Symposium: attracting & retaining fans

[RXB]

http://www.drf.com/news/racing-symposium-attracting-and-retaining-fans-focus-opening-day

[Stillriledup]

Why would you want to attract new fans if the current fans arent happy? Isnt it better to make sure you have great "word of mouth" before you "ignore" the current customer base and go and try and recruit new "fish"?

I don't know about you, but if i plan on trying out a new restaurant, i check out Yelp, you know, to see what other people thought of the place, the service, the food, etc.

Racing industry needs to stop treating customers like they're stupid. You're not going to "Trick" current customers that everything is A OK and those current customers are not going to tell their family and friends to "give the track a try, its fun".

[Robert Fischer]

the media seems like a great tool for reaching the masses

[burnsy]

Why would you want to attract new fans if the current fans arent happy? Isnt it better to make sure you have great "word of mouth" before you "ignore" the current customer base and go and try and recruit new "fish"?



Its probably best to treat ALL of your customers well......you know.....especially if you are losing 2 percent per year in overall customers as stated by the jockey club. Overall handle down from 15 billion to 10.9 in 5 years time.

Yeah, aiming for women and younger folks is a great idea but there is a learning curve to this game...its complex. You don't slide in a few bills and push buttons. Why would you increase overhead costs (for the fan or bettor) when people are intimidated before step 1? Does this Kay character even understand women? They see an admission fee, parking fee and the price for a form....The first thing out of their mouth is..."I could of taken my chances and put 20 or 30 in a machine without reading or thinking about it." I know so many women and younger people that don't even care to learn how to read a form...some even say its too much work and a jumble of crap. So, the data base, rating deal is probably a great idea but what are they going to charge for it? They should of had someone say....."Stop nickle and diming everyone at every turn BEFORE they even make one bet." Theres step one. Get horses to run more, Especially the good ones...step two. Promote GOOD food at a GOOD price...step three. The simulcasts should be attractive and offer service...step 3. My girlfriend loves the casino side of the Saratoga Harness......Upstairs the simulcast is a dump...she calls it the MORGUE...no lie. Step 4. They put about 20 million into that place and the horse betting side is the same dump it was 30 years ago...no lie either...... Thats a start. Oh yeah, and get it through the "Talking heads"...these people will never open an account online in a million years.......they are just not that serious about it. They are looking for occasional action and fun.

[Stillriledup]

Its probably best to treat ALL of your customers well......you know.....especially if you are losing 2 percent per year in overall customers as stated by the jockey club. Overall handle down from 15 billion to 10.9 in 5 years time.

Yeah, aiming for women and younger folks is a great idea but there is a learning curve to this game...its complex. You don't slide in a few bills and push buttons. Why would you increase overhead costs (for the fan or bettor) when people are intimidated before step 1? Does this Kay character even understand women? They see an admission fee, parking fee and the price for a form....The first thing out of their mouth is..."I could of taken my chances and put 20 or 30 in a machine without reading or thinking about it." I know so many women and younger people that don't even care to learn how to read a form...some even say its too much work and a jumble of crap. So, the data base, rating deal is probably a great idea but what are they going to charge for it? They should of had someone say....."Stop nickle and diming everyone at every turn BEFORE they even make one bet." Theres step one. Get horses to run more, Especially the good ones...step two. Promote GOOD food at a GOOD price...step three. The simulcasts should be attractive and offer service...step 3. My girlfriend loves the casino side of the Saratoga Harness......Upstairs the simulcast is a dump...she calls it the MORGUE...no lie. Step 4. They put about 20 million into that place and the horse betting side is the same dump it was 30 years ago...no lie either...... Thats a start. Oh yeah, and get it through the "Talking heads"...these people will never open an account online in a million years.......they are just not that serious about it. They are looking for occasional action and fun.

I think the lack of "new fans" to the game has nothing to do with the learning curve, it has to do with what "horse racing" makes people do to make a wager.

If you know nothing at all, and you enter a 7-11, you see a sign that says "Megamillions and then they show you the "carryover" of 400 million". Then, they actually permit you to purchase "quick picks" so there's no learning curve there, you just hand the cashier money and away you go, you're involved, you're part of the action.

BUT, if a bettor wants to "get involved" with a huge carryover at Santa Anita (for example) how do they go about even HEARING about it? There's no sign in the window of 7-11 saying "Pick 6 carryover at SA, 100k" there's no way to wager on that bet either, unless you physically drive to Arcadia, Ca, pay 5 bucks to park, 5 bucks to get in and then what? There's nobody there that will help you wager on this bet or can even explain what it means.

Go find 100 random people on the street in Los Angeles and ask them "have you ever heard of the horse track Santa Anita park". I would say most of them would say yes they've heard of it. Than, ask them this "There's a wager there called a pick 6, can you explain to me what the pick 6 is, how much it costs and what is required" and i'll bet very few would be able to tell you.

[Race Promoter]

It is basic business knowledge that it costs 8 to 10 times more to gain a new customer vs. retaining a current one. So many businesses review their retention rates ( big in health club industry ) and know exactly how many people they are gaining or losing in a given month. You need to do both, but racing seems to forget about the value of retaining current customers.

