getting caught. What is the point if the trainer gets a slap on the wrist?, as is the case in most instances that are made public.

Disgruntled ex employees (grooms and hotwalkers etc.) may not be the most reliable source, especially if the reward is too high. But I don't see the harm in at least trying snitch programs at every track to see where it leads.

It would be great if ex trainers or ex vets had the balls to "rat out" the industry, but there seems to be some sort of mafioso club type of connection backstretch people have whether they are in the game still or out of the game. And when someone finally does talk they get slammed by their former coworkers (remember when Shane Sellers admitted to using buzzers?).

Dutrow may be a scapegoat, hopefully not. Hopefully severe fines and suspensions will become more persistent, and finally become a deterrent to the obvious cheating that is going on in horse racing.

Personally, I get turned off handicapping races and sometimes it prevents me from handicapping full cards, when I see super trainers in the race or races. They definitely do not help the game in any way shape or form. And of course, it isn't just the super trainers who cheat, but the super trainers seem to have their Teflon ways about them.

ITPP News
ITPP Research Receives Funding From PHHA

Researchers have found that mice with damaged hearts increased exercise levels by 35 per cent when given the drug orally, and 60 per cent when it was injected in the abdomen.

Hong Kong Has ITPP Test

One of the Group One Winners at the Moonee Valley meet in Australia tested positive for arsenic (one of the ingredients in ITPP)


Hanging On By A Thread
Fort Erie announced that they have applied for less dates and a shorter season next year. They intend to race 69 days, down from 78 this year.

Interesting observation:
...the track was successful in accomplishing their goal of attracting new customers with their twilight races and live music, but over the same time period, they lost many of their older, more dedicated attendees, mostly attributed to the poor economy and weak US dollar which kept many Americans on their side of the border.

I'm not sure that I buy into the excuses given. It doesn't make sense that they could attract new customers if the reasons given for losing the older customers is correct. Older customers are dying out, more people are playing online, and as for the economy I don't see people buying less lottery tickets, and as for not attracting Americans to cross the border, that is old news, long before the Consortium took over.

If they are in fact attracting new customers, it won't last too long as a 26% takeout on exactors and doubles wipe them out very quickly and take away incentive to come back.

Handle at Fort Erie this year has been abysmal. The only bet that seems to be doing well is the Pick 4 (they reduced the takeout on that bet to 14% this year).

Horse racing is in decline when it should be flourishing, but it all starts with takeout. The money returned to bettors is too low and non competitive with other forms of gambling.


Woodbine Attempts To Optimize Dates:
Woodbine is looking to dump low handle Thursdays during the summer and extend the season, so the race dates remain the same.

Great thinking on their part. Now how about optimizing takeout? Handle has been crappy lately there. Big purses, yet we still see plenty of 6 horse fields, and way too much dominance by certain outfits and jockeys. At least I can't say that super jockeys are cheating....Luis Contreras seems to be in a league of his own, but I doubt he is using ITPP or snail venom:) He just outfinesses the rest of the colony it seems.

Should Northern Dancer Have An Asterisk Next To His Name?

A couple of nights ago I watched a show called The Canadians. The topic was Northern Dancer. This episode was done a few years prior to the Biography Channel Northern Dancer show, though many of the clips were the same.

Lots of recollection by those who were there, but one of the guests intrigued me enough to do a Google Search. It was Alex Harthill, Northern Dancer's Kentucky Derby vet.

What I found was new to me, or at least this is the first time I acknowledged it, if I in fact read it before. It is a story dated back 9 years ago (Harthill wasn't pushing up daisies yet):

My interest in Harthill, never dormant, was ignited again in 2001 by a remarkable interview that he gave Jay Hovdey of the Daily Racing Form. Harthill teased those of us who have been interested in his career by admitting that, before the 1964 Derby, he gave Northern Dancer a then-illegal, anti-bleeding medication known as Lasix (now used by an estimated 95 percent of the horses in training).

