My response to Andy C re Whales

[Denny]

The game was more popular when it was simpler for the average person.

Simpler bets, simpler PP's without speed and pace figures, less statistics, one track to bet at a time, no computers, etc...

Now it's fractional wagering, jackpots and guaranteed pools.

Pie in the sky.

[Denny]

Horse Racing is the Lottery - with PP'S.

[dilanesp]

Originally Posted by AndyC

We have been over this before. Del Mar runs a fall meet where the attendance is just slightly higher than a high school JV basketball game. Is that the business model that should be followed? Any success achieved in the summer doesn't carryover to the fall. Perhaps the $12 beer and $15 Margarita drinkers aren't really interested in becoming horseplayers.

Doesn't matter really. Drl Mar makes plenty of money. Maybe we shouldn't race in gloomy November.

We didn't really do that a lot in racing's heyday.

[Poindexter]

Originally Posted by AskinHaskin

LOL - which side of the equation are you even on?


So racing should halve the mutuel take while fully expecting the whales to wager 2/3 of what they now wager, while the serious players bet no more than they do now (in your example). All of this while racing slices its revenue by at least 50% ?


(this already happens in just about every example of lowering takeout known to North American racing in the 2000's, each with somebody trumpeting: "Pools will get bigger!" in a sorry attempt to goad those establishments into another absurd wrong turn)




The net effect of lowering takeout would be a death knell for racing associations everywhere, because of the lack of parity in the pools. The factual reality is that, if you reduce the house cut to that level or further, various factions will come out of the woodwork and suddenly make a go of betting for profit, which in turn would further exacerbate the lack of parity in the mutuel pools (leaving the novices even more buried than they are today).

Do you ever read an old racing story about some shifty character at Aqueduct in the 1960's or 1970's who made a betting coup on a place bet?? (it may have happened a time or two, but do you ever read about it??? )


Chief among the reasons racing thrived back then is that even the whales were there slugging it out with the rank and file, in long wagering lines and with toteboards showing enough money so that the odds didn't change drastically in the last few seconds. Everybody went back and forth all day long, betting win and place, or stacking tickets at the $6 combo window.

Today the whales and their ilk are making bets where they need only net one good score every month the stay well above the water line. The rank and file, who once stood elbow-to-elbow with them in those long lines at Aqueduct, can no longer interact on the same level, and thus they have given up and gone away, never to return.


Fictional characters who might one day read on Twitter that Aqueduct to lower takeout from 20% blended down to 7% blended are not going to materialize and race to the track just to leap on that bandwagon (with a jazz band belting out "Happy Days are here Again" at one of Aqueduct's entrances).

The only reactions to such drastic, last-gasp measures will be those few who in their best current performances, lurk just under the break-even line... leaping up to find a bankroll somewhere with the new and exciting belief that they can now, finally make a living at the races... (and many of them would succeed (if racing didn't go belly-up entirely before it could matter) ).

The net effect would be even greater parimutuel pressure on the stragglers down at the bottom who in even greater numbers would stay home and never reappear.

Collectively, just about every attained desire had by the Pace Advantage sorts over the past 3 or 4 decades has been detrimental to the bottom line of horse racing. For it has been those self-indulgent pursuits which doomed racing's bottom line to where most once-self-sufficient racing entities exist today only because of handouts and subsidies from elsewhere.

In this world where it's quite customary to blame guns... or blame Facebook for whatever problems there are all around you, it has become way too easy to avoid identifying yourselves as the forces behind today's downward/problematic trends.


The most significant problem racing faces in 2018 is that potential newcomers are completely buried before they can even think about entering a wagering establishment for a second time. You (collectively) caused this - it's that simple and concise.

And the first step toward solving past mistakes is to begin to offset all of the advantages which you and the whales have created for yourselves over the past 30 years, on behalf of the little guy who is still getting buried at never-before-seen levels even though takeout hasn't changed markedly in decades.


So that's it:

Guns...

Facebook...


and now Parimutuel takeout




Look in the mirror for the culprits - youuuuuuuuuuu caused this.