[Seabiscuit@AR]

Some of the current players in the racing game are on too good a deal and need to be brought back to the pack. And this does not entail hobbling these people but simply taking away their current unfair advantages

With trainers, you currently have some super trainers who owe their great number of wins more to their use of chemicals than training skill. So better drug policies will help (maybe locking up horses for 24 hours before the race). Along with maybe a salary cap idea for owners and trainers. Limit the number of horses a trainer can have under their control and perhaps even have a salary cap based on the yearling sale values of the horses in the stable. Hong Kong has limits on trainer numbers I think. Now of course HK has a limited number of horses but even so limiting the number of horses per trainer has merit in improving competition between trainers. Salary cap ideas work OK in football codes from what I have seen

With bettors, you currently have a few bettors making a killing not due to superior handicapping skills but due to bigger rebates and other deals. This is entrenching the power of those older more experienced players with the biggest rebates while shutting out new players who will generally begin the game with no rebate. This is part of the reason for too many old players and not enough young players. Rebates need to go to make the game fairer

So I would target the super trainers to bring them back to the field and target the biggest bettors to bring them back to the field. Both groups are currently making a mint out of the game. Make the game fairer and they will make less while others can make more. This will spread the wealth around and make the game healthier

There is a lot of talk in the DRF article about racing needing "stars". Now I agree that stars are good for racing. But more than stars racing needs great CONTESTS. Creating good contests on the track (between horse, jockey and trainer) and good contests off the track (between the bettors) should be racing's goal. Star horses are good but if they are winning soft races against no opposition it gets boring fast and turns fans off the game. But even better than one star horse is a good race with multiple good horses in it where nobody can be sure before the race who the winner will be. This type of race will create great interest both on the track and off the track between bettors. Even better if it is a major G1 race

Every year on this board the most discussed race is the Kentucky Derby. Now part of this is because of the history behind the race. But the other reason is the Kentucky Derby is a good contest pretty much every year. Sure the quality has dropped somewhat in recent years which is a slight negative. But in a relative sense the race is still a good contest where you can make a case for several horses before the race is run and then you often get a truly fought race out on the track

I contrast this recent world racing "stars" Zenyatta, Frankel and Black Caviar. All 3 horses engaged in way too many no contest races. This made for lots of boring races where the winner paid 1-5 or lower. It also created lots of negative discussion before the races about these horses dodging competition etc etc. Sure these horses all generated some media coverage for racing in the wider news media. But they also caused angst among regular racing fans. Zenyatta did redeem herself somewhat in her last race because she took on the challenge of a top field on dirt and the race was a good contest out on the track fought right to the wire

Racing needs to focus on creating better contests both on track and off track. This should be the core principle

[PhantomOnTour]

Seems like we have this discussion every two weeks or so - doesn't matter what we (the bettors) say, scream or do...they ain't listening.

Done

[Stillriledup]

Some of the current players in the racing game are on too good a deal and need to be brought back to the pack. And this does not entail hobbling these people but simply taking away their current unfair advantages

With trainers, you currently have some super trainers who owe their great number of wins more to their use of chemicals than training skill. So better drug policies will help (maybe locking up horses for 24 hours before the race). Along with maybe a salary cap idea for owners and trainers. Limit the number of horses a trainer can have under their control and perhaps even have a salary cap based on the yearling sale values of the horses in the stable. Hong Kong has limits on trainer numbers I think. Now of course HK has a limited number of horses but even so limiting the number of horses per trainer has merit in improving competition between trainers. Salary cap ideas work OK in football codes from what I have seen

With bettors, you currently have a few bettors making a killing not due to superior handicapping skills but due to bigger rebates and other deals. This is entrenching the power of those older more experienced players with the biggest rebates while shutting out new players who will generally begin the game with no rebate. This is part of the reason for too many old players and not enough young players. Rebates need to go to make the game fairer

So I would target the super trainers to bring them back to the field and target the biggest bettors to bring them back to the field. Both groups are currently making a mint out of the game. Make the game fairer and they will make less while others can make more. This will spread the wealth around and make the game healthier

There is a lot of talk in the DRF article about racing needing "stars". Now I agree that stars are good for racing. But more than stars racing needs great CONTESTS. Creating good contests on the track (between horse, jockey and trainer) and good contests off the track (between the bettors) should be racing's goal. Star horses are good but if they are winning soft races against no opposition it gets boring fast and turns fans off the game. But even better than one star horse is a good race with multiple good horses in it where nobody can be sure before the race who the winner will be. This type of race will create great interest both on the track and off the track between bettors. Even better if it is a major G1 race

Every year on this board the most discussed race is the Kentucky Derby. Now part of this is because of the history behind the race. But the other reason is the Kentucky Derby is a good contest pretty much every year. Sure the quality has dropped somewhat in recent years which is a slight negative. But in a relative sense the race is still a good contest where you can make a case for several horses before the race is run and then you often get a truly fought race out on the track

I contrast this recent world racing "stars" Zenyatta, Frankel and Black Caviar. All 3 horses engaged in way too many no contest races. This made for lots of boring races where the winner paid 1-5 or lower. It also created lots of negative discussion before the races about these horses dodging competition etc etc. Sure these horses all generated some media coverage for racing in the wider news media. But they also caused angst among regular racing fans. Zenyatta did redeem herself somewhat in her last race because she took on the challenge of a top field on dirt and the race was a good contest out on the track fought right to the wire

Racing needs to focus on creating better contests both on track and off track. This should be the core principle

You take another opportunity to cry about rebates and spew stuff that nobody except you thinks is true. Rebate or not, you have to be an incredible handicapper and bettor to win a small amount of money, nobody who's getting a rebate is winning unless they're great, there arent average horseplayers out there cleaning up just because of the rebate, anyone winning is winning because they're in the elite 1% of players.

I dont think capping the amount of horses a trainer can have, i like writing in the conditions that trainers with certain win percentage at the current meet not eligible to certain races. The game has to be "fair" enough for enough people to want to participate. If you are an owner or prospective owner and you dont have a horse with Baffert, Jacobson, Pletcher or the other 1% of the greatest trainers on the planet, you have to feel you have no chance....and that needs to change, people who DONT use these supertrainers need to feel they have some sort of shot, there needs to be incentive for owners to learn the game and not just open up the newspaper to see which trainer is batting 45% and making the phone call to give that trainer horses.

Racing doesnt need "Stars". Those people who painted their faces and went to the track to See Zenyatta didnt bet. Well, maybe they bet 2 dollars to show, but they werent bettors...those "fans" who come out to see the "starts" arent doing a heck of a lot to fill the betting pools with money.

