Wednesday, December 10, 2008

ADW Redux

Reprinted from another blog, here is an interview dated December of 2007 with an ADW head. It is interesting to see what the philosophy is with the resellers and what is was like one year ago. We wonder here often why the business does not embrace and work with resellers. We still do a year later. It has gotten even worse.

When I emailed Ian Meyers of Premier Turf Club to ask him if he’d answer a question or two, the response was the same as it always is: “What can I do to help?”

He, after a long career as a stock trader (and a horseplayer since his teens) had a dream. It was to own his own ADW, or advance deposit wagering company. After toiling for a couple of years he finally got it off the ground. The company’s slogan: “By Players – For Players” is not lost on anyone who is a member. The betting platform is second to none. The features of the site are always changing and improving based on what his players are telling him. You want to dutch your bets? You can. How about conditionally wager, where you can put your bet in as limit order to make sure at one minute to post the odds have not dropped too much? You can. How about track your wins and losses by type of bet to improve your play? You can. How about player rewards? You bet. What about handicapping tools to make you a better player? He has them. Most if not all of these innovations happened after he was established. It is this type of innovation this business needs, and most if not all he does, concentrates on helping players win and become long-term horseplayers, with larger bankrolls, and growing handles. So he was a perfect person to ask about our topic.

Currently he has a wide array of harness tracks, ranging from places like the Meadowlands, to the B track scene with less than $200K handles per day. My questions to him focused on these small tracks. He had some good answers that should help us wade through the B track experience.

We know from experience that pool size is a factor to attract or dissuade play. Woodbine recently has mentioned that they are worried about sub $1M handles, because when they drop below a million, handle losses can snowball. Ian agrees that small handles are the biggest stumbling block to his players playing those tracks. “I know its chicken / egg. If pools are small it’s hard to get people to play, and if they don’t play pools are small.” he said. Surprisingly though, it is not as much the product. He says the product placed on the track matters “only to some extent”.

He believes that some of his larger players will play smaller tracks for a few reasons. Mainly these are as follows:

1) Signal availability: If they can watch it, they will play

2) Cost to Wager: If they can get rebates, they will play

3) Availabilty on the Betting Menu : Goes without saying

Offering rebates to smaller players is something he believes is of paramount importance, but finds there is some reticence in small tracks joining his service, simply because he is rebating. On the surface I would have to agree with him. Since getting handle up is the greatest challenge for B tracks (the chicken/egg above), why should it matter to them what resellers are doing? “Rebates to my players are absolutely essential, and you’d be amazed at how many small tracks at least dissuade you from offering them if they don’t try to ban them altogether. If you’re a track operator I never understood why YOU care what I do with MY profits.” He feels B tracks that he carries can get a leg up on some other higher-priced tracks with larger players. “We have a couple of players that wager $150k-$200k a month on almost all small tracks. One of them just killed Northlands this summer. We are finding a gradual shift away from some of the high profile (i.e. TrackNet) tracks as signal fees are pushed to unsupportable levels.”

What can or should small tracks do to get bigger players interested, then? Noticing last year that Buffalo Raceway planned to offer their signal out for a 1% fee, I asked if that was the right approach. “Yes, absolutely. Now there is only so much handle you can get on a small track regardless of the rebate offered (again a pool size issue) but an affordable signal fee is very important. Look at the difference in financial performance of the small tracks that are ball-busters in terms of price and access. Gigantic fall-offs in handle. Remington was down 25% this meet because TrackNet wouldn’t distribute the signal.”

So, it seems there is some room for B tracks, like those in Ontario to be part of the picture. If the distribution problems in the US, and the infighting continues, perhaps there is some opportunity.

Also, it seems that when a track signs up with a reseller (ADW) they leave it at that, and they do not continue to fight and claw for more business. I have always found this strange. If I had a track with a reseller I would try and make sure I distributed free video, programs, or anything else I could to encourage play. So I asked, what can a track with you do to increase wagering? Is there anything you can do to push a product working hand in hand with your tracks? He seemed almost apoplectic with this question:

“That is a terrific question that no track has ever asked me. You know we sponsored a contest on this year, put up prize money out of our own pocket. More than half the tracks we contacted balked at providing t-shirts, hats, etc. One track actually threatened to cut us off or raise our rates because we have conditional wagering. Tracks look at me as a parasite, but while I might not produce the product I am much better at distribution than they are. They should try looking at us like partners. We would be happy to develop a targeted campaign with a track or two that maybe included free handicapping analysis, t-shirt giveaways, special rebates for certain nights/pools, etc. Not one track has contacted us in the year we’ve been in business (phone or e-mail) other than for settlements. We’d love to do something creative with them.”

This is an extremely important point to me. The current market of tracks distributing signals, and resellers pushing them is a fine system. It is a system that is seen in business every day. Your resellers advertise for you. They work for you. They are in touch with their customers on a daily basis – customers that may never even be customers in the first place. It makes more sense for you to offer out something at price “A” where it encourages distributors to increase their profit by increasing gross handles.

I was happy Ian pulled no punches. When people are passionate about something, you tend to get their true feelings. From my conversation with him, I have concluded the following in terms of step one of the B track question: “What can B tracks do to raise handles?”

One, distribute their product far and wide. Offer it out for as low a price as possible, to get to as many people as possible. If the pool size grows, handle can grow at a faster and faster rate.

Two, work hand in hand with your distributor. Make it easy for them to push your product. If you have a back door to video on your site, let them have access. If you offer free past performances, let him offer them out to his customers too. If you have an on track handicapper, offer out his or her thoughts with those past performances. If you have hats, a handicapping contest, shirts, or want to design a promotional day with a special rebate offer, ask. If you have cross promotional ideas, go to it.

It seems we have barely scratched the surface on what may be possible.

This might be a good time for a series here at HANA. If you are an ADW and want to answer some questions and have your say, please email horseplayersassociation at We'd be happy to hear from you.

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