"Security was following me, though," Harthill told Hovdey, "so I got a vet I know from out of town to come along with me. I told him I was going to turn to the right, and he would go that way and take this little syringe down to Barn 24, stall 23, and give this to that horse. There would be a guy there named Will. He’d be waiting. So he did it, while the gendarmes followed me. They were following the mystique."

And the mystique helped Northern Dancer hold off Hill Rise’s challenge by a nose in one of the most exciting stretch runs in Derby history.

Now, read the whole article. I'll wait.

That was worth reading, wasn't it? But it really begs at least a couple of questions. Assuming Hill Rise wasn't treated with illegal (at the time) drugs, how can one not look at Northern Dancer's Kentucky Derby as anything but tainted? Then when you take the Dancer's Image fiasco into account, how did Dr. Harthill remain a prestigious vet at the world capital of horse racing, even after doing the Hovdey interview?

Being Canadian, and also being born the same year as the Dancer, I hate the idea of ruining Northern Dancer's reputation, but if this story is true, and it sure sounds true, I have no choice.

As for the second question. That one is easy too. Dr. Harthill's of the world are in high demand. In Harthill's own words:

"Everything (drugs) went through a transition period of being detected. The thing everyone wanted to find out was what didn’t show at the time. It was just part of the game, ever since I can remember. Everybody was looking for an edge. I don’t care who it was. A trainer would say, ‘Don’t get me caught, but keep me worried.’"

It seems that nothing much has changed since Northern Dancer, except more drugs are legal and more drugs are tested for. There is still the quest to get an edge that seems to motivate (the majority?) of trainers out there.

With EPO, DPO, snake and snail venom and their knockoffs, ITPP, and whatever else is still "illegal" but not tested for, the edge is always very tempting, and some trainers can pull the charade off over and over again without a blemish.

Some can't get the formulas right though. That might be what happened with Dutrow.

How many other super horses won big races thanks to trainers and vets "experimenting" with drugs that weren't being tested for? I have a feeling that the answer is lots.

Here is the 2005 DRF obit for Harthill.

As for Dutrow, it will be interesting if the industry now sighs "OK witch hunt is over, we gave the public what they wanted," or the time has come to clean up the game. It will be equally interesting if other jurisdictions honor the ban. California has climbed aboard. Good for them (who says I don't say anything good about California racing?)


A COUPLE OF STORIES YOU MIGHT NOT SEE AT THE PAULICK REPORT
10% Takeout On WPS????? No Way! Yes Way!!!!! No Way!!!!!!!!!!!
Northlands Park harness racing's 2011 Fall Meet kicks off today and they have decided to lower the takeout on Win Place and Show bets to 10%. This is phenomenal news, and I hope it works out fantastic for them.
EDITORS NOTE: Looks like I fell for something that was nothing short of a deceptive article and promotion. The association takeout is 10%, but the Alberta tax is 5% and there is a levy of .8%. Total takeout is 15.8%. Nothing has changed. Incidentally, Northlands takeout on other bets is a whopping 24.8% (exactors and doubles included).

It Appears That Tracknet Was Dissolved In Name Only
And HANA is on the case.

It is definitely horrible for the growth of the game when dominating companies like Magna or Churchill even think this way. The leaders of this industry should be focused on growing the Horseplayer base not chasing it away, unless they have given up hope that growth can be had. I believe it can, but it is going to take a lot of tracks getting together and focus on a longer than a year or two plan.

Where Is The Bottom?

Handle dropped again in September. I don't need to go over the reasons why again, simply click here and read my post after August's numbers came out.

September's numbers were very ugly: Wagering was down 6.3% despite 3.3% more race dates. For the year wagering is down 7.6% and race dates are down 5.2%.

Interesting that total purses were up slightly over a half a percentage. Purse money doesn't motivate bettors very much. And the purse money would have been down if not for the artificial increase in California and the win fall in Illinois.

