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Tuesday, August 31, 2010

Trackmaster Blog Goes to Work

Some excellent posting at Trackmaster lately. Craig Walker has taken the time to write one of the better blogs on the web. You can tell this baby took awhile.

He illustrates beautifully what the aggregate horseplayer goes through when betting the races, via tax rates. Quite an interesting read, especially when he uses the Del Mar data to make his point.

Well done Craig.

Monday, August 30, 2010

How I got Fired from DcMonalds

After reading today on the drf that California passed the takeout hike portion of Bill 2414, raising the prices on their customers by up to 15%, and then killing the exchange portion of the bill which gave players lower takeout, this story came to mind.

I walked into the boardroom on a Monday, and boy Ray was mad. Sales were down, we were having serious trouble, and we thought heads were going to roll. Everyone was assembled and we were ready for trouble.

With sales down, he wanted ideas. Kurger Bing was selling their product at a lower price and winning. Bendy's was offering a brand new type of shake. Our customers were heading for the door. I was fresh out of a job in racing, and this was a new gig. If he asked me for advice, I would have to fall back on my vast knowledge that I learned there. I took a gulp and away we went. I hope he liked my ideas.

"Things are bad. Give me some ideas!" bellowed our CEO

He called on Bill first.

"I think we should offer a new product at a low price, and change our packaging, Ray. We need a hook, and when we have added a product we add customers. Studies tell us that if we change packaging, it gets us some buzz and helps sales."

"Not bad" said Ray. "Susan, how about you?"

"Well we are getting killed on price. These other stores are undercutting us, and our margins are fine if we increase volume. Studies tell us that burger buyers are price sensitive and elastic, so if we lower it to one penny below Bendy's we can get them back. We can advertise and bring people to the stores and hopefully grow"

"Thanks Susan," said Ray.

"What about you Patty?"

"The world has changed Ray and people are not buying Burgers like they used to. We need a new way to sell them, and we need to improve our distribution channel. I suggest we partner with the french fry maker, who has already signed deals with hundreds of businesses and offer a new product combining the two. Our demographic studies tell us that kids are buying these fries and we can attack that demo. This seems like a no-brainer."

"Nice Patty, I like that"

"Now to our newest board member, formerly from the business of racing. What do you think Peter"

It was my turn. I was ready to wow them. I had a way to grow business that I used at my last track. This idea got me a promotion and a company car. I was pumped to bring it to DcMonald's.

"Thanks Ray. Well first, let me confirm a few things. We are selling 100,000 burgers right, and that number has been falling."

Everyone nodded

"And we charge $2 right, so we have $200,000 revenue right"

"Yes" they said

"Well here it is - we raise our price to $3 a burger, we still sell 100,000 burgers, so we immediately make $100,000 more. Problem solved, I made everyone more money. Our business can grow again using this new revenue"

I was met with blank stares, almost like they thought I was from another planet. This made me quake - in racing I had only gotten praise for this idea. I did not know what was going on in this strange business..........

And that is how I lost my job at DcMonald's.

Whispers & Success

We are hearing whispers that the California Bill 2414, which provided a 2-3% increase in takeout in California, as well as a low takeout betting exchange option, might be dead. However, it appears one of the two items will be passed in a new bill. I am sure you can guess which one; the high takeout option. We expect takeout in California to rise in December, and any price sensitive players who wanted to continue to play there will not have the low cost exchange option.

We do have some success to report though. Tioga Downs is rolling well and Bill Finley on ESPN.com interviewed Jason Settlemoir of Tioga in an article "A Racing Resurgence at Tioga Downs". Tioga lowered takeout this year to state minimums and Jason let us know how he feels about the horseplayer:

Settlemoir understands that and knows excessive takeouts are among the many reasons racing is struggling. If he and Gural get their way, the takeout on Tioga races will go even lower.