[Track Phantom]

A lot of these ideas are good and should be pursued but the question is where does "horse racing" invest the majority of its marketing budget to make a sustainable impact.

There are multiple steps in the process.

1. Conduct a thorough, complete psychological profile of the "hard core" players. We already know they are in their late 40's to early 50's, some college education and above the national average in income. What we also need to know is what similar psychological traits us dedicated players have.

2. Once the profile is identified, an analysis must be done to determine which pond these types of people normally swim in. What types of jobs, hobbies and interests do these people have.

3. Once #1 and #2 are accomplished, you'll have a more focused group to market to. If the end result is 50-55 years old, making 70k or more, strategy-oriented, left-brain types that work in fields like insurance underwriting, stock trading, and spend their free time playing golf, reading and playing chess, then a marketing plan and serious investment should be made to expose the game to this hyper focused group.

Once the above is accomplished, then secondary initiatives should be formulated to retain these players. There are hundreds of great ideas listed here and other spots. Some require a large investment of time and capital and others are of simple common sense and free.

I doubt anyone in a position to make a difference has approached the problem in this way. All too often, these difference makers listen to people that solely want changes in the game that benefit their own agendas. They need to disregard this "noise" and focus on getting to the kinds of changes that matter. (While I've been a longtime advocate for going after trainers that use PED's, it has virtually no relevance on finding or retaining players).

I certainly don't have all the answers but I absolutely cringe when I read about marketing the sports biggest horse racing stars, finding ways to make it easy for new players to understand how to bet and handicap, needing a Triple Crown winner and on and on. Some of these types of things sound good but are either not sustainable, can't be done or have little long term effect.

The big name horses can be promoted but only as opportunity presents itself. It should only be an enhancement to other more important initiatives. There just aren't enough stars any longer due to retirement. By the time the public gets to know who these runners are, they're gone.

Work hard at simplifying learning handicapping and wagering but don't sell it as an easy game. It's not and that fact will be discovered quickly by newbies. Instead, market the fact that, like golf, lots of practice and study, can significantly improve your game.

One of the best things going for horse racing is the fact that the Triple Crown is so elusive.

Finally, leverage popular endeavors that people invest serious time and money into. March Madness, Fantasy Football, etc.

If I were track management, I would stand up a free season long online contest. I would offer the contest to anyone online AND an additional entry for ontrack players via a kiosk on site and an MVP card.

The basics of the contest would be to select a winner and two alternates for every race for a race day. A mythical $2 to win, $4 place and $8 show on your top runner for every race (or alternate if top choice is scratched). At the end of the day, your total money returned divided by the number of races gives you a daily total (if your horses returned $500 in a 10 race program, you'd have a daily total of $50). You get your top 15 daily totals for a grand total. Thus, those that miss a day or two are not eliminated but it behooves you to enter every day. At the end of the season, the top 16 players based on combined totals qualifies for the "playoffs". This is a head to head, march madness type of format where 1 plays 16 and so on. The final 4 days of the season are the playoff days. At the end, you have a Champion with a significant prize.

If you list the top players daily and an ongoing leaderboard on the inhouse feed, you'd get these players excited. If it is run and promoted correctly, it will get a lot of eyes and attention to your track. That is usually the precursor to betting on the product.

[Stillriledup]

Great post Val!

I think that the #1 problem racing faces is that the tracks themselves don't "embrace" their customers as human beings. I went to a cafe the other day for a sandwich and i saw the manager in there, he didnt really recognize me because i'm rarely in there, but i recognized him and he was walking around, going up to tables, making sure everything was ok with the food and service, etc. You don't see that stuff in racing, tracks are big "concrete jungles" where you feel that there isnt any personalized attention, if you have a problem you have really nobody to talk to. Most security personnel and bet takers are old, grumpy people who don't smile and arent inviting, people who are new don't want to ask THEM for help or to answer a question, you just feel like there's nobody to turn to if you have a question about something.

While Valento has good points about marketing and whatnut, there still needs to be a complete overhaul in how tracks treat their customers. I'm not even talking about the exorbitant prices for admission, food, drink and parkiing that Las Vegas casinos do NOT charge, i'm talking about the personal attention and the warm feeling that you might have when you are patronizing a successful business, not this thing where you go to a track and all you see is broken down bust out old men down on their luck with holes in their shoes kicking over tickets on the ground hoping for a miracle. Young people don't want to see that. The times i've gone to the track with young and fresh faced people, most of the time i hear things like "its so depressing here" or "everyone is really old".

Young people dont want to be around old people, its hard to convince someone young that they should hang out in a dingy and depressing "old age home". Its a really hard sell.

[Robert Goren]

It is basic business knowledge that it costs 8 to 10 times more to gain a new customer vs. retaining a current one. So many businesses review their retention rates ( big in health club industry ) and know exactly how many people they are gaining or losing in a given month. You need to do both, but racing seems to forget about the value of retaining current customers.It is hard for somebody to bet from inside a coffin. I think racing actually does a pretty good job of keeping its suckers hook as long as they are alive and outside a nursing home.

[Robert Goren]

I doubt that the profile of the current bettor is 45-55 and has above average income. I think he( the male part is right) is older and has slightly less than average income. Val's profile may or may not be what they want to reach, but it is not what racing has now.
I like the idea of promoting tournaments. The entry fees must be a lot lower for some of them. There has to be a way running them online. One day-one track $5 tournies could be very popular. I think a way of eliminating contestants after every race or two is needed. A tourney set up like this. 10 race card at Aqu. Pick the winner of the race. After 2 races, everybody without a winners is gone. After 4 races everybody without 2 winners. After 6 you need 3, after 8 , you need 4 after the tenth race everybody needs 5. is ranked by total amount of money won and prizes awarded accordingly. This keeps contestants from hunting longshots until they have 5 winners. You might pay out a small amount to everybody with 4 winners. These kind of tournament could be run for any kind of entry fee. You could have mixed fees in the tournament.

