Upcoming Contests and Carryovers

We wanted to provide you with a heads-up on a few upcoming items.

First, Mohawk Racetrack has a mandatory payout in their Super High Five wager in their final race this Saturday night .  The carryover is $647,331.  For more information, please click here.  A free program (PDF) for the entire card is also available here.

Second, our friends at Derby Wars have a $100,000 tournament coming up on Labor Day (September 1).  To learn more about Derby Wars and how you can participate, please visit their website at derbywars.com.

And finally, Kentucky Downs will be hosting a $15,000 Breeders’ Cup Betting Challenge qualifying handicapping tournament on Wednesday, September 10.  For further information, please click here.

Best of luck with all your wagers and enjoy the holiday weekend!

Double Gate (Part II)

Yesterday we exposed the flawed logic used by track management, horsemen, and state regulators to justify takeout increases at Los Al, Santa Anita, Golden Gate, Hollywood, Del Mar, and Churchill Downs.

In case you missed it, the logic goes something like this:

"We make more money with higher takeout because last year's handle numbers multiplied by this year's higher takeout rates is bigger than last year's handle numbers multiplied by last year's lower takeout rates."

But in the real world it never works out that way.

Why not?

The logic is flawed because it fails to account for the fall off in handle caused by higher takeout rates.

In California, this same flawed logic has been used by track management, horsemen, and the CHRB to lobby the Legislature and Governor’s Office for changes in state law. (SB1072 is one example of this.)

Yesterday we also pointed out that takeout increases based on this flawed logic have not helped racing as their proponents had suggested – but have had the opposite effect.

Instead of bigger field sizes, more betting handle, and more purse money being paid out as promised: The real result has been the worsening of an already falling handle trend, fewer dates, fewer races, less purse money paid out, cutbacks in hours worked, and lost jobs for workers.

We also pointed out that California’s handle woes in 2011 were not caused by the economy. During the same fiscal time period that California racing handle was falling off a cliff because of SB1072 – the California Lottery was generating record dollars going to Education because of AB142 and its higher prize payout (lower takeout) provision.

For those of you who might not know, racing is facing a crisis in the form of a downward handle trend. According to The Jockey Club website North American handle peaked in 2003 and has fallen sharply since. 

We at HANA can’t emphasize strongly enough how critically important it is that decisions about changes in takeout rates not be based on logic that is flawed. 

To that end, we prepared a spreadsheet that can be downloaded: here.

The spreadsheet contains a look at Santa Anita Double Pools. There are six tabs going across the bottom.  The left-most tab is labeled DD SUMMARY. 

The above image shows the first section of the DD Summary tab. Here we are presenting a year over year comparison of handle numbers for double pools in isolation for the first Santa Anita meet that was run this year vs. the Santa Anita meet that was run at this same time last year. As indicated on row 4, this year's meet began on Dec 26, 2013 and ran through Apr 20, 2014.

For this meet, Tom Ludt of Santa Anita fought for, and obtained permission to implement 18% Takeout Doubles on an experimental basis from higher ups at The Stronach Group, the TOC Board, and the CHRB. For that Ludt is to be applauded.

However, Santa Anita was not allowed to offer Rolling Doubles at 18% takeout. I am unclear as to the exact reasons why but instead of rolling doubles they were allowed to offer three doubles only each race day.

Thus, the wide differential in doubles offered: 545 last year vs. just 207 this year.

This accounts for the wide differential in double handle: $20.55 Million last year vs. $13.98 Million this year.

Despite being handcuffed, Ludt's reduced takeout double experiment did show some promise. Average double handle per race rose 79.16 percent.

----------------------------------------------------

Before diving into the numbers on the second section of the DD Summary Tab, for benefit of those interested in examining the numbers closely, I should disclose that last year's Hollywood Park meet began on Thurs Apr 25, 2013. However, there was no live racing at Santa Anita on the same calendar Thursday this year. Also, Hollywood Park conducted live racing last year on Thurs May 16, 2013 and Thurs May 30, 2013. There was no live racing at Santa Anita on either of the same calendar Thursdays this year.

In an attempt to achieve as close to a like date (apples to apples) comparison as possible, handle numbers for Thurs Apr 25 2013, Thurs May 16 2013, and Thurs May 30 2013 are purposely not included in the analysis presented in our spreadsheet.

Also, before diving into the numbers, it is important that I point out we are comparing handle numbers from Santa Anita against handle numbers from Hollywood Park and that Santa Anita traditionally out-handles Hollywood Park. For that reason, it is important that we establish a benchmark.

The above image is a screenshot taken of the lower right hand corner of the Side by Side tab on our spreadsheet. It shows that Santa Anita out-handled the Hollywood meet we are comparing to by about 17%. (17% is our benchmark.)

With that out of the way, let's dive into the numbers on the second section of the DD Summary Tab:

The above image shows the second section of the DD Summary tab. Here we are presenting a year over year comparison of handle numbers for double pools in isolation for the second Santa Anita meet that was run this year vs. the Hollywood Park meet that was run at this same time last year. As indicated on row 10, this year's (second) Santa Anita meet began on Apr 25, 2014 and concluded on Jun 29, 2014. As indicated on row 9, Hollywood Park ran at this same time last year.

