Wednesday, October 1, 2008

THG - Not Making Many Friends

The Thoroughbred Horseman's Group (the one that wants to negotiate all ADW deals for horseman) don't seem to be making too many friends in our sport. At the International Simulcast Conference yesterday several groups locked horns.


Drew Couto, president of the Thoroughbred Owners of California and vice president of the Thoroughbred Horsemen’s Group, said keeping the current structure whereby horsemen and racetracks “trade 70% dollars for 40% dollars” amounts to a “recipe for disaster.”


Chris Scherf, executive vice president of the Thoroughbred Racing Associations, a racetrack trade group, said turning the negotiation process over to horsemen could threaten tracks and disrupt a competitive marketplace.

“It’s a recipe for disaster,” Scherf said.

A few track executives who were on hand expressed concerns about the THG. Beulah Park general manager Mike Weiss said he believes the THG is dictating terms, not negotiating, while Tampa Bay Downs general manager Peter Berube said he has been told the model doesn’t work.

"I don’t prescribe to the THG position,” Berube said. “I think they’re unreasonable.”


And Dan Perini, an attorney for ADW provider, said the THG model—horsemen, tracks, and ADW providers each would get one-third of pari-mutuel takeout—would eat into company revenue, and in some cases, “the ADW provider would be left with nothing.”

From players the reaction is obvious. Since ADW's are the only place that we are getting a price break, or convenience, when they lose we lose.

This last quote from THG is what I think is what is wrong, and is somewhat disingenuous:

“Their retention is much greater on two-thirds (of the handle),” Couto said. “This is the trade of a 70% dollar for a 40% dollar. It needs to be revised, or we’re all going to be history.

THG wants more ADW (eg arguably the players) money for purses. If not "we're all going to be history" according to Couto. I would vehemently disagree. Under the present ADW environment, the one which the THG says is broken and wants to change more in their favor, purses for horse owners have actually gone up. We are clearly not "history". From the NTRA:

Thoroughbred Racing Economic Indicators (second qtr. 2008 vs. second qtr. 2007)
Indicator 2Q 2008 2Q 2007 % Change
Wagering on U.S. Races* $3,837,687,728 $4,003,960,415 -4.15
U.S. Purses $317,235,241 $306,210,835 +3.60

Purses are NOT the problem. They are going up, and were up 3.60% in the second quarter of 2008. The problem is wagering. It is down another 4.15%.

The player needs to be rewarded to churn money and grow our game. There is a crisis in our business, a wagering crisis.

HANA hopes these groups get together and find a way to make sure players are part of this "three legged stool". If they are not it is very possible that wagering losses mount, which will result in purse losses. And if we reach that tipping point, there will be very little this business can do to stop it. It will be a snowball of horseplayers money moving to the nearest poker table, or betting exchange.

Anyone ever try to push a snowball back up a hill?

1 comment:

Anonymous said...

I have never understood how taking more money for purses, out of wagering pools is a good strategy. If the past several years have proven anything, it is that there is little correlation to big boosts in purses and handles.