[Dave Schwartz]

... but Val's point is well-taken. Determine the demographics and go after them.

:ThmbUp:


Problem for us is that what I think what matters (like with sports teams) is JUST the big money players.


I have a similar problem here in Reno when I go into a casino that is not doing well. Two in particular: Harrah's & Grand Sierra (formerly Bally's, Hilton, MGM).

I just want to scream things at them:

"Do you not see that you are wasting this property?"

"Do you really think people do not recognize a bad gamble when they see it?" (video poker payouts are out of whack, for example.)

"Maybe if you were willing to pay a marketing director more than $500 per week you could get some good ideas!"


Yup. That's the kind of stuff I would say.

[Seabiscuit@AR]

Stillriledup

I am not having a cry about rebate players but simply stating a fact. Rebates have failed to grow turnover as their advocates promised they would. As such it is fair enough now to take the rebates away and see if racing works better without them. Rebates make it easier for those with the biggest rebates to transfer wealth not only from the players without rebates but also from the racetracks. Rebates don't grow wealth they transfer it and do so in an unfair manner

The end result is that the tracks now have 10 billion a year in betting turnover instead of 15 billion and are looking to raise takeouts to make up some of the shortfall. When you cop your next takeout increase you can thank all the rebaters

[Valuist]

Most successful horse bettors that I know had a mentor early in their handicapping life. Someone who actually has beaten the game; not the nonsense you hear spewed by 95% of the people in any grandstand. I think the Night School program is a good way of reaching out.

Only problem is that many newbies aren't going to be patient to learn. They aren't going to come in and take the game by storm right out of the box.

[Robert Goren]

Most successful horse bettors that I know had a mentor early in their handicapping life. Someone who actually has beaten the game; not the nonsense you hear spewed by 95% of the people in any grandstand. I think the Night School program is a good way of reaching out.

Only problem is that many newbies aren't going to be patient to learn. They aren't going to come in and take the game by storm right out of the box.If they don't have some success early, they won't be around long. I know I would not have.

[JustRalph]

I have a similar problem here in Reno when I go into a casino that is not doing well. Two in particular: Harrah's & Grand Sierra (formerly Bally's, Hilton, MGM).

I just want to scream things at them:

"Do you not see that you are wasting this property?"
.

Good post Dave. On marketing people, you get what you pay for, that's a fact. Just like anything else.

Your comments above remind me of my wife's comments about restaurants. She can spot a loser a minute after we enter.

[Charli125]

Rebates have failed to grow turnover as their advocates promised they would.

Have you thought about where handle would be without rebates? I'd say instead of the 10 billion number we'd be closer to half that. So rebates have grown turnover, just not enough to offset falling turnover overall. Take away rebates, see what happens. It's happened in enough jurisdictions that it's not hard to see the results.

[Robert Goren]

Have you thought about where handle would be without rebates? I'd say instead of the 10 billion number we'd be closer to half that. So rebates have grown turnover, just not enough to offset falling turnover overall. Take away rebates, see what happens. It's happened in enough jurisdictions that it's not hard to see the results.Have you thought about how much money the track and horsemen get after the rebate and the ADW's cut ?

[the little guy]

Have you thought about how much money the track and horsemen get after the rebate and the ADW's cut ?

The better question is whether or not you thought about THIS before posting it?

Unless you are being rebated directly by the host track, on wagers made on their races, the rebate is from the ADW's take after paying host fees.

[thaskalos]

An annual, year-round, nationwide handicapping tournament is staged...using some of the slots profits which, up 'til now, have been used strictly for the benefit of everyone else but the horseplayer. This would have to be a free tournament...available to all the horseplayers in the land. The races selected for wagering would come from weekend races...thus insuring that maximum attendance would be achieved. The top 10% of the finishers get paid...and the winner walks away with a cool million-dollar prize.

I have played in more than a few poker tournaments, and I am well aware of the excitement that they generate...and I happen to think that horse racing is in dire need of a little excitement.

If you excite them...they will come.

[Robert Goren]

The better question is whether or not you thought about THIS before posting it?

Unless you are being rebated directly by the host track, on wagers made on their races, the rebate is from the ADW's take after paying host fees.No matter how you word it, the track is getting less money per dollar bet with a rebated bet. The question is how much less. I am guessing that money that goes through an ADW , the track is probably getting about 40% of what it get if the money was bet on track with no rebate. I know the track will get same cut whether the ADW offers a rebate or not. The point I was trying to make is the track makes more money if the bets are placed live at the track. Not all handle is created equal for the track and the horsemen.

[pondman]

The novice fan has very little clue as to how the game should be played. Look around at what you see offered. Tips on how to Parlay a show bet. There are no Perfect Strategies. There never will be. It's a game that takes considerable more time to learn. And mastering it requires going in your own direction.

It's considerably different than a table game. A resort will give out a perfect strategy card for black jack. Some go as far as offering an introductory class. What does they track offer? A hot dog and a beer for $11. Online wagering was going to save the game. But will that help the beginner? NO. It only increases the sophistication of a skill player. Because now they have access to every track and can extend their reach. Those who can play the game now are able to say, if I find a bet at Finger Lake or Hollywood Park, I'll play. So there no longer is loyalty to a brand. It's about making money. And not being concern if a track folds, because there are 10 others.

[Charli125]

No matter how you word it, the track is getting less money per dollar bet with a rebated bet.

Wrong. The track gets the same amount from adw's that rebate, that they do from adw's that don't rebate. The only one making less money with rebates is the adw.

Adw's that rebate, just make less margin per bet, paying the same or more as other adws to the track.

[Robert Goren]

Wrong. The track gets the same amount from adw's that rebate, that they do from adw's that don't rebate. The only one making less money with rebates is the adw.

