Even a Carnival Has Learned ......

I just returned from lovely Prince Edward Island where I took a nice holiday. While there I took in the Harness Racing festival at "Old Home Week" that happens every year in the capital city of Charlottetown. The week is well attended, with tourists, natives and locals gathering together for a week at the fair, harness racing, and much more. The $60,000 Gold Cup and Saucer Pace, which attracts well over 20,000 fans each year, culminates the unique and interesting event.

Arriving at Charlottetown Driving Park, I noticed that the racetrack was on the fair grounds, which I had not known. The various rides, games, cotton candy kiosks and so on were spinning, and serving and so on. Bypassing the fair I went to the track and enjoyed the day and evening. I bet, had some good food, and enjoyed my time. After the races were over I decided that a walk around the fair would be a good idea. I had not been to one in many years, so I figured it was time to.

Walking around the rides, and not thinking about hopping on one (I like rides about as much as betting into a Philly Park trifecta take), I headed to a line-up at the dart throw. Why were people lined up to throw darts? Who knows, maybe some good prizes. It turns out that the balloons that the customer had to break were about a millimeter apart; so close a blind man could go five for five. People were winning, and smiling. The price was $5 for five darts, so I gave it a go. I won a stuffed dog. I think purple dogs are cool, so $5 was not too bad. Everyone's a winner at the dart throw.

But that struck me. $5 to win a stuffed dog that they paid a dollar for? Nice business. You could spend $20 on twenty darts and get a cooler stuffed dog, this one worth maybe $8.

I walked to the basketball throw next. No one was there; no buzz at all. The hoops were 20 feet off the ground. I asked the fella why no one was trying it and he said "c'mon it's easy. Three balls for $5 and you win this great prize." The prize was worth more than $5 that's for sure. Since I was a bench-warming point guard in high school and still had visions that I was Allan Iverson (but simply overlooked by scouts), I took a swing.

It was impossible. I think I hit the rim once. Shaq with Ben Stein on his shoulders could not dunk a ball in those hoops.

I could see why this game was not very well attended and I left.

It has long been a held belief that you can't win anything at carnival's - the deck is stacked against you. People believe that the hoops are too small, the gun sites are off, or the balloons are made of titanium. What happened from when I was a kid to now?

I think carnival folks have learned that people need to win to have fun, and to come and play your game. They are not there to be taken, as they are tired of it over the many years they have been.

A poster at Pacedvantage.com posted something poignant regarding takeout, and in our case here, something to do with fairs:

"Even if you treat it (betting on races) as recreation, you still want a fair shot. If I go to a carnival and try to win a stuffed panda by throwing softballs at milk bottles, it's all for fun and I really don't need the panda, but it would still piss me off if I found out one of the milk bottles was nailed down. 20-25% takeout isn't exactly nailing the bottle down, but it sure is a pretty strong glue."

Fairs have learned that giving people a shot to win is a godsend. Why won't racing follow that lead and lower takeout to send more people home winners? We are not as progressive as the people who run a dart throw game at a carnival, I guess. To me that says something.

This piece was contributed by a Canadian HANA member.

How Much Lower Would Wagering Be......

Without advance deposit wagering?

I see Youbet is now offering a 10% winners bonus on the Saratoga late pick 4. So if it pays $1000 and you hit it, you get back $1100 (an extra $100 that you will rebet of course). In addition, they have some sort of $20 free bet deal. These types of promos are seen at several ADW's out there; I am just mentioning Youbet because I saw it in my email today.

I suspect that without ADW - reselling and adding to churn with rebates - we would be below $12B this year in handles (much lower than that if we counted the large rebate shops of course). There were rumblings this past two years (before the bottom fell out of handles) that horsemen groups and some industry insiders wanted to run and take over advance deposit wagering. My goodness, we can thank our lucky stars that never happened. The chances of getting a 10% winners bonus, or free bets with those folks running wagering would be about equal to hitting back to back to back pick 6's.

Andy Beyer Had it Right, in 1991

Doing a google search tonight I came across an Andrew Beyer article, way back in 1991. It was titled "Taxing the Bettors, Taxing the System"

Whenever U.S. racetrack executives get together at industry conclaves, they talk endlessly about the need to broaden the sport's popularity and attract new fans. But perhaps their real problem is that their horseplayers don't bet enough.

