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Tuesday, January 25, 2011

Boycott Wars

Let's take a brief detour through the thoroughbred world.  HANA is a supporter of the boycott of California thoroughbred racing due to its recent rise in the takeout rate for exotic wagers which was promoted to benefit the TOC (Thoroughbred Owners of California).  The logic of the dysfunctional CHRB decision is that they equate horse racing with attending a basketball game (entertainment) and since the exotic takeout rates in California were some of the lowest in the land, they felt they could increase their takeout and still be a desirable product as their rates would still be lower than some tracks.  Only one problem.  Horseplayers of all breeds are complaining about takeout rates being too high.  With the sensitivity of horseplayers towards takeout, no increase of a takeout rate is going to be appreciated by a horseplayer, even if it is still cheaper than another product.

Let's put it this way.  You buy a generic ketchup at $1.49 a bottle.  You can buy a name brand for $1.89 a bottle.  If they raise the price of the generic ketchup to $1.69 a bottle, are you going to be happy?  Most likely not.  Only problem is many of the thoroughbred horseplayers around the country are "mad as hell and are not going to take it anymore" and have called for a boycott. 

Well, regardless of how they try to present their figures, it is clear the boycott of the California thoroughbred racing product has been successful thus far; successful enough that some renegade members of the TOC have asked the CHRB to rollback the takeout rate increase.  If you need any proof that the boycott is working, the Paulick Report, a leading thoroughbred racing news site, which accepts advertising from the California thoroughbred industry, launched what would be considered an attack on Jeff Platt, who happens to be the President of HANA in an effort to discredit HANA and the boycott.  In fairness to Mr. Paulick, he does indicate he looks out for the interests of the horse owner first.

In an article/editorial Paulick discusses how the racing industry made it possible for rebate shops to function by selling their signal too cheaply.  Perhaps the industry did sell their signal to cheaply, no one forced them to let the genie out of the bottle.  I'll even agree with Mr. Paulick that the rebate shops are no friends of racing.

Where Mr. Paulick goes awry is on his attack on Platt and HANA, claiming Platt is a pimp and HANA is no friend of racetracks, obviously in an attempt to get racetracks to no longer work with HANA.  It should be noted that HANA is receiving an award from the USHWA for their efforts on behalf of harness racing so the harness racing industry has no problem with HANA's efforts. 

Paulick's argument with Platt is that he claims he has no financial interest in Rebate shops yet in his business, he gets compensated for every new customer he directs to a rebate shop.  Paulick claims Platt is twisting words to defend his business, yet in Platt's own advertising, on the website where he promotes rebate shops and attempts to drum up business by placing those seeking rebates with the company the gambler gets the best benefit, Platt clearly points out the following in the middle of his advertisement:
I'm a full time player and handicapping software author. I do not operate an ADW - nor do I have a financial stake (ownership interest) in an ADW.

At the end of the advertisement, Platt also indicates:

Full disclosure: If you take me up on my offer, once you are signed up and start earning rebates, I receive compensation in the form of a referral fee.

If you read the whole advertisement, you know exactly where Platt gets his compensation.  There is nothing hidden going on here.   

Okay, so Mr. Platt makes his living selling handicapping software and directing gamblers who wager enough to rebate shops.  May I point out if the takeout rates were low enough, the rebate shops would go out of business as gamblers will have no need to seek out rebates.

The main goal of Paulick's article does seem to be to discredit HANA and the work they do.  Mind you this is the same group that goes all out to promote any track that has taken steps to help the horseplayer, most notably to harness fans, Tioga Downs when they cut their takeout rate to the lowest allowed in New York. 

In response to Paulick's attack article/editorial, HANA released a statement on their blog, which clearly indicates that there has always been a wall between Platt's private business and his volunteer efforts on behalf of horseplayers, big and small.

Those tracks who do not deal with HANA seem to be of the opinion that everyone but horsplayers are free to band together and consider gamblers dolts who should be grateful for the opportunity to bet at whatever price you want to charge.  Tracks which deal with HANA seem to acknowledge horseplayers are not idiots, they are customers and as such they are free to group together to have their voices heard.  It is smart business for a track to listen to what the customer has to say and see if they can work with them to increase their own business.

Perhaps from Mr. Paulicks own editorial, we can deduce where he stands on the issue?


The_Knight_Sky said...

PacingGuy wrote:
May I point out if the takeout rates were low enough, the rebate shops would go out of business as gamblers will have no need to seek out rebates.

Lowered takeouts would level the playing field, making proficient players wager (churn) more winnings. Handle would rise steadily for sure.

Furthermore newcomers to the handicapping and wagering arena get the bar lowered. For many studious types it becomes a realistic and attainable goal to reach profitability. These are the horse racing fans who will become new long time customers of the parimutuel sports.

Isn't that what will ultimately save racing?

That Blog Guy said...

My apologies to all who may have seen a prior comment on this thread which clearly violated my rules regarding civilized conversation/debate.

How I let this comment get by the first time I can't explain and I apologize to all those mentioned in the thread, in particular Mr. Paulick.