Adw's that rebate, just make less margin per bet, paying the same or more as other adws to the track.But if the money is bet track rather the through an ADW, the track makes more money. You reword it all you want, it does matter. If $ 10 at the track, then track and horsemen get a $1.60. If I bet $10 at an ADW then the track and horsemen gets about $0.80 . How hard is this?

[Charli125]

But if the money is bet track rather the through an ADW, the track makes more money. You reword it all you want, it does matter. If $ 10 at the track, then track and horsemen get a $1.60. If I bet $10 at an ADW then the track and horsemen gets about $0.80 . How hard is this?

But that's not what you said. You said the track gets less when rebates are involved. Which is not true.

If you'd said that the track gets less when ADW's are involved, then of course you're correct. They also get less when simulcasting at other tracks is involved.

Get rid of ADW's and see what happens to handle. Look at Tampa's 3-day meet that was held for business reasons where they didn't bother signing any ADW contracts. Handle was around 5% of a normal day.

Get rid of simulcasting while you're at it since the host track gets a lower percentage than on-track bets.

[Robert Goren]

But that's not what you said. You said the track gets less when rebates are involved. Which is not true.

If you'd said that the track gets less when ADW's are involved, then of course you're correct. They also get less when simulcasting at other tracks is involved.

Get rid of ADW's and see what happens to handle. Look at Tampa's 3-day meet that was held for business reasons where they didn't bother signing any ADW contracts. Handle was around 5% of a normal day.

Get rid of simulcasting while you're at it since the host track gets a lower percentage than on-track bets.I did mis -state that. I have to keep reminding myself that some tracks have got into the rebate business. Up to a few years ago, unless you were a very high roller, you had to bet at an ADW or a OTB or a simulcast outlet. The thing it that gets me is that when announce handle number, they treat of sources like it was on track unrebated. Handle can be up, but income could be down quite a bit. I think that happens quite a bit these days.
ADWs and simulcasting are the blood of what little life is left in racing, of that there is no doubt. I am just sure that racing can recruit very many new bettors without them first going to the track.

[Charli125]

I am just sure that racing can recruit very many new bettors without them first going to the track.

I'm really torn on this. My start in horse racing came through the gambling aspect. I was a sports bettor, that became illegal(illegal enough for me to stop I should say), so i looked for something else where I could put my mathematical mind to work. A few people I knew through sports mentioned horse racing, and it's been a great journey every since. I've since been to many tracks, and that further cemented an actual love for racing rather than just the gambling.

I think I'm one of the few though. Practically everyone I've met over the years, found their love via going to the track, and usually with an older family member. Everyone has a first story from the track, their first bet as an underaged kid, etc.

I agree with you that fans and bettors alike are made at the track, but I wouldn't fully discount the number of pure gamblers out there.

I know there a lot of people betting into the Betfair exchange that don't know anything about the sports they're betting. I used to bet hockey, profitably, on an exchange, and I never watch hockey unless it's the playoffs. They purely make mathematical betting decisions. I think racing has really screwed up by not going after the poker players who live for math. I think at times we're too focused on the magiv that happens at the racetrack.

[Dave Schwartz]

Wrong. The track gets the same amount from adw's that rebate, that they do from adw's that don't rebate. The only one making less money with rebates is the adw.

That would be correct.

The rebate comes out of the ADW's cut.

However, the ADW's cut comes out of the track's cut.

Therefore, it isn't rebates that are bad for handle, it is ADWs. Yes, I am joking. It is a cost of doing business.

Here is the problem with rebates...

It creates consistent, winning players!

And consistent winning players just logically take money out of the pools permanently. IOW, the money won by "winning players" does not come back to the track. It is just like another takeout on racing.

Picture a poker table. The dealer reaches out and cuts the put with every round of betting. Imagine what happens if another player at the table does that as well.

Of course, I am not ranting against winners. Just stating fact.

[dilanesp]

I'm agnostic on rebates, but the weird thing about the poker analogy is that poker actually does feature people who get rakeback in various ways and thus pay less rake than other players. For instance, online poker sites have frequent player programs that rebate cash back. Some cardrooms have it too. For instance, Hustler pays 1/8 a big bet ($2 in 8/16 games, $5 in 25/50 games) to limit players who play at least 50 hours per week.

The result is that frequent players do indeed have an advantage when it comes to making +EV wagers. Indeed, before the major online sites were shut out of the United States, there were "bonus mongers" who were losing players who nonetheless won because of all the bonuses and frequent player rewards they collected.

The point is that giving high volume players in the pool a better deal isn't a particularly unusual practice in gaming.

[Stillriledup]

Stillriledup

I am not having a cry about rebate players but simply stating a fact. Rebates have failed to grow turnover as their advocates promised they would. As such it is fair enough now to take the rebates away and see if racing works better without them. Rebates make it easier for those with the biggest rebates to transfer wealth not only from the players without rebates but also from the racetracks. Rebates don't grow wealth they transfer it and do so in an unfair manner

The end result is that the tracks now have 10 billion a year in betting turnover instead of 15 billion and are looking to raise takeouts to make up some of the shortfall. When you cop your next takeout increase you can thank all the rebaters

Here's the problem Biscuit. If you take the rebates away from the players (hypothetically) you not only would chase a lot of bettors out of the pools, but the ones who stayed, do you know where their rebates (that they used to get) would end up? In the pockets of track owners and ADW owners. A rebate is just a share of the ADW owners cut....so, if there is a 50-50 split (hypothetically speaking) than either the bettors get 50 and the ADW gets 50, OR, the Adw gets 100. The ADW owner will take his "100 pct" and take that money and buy a new hottub and a new Benz. Its better for all of is if the rebate player gets to keep his "50" because that money goes back into the pools. The money gets churned back.

As far as it being fair or unfair, if you bet 5k per race, i'm sure someone will take your action and give you a nice cut. The "unfairness" would be if someone who CAN afford 5k a race did NOT get a rebate just because you couldnt get one either. So, while you say "unfair" you would think quite differently if you were the 5k per race player getting a big rebate and they took it away just to be "Fair".