Mr. Askin, the one who loves to criticize, but never has an idea of his own. You missed the point. I was illustrating what would happen takeout wise to different groups of players. What you are missing is that instead of stagnating at 10 to 12 billion handle per year, with the proper model this game can grow to 15, 20, 25, 30...50, 60 billion over time. So yes initially the p&l will not look so good but over time handle will explode and when handle is 50 million and whales are betting 20% of that suddenly a heck of a lot more than they are betting now. We cannot even discuss revenues, because we don't even know what kind of money the tracks are making off this player or that player or this team or that team or with this adw or that adw. It's all a big secret.

re:

The net effect of lowering takeout would be a death knell for racing associations everywhere, because of the lack of parity in the pools. The factual reality is that, if you reduce the house cut to that level or further, various factions will come out of the woodwork and suddenly make a go of betting for profit, which in turn would further exacerbate the lack of parity in the mutuel pools (leaving the novices even more buried than they are today).

What are you talking about? My guess is that 8% wps, 10% exacta/double takeout and a 12% other exotic takeout with no rebate would probably be an increase in takeout for most whales at many locations. Moreover they will not have the luxury of pounding horses or combos down to significantly below fair value knocking all the value out of the pools. In the example I gave you that you were so quick to quote I illustrated how significantly better all players would do with proper pricing (aside from maybe the bottom 10% for reasons Andy C stated). Moreover, you must have missed Ian Meyers stating how teams of Phd's investing millions of dollars before making their first bet, are using wall street money to enter our pools. Is this the "parity" that you are so eager to protect? You can never have parity in a gambling market, but you can certainly lessen it by not giving huge rebates to those most equipped to beat the game while other get no rebates at all.

RE: the rest of what you wrote, it sound like you agree with me that catering to whales is the problem and somehow us at Pace Advantage have something to do with that. I am not sure what your solution is, perhaps you
want to eliminate rebates without lowering takeout. That was fine in 1975, but in 2018, we can all get fairly fat rebates offshore, at many tracks, so I certainly don't see serious horseplayers not shifting their money offshore even if it isn't legal. If takeout was reduced to the levels I suggest, I doubt you would see more than a 3% offshore rebate, and I do not see that attracting very many horseplayers. But more importantly this game at the levels I suggest can compete with all other forms of gambling, at the current levels it cannot compete with any (well maybe Keno). Of course the biggest problem is racing driven so many out of the pools with whales that they need whales to keep the pools tolerable. You can keep whales in the pools with proper pricing, you can't with 1975 pricing and no rebates.

So imo there are only 2 option, the status quo which means this industry will never grow and will ultimately die or they can go with proper pricing and try to grow the industry. There is no in between.

Andy, C, we will have to agree to disagree. As certain as I am that there will be a Sun in the morning and a Moon at night, that if priced properly with no rebates this game would grow like it never has before. You disagree, and more importantly the brain thrust of racing disagrees. You know what they say about opinions. I cannot present my case any clearer than I have in this thread. If you don't see it, you don't see it.

[castaway01]

Originally Posted by Denny

Horse Racing is the Lottery - with PP'S.

If horse racing was the lottery it would be making billions of dollars in profits a year despite a 40% rake.

[classhandicapper]

Originally Posted by chiguy

Get some figure skaters to host coverage of the Kentucky Derby. That would attract the hip and trendy folks out there.

The Preakness coverage could have shown some birds bathing in the mud and I would have found it more interesting than those two.

[classhandicapper]

Originally Posted by keenang

It is strange that the three tracks that seem tom do well are all called "RESORT areas

DELMAR
SARATOGA
OAKLAWN

Maybe we can learn something from this

Geno

+1

I would add Keeneland.

People still love racing. They just don't love it enough to go to the track all the time to watch battle scarred NW2L claimers and statebreds. It has to be an "event" race or part of a broader vacation of which racing is a part.

[Denny]

Originally Posted by castaway01

If horse racing was the lottery it would be making billions of dollars in profits a year despite a 40% rake.

Isn't that exactly how the Rainbow Six works?

40% or more daily takeout. Track holds everybody's money for weeks/months till mandatory payout day. Then rakes it in big time with five times the handle on that day!

Now other tracks have their own version of jackpots. Thank Stronach group.

It's no different than a lottery except for PP's - which are mostly useless for the impossible bombs that come in. People win with ALL. No handicapping.

[classhandicapper]

Originally Posted by AndyC

Pure fantasy. There would need to be a whole lot of new money bet to make it work. New money is not the churn the track gets from having lower rates. Players would literally have to dig into their pockets and bet more money than usual or a there would have to be a huge throng of new players just waiting to throw their money down. Neither of those scenarios is likely. Losing less money doesn't make most people want to increase their bets size.

I always felt that many losing players vary their handle to match losing whatever they can afford to lose.

