Keeping the Purse Money Local?

Elsewhere, I had a discussion with some individuals on how some tracks have poor stakes programs, either having few late-closing events and/or not dedicating much purse money to stakes races. The argument many horsemen bring up is why should the money go to out of staters, especially when the money is derived by slot revenue? Of course, one of the reasons the Ontario provincial argument makes for ending slot support for racing is the money is going to those Americans.

While I don't necessarily subscribe to this theory, I can understand their point. If the slot money comes out of the pockets of Freedonians (not to name any states), why should this 'earned' money go to the pockets of Sylvanians? You can make an argument for this. Of course, if they don't want their purse money flowing out of state because the local horsemen 'earned' it, out of principle those horsemen from Freedonia should stay home and not race in stakes races in Sylvania, right?

But of course, this is not the case. If those Freedonian horsemen have a horse that is competitive enough, they will be heading over to Sylvania to race in their stakes races to bring the money earned off of Sylvanians back to Freedonia and they won't think twice about depriving the horsemen of Freedonia of their purse money.

But if Freedonian horsemen feel they don't want their purse money going to out of staters in stakes races, why stop there? Instead of having races for Freedonian owned or sired horses in addition to their non-restricted events, why not just close the entire racing program to non-Freedonians? Then Sylvanian horsemen should do it as all the other states.

Of course this would be absurd. In fact, in many states, racinos or non-racinos, there aren't enough horses to fill their race cards if they were limited to state-owned, sired, or foaled horses. So with the exception of some restricted races and sires stakes programs, races are non-restricted. Each state seeks out the best horses for their races as it increases wagering. Breeders want their horses racing in other states as well as it increases the value of their stallions when they beat the best and have more racing opportunities.

You can't have it both ways. If you need the out of staters to support your overnight program, then don't try to shield the money from them when it comes to stakes races. Main Street is a two way street, money flows out of the state and flows out of state. If you want to keep more money in your coffers, do it the way you are supposed to do. Compete for it. If too much money is flowing out of state it means one thing, you need to improve your racing stock.

Note: For you ‘youngsters’ who are wondering about Freedonia and Sylvania, they are references to the 1933 Marx Brothers classic Duck Soup.  If you have never seen the movie, I strongly recommend you see it; as far as I am concerned it is ‘THE’ definitive Marx Brothers flick.

Should Racing be Picking the Public's Pockets? [UPDATED]

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 it.

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 Jersey.

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.

Good News, Bad News

Good news for standardbred interests in California.  Reports indicate an agreement in principle has been reached between the Cal Expo fair board and a partnership consisting of European Wagering Services (EWS) and Golden Bear Racing.  The aim of all parties is to have this agreement approved so licensing of the new operator and date allocations may occur in August by the CHRB.  Since a new operator will be taking control of the standardbred meet at Cal Expo, a contract between the new meet operator and the CHHA must be in place before the August meeting as well.  Of course, while things are looking promising, we need to remember until things are signed, sealed, delivered, and blessed by the CHRB, it's not a done deal.

Racing may not be resuming on August 24 as originally planned for before Cal Expo decided to get out of operating the standardbred meet, but the important point is there is still life in California harness racing.

Meanwhile, when standardbred racing returns to Cal Expo, it will be with a ban on clenbuterol which has been implemented for a one year period with a withdrawal period  of twenty-one days.


On the other side of the coin, the Observer-Reporter, a Washington County, PA newspaper, in The Meadows own backyard asked a poll question where they mentioned Dave Palone (here is a nice article about him)  is about to set a record and asked how many people follow harness racing.  The results indicated: 11% said yes; 69% said no; 20 said don't care.  I must confess, I would love to see a similar poll regarding thoroughbred racing in the area, but the standardbred industry has its work cut out for itself.  If there is any hope for thriving, the sport must revamp the game to make it more modern and appealing for the gambler.  While promotions will get some people in the gate, if the product is faulty, what is the sense?

RUS Debuts for 2012

Racing Under Saddle kicked off its 2012 season on both sides of the border.  At Historic track, two divisions were contested with Windsun Dixie, ridden by Leigh Nichol winning in 2:07 while in the second division, Keepin The Chips, ridden by Jenny Melander was victorious in setting a world record over the half mile track in 2:00.3.

While the fans at Historic Track were receptive and enjoyed the monté races, the tilts were not overly competitive as many of the horses jumped off stride during their respective heats.  The first division winner, Windusn Dixie was a 13 length winner with the real race being for second where Saver finished one length  ahead off the fast-closing Winuendo who was far back at the start.  In the second tilt, it was more exciting as Keepin The Chips beat Armbro Doyle in a 3 1/2 length victory in the world record effort.

Meanwhile, at Mohawk Racetrack, a much better show for the fans was presented in the Canada Day exhibition when I've Got It All (Marielle Enberg) won in 1:59 with a late closing burst which was assisted when the You'll Never Walk Alone jumped off stride in the deep stretch.