"Jeff [Tioga owner Jeff Gural] and I would like to see the takeout lowered to 9 or 10 percent," he said "That way it would be equal to what the take is on the slots. We want to put the horseplayer on an equal level with the people who play the slots."

more here

Friday, August 27, 2010

Hegarty: Horseplayers Disagree With CA Plan to Raise Takeouts

Via the DRF:

The business world generally agrees that the last option for a struggling industry should be raising prices. But the California racing industry is contemplating just that option in legislation that would boost the takeout on exotic and superexotic wagers by 2 or 3 points.

Economists who have studied takeout increases have contended that raises lead to depressed handle, at least when takeout rises above a certain rate. Most significantly, economists say, an increase in takeout reduces the amount of churn, or money available to bettors to wager back into pools, because payoffs are reduced.

more at link.

Tuesday, August 24, 2010

What's Up With This?

We see East v West in many things in this sport, and have for years, but on doing racings business it is rare to see execs throw a salvo out at other execs.

We all know takeout is going to increase 10-15% in CA (2-3% increase on exotics). We have read cali racing say that they think raising it is a good policy to grow purses.

Horseplayers and many industry watchers let their thoughts be known.

Then we have NYRA Chair Steve Duncker say the opposite on Sunday:

"Duncker noted the blended rates in New York were 15% in 1960, 17% in 1970, and 19.81% in 2010. Over that period, racing has faced growing competition from other forms of gambling that employ takeout rates of 2%-10%.

“What business people in this audience think that’s the way to increase business?” Duncker said. “We’re being priced out of this market. We need to bring the cost of our product down in a competitive market.”

OK, maybe just an aberration, huh? Coincidence?

Maybe not.

Just today on CNBC, NYRA Pres Charles Hayward comes out saying the same thing Duncker says, live on camera (click here for video).













When asked about why horse racing is down, he said "in 1960 our takeout was 15% and today its 19.8%. The industry has to look at the financial side and make it a better value proposition. We are taking too much out of the customers pocket. It is not competitive. A reduction of takeout would be more beneficial for us"

This prompted the opposite reaction from players. For example, New York player Ernie Dahlman, who almost never posts on the web said "It is great to hear that NYRA's CEO Charles Hayward "gets" that racing has a problem with excessive takeout. That alone puts him in the upper 1% of racetrack executives."

Our question: What do players think is going on here?

Monday, August 23, 2010

East Coast Versus West Coast

In an example just how different, and fractured, the business is, even on something as simple as the price of the product, we offer this. East versus West. NYRA versus California.

NYRA Chairman Steve Duncker, yesterday:

On the topic of pari-mutuel takeout rates, Duncker noted the blended rates in New York were 15% in 1960, 17% in 1970, and 19.81% in 2010. Over that period, racing has faced growing competition from other forms of gambling that employ takeout rates of 2%-10%.

“What business people in this audience think that’s the way to increase business?” Duncker said. “We’re being priced out of this market. We need to bring the cost of our product down in a competitive market.”

Del Mar's Craig Fravel, last week, while discussing the proposed increase in takeout in California.

"In terms of takeout we are significantly lower than most jurisdictions. NYRA’s three-horse wagers are 26%, compared with 20.68% for Del Mar. That 20.68% is on superfectas, pick threes, pick fours and pick sixes. Monmouth’s takeout is 25% on those three-horse bets. We still have plenty of room to be price competitive."

Saratoga Round Table - Takeout is too High

Via Steve Zorn on NYRA Chairman Steve Duncker's presentation today at 'Toga:

"More substantively, Duncker pointed out that our product -- betting on horse racing, is grossly overpriced, and has been getting more expensive. From a blended takout rate of 15% a few decades ago, NYRA's takeout is now at a level of 19.8%. That's undoubtedly one of the factors causing the rankings of NYRA tracks by HANA, the Horseplayers' Association of North America, to be well below what would be suggested by the quality of New York racing.

