This article by Jerod Dinkin appears in the September edition of Horseplayer Monthly. To read the remainder of that issue for free, please click here.
Mankind/womankind cannot live so cynically as to believe that physical interaction is no longer important in the post-modern era. In our sphere of influence, Twitter, Facebook, online contest sites, and ADWs are the reality of the times and what will sustain the sport moving forward.
Cyberspace is replacing physical space, but one cannot and will not subsist without the other. Namely, the sport won’t grow in cyberspace without positive experiences cultivated on track, at a horse farm, at a yearling sale, or some other physical venue, and at least for the time being (until Instant Racing takes over the world) the races are still run over a track, outside, on good ol’ fashion dirt and grass that God created (homage to Nick Zito).
As the summer winds down and the boutique meets come to an end, I’m reminded of how nothing in racing can replicate the on-track experience of a quality summer meet; the sights, sounds, and atmosphere of Del Mar with a laid back deco style and a fashionably late post time to match; Saratoga, with a nostalgic carnival motif, tree lined paddock, and a facility that rivals Fenway Park or Wrigley Field in terms of historic charm in the world of sport; and Arlington Park, a quality facility with top notch customer service providing a memorable experience. These summer locales provide a great family atmosphere and vibe that will help catalyze such memories and should cultivate new support to the game over time.
With all of the competition available at this juncture vying for the precious entertainment dollar in an uncertain economy, the significance of the summer racetrack destination cannot be overstated. We need to make sure the sport remains a part of the entertainment conscious of a typical non-racing fan so when it comes time to decide where to go this weekend or next, “the track” is considered along with the theme park or a day at the zoo.
There is no doubt that the sustainability of the sport moving forward is largely based on appropriate pricing of the product as a gambling pursuit; a business that will involve a majority of its dollars wagered online. This is the reality of a 21st Century world where horse racing holds no special advantage in the pantheon of gambling activities as it did in much of 20th Century. Quite on the contrary; we’re too expensive and overly fragmented into small groups where the norm involves a precarious power struggle.
John Q. Onceameetsaratogaguy (“J.Q.O.”) decides he loves going to the Spa so much that he will become a regular bettor through an ADW to continue his interest in the game. Here are said barriers to entry that J.Q.O. must now go through:
1. Reside in a state where it is legal (sorry Alaska, Georgia, Hawaii, Mississippi, North Carolina, South Carolina, and Utah): 24,000,000 people aged 18 and older reside in these seven states.
2. Successfully research available ADWs: After looking at all of the possibilities (which involved calling friends and extensive “googling”), he decides the best service with the most features is “XYZBets.com.net.org”, but it isn’t available in his state. After more careful analysis, he realizes there is only one option, “ABCWagers.com” which is inferior to most other ADWs. As a consumer in the year 2014, he wonders why there isn’t more choice. It strikes him as a bit monopolistic or at the least “anti-capitalistic”.
3. Takeout: Now that he is funded and ready to bet, he becomes inquisitive about how horse racing stacks up to blackjack and sports betting, his current preferred forms of gambling. J.Q.O. looks up the track takeout (http://www.horseplayersassociation.org/sortableratings.html). He thinks to himself, good Lord, that can’t be right, it must be a mistake – those numbskulls at HANA have at all wrong. How can a business subsist charging customers those rates? Subsequently, J.Q.O. finds out that some major circuits are actually increasing takeout and one even overcharged bettors above and beyond the current legal rate.
4. Perception: J.Q.O. recognizes some of the big name trainers from his experiences at the marquee tracks and from watching the Kentucky Derby on TV, but never knew much about them beyond the two minute human interest pieces used to kill two hours of coverage (you know, instead of showing really good Grade I races that occur prior to the marquee events). He is despondent in finding out many of them have a list of medication infractions that make Ben Johnson look clean.
5. Rewards: J.Q.O. isn’t a huge bettor, but does get some nice perks out of his casino betting. He looks into the rebate rules of his ADW and finds he can get about $5 back a month and perhaps some free PPs once and awhile.
6. Consistency: J.Q.O. places a wager and watches a race where he is holding a correctly structured ticket that will yield a $250 profit from a $5 bet. This is one of the many reasons why he is excited about horse racing – few other pursuits afford you the ability to invest a relatively small amount of money to win a relatively large amount (and unlike the lottery, have a realistic expectation to win)! However, the inquiry sign is flashed and his temporary excitement has evaporated as his horse has been taken down. This is perplexing to J.Q.O. as the same level of interference did not yield a disqualification in the exact same situation yesterday at the very same track. He looks into the rules used by the Stewards to formulate their decisions because with all this money at stake for the bettors and the connections, surely there are uniform rules for what happens within the field of play (you know, like in every other sport on the planet). He finds nothing but a tax write-off. Speaking of taxes….
7. Central Governing Body: J.Q.O. wonders why the Commissioner hasn’t addressed a number of these items. Surely the head of this sport would be taking prudent measures to ensure the integrity of the game isn’t compromised. Goddell wouldn’t put up with this.
Some of the barriers to entry are legal and/or political in nature and out of the control of the industry. However, to the customer it’s irrelevant; the bottom line is they cannot access the product. Imagine if Apple could only sell I-Pads in 43 states? This is precisely what the industry must deal with; not an easy task.
With respect to takeout, I often hear the counter argument that most patrons of a summer meet like Saratoga (and many OTB customers as well) have no idea what takeout is or how it impacts their wallet. This is entirely true. The yearly or even bi-weekly or weekly customer at Del Mar or Saratoga is unlikely to care. Regardless of the takeout, within reason, these folks will make Del Mar or the Spa a semi regular destination. However, this mindset is so inherently flawed and self-fulfilling that it boggles the mind. We need the customers who have good experiences at the track (like J.Q.O) to become regular customers in the ADW world, the future of betting. Given the laundry list of difficulties (only some of which are listed above), this is increasing unlikely and why the sport is in decline. Further, even if the typical OTB patron isn’t consciously aware of takeout, he or she will be keenly reminded of it when they are broke.
However well intended, any marketing strategy that isn’t centered on competitive pricing for the bettor is a losing long term proposition. This is pressing issue number 1 and 1A and is relatively simple to correct. This is of paramount importance and unlike many of the impenetrable factors that hamper growth - this is controllable (with any sort of leadership and pragmatic thinking). The concerts, food truck festivals, ostrich races, Weiner Dog Derbies, and the like are irrelevant if any new customer gained through these endeavors fails to become a regular betting customer; a goal which is unbearably difficult with an uncompetitive, usurious rake, in addition to some huge barriers to entry.