Why do American racegoers bet so little? The reason is certainly not a lack of gambling fever or a lack of high-rollers. The casinos of Atlantic City and Las Vegas are filled with players who routinely bet thousands. And the country is filled with people who regularly make large wagers on sporting events. The magazine Gaming and Wagering Business estimates that $25 billion a year is bet illegally on sports -- compared with the $9.2 billion bet legally on horses in 1990. There are plenty of people who are ardent, enthusiastic horseplayers, yet might bet $300 on a Sunday afternoon at Laurel while they are rooting for $1,000 in pro-football bets.

The explanation for this phenomenon is that even gamblers are reasonably rational about the economic decisions they make, and they know that horse racing is usually a bad gamble. Tracks typically take from 17 to 25 percent of every dollar wagered, and those in Pennsylvania have blazed new trails by grabbing an exorbitant 30 percent from trifecta wagers.

It is no wonder that big gamblers in America prefer to call their bookie
and bet on a sports event, where there is only a 4.5 percent disadvantage against them. If horse racing is ever going to attract big players, it will have to reduce takeout to more reasonable levels.

This 1991 article could have been written in 2009. And sadly, will probably be written in 2029. We never change. We keep losing market share, and continue to do nothing about it.

Full article here.

The State Line

Remember the old movies? Bonnie and Clyde, anything set in the late 1800s or early 1900s. I do. Inevitably the crooks would have to make a run for the state line to make sure they escaped the clutches of Sheriff Joe. I think in, oh about 1950 most states made sure that reciprocity came about so that Bonnie or Clyde would be put in the clink, no matter what side of the border they were on.

But in horseplaying it is a little bit different. To illustrate, here is a post from a horseplayer who is leaving his state for a few months:

I have a ADW account in a state that is legal for online wagering. I am moving to a state (MO for three months) that does not allow online wagering, is it okay for me to continue using my account?

Wow, and we wonder why wagering is down. Horseplayers are not even sure if they can use their youbet account with the absence of criminal prosecution if they go on vacation for three months to see Aunt Sue in another state.

I notice that Betfair's slogan, used to advertise their internet wagering platform is "Betting as it Should Be". I wonder if ours is "betting as it shouldn't be".

If you would like to join Jeff for meetings at Yavapai this weekend, please do. We'd love to have you aboard.

HANA Meetings at Yavapai

Jeff recently sent this out to members via email. For those who are not members who might be in the area this weekend, here is the info.

You are invited to attend a meeting between HANA, track management from Yavapai Downs, and representatives from the AZ HBPA.

WHEN: This Sunday August 9, 2009 at 10:00 am.

WHERE: In a conference room in the clubhouse at Yavapai Downs in Prescott Valley, AZ

AGENDA: The topic of discussion will be horseplayer concerns: takeout, signal availability, pool integrity, drugs, quality of the product, and AZ's ADW law. HANA will be presenting suggestions for improving each of these critical areas. Track management and horsemen have promised us they WILL be listening.

If improving conditions for horseplayers in AZ is something that matters to you, YOUR presence is requested and we urge you to attend. We can not stress the importance of this strongly enough. Please understand that this is a meeting not a demonstration or a protest. If you have something to say you will be given the chance to be heard. If you choose not to speak up that is perfectly ok. By simply showing up you will be letting decision makers within the Arizona Racing Industry know that the voice of the player matters.

Your presence is requested and we strongly urge you to attend.
RSVP to me personally.

Sincerely,


Jeff Platt

President, HANA

jeff @ jcapper . com
(remove the blank spaces first)

Not Exactly Pen and Paper Handicapping

I was reading a book recently and the head of packaging and marketing for a major food company was speaking about package changes, and product changes. The gist of what he had to say could be synopsized as "if you offer more choice or package existing products differently, sales will go up".

In racing we have repackaged, or changed our product, not as a proactive act, but a reactive one. It seems many in power in our sport want things to be exactly like it has been and fear change. That darn internet betting for example was brought into the mix, not as a new thing to completely change the way we play (like Etrade did for stock trading), but just done by moving a tote machine into our homes. Presto, put it on the net and it is supposed to grow racing beyond its boundaries, to fantastic riches.

Not likely.

Conversely, I came across a commercial for a product that is built by the private market, for Betfair racing. I have no idea if this product is good, or bad. That is not the point of this. The salient point one should take from watching this below is that this is not 'betting like at the track, beamed into a house', far from it. This is a brand spanking new way to sell racing to new people - people who want to play a gambling game in new, fresh ways.

This video is actual horse race betting. No one is looking at Beyer figures, or watching replays to make these bets. But they are betting, in a completely different way. Just because they do not use a pen and paper to bet, does not mean they are not a viable market - far from it, in fact. They are a surging growth market that we need to survive.

When I watched this for the first time I said "wow, this is not my grandfathers racing". See if you have the same reaction.