Cangamble has written a great article regarding how racing is facing extinction thanks to its own greed which has shrunken our potential fan base. According to Can, the problem is takeout and the over saturation of wagering opportunities at tracks with regards to exotic wagers as well as the number of tracks a horseplayer can wager. We have lost many 'smart' gamblers, those who realize they can get more bang for their dollar playing other wagering games due to racing's high takeout rates, but what racing is doing to the rest of the gamblers is picking their pockets. Yes, no one is putting a gun to the head of the horseplayer to gamble, but just because the gambler is happy to hand their money over (until they get sick of losing) should racing do it?
I would argue racing should show some restraint. Why? You want to keep the
gambler happy, happy to keep coming back and losing; the same way casinos do
it. The last thing a casino wants you to do is lose every time you come to
their gambling hall, because if you keep losing, you will eventually realize
the game is a losing proposition and what's now entertainment becomes akin to
paying taxes, except this is one tax the gambler can walk away from. The smart
casino wants you to lose slower or win every once in a while so you maintain
the entertainment aspect of the gaming experience and keep coming back. The
casino knows in the long run you will lose, but they are willing to take their
time getting their hands on your money and by waiting, they will get more of
In the same vein, is it really necessary for an individual track to import
twenty signals on any given day? We all know you can't follow those many tracks
at a given time and do well; playing those many tracks is a recipe for wringing
the gambler out. For the gambler's own protection as well as racing's long term
interests, no track or ADW for that matter should be offering those many
tracks, though I am not for cutting certain signals off, but prefer less
signals being available at any one time. Not only would this mean keeping
players around longer, we would have more meaningful wagering pools.
Exotic wagers have a place in horse racing, but when you offer on every
race, exactas, trifectas, superfectas, rolling Pick-3s and Pick-4s, not only do
you get smaller individual pools, but you kill your churn. The harder it is to
win a wager, the fewer winners there will be putting more money in their
pockets instead of the windows. For example, if there is a net pool of $1,000
to pay out, with one hundred winners splitting the pool, more of the payoff
will be churned through the windows in subsequent races than there will be if
one person collects $1,000 as there is only so much a person will bet per race.
Of course, you need a mix of favorites and long shots to win for this very
reason, you want favorites or near-favorites to win as more money will be
churned, but without long shots, how are you going to attract gamblers? Yes,
you will have people wagering a full menu of exotics, but just because they are
willing to, it is not in racing's best interest to grab it all at one time; the
gambler needs some positive reinforcement.
As you know, exotic wagers have higher takeout rates, namely because the
traditionally large payoffs mask the takeout rates. Again, just because racing
can get away with the higher takeouts, why should they do it? It doesn't cost a
track any more money to handle an exacta, trifecta, or superfecta any more than
it costs to process a win wager? Why not have all wagers at a single rate? With
a presumably lower takeout rate for all wagers, it will allow gamblers to play
longer, thus increase their churn and keep them happy.
Monmouth Park appears to be the
only track or casino in New Jersey to be the sacrificial lamb when it comes to
sports wagering in New Jersey as they have announced they will move forward
despite an anticipated court case. The Meadowlands, Freehold, ACRC, and
Atlantic City casinos are going to hold off until there is some clarity as to
how the courts will rule. As you are aware, a Federal ban against sports
betting exists with the exception of four states that had their sports betting
grandfathered, with New Jersey having been given a window to approve sports
wagering which it failed to do.
Update: The Record's John Brennan speculates why the Meadowlands may be holding off. It has to do with the new grandstand.
Forgetting about the legality of the legislation, I have a problem with the
law approved. It seems somewhat hypocritical to allow wagering on sports for
professional and college teams except those involving New Jersey college teams
or a college game played in New Jersey. Apparently, the legislators feel there
is a threat to the integrity of New Jersey collegiate sports but they have no
problem if someone attempts to tarnish a college sports program outside of New
Assuming New Jersey prevails, it is safe to assume any windfall to casinos
and racetracks will be short lived, because as soon as the Federal ban is
overturned, Delaware will be expanding their sports wagering which under the
current law is limited to three game parlays and we should expect other states
to add sports wagering to their racinos/casinos as well, making sports wagering
a commodity as has happened to casino gambling. One thing for sure, if sports
wagering is approved, there will be less money wagered on horse racing.
Let the countdown to the Gold Cup and Saucer begin! Grandstand tickets for the Gold Cup and Saucer at Charlottetown Driving Park (or to be technical, Red Shores Charlottetown) have gone on sale today. Tickets cost $40. Other than the Little Brown Jug, find me a harness race where you can charge $40 or more for a seat. My guess is there is none. For the record, the Gold Cup and Saucer is on August 18.