The amount they lose each week or month might vary, but let's say they can afford to lose between 2k-3K for the year. If you made the take 30% or 10% they would still lose around $200-$250 a month. They'd just stay in action longer on some days, in some weeks, and months and bet more races at 10%.

[toddbowker]

Originally Posted by Denny

Now other tracks have their own version of jackpots. Thank Stronach group.

Well, technically you can sort of blame Beulah Park. We were the first out of the gate with the bet. I wrote the rules, so I guess you can blame me.

Of course, we "borrowed" the concept from the Poolpote bet in Puerto Rico ...

[AndyC]

Originally Posted by Poindexter

......... imo there are only 2 option, the status quo which means this industry will never grow and will ultimately die or they can go with proper pricing and try to grow the industry. There is no in between.

Andy, C, we will have to agree to disagree. As certain as I am that there will be a Sun in the morning and a Moon at night, that if priced properly with no rebates this game would grow like it never has before. You disagree, and more importantly the brain thrust of racing disagrees. You know what they say about opinions. I cannot present my case any clearer than I have in this thread. If you don't see it, you don't see it.

What I disagree with you about is the actual chance of implementing any of your opinions. To argue about whether or not your opinions are "facts" as you suggest is useless. The brain trust of racing has to work within the constraints of the industry. They don't have the luxury of being an armchair racetrack operator.

[AndyC]

Originally Posted by classhandicapper

I always felt that many losing players vary their handle to match losing whatever they can afford to lose.

The amount they lose each week or month might vary, but let's say they can afford to lose between 2k-3K for the year. If you made the take 30% or 10% they would still lose around $200-$250 a month. They'd just stay in action longer on some days, in some weeks, and months and bet more races at 10%.

Exactly. That is why the track needs new money and not just the existing money churned more often.

[Poindexter]

Originally Posted by AndyC

Exactly. That is why the track needs new money and not just the existing money churned more often.

Which is why at a time when Monmouth Park going to be a major player in sports betting in NJ and is talking about introducing the sport to a whole lot of new blood, it sure would have been refreshing to hear Dennis Drazin say that we are going to use 1/2 the money to boost purses and improve the quality of racing in New Jersey and the other 1/2 is going to be used to promote the sport with reduced takeout so not only can we attain new interest in the sport but we can retain these fans long term.

However, all I heard was that all the money is going into purses. This industry will squander away yet another opportunity.

[Poindexter]

Originally Posted by AndyC

What I disagree with you about is the actual chance of implementing any of your opinions. To argue about whether or not your opinions are "facts" as you suggest is useless. The brain trust of racing has to work within the constraints of the industry. They don't have the luxury of being an armchair racetrack operator.

So you now I am little confused about your position. Do you think it is pure fantasy that racing could turn into a huge player in the gambling industry, reaching handle of 30-60 billion somewhere down the line if priced and marketed properly, or do you think it is pure fantasy that racing could ever be priced properly due to constraints, or both?

Whatever the constraints of the industry are, isn't their job to understand what will help their industry succeed and what is killing it? Isn't it their job to try to eliminate whatever constraints are there so their industry can succeed? I do not buy that it is a constraint issue. I believe they (the decision makers) honestly think their ways are the best ways. Much of the betting public pays the price of their misguided decisions.

[AndyC]

Originally Posted by Poindexter

So you now I am little confused about your position. Do you think it is pure fantasy that racing could turn into a huge player in the gambling industry, reaching handle of 30-60 billion somewhere down the line if priced and marketed properly, or do you think it is pure fantasy that racing could ever be priced properly due to constraints, or both?

Whatever the constraints of the industry are, isn't their job to understand what will help their industry succeed and what is killing it? Isn't it their job to try to eliminate whatever constraints are there so their industry can succeed? I do not buy that it is a constraint issue. I believe they (the decision makers) honestly think their ways are the best ways. Much of the betting public pays the price of their misguided decisions.

I doubt that racing could be a major player in the gambling industry even if priced right. Too many good alternatives in place would be the primary reason. But I agree that it has no chance for survival being priced wrong.

Who is "their" in their job? Is it the state? The horsemen or the tracks? Everyone (but the bettor) has a seat at the table and nothing gets through unless all are satisfied. I am just referring to California. It may be easier or harder in other states. I am sure Andy Asaro could fill you in on the difficulties of getting things accomplished through the CHRB. The problem is there are too many decision makers. Nobody will give up their seat or position based on somebody's theory about what would be good for the industry.