[baconswitchfarm]

Rebates have kept handle at ten billion instead of seven. There is no way to do away with rebates now as the genie is out of the bottle. Rebates have boosted player handle. Just not enough to overcome the freefall that the industry is in.

[Stillriledup]

Rebates have kept handle at ten billion instead of seven. There is no way to do away with rebates now as the genie is out of the bottle. Rebates have boosted player handle. Just not enough to overcome the freefall that the industry is in.

This is a good point, take away the rebates and the handle gets destroyed.

[Track Phantom]

Thought the thread was about attracting and retaining fans. Somehow, the entire thread has been hijacked by rebates, which have absolutely no impact on new fans (most don't even know what they are or how to get them).

Whenever there is a meaningful conversation about how to market to a new audience and expand the revenue dollars, talking points immediately revert to personal agenda items irrespective of their importance and ignoring wider reaching ideas that make a difference.

Until people (tracks, fans, horsemen, etc) are willing to sacrifice their own interests for the betterment of the game, it will continue to swirl in the porcelain bowl.

[proximity]

Thought the thread was about attracting and retaining fans. Somehow, the entire thread has been hijacked by rebates, which have absolutely no impact on new fans (most don't even know what they are or how to get them).

Whenever there is a meaningful conversation about how to market to a new audience and expand the revenue dollars, talking points immediately revert to personal agenda items irrespective of their importance and ignoring wider reaching ideas that make a difference.

Until people (tracks, fans, horsemen, etc) are willing to sacrifice their own interests for the betterment of the game, it will continue to swirl in the porcelain bowl.

rebates are the game's only shot. the takeout is so high that it is actually visible in this game (5/2 3rd choices sometimes on tote boards) and if you're at a place like, say, Delaware park..... racing is your worst choice by far.

outside of racing I live closer to two Hollywood properties but still go to atlantic city because it's nice to be treated well sometimes. this isn't some personal agenda, it is how atlantic city attracted me as a new customer.

we have to be honest and say that promoting significant on track rebates would hardly hurt most racinos at all, and in the long run would probably be beneficial to their bottom lines. but I think it would also be honest to say that most racinos would just as well not have to deal with racing at all and would prefer to just run the casino.

[Dave Schwartz]

Until people (tracks, fans, horsemen, etc) are willing to sacrifice their own interests for the betterment of the game, it will continue to swirl in the porcelain bowl.

That is absolutely true.

:ThmbUp:

[Stillriledup]

Thought the thread was about attracting and retaining fans. Somehow, the entire thread has been hijacked by rebates, which have absolutely no impact on new fans (most don't even know what they are or how to get them).

Whenever there is a meaningful conversation about how to market to a new audience and expand the revenue dollars, talking points immediately revert to personal agenda items irrespective of their importance and ignoring wider reaching ideas that make a difference.

Until people (tracks, fans, horsemen, etc) are willing to sacrifice their own interests for the betterment of the game, it will continue to swirl in the porcelain bowl.

Why should the fans/bettors/customers be asked to "Sacrifice" anything for the betterment of the game? And, what do you think the fans should sacrifice that they're not already sacrificing with high takeouts and whatnut?

[acorn54]

well horseracing is not like other spectator sports such as football, where the spectator can watch and be entertained with or without gambling.
that being said, since gambling is the reason a person gets involved in the activity, they have to be persuaded that they have a fighting chance to win money. i don't think in it's present structure that horseracing does that.

[Seabiscuit@AR]

Stillriledup

I don't agree with the argument that rebates come from the ADW's cut. The fact is the source of all funds is from the bettor. So the ADW's cut is money from the bettor, the ADW does not put any money into the pools

The way I look at it is this

SCENARIO 1. A Horse is an even money shot so exactly 50% chance to win. A Bettor can obtain odds of 10-9 odds on this horse. How much should the bettor bet? The answer is a decent bet as the bettor has a decent edge of about 5%. The bigger the pool and the bigger your bank the more you should bet

SCENARIO 2. A horse is an even money shot so exactly 50% chance to win. A better can only obtain odds of 9-10 odds on this horse. How much should the bettor bet? The answer is the bettor should bet nothing as they have a negative expectation of about -5%. Betting pool size and bank size are irrelevant as you should not be betting at all (if you aim to win money)

How is this relevant to rebates? Well you will see this situation every day if one player has a rebate of 10% and the other has no rebate. The rebate player can bet the horses odds down to -5% loss. Their rebate turns the bet into a 5% win for them but leaves the bet as -5% loss for the player with no rebate. This is with both players betting the exact same horse

If the rebate player bets 1K per race after 20 bets they win 1K. After 200 bets they win 10K. After 2000 bets they win 100K. After 20000 bets they win 1 million etc etc

Now the non rebate player is likely to be a smaller bettor (hence no rebate). So instead of 1K per race they might bet $10 per race. So after 20 bets they lose $10. After 200 bets they lose $100. After 2000 bets they lose $1000. After 20000 bets they lose $10000 etc etc

The pool will be made up of lots and lots of these small non rebate players. So that once you pool together all their bets you are looking at a significant share of the pool not just one $10 bet or one player

So the 10% rebate player wins relentlessly and bets their way to a fortune. The non rebate player loses relentlessly and goes bankrupt and quits the game eventually. This is with both players betting exactly the same horse

This is where rebates fail as a matter of theory. They will increase the turnover of those with the biggest rebates. But they will destroy the turnover of those with no rebates as the optimal play for the non rebated player is NOT TO BET AT ALL in most races when other players are getting big rebates. If they do bet then the non rebated player gets bankrupted in the long run even as the big rebate player makes a fortune. All while betting the same horses. How is this fair?