Speaking of California. There is now fallout from the stunned deal the racetracks made at the beginning of the year which gave the horsemen a bigger cut of the proceeds from betting and at the same time, increasing the takeout, assuring that tracks would have much less revenue bottom line. The ax is flying, and it is estimated that 100 jobs will be lost at Santa Anita.

Less workers at the track will inevitably mean less customer service and marketing....should kill racing there even quicker than before. I wonder if California horsemen are getting it yet.

Hastings, despite horrible weather early in the year, made a nice recovery and bucked the trend with a 4% handle increase this year. They dropped takeout on quite a few wagers before the meet started, and they finished very strong, which is predictable when lowering takeout....it doesn't happen overnight, but usually takes a half a year minimum for the real effects to start showing.

Last year, when doing nothing but staring in the headlights, handle at Hastings was off around 25%.

Updated Google Takeout Maps Of Thoroughbred And Harness Tracks

The popular Thoroughbred and Harness Google Track Takeout Maps have been updated. There are still a few mysteries (tracks missing takeout data), and if there are any new tracks that need to be added or old tracks that need to be deleted, or takeouts that are incorrect, please leave a comment and corrections will be made.


View Thoroughbred Racetracks in a larger map


View Harness Racetracks in a larger map

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RCI Report On Drug Violations: C'mon Man

That Racing Commissioners International report called the 2011 Report on Drug Violations really insulted my intelligence. I'm sure I am not alone.

Their major findings: Less than 1 out of 200 tested samples came up positive. And 94% of those positives were overages of "legal" drugs.

From this, they were hoping that the conclusion is that horse racing is a very clean business, and that it gets a bad rap.

The reality is that the drugs tested for are limited. Trainers and vets will go out of their way to prevent overages of known drugs, they would have to be completely dimwitted not to. But what about the drugs that aren't tested for? And what about the concoctions which make even the testable drugs undetectable? How can they possibly make the assertion horse racing is clean? It is mind boggling.

The hype from this RCI report is similar to making the assumption that from 1992 to 2007, Bernie Madoff was running a clean investment firm.

To my knowledge, most if not all the tests were after race testing. Actually, the RCI could have even used this as more propaganda, by stating that winners and usually another horse in every race is tested, and using this logic, and the assumption that overages enhance the chance for a horse to win, it would make sense that horses that lose are less likely to have a positive.

Also, and this is a big also, to my knowledge, outside of out of competition testing by some jurisdictions, drugs like EPO, DPO, ITPP, snail venom, and cobra venom are not tested for. For a longer list and what these drugs do, check this out.

And then you have things like electric shock treatment which will not yield any positives,
tapping of joints, and hyperbaric oxygen treatments (which works the same way as milk shaking), only it is legal.

Trainers sporting 30% plus win percentages aren't clean, and they are a detriment to the game, not only when it comes to bettors confidence but when it comes to attracting new owners, and keeping current owners in the game as well.

Sorry, but horse racing deserves the rap of being a drug tainted, performance enhancement game, and the RCI report is nothing but a farce. Was the report spurned on by those who don't want lasix banned?, or was it a hokey marketing attempt to get the public to rethink their prejudices against horse racing? Either way, I'm not buying into at all.

Now For Some Good News

Charles Town

Beginning September 19th, Charles Town has decided to cut takeout on trifecta, superfecta, pick three, and pick four wagers to 22% from 25%.
Charles Town takeout wasn't relatively terrible to begin with, as they ranked 19th in takeout score according to HANA's 2011 chart. This cut will easily catapult Charles Town into the top 10, probably closer to 5th or 6th in best overall takeout score.

Back To More Mind Numbingness
There is absolutely no consistency at Woodbine when it comes to thoroughbred fair starts, refunds and disqualifications when a horse obviously opens the gate earlier than the rest of the field.
Here we go again. Watch the 6 horse, Bossman's Blues at 4-5, break from the gate. Put the video on pause at either 21 seconds or 22 seconds:

Bossman's Blues finished second. There was an inquiry, unlike the Fifty Proof debacle a while back. What do you think the result of the inquiry was?
A refund (which would have cost Woodbine quite a bit of money since he was such a heavy favorite)? A DQ from 2nd to last for having an unfair start? Or no DQ and no refund? The answer will appear at the bottom of this post.

