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Sunday, November 16, 2008

ADW Dispute: The Parties & HANA

HANA President Jeff Platt, as we have previously reported, as been working the phones with the parties in the ADW dispute. He has placed three articles on the HANA website, speaking a little bit about his interpretations and opinions.

In Part I he speaks of his discussion with the ADW side.

In Part II he speaks of his chat with the horseman side.

In Part III he speaks about how important this issue is, and solving it with an opinion that the long-term view trumps both sides. He uses data from a racing study by an MIT graduate with 30+ years experience in gambling to point out why ADW wagering should follow the business principles it was designed to follow. If it does not, we might be in the exact same spot five years from now fighting about this all over again, but this time with even more handle losses.

The parties involved aren't just going back and forth on numbers for signal and host market fees. Decisions reached in these negotiations are going to have a profound effect on thoroughbred racing well into the future. Whatever final agreement is reached, it should be part of a comprehensive strategy that takes into account the future of the industry.

From what we hear from HANA members, as well as some critical thinkers in this sport, it is not about getting 4% or 9% or 11%, or whatever. It is about growing the sport in 2009 and beyond by reaching a gambling customer who is currently spending his/her money elsewhere, or who might be interested in racing if we offer it to him/her in a new, fresh way. We believe that if E*trade was created on a "fight for a slice" model, rather than an internet model it would not be successful, and we believe the same online stock brokerage model should be used for the ADW system. It is time for racing to become 21st century. This dispute and the future of racing is bigger than the parties, and what's best for the industry as a whole must be the only consideration.

HANA needs your help. The response has been overwhelming the past two weeks. Horseplayers from all walks of life, of all sizes, including small bettors, big bettors, horsepeople and horseowners are all joining us. Please join up if you already have not. Your information on the form is held in confidence, it is free and you can add your name to the list of folks who want to see this industry grow, so we have higher purses, more of a fan base and bring the sport we love to those who are yet to find it.

This week at HANAblog: Watch for Hjack Hillstrom's Part III of "Why I Left Racing", due out sometime late tomorrow. Read Part's I and II at the right if you have not for an interesting read.

3 comments:

Steve Zorn said...

Jeff:

I appreciate your efforts, but as an involved owner (I'm on the Board of Directors of the NY Thoroughbred Horsemen's Association), I think you've perhaps underestimated the severity of the situation in which many horsemen find themselves.

For many years it's been true that purses, in the aggregate, covered less than half the true cost of keeping horses in training. A few owners do very well, most lose substantial money. While not many of us are in the game to make profits, there comes a time when the bleeding has to stop. That's what Drew Couto was referring to when he mentioned owners leaving the game.

In the past year or two, it's become much worse. Purses have been flat, and costs have risen rapidly -- by 10-15% in New York, where I race, just in the last 18 months.No matter how much the horseplayer wants to bet, s/he needs a race to bet on, and it's the owners who supply that product. If we're all heading for bankruptcy, and don't put the horses out there every day, then it won't matter what the takeout is or how it's split.

One further point: the only leverage that owners and trainers have is our ability to block the signal. Quite frankly, as an old union organizer, I'd much prefer the right to strike; it's quick, effective, and gets everyone to the table in a hurry. But we can't do that, so we go with what we have. Now, if you'd like to lobby for an antitrust exemption for us so we could go on strike, I'm right with you. But until then, we have no options.

Anonymous said...

Steve,

Will all due respect, we have a problem in terms of cost in this game for owners, but revenue increases by taking money from horseplayers via ADW is not the answer to that problem. The cost of owning a horse at PEN or MNR or Woodbine, with slots, have gone through the roof and owners are in the same position, despite purses rising by upwards of 150% since slots were introduced. I know what I am talking about as I just got off the phone with a blood report from our trainer that cost me $50 each for five horses. Ten years ago it would have been $50 for all five. Purse increases are a band aid because we have not controlled the madness. In fact, I think that horse racing is a sport in need of an appendectomy, but what you propose is treating it with a tetanus shot.

And that is not even speaking about any growth issues in terms of our customers. It is pandemic in this business that short term solutions are the ones preferred. We know that, as owners; it is what is always done. Taking a few bucks in this fight by a higher percentage from ADW might raise a purse in New York or California by $4000. What good does that do when purses have been raised by $20,000 per race at Woodbine and horse owners find themselves paying more money to vets, eating all the profits and are in exactly the same position? Not to mention, if more money is taken from ADW, in 2010, or 2011 when our wagering drops even more because we have not reinvested in growing handle, purses will drop again, probably below 2008 levels before this mess started.

I, as a horse owner and bettor firmly believe that horsemen groups have to focus on horsemen costs, because that is what they know best. They must get their fingers out of trying to control wagering - something they clearly do not have a specialty in and to not mince words, have shown they can screw up royally. Until we think of one thing and one thing only in this business - growing handles - horse ownership is doomed to stagnate. Actually with running so many races that we do run, some could argue on sound economic footing that there are too many of us and less supply will help demand.

I support Jeff and his quest to grow handles, because we are all going to wake up one day and finally realize that without handles we will have no feed men, no vets, no banamine or bute middlemen, and no sport. Fixing the fundamental problems in our business in terms of horse ownership is much larger than a purse increase.

People in this business have had 100 years to fix these problems and they have not. It is 2008, and I say give people like Jeff a shot, as at least they want to grow revenue, not just fight over it, or protest on a state house for slots or some sort of a handout.

Thanks for reading.

Cangamble said...

Vet bills are ridiculous, and from what I understand in harness racing there are the few trainers who basically let the vets do the training for them. Problem is, they are the ones who win most of the races.
There isn't really a good solution for this, as long as so many drugs are allowed.
My solution is a radical one. Vet bills must be filed with the stewards. Any horse getting more than say $400 in total treatments for the previous month, can't race the next month. Any trainers or owners caught hiding treatments get a 2 year ban.