Betting turnover in the USA should now be about 15 billion to 20 billion. Rebates have contributed to the destruction of turnover by bankrupting the non rebated players. Rebates have also prevented new younger players joining the game as these players typically will start with no rebates

Then you also have the issue of leakage from the tracks which rebates contribute too meaning less money for the tracks

If racing wants to improve its standing it needs to ditch the rebates which make for an unfair game in the same way as it needs to clamp down on cheating trainers so they don't bankrupt the honest trainers

[tzipi]

Why should the fans/bettors/customers be asked to "Sacrifice" anything for the betterment of the game? And, what do you think the fans should sacrifice that they're not already sacrificing with high takeouts and whatnut?

Exactly. Also get rid of the drug trainers. Most my friends don't even really ever play or go but know the games drug problems. People don't want to bet on what horse they think is drugged up. Get a couple of obvious drug infractions and you're banned.

[acorn54]

seabisquit with all due respect you can't stop the future. rebates are here to stay. it is sort of like someone that said to me, why do i shop on the internet, i should shop in my local community stores so they don't go out of business. i told him it is not me that is putting the local stores out of business, it is THE FUTURE that is putting them out of business. adapt or perish. it is called capitalism.

[dilanesp]

Stillriledup

I don't agree with the argument that rebates come from the ADW's cut. The fact is the source of all funds is from the bettor. So the ADW's cut is money from the bettor, the ADW does not put any money into the pools

The way I look at it is this

SCENARIO 1. A Horse is an even money shot so exactly 50% chance to win. A Bettor can obtain odds of 10-9 odds on this horse. How much should the bettor bet? The answer is a decent bet as the bettor has a decent edge of about 5%. The bigger the pool and the bigger your bank the more you should bet

SCENARIO 2. A horse is an even money shot so exactly 50% chance to win. A better can only obtain odds of 9-10 odds on this horse. How much should the bettor bet? The answer is the bettor should bet nothing as they have a negative expectation of about -5%. Betting pool size and bank size are irrelevant as you should not be betting at all (if you aim to win money)

How is this relevant to rebates? Well you will see this situation every day if one player has a rebate of 10% and the other has no rebate. The rebate player can bet the horses odds down to -5% loss. Their rebate turns the bet into a 5% win for them but leaves the bet as -5% loss for the player with no rebate. This is with both players betting the exact same horse

If the rebate player bets 1K per race after 20 bets they win 1K. After 200 bets they win 10K. After 2000 bets they win 100K. After 20000 bets they win 1 million etc etc

Now the non rebate player is likely to be a smaller bettor (hence no rebate). So instead of 1K per race they might bet $10 per race. So after 20 bets they lose $10. After 200 bets they lose $100. After 2000 bets they lose $1000. After 20000 bets they lose $10000 etc etc

The pool will be made up of lots and lots of these small non rebate players. So that once you pool together all their bets you are looking at a significant share of the pool not just one $10 bet or one player

So the 10% rebate player wins relentlessly and bets their way to a fortune. The non rebate player loses relentlessly and goes bankrupt and quits the game eventually. This is with both players betting exactly the same horse

This is where rebates fail as a matter of theory. They will increase the turnover of those with the biggest rebates. But they will destroy the turnover of those with no rebates as the optimal play for the non rebated player is NOT TO BET AT ALL in most races when other players are getting big rebates. If they do bet then the non rebated player gets bankrupted in the long run even as the big rebate player makes a fortune. All while betting the same horses. How is this fair?

Betting turnover in the USA should now be about 15 billion to 20 billion. Rebates have contributed to the destruction of turnover by bankrupting the non rebated players. Rebates have also prevented new younger players joining the game as these players typically will start with no rebates

This is all true in poker too. But somehow poker continues to attract casual players even though they have an additional disadvantage because the top players get frequent play benefits.

Look, if it were possible to go in the other direction-- to create a bunch of benefits that could only be claimed by BAD, LOSING players, that would actually be to the long term benefit of any gambling enterprise. Because, as every casino that runs a slot player's club will tell you, you don't want the bad players to quit the game and run out of money. And, indeed, this would benefit the winning players too-- instead of getting a rebate, they would get a higher winrate because of the presence of more casual players in the pools.

But nobody's really figured out a way to do that with respect to games where the players compete against each other.

And what rebates DO do is make the game beatable, or more beatable, for some players, which at least keeps handle up. I'm truly agnostic on the subject, but I can see the argument for them.

[Stillriledup]

Biscuit,
I appreciate your response, great writeup, lots of passion for this subject is what you have.

I think you're saying that if the rebate guys lost their rebates, that it would be 'easier' for non-rebated players to win. But, the way i view it is this way. Lets say you have a typical 200k win pool at Santa Anita. The win takeout is 15.43 percent to you, the non rebated player. The odds are determined by that 15.43 percent. Now, the one thing that you're going to have to explain to me is this. How is it different for YOU if the 200k is rebated money or non rebated money? Its still a 15.43 takeout.

30,860 is being removed from the pool and 169,140 is being given back to the winners. This was true in 1980 and it is true in 2013.

Before rebates, you, the non rebated bettor, was getting 9-10 on that even money shot. That hasnt changed. You're still getting 9-10.

If a rebate bettor makes a large bet on an even money shot and knocks the horse from 1-1 to 4-5, you have the option of betting against that horse as the rebate bettors money made the prices of other runners go UP. You don't have to bet on the 4-5 shot, you can bet someone else and take advantage of the odds dropping.

It seems that you're arguing that its "not fair" that other players get rebates, but you still havent shown me, from a math standpoint, how a 4-5 shot in 1980 is different from a 4-5 shot in 2013.

[Jeff P]

Here it comes, another takeout post by that Platt guy from HANA... :rolleyes:

One of the hurdles the industry faces in converting the first time track visitor and new would be racing fan into a long term horseplayer is the severity of the negative gambling experience imprinted during those first few track visits.

How bad is it (really?)