WHAT THE HECK IS GOING ON WITH ALL THE BUMPING AT WOODBINE
I checked out the charts for Woodbine from Saturday and Sunday and saw all these "bump" comments next to the racing lines. I decided to count them. 19 in total. Oh, and one even resulted in a DQ.

Maybe they should stop playing this video in the jock's room:


Now the answer to the quiz. Obviously, no change in the order of finish was decided upon. I wonder if the stewards draw sticks or if they pick cards from a deck before making these decisions.

Getting A Handle On Handle Drops

Total handle was down a whopping 12.3% in August, as horse racing continues with a deer in the headlights approach.

Why is this happening? Let me try to cover all the bases.

First the negatives.

Net Loss Of Horseplayers

According to the McKinsey Report "2 percent of fans die, 5 percent lapse and only 3 percent are newly attracted." Less players means less handle unless horse racing is attracting big players to overcome the loss of smaller players. It is not. In fact, horse racing is more likely losing big players while gaining small players. There is no reason for big gamblers to entangle themselves in horse racing's steep learning curve, as the perception that the game can be beaten in the long term is not there.

Less Racing Days

Less racing days doesn't mean that Horseplayers will bet more to make up for those days on existing cards, though it doesn't take long for a multi-race track player to burn themselves out no matter how many days are cut.
Less racing, kills the continuation, especially for the live one track player. They go less, and bet less.
Less racing generally means less horses, and less owners. Owners bring friends to the track. Less owners means less potential players both today and in the future.

The Hurricane and One Less Sunday

In August Hurricane Irene caused a few key weekend cancellations. Weekend handles are generally much higher than weekday handles, especially for A and B tracks. There was one less Sunday this year as well, and that was replaced with a Wednesday, which is a weak betting day.

A Focus On Pick 5's and 6's

Low takeout bets are always good, but some are much better than others when it comes to keeping players in the game and creating more churn and handle. Some racetracks have begun promoting low takeout pick 5's lately. It works out as a gimmick, and just a way to get a player to play that track as opposed to another track with at least some betting funds.
The problem is that these wagers mostly produce fewer winners, and very little churn as payoffs are large enough for winners to take some money off the table, at least temporarily.
And there is also the tax consequences of hitting large payoffs in the US. Withholding takes quite a lot of money out of the churn circulation as well.
If these low takeout gimmick pick 5's were attracting new money, it would be a good thing, but evidence seems to indicate that it is just cannibalizing other pools.
For the sake of the game's future, tracks should focus on low takeout WPS, exactor and double bets, not lottery type of wagers.

California's Takeout Hike

Old news: California raised takeout on exactors, quinellas and doubles 2%, and all other exotics 3% in January. Since then, they've seen a substantial drop in handle. Pretty simple, players have less money to churn.
However, not only do those who play California tracks have less money than last year to churn back on California tracks, they have less money to churn back on any track.
This is cannibalization of the worse kind. The less players get back, the more likely they are to leave the game or in the very least come back and play so quickly. When they do take their leaves, the more likely they are to find a new hobby. Also, the less likely they are to expose friends or family to horse racing.

More Exotics In More Races

Nowadays there seems to be a superfecta in every race at every track. More Pick 3's, Pick 4's, and Pick 5's, more High Fives too. The one thing most of these bets have in common is that they are offered at a higher collective takeout than doubles and exactors in most jurisdictions. Again, this is cannibalization, and current Horseplayers are losing at a faster rate than ever before. It doesn't matter if the super has a dime minimum bet. If the average bettor makes $20 worth of superfecta bets a day at a 25% takeout, they will go broke faster than if they wagered $20 on WPS or exactors, no matter the minimum.

