Recently at the Paulick Report, Ray spoke about betfair and its reach to the US someday. We of course concur that bringing something new and exciting to the gambling market is a good thing, and we have spoken of that many times. Unfortunately the fingers-in-the-pie economics and the resulting probable 15% takeout on a betting exchange would kill it before it starts here, but I hope the lesson of the following is not lost on us.
On the Pull the Pocket blog, he has been looking at what has been happening in the UK with bettors and he speaks about them. First up, a 23 year old kid who just learned racing is blogging about his experience. He wants to make GBP150,000 in 2009. Yep, you read that right. Hey, he's a kid. He will never do it, after all over here it is well documented that only 2% of the entire population that plays racing wins. So this kid is showing bravado, correct?
Well maybe not. Pull the Pocket found another blog. This one from a horse race bettor who succeeded in making GBP100,000 in 2008 on the low takeout exchange.
Examples such as this tell us that racing is a good bet, if done right - after all Adam is not playing racing through bookies or betting the Tote - he is playing at an exchange. It clearly is not done right here in North America. Unless we change, we will never see this type of blog here across the pond. People do not think they can win at racing, and this is probably our biggest hurdle in attracting people like Adam. The point is not if he wins $300k, but that he thinks he can make $300k.
In the UK whose GDP is about 2.2 trillion, horse bettors like this are still drawn to racing, and bringing new blood with them to enjoy the game. In Canada and the US our GDP is about 15 trillion, so there is no reason we should not be able to blow away the UK numbers.
We at HANA could not agree more. There is a whole world out there that we have to keep our minds open to, and execute ways in which to exploit.
There is nothing inherently wrong with a betting exchange. The main thing holding up it's deployment in N. America is figuring out who will benefit the most.
Racetrack owners are not about to let an entrepreneur make a profit at their expense. ADWs don't want to be outflanked. Horsemen and politicians fear the low takeout.
Fear is a big motivator -- sometimes it motivates people to embrace the status quo.
Remember what FDR said, "We have nothing to fear, but fear itself."
Hmm. There are thousands and thousands of professional poker players and they have built an industry on their backs. There are thousands and thousands of professional horseplayers in the UK with these low takeouts. There are like 300 pros in the US with 350 million people?
Racing is not delivering the product to the public. They never really have. Let's hope someone wakes up soon!
It seems we never try to expand markets. We can't get poker players because they wont play a game that has 20-30% takeouts. We cant go after sports bettors for the same reason. Out there are the Etrade types who will trade horses and/or make odds lines and work out value. We dont go after them either. Smart companies have and they are winning the war. We deserve to lose when we think about it. We have been the opposite of innovative.
We are still missing out on player education. I believe it's one of the main reason's we can't pull from other markets like poker or sports betting. New players just don't have an understanding. As far as the 20%-30% take out which I admit is way to high, but you have to remember it's all relative when is the last time you sat down at a poker game and got 20-1 odds ?
Player Education? Anybody that you try to educate with an IQ above 12 will immediately realize it's basically impossible to win unless you want to put in years of full time hard work before you would even have a almost impossible chance of winning with the takeout levels where they are at right now.
Todaysdarkhorse, your relativity argument holds no water. You can get a lot more than 20-1 by playing jackpot slots, and the takeout for that is around 10%.
Player's aren't interested in learning about a game that next to nobody wins at.
The reason next to no one wins is because the takeout is way too high.
People are learning the game overseas though because exchange takeout is low. Same with poker and online sports.
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