Unlike the first Santa Anita meet that was run this year, Ludt was able to win permission to offer rolling doubles at 18% takeout for this Santa Anita meet - albeit on an experimental basis.

The result?

Double handle rose about 24 percent.

Keep in mind that this was after a lot of players had become disenfranchised because top decision makers had refused to allow Rolling Doubles to be offered at 18% takeout the previous meet.

Also keep in mind that at 24 percent, the growth rate in Double handle was more than 1.4 times the growth rate in overall handle for the meet. (1.41 = 24 / 17 our benchmark number.)

Clearly the 18% Takeout Double Experiment was showing some promise.

Clearly the decision to not allow Rolling Doubles for the first Santa Anita meet was a mistake.

Clearly the net cost to purses because of the 18% takeout rate was nowhere close to $500k as claimed on page 83 of the July, 2014 CHRB Meeting Transcript and quoted in our write up from yesterday.

Frankly, if Santa Anita were my racetrack - and my management team had shown me that they had raised double handle by 24% (or more than 1.4 X my growth rate for handle in general) once they began offering Rolling Doubles at a reduced takeout rate:

My decision would have been to continue the Experiment!

Jeff Platt
President, HANA

The Flawed Logic behind higher takeout

At the July 18, 2014 CHRB Meeting, Tom Ludt, speaking as a representative of track management for Santa Anita, told the Commissioners of the CHRB that 18% takeout on doubles had resulted in a net loss to purses of almost half a million dollars.

Link to the July 18, 2014 CHRB Meeting Transcript:
http://www.chrb.ca.gov/Board/board_meeting_transcripts/transcript_14-07-18.pdf

Quote from page 83 of the transcript:

"MR. LUDT: We do listen, and I do think that's very important. And my challenge and in -- not just me, but the tracks and a TOC, in setting these things, we just -- not -- like we said, it was an experiment. The handle went up, but if you look at the net to the purses, it actually went down almost 500,000 to the net purses on daily-doubles, singling that out."

I think horseplayers everywhere deserve to understand how Ludt, as a representative of track management for Santa Anita, came up with that $500,000 number as the net loss to purses he claims resulted from 18% takeout on doubles.

HANA has obtained a spreadsheet from the CHRB which you can download here.

Believe it or not, the spreadsheet contains the following columns:

1. A column listing handle on doubles.

2. A column listing handle on doubles multiplied by 22.68%.

3. A column listing handle on doubles multiplied by 18.00%.

Incredibly, the $500,000 number given out by Ludt as the supposed net loss to purses because of 18% takeout on doubles was arrived at by subtracting handle on doubles multiplied by 18.00% from handle on doubles multiplied by 22.68%.

Incredibly, the CHRB swallowed the $500,000 number given out by Ludt hook, line, and sinker - because they approved Del Mar's application to go to 20% double takeout for their current meet.

This was the same flawed logic used by Los Al to justify their takeout increase back in 2010.

This was the same flawed logic used by the CHRB, TOC, and Track Management at Santa Anita-Golden Gate to justify SB1072 and the takeout increase that went into effect at Santa Anita, Golden Gate, Hollywood Park, and Del Mar on January 1, 2011.

This is the same flawed logic used by Churchill Downs this past April to justify their takeout increase.

The logic?

We make more money with higher takeout because our latest handle numbers multiplied by new higher takeout rates is bigger than our latest handle numbers multiplied by older lower takeout rates.

But in the real world it never works out that way.

Why not?

The logic is flawed because it fails to account for the fall off in handle caused by higher takeout rates.

Betting handle and takeout rates share an elastic relationship.

The fact is handle is created by bettors who are price sensitive. This is something that has been studied at length and is very well documented in the economic studies paid for by the thoroughbred racing industry.

We found a link to one such study on the website of the National HBPA: here.

We put a link to a second such study on the HANA website: here.

Sadly, this fact has been continually ignored by decision makers within the thoroughbred racing industry.

Fact: Los Al's on track handle was down 27% during the first six months immediately following their takeout increase in 2010.

Fact: Handle at Santa Anita, Golden Gate, Del Mar, and Hollywood Park fell almost $250 million (a quarter of a billion dollars) during the first year of their takeout increase.

Fact: Santa Anita cut one third of its staff as a direct result of the flawed logic used to justify SB1072.

Fact: On page 4 of the 2011 CHRB Annual Report then CHRB Chairman Keith Brackpool cited "the economy" as the reason for California's handle woes.

But SB1072 wasn't the only gambling bill to be passed by the California Legislature in 2010. AB142 authorized the CA Lottery to leverage higher prize payout percentage (lower takeout) to drive an increase in total dollars going to education.

Q. If the economy was so bad, how then did the CA Lottery achieve a completely different result through AB142 and lower takeout than CA Racing did with SB1072 and higher takeout?