The difference, I suspect, is the amount of preparedness the horses went through.  While I can't speak for the Canadian event, the horses in the Goshen event have been actively racing up to this event.  For the most part, the riders had to obtain mounts from owners and trainers who generously offered their horses for the exhibition races, so I suspect the amount of training miles were minimal, especially under race-like conditions, which is understandable with the purses being only $950.  Couple this with the fact the entire stretch was lined with people and Goshen's grandstand is right up against the track, the noise may have been somewhat disruptive.  With the Meadowlands hosting a $15,000 purse, I suspect those horses will be much better prepped. 

Of course, this go-around of racing under saddle is still a trial and error process.  While the riders needed to be licensed by going through a practical in front of the judges, there is no such requirement for the horses.  It is probably too late for this year, but next year, horses should be required to qualify if it doesn't show a clean line under saddle.  Of course, this will require more commitment from trainers, so it would be a great help if more tracks, with the help of local horsemen, would step up to offer exhibition races with purses sufficient enough to merit attention.  This doesn't mean purses need to be $15,000; but at least equivalent to the lowest class racing at the track.

With the help of those involved in this year's racing under saddle series, the march towards pari-mutuel monté races has begun.  Catch it at its beginning by coming out to the track when these races appear at your local racetrack.
    

The Supplemental Payment Debate - Have Your Say

The success of Googoo Gaagaa has once again raised the issue of supplemental entries, in particular with the Hambletonian. As you are aware Googoo Gaagaa is not eligible to this year's event since he was not nominated to the Hambletonian as he was not expected to show as much as he has thus far, being sired by a pacing sire, and the race does not allow supplemental entries. Should the Hambletonian provide for supplemental entries?

I don't think anyone would debate the point the best races should have the best horses competing in theory, but is it fair to allow a supplemental entry? Let's start with those who pay their way into the Hambletonian by paying their nominating and sustaining payments which are $2,775. How would you feel about making payments only to find a Googoo Gaagaa-type horse swooping in at the last minute and pay their supplemental entry fee to get into the race? There is a good chance you wouldn't be happy, after all, would it be much different than four poker players playing their hands the traditional way only to have a fifth player not feeding the kitty but drawing cards and deciding at the last round of betting since they have a full house, they want to pay into the particular round if they could?

Having supplemental payments may also have a less desirable side effect; some people may not make payments figuring someone is always going to swoop in the last minute and make their supplemental payments or well-heeled players may decide it is a better investment to wait until the last minute before committing to the race thanks to the supplemental payment option; remembering many of these owners have more than one horse to make payments. The result being you may find the actual purse for the Hambletonian going down in the future as yearling or two year old owners may opt not to nominate their horses.

I see four possible scenarios to balance the interests of all parties; allowing supplemental nominations, but also protecting the interests of those who nominate the regular way. In order these, preferences would be:  have limited supplemental nominations; offering a late supplemental entry with a sizable payment; change the race to an early closing event; introduce a combined Triple Crown nomination and supplemental payments.

The following are the four possibilities. After the possibilities are listed, you may take the survey which follows. Results will be released in a week or so.

A - Limited supplemental nominations.
Allow supplemental nominations, but not too late so a supplemental nominee can't buy themselves a check. For example, if you miss making the initial nomination fee of $25, allow a yearling to become eligible by making a payment of $250 by November 15 of the yearling year and all future payments. Another option would be if not making your nomination and/or two year old sustaining payment of $500, allow a two year old to buy in to the Hambletonian by November 15 of their two year old year by making a payment of $2,000 and all future payments.

B - Late Supplemental Entry
If a horse is not eligible by November 15 of their two year old season and wish to compete in the Hambletonian, allow a horse to become eligible by making a payment of 10% of the advertised purse amount in addition to the $10,000 final starting fee if they advance but the supplemental entry fee is payable to those eligible prior to entry time (paid out as if a separate purse). Using this method, it would discourage people from choosing a late supplemental entry in lieu of making regular payments but still allow them to enter if they feel they might win.

C - Become an Early Closing Event
Using this strategy, the race would no longer be a traditional stakes race but an early closing event with all payments made in the 3yo season. This way, an owner will be able to evaluate their horse's two year old season and prospects as a three year old before making payments. While this would allow more educated payments to be made, the fees would be larger to make up for those nomination and 2yo sustaining fees currently acquired from a much larger base.  There would be no supplemental nominations or entries allowed.

D - Combined Nominations and Sustaining Payments
Leaving which races should be a Triple Crown race event or not aside, this proposal would have one nomination fee and set of sustaining payments for all three Triple Crown events. The nomination and sustaining payments would be divided equally between all three races. Horsemen then would be required to make the required starting fee payments to whichever race(s) they wish to contest. Under this methodology, there would be no supplemental nominations or entries.

Feel free to take the survey below.

Create your free online surveys with SurveyMonkey, the world's leading questionnaire tool.