The Economy

The USA economy sucks right now, but it was arguably worse a year ago. Meanwhile, things are flying in the Macau casinos.

Higher Signal Fees

This has a major affect on rebate players (the fastest growing segment as far as Horseplayers is concerned). The higher the signal fee, the higher the net takeout is for those who get rebates, including the biggest Horseplayers on this planet. Signal fees have been inching up the past two years. Jurisdictions like California increased significantly when the takeout hike occurred.
The effect of this is that there is less value, and therefore less plays (less handle) made by the most sensitive Horseplayers, which include the biggest bettors.
One offshoot is that many rebate players have shifted their action to tracks that have either kept their signal fees the same or even dropped them slightly, but overall, I would guesstimate that the shift doesn't exactly match the monies not wagered at California tracks, for example.


Now the positives, though the impact of these two things seem next to negligible at this time:

More Horseplayers Are Discovering Rebates

More Horseplayers are getting benefits from ADWs and Track ADWs (like HPI) experimenting with rebates. And many are discovering that in most jurisdictions in the USA (at least two thirds), player rewards can be found, even for not so large players.
Horseplayers getting rebates keeps them in the game longer, and gives them hope the game is game is beatable (which causes new money, money that wouldn't have been allocated to horse race betting if rebates didn't exist, as the more a player stays in action, the more they don't have other hobbies). This, of course, means higher handle. Unfortunately, the negative factors are winning the war right now.

Poker Players Itching For Action

Horse racing has been slaughtered by gambling competition. Mostly slots, but horse racing has lost many a potential customer to skilled games where takeout or rake is much lower enabling a few players to be actual visible long term winners. The US government has come down very hard on online poker of late making it very hard to be an online poker player.
There is a slew of gamblers (many poker players are price sensitive) now itching for action. However, most want a game which has the possibility of winning in the long term. Many will get their feet wet in sports betting, some will try horse racing.
The ones that do a little homework will discover ADWs that give decent rewards back, and they are the ones most likely to become a new wave of Horseplayer, something horse racing desperately needs.


I know I left out field size and purses and handle generators. True, that races with more horses generally get more handle, however, this is strictly a cannibalization effect. Existing players only have so much to lose over mid term stretches. When it comes down to it, big fields will attract betting that may have gone to another track with smaller fields, but it doesn't attract new money, and in fact, again, larger payoffs cause the tax man to get involved sometimes, so churn money is taken off the table.
As for purses, studies have shown that if you double purses, handle only rises around 6%. This is negligible in the scheme of things, though higher purses can potentially mean more owners and more exposure from newbies (friends of the owners).

Evolution And Horse Racing

I've done a bit of reading on the evolution of horses lately. Really interesting topic. They share common ancestry with the zebra (branched off around 4 million years ago). Prior to that they share common ancestry with rhinos and tapirs. It is sort of like humans who share common ancestry with chimps around 7 million years ago, and monkeys around 25 million years ago. Of course, if you go back far enough all animals on this planet share common ancestry (humans and horses share a common ancestor around 65 million years ago.

Another interesting thing, horses evolved from having 3 toes in the front and four toes in the back to their current characteristic of have just one toe. The most probable reason for the change has to do with horses being pray animals. They eat grass, not other animals, so the ancestors who survived eventually needed speed to run away from predators, and balance in the plains, for example and having multi toes slowed them down.

Another cool yet disturbing reality is that horses made it to North America 2.5 million years ago, but they went extinct around 8,000 years ago. The most likely culprit for their extinction was a combination of a change in climate and man's arrival to North America.

It was around the end of the last Ice Age. The ancestors of the North American Indian came to North America via the Bering Straight which had a frozen land bridge and may have been preceded by the Clovis People who likely came from a region in what is now France (not the Coneheads). They came across the Atlantic, most likely on small watercraft, as the Atlantic was full of icebergs to rest on. This is still a controversial hypothesis (not a scientific theory based on mounds and mounds of evidence like evolution), there is also a thought the Clovis came to North America via the Bering Straight as well.