Fact: Handle at Churchill Downs was down $49 million vs. the prior year's spring meet in the wake of their takeout increase this past April. Further, Maggi Moss reported on Twitter that Churchill will have a 20% purse cut for their upcoming September meet.

Fact: Handle at the current Del Mar meet is down approximately $30 million vs. the prior year - IN PART - because of player reaction to seeing Santa Anita Track Management use this same flawed logic to blame 18% double takeout as causing a net loss to purses of $500k.

My questions to the CHRB:

Have you not learned anything from all from this?

Can you not see how your continued belief in the flawed logic behind SB1072 is causing you to harm the very industry you are sworn to protect?

Jeff Platt

President, HANA

Beyer: Horseplayers Are Making a Difference on Takeout

Noted horse racing columnist Andy Beyer has penned some thoughts regarding the low takeout pick-5 in southern California and the HANA-supported boycott of Santa Anita a few years back. 

Writing for the Washington Post and the Daily Racing Form, Beyer said, "The pick five's success since it was introduced in the state in 2012 is due to two player-friendly features: a 50-cent wagering unit and a 14 percent takeout rate. It is arguably the most attractive bet in horse racing, and it has been adopted in other jurisdictions, notably New York. But the evolution of the pick five in California holds significance for the entire racing industry because it is closely tied to a crucial issue: takeout." 

The article also contains quotes from HANA's Jeff Platt.  To read the article in full, please click here.

Joining HANA is completely free!  To sign up, please click here.

Handicapping Information Galore

The archive page of HANA's Horseplayer Monthly contains all of our issues dating back to our initial edition in September of 2013, but we will cross-post the entire archive in this post so you have it handy on the blog as well.  There are many handicapping articles, articles, and statistics for you to peruse. 

June Issue Features:

Barry Meadow talks Morning Lines, Lenny Moon finds a track he can crush, CJ of TimeFormUS looks at track bias. Pletcher's Derby record, what gives? Four ways to have more fun on big days. Mike Dorrwants WPS minimums hiked. 

Features: Belmont Epilogue, Dinkin is going to miss Keeneland poly, Garnet's harness column focuses on the Hawk, Belmont meet stats and much more. 

Click here to read that and much more! 

April Issue Features:

Track Ratings:

Methodology, Top five at a glance, Big movers, Interviews: Kentucky Downs Johnsen & Sam Houston’s Stahlbaum, Tracks Listed, 1 through 64, Statistics.

Features:

Keeneland Previews: Rich Nilsen, 7 Reasons to Play Keeneland, TimeformUS Trainer Numbers, Melissa Nolan’s Freshman Sire Outlook for the Horseplayer. 

Woodbine Preview, Stats, Bruno channels Abbott & Costello, Barry Meadow talks takeout, taxes & fees. Lenny Moon says it’s all about the Player. Garnet Barnsdale looks at false chalk in harness racing. JJ Hysell’s Derby Top 5, CJ from TimeFormUS explains run ups. Big figure gaps, sucker bets?

Click here to read that and much more!

March Issue Features:

Barry Meadow kicks it off looking at odds lines, followed by an excellent article by Bruno de Julio, and our Cover Story, “A Review of Esquire’s Horseplayers” by Jerod Dinkin. Twinspires’ Jeremy Clemons answers eight questions and Larry Collmus gives one dandy interview.  Mark Patterson of Mountaineer shares tips and tricks, Doug McPherson lends his thoughts on Quarter Horse bias. In the harness section, Garnet Barnsdale looks at a “Trident” of handicapping.

JJ Hysell gives us her kick butt Derby Top Five, the WirePlayers boys and girls share their top ten.Mark Midland tells us why he thinks bigger tournaments are working at Derby Wars. We get some “FTS” and “STS” insight with Art Parker.

The Back Page shares some trainer stats from database handicapper Jeff Platt, that to our knowledge, are not published anywhere.

Click here to read that and much more!

February Issue Features: 

Horseplayer Jerod Dinkin, a seven-time Horse Player World Series and three-time National Handicapping Championship qualifier, offers several tips tournament play, both before you enter and when you are in competition.
 

What is "lawyer handicapping" and why should you avoid it?  Barry Meadow explains.  Clocker, horseplayer, and jack-of-all trades Bruno De Julio explains why he likes to see horses "multi-task" and what that means. 

Click here to read that and much more!

December Issue Feature:  

A trainer is 15% off the claim, wins 32% sprint to route, is pretty good with a certain jockey. How are we supposed to use these numbers? Barry Meadow explains how to, and not to, use published statistics when we handicap.

Click here to read that and much more!

Breeders' Cup Issue Feature: 

Patrick McGoey won the Breeders' Cup Betting Challenge and over $500,000 two years in a row. We spoke with him as he goes for three.

Click here to read that and much more!

October Issue Feature:

An interview with professional horseplayer Mike Maloney.  Learn how a pro goes about his betting day, and see if it can help you become a better horseplayer.

Click here to read that and much more!

September Issue Feature: 

Are horses getting slower or faster? What's up with run up times? How are the TimeformUS figures constructed? Learn the answers in our Q and A with TimeformUS's Craig Milkowski. 

Click here to read that and much more!