Yesterday Ryan Conley of the Bloodhorse wrote a story on the current infighting in racing regarding the ADW issue we have been chatting about here.
One old betting axiom -- “shut out at the window” -- has taken on a whole new meaning when paired with a relatively new one in the racing industry lexicon: “signal wars.”
Disputes between horsemen, racetracks, and advance deposit wagering entities have dominated racing news in 2008, and threaten to continue into 2009, as the primary parties scrap over revenue from wagers made via the Internet, telephone, or mobile devices. The fallout has contributed to declining handle and purses at many tracks, as horsemen exercise their right to withhold consent for signal distribution.
President of HANA, Jeff Platt, was interviewed in the piece and spoke on behalf of all of us. We read every comment from the signups, and we read every comment here on the blog. You have spoken loud and clear, and Jeff made sure we were all heard:
Left in the wake of the battles are ADW customers, who while sometimes sympathetic to one side or the other, are often left without favored tracks upon which to bet.
“They are very frustrated, and discouraged; some are outraged, that the signals aren’t going out,” said Jeff Platt, a Southern California computer programmer who is president of the new bettors’ advocacy group, Horseplayers Association of North America. “The level of frustration is an eye-opener to us. And a lot of players are telling me they are going to play something else.”
Ryan went on to outline that some of the signals actually are being let through by THG, while others are not. The offshores so far, seem exempt, while those playing onshore can not bet.
But some wonder why offshore entities such as Elite Turf Club and RGS aren't THG targets. Earlier in the year, Reeves simply said offshores are something the THG still needed to figure out what to do with. But now he says Elite and RGS deserve preferential treatment because of their volume.
The two offshores alone are estimated by some to process up to 15% of all North American handle. Players are given cash rewards, or rebates, on their wagers, often to the tune of 10% or more.
“Do you believe that businesses dealing with big customers should get a discount?” Reeves asked. “I happen to be in that school: that high-volume players betting over $1 million or more should get a discount. If these guys had to bet at a racetrack, or at the same takeout at the racetrack, would they still bet? And at the volume at which they are betting? I don’t think they would.”
Conversely, Reeves asked, why don’t TVG, TwinSpires.com, XpressBet.com, and Youbet.com offer discounts to its top-volume players?
“Why should we tell high-volume players through which platforms they should place their wagers?” he asked. “I think a high-volume player ought to be able to choose a platform with what he perceives as to be the best service.”
Jeff went on to elaborate that this business should not be shutting anyone out in such a sensitive time. If we parallel this to the economies right now of North America it would seem to be tantamount to Wal Mart not letting some people in some states shop there, under the guise that selling the products to less people means more long-term business. Of course this would not happen. Now more than ever Wal Mart, or any other business want to not only maximize their customer base, but in fact want to offer attractive pricing to cash strapped consumers. Racing seems to, once again, do the opposite.
Platt, who has penned a critical open letter to the horseracing industry on behalf of HANA, believes availability should be made to all bettors, regardless of the level. And he said players in the HANA organization and elsewhere could really care less how it happens, as long as it happens quickly.
“You don’t walk into a casino and have someone tell you the craps tables are closed, or the blackjack dealers are on strike,” Platt said. “Racing is making it difficult on its players. Players are leaving the game. They are spending their money elsewhere. And many of them are not coming back.”
HANA, which was launched this summer, has just fewer than 300 members that combined wager about $25 million a year, Platt said. “We don’t have enough members yet to stage a public demonstration (such as a wagering boycott), but the day may come when there will be several thousand members. And then we will be able to coordinate some sort of an effort.”
THG's Bob Reeves, in a comment that is surprising to say the least, said that horseplayers should be with them, because the economics of racing are bad:
Reeves said the THG sympathizes with the horseplayers’ community, including the average $2 bettor.
“I am asking for patience and support,” he said. “My goals are parallel to the guy you are talking about. If you blow the smoke away, and understand the economics of how little horse owners and racetracks get when a wager shifts from on track to an account wagering company, he would be banging on the table with his shoe for us to negotiate harder.”
ADW's have taken their share (the one that THG wants) and given customers free past performances, free handicapping tournaments, increased innovation for stay at home bettors, given rebates and lowered our takeout, advertised so we have higher pools to bet into and more. They have at the very least given the player something back in the highest rake game in the entire world, if not the history of the world. That is the reason that ADW wagering grew by 17% last year. They have been far from perfect I am sure, but why would we want a so-far successful mechanism underfunded?
Not to mention, as Steve Crist noted on his blog, purse funding has not been a pressing issue in North America, customer loss and per capita wagering has. The US gets over 6% of wagering for purses, whereas places like Japan (less than 3%) and the UK (less than 1%) are much lower.
Though American racehorse owners constantly complain about not getting a sufficient return on investment, in comparison to other countries, we do a pretty efficient job of directing betting commissions back to owners through purses. If British purses were our 6 percent of handle, rather than their current 1 percent, the average British purse would be over $130,000, even bigger than Hong Kong's.
Handle is the issue. The US, in a ranking of 12 countries, ranks 11th in terms of per capita wagering, just edging out the country of Turkey. That is why we at HANA have as a plank that we must look at ways of increasing handle. For gosh sakes, we should be doing better than 11th out of 12.
Jeff and HANA have been working relentlessly on this issue and will keep doing so. Until wagering signals are sent to everyone who wants them, and until they are allowed to rebate to everyone who wants one, including minnows, we will continue the fight.
For us to succeed, we need your help. If you have not done so, please sign up here. If you have not told a friend who may be interested please link this post and email it to them. As Jeff said in Bloodhorse: There is strength in numbers. It takes less than a minute to sign up, it's free, and your name and address are held in the strictest confidence. We thank you.
Note: John Pricci, horseplayer, writer and excellent blogger chimes in on the ADW mess, too. Check it out.