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Tuesday, March 19, 2013

Overstepping and Memory Chairs

Joe Faraldo let loose with his latest missive against the Meadowlands with his comments regarding cartel wagering and its accompanying insinuations. As what usually happens in these cases is Faraldo launches a missive and Jeff Gural responds, so I will let Mr.Gural set the record straight from his perspective.

Mr. Faraldo, as President of the SOANY, represents horsemen and his comments basically talk about things from the horseman's perspective; after all that is his job. That being said, the last I heard the SOANY represents horsemen at Yonkers not the ones who race at the Meadowlands or Freehold. The SBOANJ, which is presided by Tom Luchento, represents New Jersey harness horsemen. I think Mr. Luchento is capable of speaking up for his horsemen and doesn't need an assist. I would think there is enough going on in New York to keep Mr. Faraldo busy without getting involved in another state's business.

But if one is going to make comments about life in the non-racino states, I would suggest one sit in a memory chair where they can remember the days they were racing $2,500 claimers and the track was up for sale. How were things for you back then? Not so good I imagine.

I do understand it must be annoying hearing about all these handle improvements at the Meadowlands; especially when Balmoral Park, the Meadowlands, and even Cal-Expo at times handle more money than Yonkers on a nightly basis. After all, what would the horsemen at Yonkers be racing for if not for slots?

That being said, I have some general comments regarding what was said so I thought I'd share them with you.

For the record, news of 'this' cartel is no secret. Jeff Gural in interviews made no secret of this happening.

Yes, a cartel gets a great discount on price, whether it is 2%, 3%, or whatever means less money for the horsemen. It also means less money for the track operator. Yet, for the Meadowlands to offer such a deal, I believe the SBOANJ had to approve it as well so it was not imposed on the horsemen.

Why would the track and horsemen agree to such a deal if it benefits them so little? It provides liquidity. Liquidity which entices others to wager into the Meadowlands' mutuel pools; providing them the comfort of knowing their $100 wager isn't going to bring the odds of a horse crashing down from 10-1 to 3-1. So while the track and horsemen may be getting little direct benefit by having the cartel wagering, they get an indirect benefit by their wagering enticing others to wager or wager more because there are pools large enough to wager into. For example, on February 22, the Meadowlands handled $3,201,100 compared to 2012 where the same night the handle was $1,201,477. Are we to believe this cartel wagered $2 million that night? Let's say this syndicate went hog wild and wagered $1 million; that means another $1 million came in from elsewhere.

I would suggest Meadowlands horsemen make out better because of this large discount. Let's say the horsemen were getting nothing from this $300,000 the cartel is wagering, but because of this cartel providing liquidity, another $400,000 is being wagered from other people. Isn't more money going into the purse account? I don't know about you, while it would be nice to have an extra $30,000 in the purse account, I rather have an extra $15,000 in the account instead of nothing. Yes, these numbers are made up, but it illustrates the point. I guess when you are racing for slot money you have the luxury of saying all or none because it really doesn't matter. Unfortunately, when your purses are determined only by wagering you can't be that fussy.

Yes, a cartel is in effect getting a huge rebate which allows their money to last longer. Whales get rebates at the Meadowlands through a rewards program when they bet on track. Many gamblers who wager through ADWs get rebates depending on how much they bet with their ADW. Aren't they getting an advantage over the 'regular' player who doesn't qualify for any rebate? In a way, is this any different than volume pricing some stores get from manufacturers for the same item? It is the way of the world.

Regarding the possibility of pool manipulation. It goes without saying that pool manipulation is bad and should not be tolerated. That being said, it has been around for eons. I am showing my age here, but back in the days when Vegas was a legal bookie that paid track odds, how many times did people wager on other horses to pump up the odds on a horse they were betting big in Las Vegas to get a big payoffs? If pools are being manipulated, the track and regulators have an obligation to protect the general public from it. This is why they have reports which can track where bets are being made from as well as being cancelled. Dare I say pool manipulation can happen at any track, be it the Meadowlands, Yonkers, or any other track; the only difference is it is easier to manipulate the pools at tracks where the handle is lower.

Handle no longer means how much a track and horsemen make on wagering, at least not easily. However, it does show the interest gamblers have in your product. Dare I say there is a more interest in the racing product at Balmoral Park, the Meadowlands, and at times Cal Expo with their cheap stock than at Yonkers? Let's look at the average pool per race from this past Saturday.

Balmoral Park: $1,019,467 over twelve races; $84,955 per race
Cal Expo : $878,330 over fifteen races; $58,555 per race
Meadowlands: $3,593,659 over thirteen races; $276.435 per race
Yonkers: $798,602 over twelve races; $66,550 per race

So if you look at per race handle, the Meadowlands was the most popular; Balmoral Park second; Yonkers third; Cal Expo fourth. If I was connected to Yonkers, I don't think I would be crowing about how well we did.

