I remember having a chat with a horseman group person several years ago and he was wondering why we do not double the takeout, because if we do we would double revenue. He could not quite get the whole price and quantity thing.
Well we have another, the indefatigable Fred Pope. In his most recent Bloodhorse piece (offering the same advice as all his others ..... 'raise prices and we'll do great') he actually admitted in the comment section he does not care what price we charge:
"Re takeout, I don't care if the takeout is 15% or 25%. "
A poster at Paceadvantage thinks he has Fred figured out.
"Fred Pope is a marketing and advertising executive in Lexington. He has worked for racing and breeding clients most of his career. That tells you all you need to know. Tote monopoly and high takeouts = lots of money for breeders. So Pope is just arguing the case from his side of the fence"
Compare that to a gambler. Rich Eng in his latest piece:
"So here's some free advice.
The racing industry should promote core betting products that create high churn. High churn will increase handle, thus raising purses to attract more owners, who will in turn buy more racehorses from breeders.
The cycle of growth always begins with the customer. If you want to sell more products, lower the price, don't raise it."
See the difference? Case A we have Fred Pope, shuffling the shrinking pie and Case B, Rich Eng, trying to grow that pie through more handle by using simple gambling economics of churn and demand.
Who should be in charge of setting prices in our sport? Who do you trust? Insiders who don't bet, or follow gambling, or people like Rich Eng, who actually studies and lives gambling?
In racing, unfortunately the former gets more play. That's probably a big reason why we are in the mess we are in.