In contrast to the nearly 20% that NYRA charges the bettor, Duncker pointed out that the price of other forms of gambling is much cheaper. The "takeout" on craps averages 2%, on blackjack 3%, on slot machines, 6%, and on casino poker tournaments, 8%. No surprise that we're losing the business of the numerate younger generation."

More at link.

Sunday, August 22, 2010

HANA President Platt on TVG Today - After Race 4 at Del Mar

For those who get TVG and want to hear some thoughts on racing from HANA's President, please tune into the network after race 4 at Del Mar. Jeff will be interviewed via the phone.

If you are a horseplayer, or horse racing participant, who likes what you hear, please consider joining us by signing up here.

Membership is confidential, and we do not release your email address to any third parties.

Wednesday, August 18, 2010

Walker on Peer to Peer & California Takeout. Cal-Expo Goes Low on Pick 4

A California track lowers takeout on a bet - but it is not a thoroughbred track. Cal Expo announced some ideas to get some bettors and customers to look at them. One of the ideas, which has worked at a few harness ovals, is dropping their pick 4 take to 15%:

"To start off with, we are offering free admission, as well free preferred and general parking after 4:30 p.m. every live harness racing night,” Elliott explained. “Also, for the first time, we are offering a 50-cent Pick 5 on every racing night in the fifth race. Additionally, beginning in September, we are looking at a Guaranteed $10,000 Late Pick 4 on Saturdays, as well as a reduced takeout of 15% on Saturday night Pick 4s.”

Of note, the Meadowlands offers a low pick 6 take at their track (only Kentucky tracks and Gulfstream are lower in all of racing) and they have a $109k carryover, for this Friday's card.

Lastly, Craig Walker at Trackmaster shares what he thinks peer to peer wagering means for racing. Many of his ideas are shared by horseplayers, and those who study wagering economics.

He also makes an educated guess what will happen to California handles, if rumored hikes go through:

As an aside, raising takeout is definitely not a good long term strategy for the racing industry. If California racing decides to implement the rumored increase in takeout, it is sure to have a detrimental effect on wagering handle. The proposed increase is effectively taking away ten percent of a horse player’s current returns. Let’s hope this rumored proposal never comes to fruition. If it does, I believe whatever percentage of decrease in handle California racing would have had next year will at least double due to the takeout rate hike.

Sunday, August 15, 2010

HANA CHRB Meeting Transcript

The meeting transcript is now up on HANA Reports, regarding the meetings attended by HANA's Jeff Platt and Barry Meadow.

Messers Platt and Meadow tried to stress the numbers, and that they felt lowering overall handle is not good for California racing. Members of the CHRB and Mr. English, disagreed and presented other numbers.

We found a few areas curious, and wonder if the CHRB and other boards that make takeout decisions should have experts on hand to advise them, instead of doing what they have been doing.

One part, where they all agreed (and we quote) that takeout was less important than quality, is strange to us, as it flies into the face of expert opinion.

VICE CHAIRPERSON ISRAEL: So what you’ve been able to determine so far, the most important factor in determining handle and interest is the quality of the product, not the price of the product?

MR. ENGLISH: Absolutely.


The University of Louisville did a study on quality versus takeout issues and concluded that: "A reduction of takeout results in the highest increase of handle (e=-2.3), followed by field size and number of races (e=~ 0.60) and coming in last was purse size (e=0.06)."

As well this report, which studied all wagering, and not simple anecdotal evidence of a short period at one track: "".... wagering would increase by only 6% if purse were doubled. This is a surprising finding considering the importance that is attached to the purse variable in all major policy decisions to increase the wagering in this industry.""

So, the experts tell us that "quality" (read purse increases/more horses) do not do the job when we compare it with the effects of takeout.

This also flies into the face of empirical evidence from the California lottery. They lowered takeout in April, and lottery sales rose by $55M. They did not change the "quality of the lottery tickets" they simply lowered the price.

As well, they seemed to think that we will pay a higher takeout like people pay to watch a movie.

MR. ENGLISH: Yes. That’s correct. Perhaps more interesting, because it’s just like people pay extra money to see something in 3D --

CHAIRPERSON BRACKPOOL: Right.


