Monday, May 4, 2009

Back to Business

Some headlines in HANALand.

Horse racing is being subsidized as we all know in New York state, and some do not like it.

"From the perspective of Lottery, being co-located with horse racing doesn’t do anything for our profitability," Lottery Director Gordon Medenica said.

We have been hearing more and more of this of late, with budget crunches and so on. It would be nice if racing, when expanding gaming, has a plan for some of this money. Virtually all of it has been spent on the supply side (breeding, purses) but none on the demand side. The former has not worked well to grow the sport itself, so it would be nice if we see some planning to try the latter.

Derby handle was down 5.3%.

Irish racing is doing something that is pandemic in our sport, and tends to show its clear misunderstanding of the bettor. Just as gambling expert Wil Cummings stated that 'when tracks raise takeout they think they are getting more of that $100 wagered, but they fail to see that in the future you will not have that $100 anymore', it does not sink in. Irish racing is after a bigger slice from Betfair, turning down around $10M for its share.

"How in the hell can they turn down a single cent at a time when budgets all over the place are being squeezed. Someone needs to take a very quick reality check," said one senior Government Minister yesterday.

Just like ADW revenue here where we see constant fights to grab a bigger share, doing that lowers handle and stops us from entering the 21st century by pricing our product correctly over the internet. HANA knows it, most ADW's know it, gamblers know it. Why does racing have such a tough time understanding this common-sense point?

Also, a new levy of 2% (takeout increase) was placed on racing there.

Last week a number of bookmakers expressed concern that the new betting levy of 2 per cent which came into effect on May 1 could cost the industry thousands of jobs, and one bookmaker has said he will have to close half his shops as a result.

Sports Minister Martin Cullen is to meet a number of Irish bookmakers to discuss the impact of the levy. John Hackett of Hackett's bookmakers said the additional levies will force many shops to close. "We have already seen 50 shops close, and that figure could be 300 by the end of the year. We are struggling to stay in business," he said.


Scott said...

the HRI vs Betfair position is ridiculous. Betfair don't need Irish racing, they already put a stack of money into sponsorship there on top of their VOLUNTARY payments (since they operate from the UK, there is no requirement for them to pay anything). And after Punchestown racecourse bowed to pathetic, hollow demands from bookmakers about Betfair showing live prices when they were sponsoring on the day (see my blog for the story), who'd blame them for walking away?

Scott said...

also, how does this work?

Winning wager has horseman riding high
The 41-year-old Tilden resident won $278,503.20 on a $1 superfecta ticket for the 135th Derby, which was simulcast live at Retama Park.
He says he took home $209,000, after taxes were taken out at the track.

So not only does he lose 25% or so from track takeout, then the government takes another quarter as well?? Daylight robbery!

Cangamble said...

In Canada, we don't have withholding tax. Gambling is not taxable, winnings and losings both. In the US, winning gambling is taxable. The money this guy took home was minus the withholding. This person can still try to get some or all of it back by showing gambling losses the rest of the year. At least that is my understanding.
A bill was just introduced in the US to get rid of the withholding, though winnings are still taxable at the end of the year.