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Tuesday, October 21, 2008

Depression?

Patrick has a neat post on his blog called "The Best Thing to Happen to Racing - A Depression". I too believe that racing has to hit bottom before it can put policies in place to make it grow.

Give it a read. It has some cold, hard truth to it.

As a player and someone wanting to see the sport grow, I do disagree with the ADW analogy - this is not a consumer durable business model. GM does get the most revenue because they are building cars, but we are not building cars, we are selling a gambling game.

The analogy we need to use is the internet one. Online gaming will probably garner well over $750 billion in handle this year, or next. We can not get a slice of that if huge percentages are taken away from the player. We will only grow if this is a low margin high volume business. Ebay took over the auction market and will be written about for centuries because it is high volume low margin (they take a small slice of a large number of sales by taking advantage of economies of scale). Etrade charges $10 a trade. In 1990 a $10,000 stock trade would cost you $300. Low margin, high volume wins on the internet, and is the antithesis of horseman and tracks fighting over who can get a bigger slice of the monster takeout we pay. Maybe if we do hit bottom we will blow up the system and start to position racing, allowing a new business model to thrive.

1 comment:

Handride said...

Thanks for the link. i too believe in lower ADW fees, but don't think it will come about any time soon, too many cooks in the kitchen all getting paid. why fix soemthing that isn't completely in the shitter should be their motto. well it could very well be we're headed in the shitter.