We are disappointed and somewhat surprised that people who make wagering decisions not only do not consult experts, but compare the decisions we as gamblers make to how people decide to go to the movies.

For more of the exchanges, including Jeff and Barry's points, please visit HANA Reports.

Thursday, August 12, 2010

An Interesting Comment

Is there any wonder which way takeout is going in California after reading this comment.

"NYRA’s three-horse wagers are 26%, compared with 20.68% for Del Mar. That 20.68% is on superfectas, pick threes, pick fours and pick sixes. Monmouth’s takeout is 25% on those three-horse bets. We still have plenty of room to be price competitive."
Del Mar's Craig Fravel via the Paulick Report.

It appears California racing is striving to have as high a takeout as those two other tracks on exotics, as a sound business strategy.

In other news, California's lotteries continue to hurt horse racing. They are budgeting for a 16% increase in sales, after lowering takeout in April. Sales in the first month after the takeout was lowered leaped by $55M.

Tuesday, August 10, 2010

Treating New Fans as One of Your Own

A few members of The Horseplayers Association of North America this past weekend visited an exacta of tracks – Monmouth and the Meadowlands in Jersey. The hope of the trip was to meet with some of racings participants and see if they and players could find some common ground to move this sport forward. And of course – to enjoy this wonderful game.

The first leg of the trip was the Meadowlands and the $1.5M Hambletonian. HANA Board member Charlie has never handicapped, nor barely even watched a harness race before, and he was thrown right into the fire; being a newbie and not having anywhere to turn. However it turns out he did have somewhere to turn – that sports’ participants and fans. He was welcomed into the sport with open arms, and he shares his story with us in this featured blog piece.


The Meadowlands and Monmouth – in fact all of Jersey racing – is faced with mounting challenges, and in fact might cease to exist. With hospitality and genuine good cheer like this, we sincerely hope not. Please enjoy Charlie’s experience below.


"So, do you have any idea how to read these past performances?"

That began my first experience with harness racing.

I asked this question to the nice gal sitting at our table at dinner the night before the big race at the Meadowlands Racetrack in East Rutherford, New Jersey. Little did I know that our area of the room was full of harness racing aficionados, trainers, owners and industry types. Not only was the nice lady that explained even the most simplest of items on the PP's the wife of trainer Jonas Czernyson, but also at our table were the owners of a horse that raced the next day in the Hambletonian itself and some other top drivers and trainers in the sport of harness racing.

I cringe thinking of how stupid our questions must have seemed to them. What does the number after the track code mean? What does it mean when there isn't a purse (qualifier)? What's the difference between a trotter and a pacer? It would be like someone at a Thoroughbred track asking what 6f means.

Through it all, I never sensed any frustration, and they seemed happy to explain this game to me, a clueless thoroughbred player. They had no idea who I was - I could have been a mover and a shaker, or just who I am, a horseplayer - nor did they seem to care.

We ended up discussing the state of the Harness industry, differences between Harness racing and Thoroughbred racing , and even breeding. Did you know that they only breed pacers to pacers and trotters to trotters? I just assumed it was a training issue, so that one was a big surprise.

After finding out who these folks were, I was even more grateful for their help. It shows a lot when people of their stature take an hour out of their evening to explain their sport to me. I looked for them the next day to say thank you but there were so many people around that I never got the chance.

We then met Moira Fanning from the Hambletonian Society, who runs the marketing for the big race. She has a vast amount of knowledge pertaining to pretty much every aspect of the sport from both the Harness and Thoroughbred sides. I can't help but think that if she had more power in racing, we would be in great hands. She gave us all sorts of suggestions for viewing the races the next day, and we talked for an hour about the various issues and opportunities currently facing both sports. Whenever I get frustrated that it seems like our industry continues to make bad decisions, it will help to know that there are people like Moira out there, doing their best, and refusing to give up.

