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Saturday, September 27, 2008

NTRA Task Force and HANA

Two approaches, same goals.

A HANA member lets his thoughts be known on the differences and how we can support each other:

Kudos to the NTRA task force for getting bloggers on board with their ideas. Kevin from Aspiring Horseplayer, Jessica and Dana, two other influential bloggers all played a part. Here is the story.

There is much to go through in the report and much of it is interesting. Most of it new. New ideas from passionate fans. It's a good thing.

The main difference with other groups, like The Horseplayers Association of North America, is that the NTRA task force works on newer fans, or the entertainment part of the game, while HANA tries to grow the gambling side. They do not focus on takeouts and such. I guess a simple way to put it is: They try and get fans to walk through the door and takeout groups like HANA try and keep them here when they do.

"New" fans generate about $30 of daily handle (if you look at casual fans on big days and track handles). Maybe they come twice a month. If the NTRA task force gets 1000 new fans with some new ideas (a good thing) it might result in $700k of handle.

Then what do we do with them? If 99% of them lose, a fair share will not come back. We know this to be true. Our game is hard to stay at as fans. If watching brown horses go around in a circle when you are on a 37 race losing streak is easy, then a root canal is a Sunday picnic.

I think the NYRA spent something like $25M marketing to these types of fans with the Go Baby Go campaign. It's tough to keep them as fans if they don't bring home some scratch.

That is where groups like HANA come in. In making the game more winnable, allowing for open access for all ADW and moving the game into the 21st century with both pricing and delivery, we have a chance to grow rapidly. For example there is one HANA member that has gone on record saying that he bet $30,000 per year before getting a lower price. After the lower price was given (through rebates) he then bet $1.3M a year. That is a $1,270,000 handle increase by one person.

Thankfully more progressive racing cultures have gone in this direction, so we don't even have to guess about this.

Australia, as we all know have 16% takeouts mandated by government, which is about 25% lower than North America's takeout. The per capita handle there is $430. In the USA it is $48, almost ten times smaller. If we could somehow get to a meager half of what Australia is, we could up handles by a huge amount.

In Hong Kong, getting new people out was important, but when push came to shove the braintrust there moved to lower prices to curb losses in handles. Rebates of 10% were given when the HKJC lobbied the government to take their tax off pools. Handle was up precipitously and the bleeding stopped. That one move of lowering takeout could result in 100's of billions of handle over the next decade for the Hong Kong Jockey Club.

It is clear that new fans are important, but lest we forget our old ones, and our current ones. They are already prequalified to love racing. We don't have to teach em a thing, don't have to give them a cap, don't have to start a handicapping contest, run thousands or millions of TV ads, or get a mini-horse to come and make an appearance. We don't have to go find them because they are right under our noses. We just have to give them a chance to win. If we do, they will be back spending money on racing and not a ball or slot machine.

There is a $500 billion dollar + gambling market out there. We must attack it from all sides. We at HANA are doing our part, but we need your support. Please sign up. It's free and confidential.

1 comment:

kevin morris said...

I think you sum up the two step process of increasing horseracing interest and betting very well. The trouble I see is convincing the people in the positions to actually reduce takeout that it is in everyone's best interest to do so. It is extremely frustrating to understand the fairly simple effect of churn, but see it ignored. Horseplayers who clamor for lower takeouts are seen as customers complaining about high prices, with those in regulatory positions not understanding that the "product" they are "selling" us is just our own money, which costs them nothing. If we could just get one state with a fairly modest track or two to give it a try, and handicappers flooded them with handle, we may be able to get the ball rolling. I'm looking at Iowa and Prairie Meadows....