When it comes to investing, you and I may by 100 shares of Penn National Gaming without doing due diligence, but it is unfathomable to think that a large concern investing real money is going to take an ownership position in any company without doing due diligence. A press release is not going to get a large investor to buy into any company without going over the financial statements; to suggest otherwise is absurd..

The rules for operating and surviving in a racino state are different from those in a non-racino state. I certainly won't begrudge the 'haves' for their good fortune, but when they walk in the shoes of the 'have nots', then I want to hear their opinion; until then, worry about things in your own backyard. After all, as we saw in Ontario, situations can change overnight.


edge1124 said...

Yonkers is the worst track ever to wager on for excitement. I might bet $6 on a tri there if I have to wait 5 minutes for another race to start but YES Cal Expo, Meadowlands and Balmoral are much more exciting to bet and watch a race. I have never seen so many 1-5 shots compared to other tracks. I took March 16th at Yonkers as an example for FAN excitement and will just use the first 10 races. Out of these races, only 2 horses pulled out of the 3 hole to go first over, slightly before the 1/2. 2 races had nobody pulling out first over til after the 1/2 (once it was almost the 3/4 pole). The other 6 races had someone pulling out first over from 4th or 5th "just" before the 1/2. I know this track's oval is different than other half milers so they don't like to start moving 1st over just after the 1/4. And yes their 1 1/16 was not so why not fix the dimensions of the oval? It is so bad watch a full card of Yonkers racing.

Marv S. said...

The economics of horse racing are a mess. Slots and simulcasting make handle irrelevant to purses. Putting a quality product (racing and experience) out there almost seems a mystery to many tracks, especially the ones with slots. Give Gural credit for trying to doing that at M1.

When I went to grad school in Michigan, I used to go to Jackson Harness Raceway when they were open in the spring. It was a fair track hosting an extended meet. They got 6 on the gate. This was before simulcasting so the entire handle was on-track. $1500 claimers were regular races. Purses often around $1000 and so were win pools. A $20 bet would move the odds of a horse from 10-1 to 2-1. No one bet with more than 2 MTP. You need a lot of tellers to do that today. Liquidity matters.

Anonymous said...

Did you really expect that after Mr. Gural basically threatened people that choose to take advantage of the opprtunities in NY and PA that no response would be forthcoming? Or that when he needlessly took his routine pot shots and Sears and Brennan that it would go without reply? Perhaps you thought that it would go unnoticed that the regular heralding of how "great" business is at the Meadowlands still yields a two day race week, with no purse increase? You migh also have missed that the entire "cartel" issue was brought to attention by Jay Bergman, hardly a Gural opponent. Perhaps a missive WAS written.....but it wasn't by Mr. Faraldo!

Pacingguy said...

Sadly, I haave gotten use to Faraldo's missives against anything Gural does. Then, we get Gural responding. There is no love between these two me. Personally, I wish their missives would not be covered by the inudstry.

What Gural wrote was not a real threat; it was more appaling to their sense of loyalty (of which is none).

As for the two day meet, this is what happens when you are a non-slot track surrounded by racino tracks. Remember two days a week is better than hte place being bulldozed down; obviously a longer meet would be better.

My biggest problem with Faraldo's letter (beside it being part of the personal feud these two men have) is the head of a horsemen's group at one track criticize what a track in another state is doing. Faraldo should worry about New York; not NJ, not Delaware or any other state. When Faraldo becomes President of HHI, then he has the right to be critical about what is going on elsewhere, not till then.

Anonymous said...

One item that some of you continue to err on. Faraldo's organization is the Standardbred Owners Association of New York (SOANY), and while the largely race at Yonkers, the association is not limited to where they race. So such a group can and should voice opinions about any track they race at, which in this case would include The Meadowlands, Freehold, Saratoga, Chester, Pocono, etc. Many members of such an organization could even stable in other states. Many SOANY members have their own farms off the track or at a public stable like Gateway or Showplace in NJ. So all is fair here in Faraldo speaking out about other tracks, whether or not you agree with what he says.

Pacingguy said...

I vehemently disagree. The SOANY is the horsemen's organization which the horsemen at Yonkers Raceway have decided to represent them.

Did the horsemen at the Meadowlands vote to have the SOANY represent them at the Meadowlands? No, they agreed to have the SBOANJ represent them; same thing for Freehold. At Harrah's and Pocono Downs, the legally recognized association is the PHHA. By all means, there are horsemen who race at multiple tracks but the fact remains they accept the local horsemen association as representing them at each track.

Training facilities are a different animal. By all means, if something going on at Showplace impacts trainers with regards to their ability to race at Yonkers, then it is fair game for the SOANY to get involved on behalf of their members. If something going on at Showplace only impacts trainers' ability to race at the Meadowlands, then it is up to the SBOANJ to get involved.

Let's be perfectly honest, everyone involved in harness racing knows there is no love lost between Faraldo and Jeff Gural. If the Meadowlands was not operated by Gural, odds are the letter criticizing the Meadowlands would never have