The next day I went to the paddock and took a look at a lot of great horseflesh. I continued to ask anyone around me questions on items that are different from the Thoroughbred world. Why are there constantly horses out warming up? Why are all of the horses back in the paddock instead of just the next race?

I never had a single person refuse an answer.

I have no idea who the people I was asking question to were, but when you're near the horses, you have to assume that they're pretty involved in the sport. It was just an amazing feeling to be such a newbie, and yet have access to any information that I could possibly think to ask for from people that were only too happy to help.

The racing was fantastic as well. I got to see two track records and a world record. I got to see upsets, stretch duels, front running winners - It was great! I didn't bet much because I didn't know enough to bet, but I left promising myself that I'd study up on Harness racing so that next time I get to the track, I'll be able to show my gratitude through my handle. I even asked someone that does know harness if there was a database of results, or a software program out there to use so I could study the sport. Sadly there is not, but maybe there will be sometime soon.

The cheer that went through the room when the winning connections in the feature mentioned how much they hoped the Meadowlands would be saved warms my heart, and I can't help but agree.

Suffice to say, I had a wonderful trip, and I hope the Meadowlands is still there next year so that I can do it again. We certainly felt accepted and a part of the family, and I can only hope the Thoroughbred industry and their fans take note and try to do the same for new visitors and potential customers – the ones who stand there, look out of place and ask questions like I did.

I'd like to say a big thank you to the Hambletonian Society for treating me so well, as well as everyone in the sport of harness racing for their warmth. I'd like to give a special thank You to Moira Fanning because she was great. I hope to see you all again next year!

For some pictures of this unique day in sport, please click here.

Thursday, August 5, 2010

HANA to Jersey

This weekend there are a two events planned where HANA members will be congregating.

On Saturday, The Meadowlands is hosting the $1.5M Hambletonian. This race, as most know, is the pinnacle day for harness racing, with a card filled with major stakes, and an expected crowd of over 30,000. Several members of the HANA board will be on hand, and several members will be there from the harness side, including Bob Marks from Perretti Farms. Jason and Nick from Tioga Downs will be there too.

The Hambletonian website should have free past performances up soon. There is news on the Hambo with on track events and wagering info here. Harnessracing.com will also have some info on it, from their weekly PDF. You can sign up for that here if you are a harness fan.

Since most of the HANA board are thoroughbred players, they need all the help we can get, so swing by if you can.

On Sunday, it's off to Monmouth for HANA Day at the Races. The staff at the Shore track has been helpful. They want horseplayers to play there, and it shows. They have offered members free admission and programs, and links have been sent to members.

New Jersey, with low takeout like the 15% pick 4 and pick 5, has been trying to grow. As we all know, racing is struggling there. For people who care about New Jersey racing, this is quite sad. Several of us will be playing both cards this weekend to show support.

For info on both events, and if you would like to meet up, please email skip.away@yahoo.com and we can make some arrangements!

Enjoy the weekend everyone, and good luck at the windows.

Wednesday, August 4, 2010

Tioga Handle Continues to Rise

It was announced today that Tioga Downs, who lowered their takeout to New York state minimums, continues to see rising handle. The export handle was up 21% last month. Conversely, horsemen at their sister track Vernon Downs, refused to sign on to the decreased takeout initiative and kept 2010 takeout at 2009 rates. Their handle in 2010 is off 13%.

For harness players, keep doing what you are doing: Supporting this track who has the lowest takeout in racing. They are growing, while the sport of harness is suffering. They deserve our support. Click here to go to the Tioga Handicapping page.

We wonder if California racing is listening?

Press Release below from Tioga.

Handle Numbers On The Rise At Tioga

Aug 4

Tioga Downs lowered its takeout rates to state minimums for the 2010 race season, and the numbers have shown promise as they continue to rise. In July Tioga Downs was up in its live racing handle by eight per cent, and watched its export number grow for the second straight month by 21 per cent. For the year Tioga Downs is down one per cent on live handle, but is up in export by 13 per cent compared to 2009. The import number at Tioga in July picked up by 25 per cent, and for the year is up by four and a half per cent.