There is evidence though that the Clovis dined on horse meat amongst other animals like the mastodon. The Native Indians most likely feasted on horses as well (it was the end of the Ice Age, and there is no evidence that the horse was used as transportation back then). The Clovis too were mostly wiped and the rest absorbed in the Indian cultures. There is even a hypothesis that a comet may have been responsible for a massive extinction of mammals in North America around 12,000 years ago.

The bottom line here is that there are some facts thanks to scientific observation and analysis of evidence: evolution of horses, horses dating back to North America dating around 2.5 million years ago, and the extinction of horses around 7,000 or 8,000 years ago (horses were reintroduced to North America by the Spanish around the 1500's, and many horses escaped, and this time around weren't hunted to extinction, but used as transportation by the Native Indians). The speculation comes in when it comes to things like man's hand in the extinction event, when man made it to North America exactly, and how, etc.

Future discoveries will eventually settle just about every question posed here.

So what does this have to do with horse racing?

Scientific inquiry is a wonderful thing. It is very efficient as well in determining how the universe works and how it got to this point. Hypothesizes are made (they are generally educated guesses), if over time they aren't falsified (by contrary evidence), they are accepted as scientific theory. For example, it is a fact that evolution takes place, the theory lies in how exactly it occurs in specific cases.

Horse racing seems to dismiss the scientific process, in other words, it continually flies by the seat of its pants.

For example, take the Lasix controversy. Lasix has been used for three decades, yet there are no answers that are close being conclusive regarding masking and whether it is needed as a staple. Why? There has hardly been any research done. The best we can do is make inferences at this time, and unfortunately, the inferences turn out to be very subjective (which is the polar opposite of how science works).

This is exactly why super trainers exist. At least they are exploring science as they find ways to make concoctions that are not tested for.

What racing needs to do is play catch up. Hand out heavy heavy fines, and list only a handful of drugs that are acceptable, while doing testing on whether these drugs should be acceptable in the future. The science exists to figure this stuff out.

And what about the pricing of the game (the takeout)? There has been absolutely no attempt to search for the optimal takeout. Strong evidence exists regarding takeout being too high. Though at this time, thanks to horse racing's dysfunctional ways, empirical evidence is impossible to find (for example, all racetracks would need to start off by dropping all takeout rates so that we can see actual results, which of course will still be clouded by the economy and field size as well). However it is doable. Casinos have done it, to the point that they know exactly when to tweak a house hold when it comes to their slot machines.

Empirical evidence shows that handles are dropping, amount of players are also dropping. The one thing that hasn't been dropping, in fact, going up, is collective track takeout (supers and other exotics with the higher rates are now available in just about every race and have attracted a higher percentage of total pool money).

Now if racing was thinking with a scientific mindset, they would tweak the thing they have control of, the takeout, and they should be doing it in a desperate manner as well. By the looks of it, revenues from alternative gaming will eventually start to decline and may go away altogether. A good scientist, doesn't just think of the past and present either, they think of the future.

But the horse racing industry doesn't seem that interested in researching evidence, or acting on evidence. Maybe part of the problem is that the center of the horse racing is Kentucky, the home of the Creationist Museum, a place where scientific evidence is an invention of the Devil.

Handicappers, on the other hand, look like Einsteins compared to the rest of the industry, as most everyday player uses a very scientific approach to picking winners.

If horse racing took a more scientific approach to both drugs and pricing, the game would be growing in leaps and bounds. It is after all a great game. The controversy is in regard to how it is managed.

Like with those who deny evolution, there seems to be a willful ignorance (see California for example) that plagues horses and not only is it standing in the way of progress, but it is actually causing a regression today.


BTW, please no comments about how evolution is hooey. There is no controversy amongst scientists. And if you are an anti-evolutionist or someone who believes the earth is less than 10,000 years old, no need to tell me about it, but if you want to really know what science knows, have a look at Potholer54's Made Easy Series. It is a wonderful educational tool.