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Tuesday, October 5, 2010

Economics 101

Daryl, a friend of mine, bemoaned the lack of wagering opportunities at Pocono Downs; the lack of a Pick-6, and no middle Daily Double as examples.  But a bigger complaint was the six and seven horse eliminations which made the races unplayable.  Well, the lack of a Pick-6 is due to the lack of a sufficient handle to build the carryover pool up fast enough to attract interest and the lack of a middle Daily Double is an effort not to dilute the exotic wagering pools which do exist.  That being said, this weekend is different and Pull the Pocket discusses the special wagers being offered this weekend and how the Hambletonian Society was involved in getting these bet offered.

As for the six and seven horse fields, Daryl was referring to the eliminations which drew three divisions.  Initially, he wondered why more people didn't enter horses to get rid of the short fields, but that's not the problem.  It is the owner and horsemen's refusal to race with a second tier of horses.  For example, there were nineteen horses entered into the Breeders Crown 2yo Filly Trot so eliminations were required.  Instead of racing with one field of ten, meaning one trailer, and a full field of nine to determine the field for the final, the race needed to be split into three divisions to avoid a second tier.  As a result, instead of having two full fields which would be attractive to the horseplayers, gamblers were left with two seven horse and one six horse field which turned the serious horseplayers off.  I understand why horsemen don't want a second tier, but they need to realize how their bread is buttered, and that is through the gambler.

Many of you are going to say with racinos, gamblers (horseplayers specifically) don't matter.  For those who say that, let's briefly discuss what is going on in Maine.  There, state legislators are considering cutting racing out of the slot revenue equation.  Not partial, but a total cut.  Now, before anyone has a coronary, realistically they will probably end up with a reduction in support from slot revenue.  In this perfect storm, "The Great" Recession, legislators are looking at a $1 billion budget shortfall.  When you are looking at that type of budget shortfall, certainly some legislators are going to question why $21.4 million dollars are going to horse racing while they are cutting aid to education, health, and other programs.  While the revitalized standardbred industry has benefited, sooner or later in Maine and other states, the decision will be made to cut the industry off as was done in Quebec.  For those of you saying they can't do it, after all that is the reason why slots were put in racetracks in the first place, they can; the legislature is the law and they can change it anyway they want.  So the gamblers do matter because sooner or later, racing is going to need them to survive.

When horse racing advocates talk about a revitalized horse racing industry, what are they really saying?  Breeders are doing well ('Well' being subjective; for our purposes meaning still in business).  Race horse owners and horsemen are doing well.  Ancillary businesses are doing well.  Horse racing industry (wagering on horse races) in the proverbial crapper.  So what we have is the government paying (in the form of slot revenue) an industry (horse racing) to buy a product from a manufacturer (the breeder) where a very small market (the gamblers) exists; certainly not enough to sustain the industry.  This is a good investment for the government if the industry uses the subsidy to build their market up and create a demand for their product but sooner or later if the industry doesn't make changes to build up demand, the government will realize they are wasting their money and cut the industry loose and let the industry stand or fall on its own. 

A smart industry realizes this and take advantage of the government subsidy by investing a good portion of this subsidy to build a demand for their product, modifying the product if necessary.  Time will tell if the horse racing industry is smart or not.
It appears harness racing is not the only sport which has problems getting any press on television.  John Pricci of Horse Race Insider, laments how with the exception of the Triple Crown and Breeders Cup races, thoroughbred racing gets the short end of the stick on ESPN.  According to Pricci, it is because thoroughbred racing has become less popular and ESPN is a regular media company, concerned about revenue.  Horse racing with the exception of these four days does not attract an audience which translates into revenue.  Pricci claims part of the blame lies within the racing industry.

Speaking of television, we have mentioned how the Breeders Crown Preview show will be seen on MAVTV this week.  For those of you who don't have MAVTV, PA HarnessWeek has posted the show on YoutTube.  Please watch the show on MAVTV if possible as good ratings may translate into future harness racing broadcasts.  For those who don't have MAVTV, the show (in three parts) is below.  But if you can watch it on television, nothing beats watching a horse racing show in HD, especially one co-hosted by Heather Moffett and Jennifer Sherlock.


Scott Jeffreys said...

Dear Pacingguy : Several comments on the latest blog entry.

[1] Seriously, I did not think it was possible for harness racing to degrade itself any further, but when you think you have reached the bottom, some always breaks out a shovel to dig a little deeper. MAVTV? This is what harness racing sees as giving itself visibility on Breeders' Crown day? Harness racing would be better served hosting its own product in the internet age showing live video with commentary via the USTA web site (like the Delaware/Little Brown Jug broadcast), Pocono Downs web site, or even via the Meadowlands web site which has a fine streaming video infrastructure.

[2] How about forming a relationship with TVG and see if direct air time is possible? TVG has just launched their Pennsylvania wagering option in conjunction with Harrah's Chester, so this should be possible. In commentary previously, I have said that Pocono/Chester are interested in casino-driven functions and disagreement followed. So, let's put this to the test. Where is Chester is leading their harness racing position with their newly created TVG relationship to bring harness racing to the broader airwaves?

Sincerely, Scott Jeffreys

Pacingguy said...


First of all, regarding MAVTV. I think you are too harsh. First of all, the broadcast (at least the preview show) was produced by the PHHA which leads me to think the costs were paid by the horsemen in Pennsylvania and Pocono Downs. The fact they are willing to foot the bill is admirable. Also, what are the demographics for MAVTV? 18-54 males. A target market we have not been attracting so marketing through the broadcast to this demographic is good. Better, yet these people have likely not seen harness racing before so the potential for exposing the sport to those who have not seen it before is good.

Since HRTV has the right to show Pocono races live, I believe there are restrictions as to who may stream the signal live. That eliminates TVG from the mix as well as the Meadowlands (with the exception of account wagering customers). The fact is considering where the last Breeders Crown was broadcasted (nowhere), this is a good step forward.

As for Chester, they probably have a contract for this meet to have their races broadcast on another ADW channel (perhaps HRTV). My guess is next year you will see the rights to broadcast their races on TVG.

Pacingguy said...

From "This alliance will expand our distribution, drive handle and build awareness of our world-class harness racing product. It’s a good thing for our business, and it’s a good thing for our fans." said Barry Brown, director of racing operations at Harrah’s Chester Casino & Racetrack.