“These are the types of numbers we were hoping for when we took on the lower takeout rate initiative this year. It is encouraging to see numbers grow at this rate, and we hope to keep it up through our 2010 race meet. With all of the bad news in our industry as of late it is good to see that with hard work and just a few changes we can make a positive impact here at Tioga,” said Jason Settlemoir, VP of Racing and Simulcast.

Conversely, at Vernon Downs, the HHA of CNY refused an agreement with management for lower takeout rates, and the Vernon Downs export numbers for 2010 are down more than 13 per cent in 2010.

(Tioga Downs)

Sunday, August 1, 2010

If HANA Was Bo Derek

As most know California racing this week, with the hopes of curing their ills, are looking at raising their prices, by adding it as an addendum to bill 2414. The collective gasp from the horseplayer and business community was heard around racing: "Who raises prices when business is down?" It seems they are out of ideas for growing the sport in the Golden State. So, we at HANA decided what we would do if we were a CHRB board member, and wrote it down. Our provisions are to do one thing and one thing only: grow handles in California - in effect, the opposite of what a takeout hike does.

Here is our addendum to bill 2414.


Suggested Amendments to AB 2414:


Each of these suggestions is designed to help California’s Tracks and Horsemen supplement purses by enacting long term solutions for growing handle and generating new fan interest in racing by increasing the reach and exposure of the racing product to the general public.


1. ELMINATE BREAKAGE on ALL Pari-mutuel Wagers made on all races at all California tracks.

Break to the nearest PENNY instead of the current nearest TEN CENTS.

The objective of this provision is to create player interest in the game by increasing prize payouts and CHURN – a concept that has proven itself successful in the State Lottery market space wherever it has been tried.

Did you know that earlier this year (in April) the California State Lottery generated a cash windfall for the State of California by increasing prize payouts on its scratchers games?



2. ELIMINATE the Current 6.5% Retention Cap on ADW wagers generated within the State of California.


The objective behind this provision is twofold:

1. To provide economic incentive for ADWs (which can be operated jointly by tracks and horsemen [see below]) to actively market thoroughbred racing to California residents in such a way as to GROW HANDLE and GENERATE NEW FAN INTEREST IN RACING by increasing the reach and exposure of the racing product to the general public.

2. To enable tracks and horsemen to COMPETE with existing ADWs for new customer business [see 3 below.]

Note: The Fall 2009 HANA Survey, The Cummings Report, and other industry funded economic studies all indicate that ADWs are able to win new customer business by offering the racing customer facets not being offered by tracks such as: convenience and innovation.

ADWs currently do this by offering: rebates and cash incentives, free handicapping contests, free past performances and statistical reports, high quality live streaming video and video replays, improved/innovative online wagering interfaces, customizable reports that enable the customer to see detail about his or her wagering performance, etc.

These and other INNOVATIONS are what successful ADWs are doing to win and retain new customer business (whose handle sometimes grows exponentially once given access to better pricing and innovation/tools.)

Note: Under present California State Law, price sensitive players located in California have no options for obtaining rebates and cash incentives other than to bet offshore where their money does not find its way into the pari-mutuel pools.

Money wagered offshore and outside the pools does nothing to supplement purses.

HANA, through player interviews, estimates that the amount of US and Canadian thoroughbred racing handle wagered offshore (and out of the pari-mutuel pools) runs into the BILLIONS of DOLLARS each year.

Eliminating the 6.5% ADW Retention Cap would enable California’s thoroughbred racing industry to begin capturing at least a percentage of that lost handle (which it has no hope of capturing while the 6.5% ADW Cap is in place.)


