Tuesday, February 24, 2015

It's All We as Customers Ask of Racetracks: Make An Effort

Many years ago now, after commissioning a survey of horseplayers and discussing and scouring the economic research, we saw and heard horseplayers wanted bigger fields, lower takeout, and better betting races. Not long after, the very first Racetrack Ratings were developed. The criteria of what makes a good racetrack? Exactly what you and the literature told us.

We worked on the racetrack ratings in the first place for a number of reasons. Horseplayers, we felt, needed a resource for takeout rates, field size, handle size etc - the information on the web, in programs and racing forms were woefully outdated, and wrong - to make better betting decisions. We also thought that tracks might take notice of them, and see if they could improve their product, jump up in the rankings, and in the process, give us a better product to bet. After all, if we bet more money on a better product, doesn't everyone win? Especially long term?

Over the years we have heard from some executives that were paying attention to their rankings and where they fit in the betting landscape. Often times we have heard them say "we are going to try and improve." People like John Marshall at Calder and Corey Johnson at Kentucky Downs were two such fine folks. I think we might have to add Tim Ritvo to the list.

Today at The Racing Biz, Mr. Ritvo expressed his thoughts on rejuvinating Maryland's racetracks, particularly Laurel.

“Eventually, real soon, you will see a reduction in takeout in Maryland, which isn’t hard to do because, basically, we’re about 45th on the [takeout]  list and I want to get in the top 15,” he says.  “So I’ll look at those numbers and see what we need to do to get there.  If I’m in the mix of the top 15, then I’m asking [bettors] to look at my product again.”

It's all we ask as customers. Make an effort. How can your track card better betting races. Can your track lower takeout, increasing payouts, where bettors are encouraged to come back, bet more and enjoy themselves more than they used to? Can your track offer their signal to ADW's so we don't need three accounts to give you our money?

Mr. Ritvo seems to be asking those questions. He seems to want us to look at the Maryland racing product again. He's asking for our business. If he succeeds and gives us a chance, we should all give Maryland racing a look once again.

Thursday, February 5, 2015

Fix the Splits in the Simulcast Model? Here's an Easy Solution

You've heard about it and so have we. Track A sells their signal to track B for 9%, when takeout is 21%. Everyone seems to lament that the bet taker gets 12% and the track that puts on the races gets 9%. It should be the other way around, says the racetracks.

This is why some of you can't bet Gulfstream at your simo center this winter. It's a big fight.

Magna has some big plans to fix this. From the Bloodhorse "Stronach Group Targets Fundamental Issues"

"Rogers noted the early simulcast model—still largely in place in the industry—that rewards the receiver of a racing signal more revenue than the sending track is problematic and should be reworked. "The days of the buyer importing the signal cheap and keeping most of the revenue (from wagering) are probably coming to an end," Rogers said. "The Stronach Group will do everything possible to deliver a maximum return on the product."

Magna seems sincere about this, and their only goal is to change the "days of the buyer importing the signal cheap and keeping most of the revenue". 

If so, we've got the answer. 

Gulfstream, which sells their signal for 9%, can keep doing that (so they make the same money), but they should lower their takeout to 14%. That way, they get 9% and the bet taker gets 5%, which is "most of the revenue".

Problem solved!

If you are laughing, I don't blame you. Tracks do not want to lower takeout. They want a bigger slice of a high takeout.

That's why you'll hear an echo chamber on twitter or social media from the customers about Mr. Rogers and Magna trying to "fix fundamental issues" in the sport.  It's not fixing them, it's shuffling around the deck chairs.

If the Stronach Group really is sincere about real change, we're here to help any way we can.

Note: Is 14% workable? Probably. Did you know Australian racing passed a law that at maximum 16% could be taken out of any pool? All tracks had to abide by it. In 2014, Australia set a wagering record, and the health of the horse racing business there is considered much better than in North America.