3. ADD A PROVISION TO THE CODE ENABLING TRACKS/HORSEMEN THE ABILITY TO OPERATE THEIR OWN ADW

The objective behind this provision is twofold:

1. Provide a way for California’s Tracks and Horsemen to supplement purses in a substantial way.

2. Provide a way for California’s Tracks and Horsemen to GROW HANDLE and GENERATE NEW FAN INTEREST IN RACING by increasing the reach and exposure of the racing product to the general public.

Under this provision:

1. With the 6.5 percent ADW retention cap removed, a California Track/Horsemen operated ADW would find itself in a favorable position (with a competitive price advantage) relative to existing ADWs because tracks historically sell their signals to each other at a lower signal fee/wholesale price than tracks sell their signals to third party ADWs.

2. California tracks and horsemen would be able to realize revenue wagered through their own California Track/Horsemen operated ADW exactly the same as if the customer’s wager had been placed on track. This gives them a larger share of revenue than if the customer wager had been placed through a third party ADW or (worse) if the wager had been placed offshore.

3. It would be up to the tracks and horsemen to satisfy customer needs and wants through innovation [see above] to win and retain new customer business.

If they are able to do that, this provision gives them a realistic way to grow their racing product and fan base and provides a way for tracks and horsemen to supplement purses in a substantial way.


4. ELIMINATE THE CURRENT RESTRICTION ON THE NUMBER OF OUT OF STATE RACES THAT CAN BE SIMULCAST EACH DAY.


The objective behind this provision is to enable California’s tracks and horsemen to deliver something their customers sorely want: FULL CARD SIMULCASTING.

HANA, through player interviews, has discovered that many players will not wager on track because of the current restriction on the number of out of state races that are simulcast each day. Instead, they stay home and wager through third party ADWs. Worse, many of them wager offshore where their handle remains outside of the pari-mutuel pools and does nothing to supplement purses.

Under this provision:

California’s tracks and horsemen would be given the ability to increase on track attendance and wagering handle by (better) reaching a demographic of the customer base they are not reaching now.

5. ADD A PROVISION TO THE CODE ENABLING TRACKS/HORSEMEN TO CREATE A PLAYER REWARDS CARD

The objective of this provision is to provide a way for tracks to better market the racing product to the end customer by:

1. Giving the tracks the ability to learn about customer needs and wants through tracking customer spending habits.

Example: Customer walks up to a mutuel window or betting machine, swipes card, and places bet. As this event is repeated over and over again thousands of times by (hopefully) thousands of customers: a data trail is created enabling the track to better market the racing product to the end customer.

Tracks will actually know who their customers are (name and address) and what they do and don't do. Tracks can mail them a coupon when they haven't been around for awhile. They can be invited to specific events tailored just for "people like them." Tracks can test things out and actually measure their impact directly, across different demographics. This is basically how successful companies work - through the measurability of things, etc.

2. Bestowing the end customer with innovations such as convenience and player rewards. Player Rewards Cards would be tied to the player’s CA Track/Horsemen ADW account [see above] and would be loadable just like a debit card.

Example: Customer walks up to a betting window, swipes card, hands the mutuel clerk cash, which is added to the customer’s account balance on the spot.

As the customer swipes the card and places bets throughout the course of the day, and as he or she reaches pre-established handle thresholds, the customer qualifies for rebates and/or cash rewards. Each night, a computer routine would automatically add earned rebates and/or cash rewards to the customer’s account balance.

At any time, the customer would have the ability to walk up to a mutuel window, swipe the card, present identification, and make a cash withdrawal from his or her account.

This provision, combined with Provision 4 [above] allowing for Full Card Simulcasting, enables tracks and horsemen to better market to widely different customer demographics/market segments where they are failing now.

This provision would also enable tracks and horsemen to offer significant ON TRACK rebates and cash rewards to high volume bettors who seldom frequent the track given the racing industry’s current marketing efforts.

When you give a horseplayer a cash reward, he or she does not place the money in a sock. He or she rebets it. California needs players to feel welcome, with a chance to win, and have a chance to get hooked on the wonderful game of horse racing. Cash rewards help us achieve this goal.

Thanks for reading.