If WPS takeout is 16% you might think the novice horseplayer, who doesn't know a thing about betting horses, and whose selections therefore might realistically be no better or no worse than random picks, should have an expected return no worse than 84 cents per each $1.00 wagered (1.00 minus the takeout percentage) right?

You might intuitively think that - but you'd be wrong.

Believe it or not, the true long term mathematical expectation of horse race bettors who make the equivalent of random selections in WPS pools is a net loss approaching 25 cents per each $1.00 wagered.

That's approximately 1.5 times worse than the percentage net loss most of us might intuitively think results from a 16 percent takeout rate!

Below is a cut and paste of some numbers pulled from my calendar year 2013 database. The database includes every thoroughbred race run in North America during calendar year 2013 from Jan 01, 2013 current through a few days ago Dec 08, 2013.

The top part of the data readout shows what would have happened to the player unfortunate enough to have bet $2.00 to WPS on every starter in every race during the time period covered by the database (approx 350k starters in all.)

The ROI number for the WPS columns confirms a net loss bordering on minus 25 percent for WPS bets.

Data Window Settings:
Connected to: C:\JCapper\exe\JCapper2.mdb
999 Divisor Odds Cap: None

SQL: SELECT * FROM STARTERHISTORY
WHERE [DATE] >= #01-01-2013#
AND [DATE] <= #12-31-2013#
ORDER BY [DATE], TRACK, RACE


Data Summary Win Place Show
-----------------------------------------------------
Mutuel Totals 529184.70 529707.00 531006.60
Bet -699134.00 -699134.00 -699134.00
-----------------------------------------------------
P/L -169949.30 -169427.00 -168127.40

Wins 45440 90386 131813
Plays 349567 349567 349567
PCT .1300 .2586 .3771

ROI 0.7569 0.7577 0.7595
Avg Mut 11.65 5.86 4.03



Next up, the second part of the above sample with the data broken out by odds rank with no attempt to break ties:

By: Odds Rank

Rank P/L Bet Roi Wins Plays Pct Impact
-----------------------------------------------------------------------
1 -14901.00 93348.00 0.8404 17228 46674 .3691 2.8396
2 -15208.70 88526.00 0.8282 9642 44263 .2178 1.6758
3 -18372.90 88404.00 0.7922 6540 44202 .1480 1.1382
4 -18563.50 88650.00 0.7906 4681 44325 .1056 0.8124
5 -22870.40 87296.00 0.7380 3078 43648 .0705 0.5425
6 -22460.60 81236.00 0.7235 2034 40618 .0501 0.3852
7 -20465.90 65288.00 0.6865 1155 32644 .0354 0.2722
8 -14106.40 46530.00 0.6968 616 23265 .0265 0.2037
9 -10315.90 30140.00 0.6577 294 15070 .0195 0.1501
10 -8129.40 17866.00 0.5450 110 8933 .0123 0.0947
11 -2351.20 7388.00 0.6818 46 3694 .0125 0.0958
12 -1884.80 3616.00 0.4788 13 1808 .0072 0.0553
13 -245.60 578.00 0.5751 2 289 .0069 0.0532
14 -63.00 258.00 0.7558 1 129 .0078 0.0596
15 -2.00 2.00 0.0000 0 1 .0000 0.0000
16 -2.00 2.00 0.0000 0 1 .0000 0.0000
17 -2.00 2.00 0.0000 0 1 .0000 0.0000
18 -2.00 2.00 0.0000 0 1 .0000 0.0000
19+ -2.00 2.00 0.0000 0 1 .0000 0.0000



This part of the data sample shows the favorite-longshot bias and hints at why horse racing might be at least attractive to some players from a viable gambling standpoint.

Note that win rate and roi (or player's expectation) varies with the odds.

To my way of thinking, the player who makes a serious go at studying the past performance records of horses will discover that horses have both positive attributes and negative attributes in their records. Positive attributes incrementally increase the likelihood of strong placings. Conversely, negative attributes result in incrementally worsened placings. Of course, the betting public realizes this and a high percentage of those attributes (as collectively seen by the crowd) are reflected in the odds.

I don't think there's any question that the newbie would be horseplayer faces a steep uphill climb. But most of us assume the hill to be climbed is 1.00 minus the takeout rate. (As you can see from the above numbers that is clearly not the case.)

In my mind getting people out to the track by itself isn't going to cut it.

The real question as I see it is this:

How do you create a good enough GAMBLING EXPERIENCE for the new would be horseplayer to make them want to come back for more?... A LOT MORE?

In my mind the most probable way the new would be race goer gets converted from a casual fan into a horseplayer is the same transformation process most of us underwent ourselves:

Speaking from personal experience and strictly for myself, 30+ years ago when I first began looking at horse racing data:

I studied some data and noticed certain things in the data itself suggesting a realistic shot at break even play and beyond. And because of what I saw in the data I took up betting horses in a serious way. (I would be curious about the transformation process that turned any of you into horseplayers.)

But the game was different back then. (Things were easier.) When I first started betting horses in a serious way there were crowds of people at the track - and many among that crowd were there for a good time... Hell, I remember being in my 20's and striking up conversations with LOTS of people whose betting was based on birthdays and phone numbers. (Good luck finding people at the races doing that today.)

The numbers in the above data sample paint a realistic picture as to the severity of the negative gambling experience faced by the new would be horseplayer.

Keep in mind the above data is WPS only. (FYI, it's worse for exotics... MUCH WORSE.)

If the long term handle trend in North America over the past 10 years or so wasn't off by one third or more (not adjusted for inflation) I wouldn't be making another post about takeout.

I think the long term downward handle trend is alarming. I also think it's crystal clear that insisting on takeout rates that create net losses bordering on minus 25 percent for bettors making random selections in WPS pools plays a big big part in our downward handle trend.

According to economic studies commissioned by The Jockey Club we've stopped creating enough new horseplayers to replace the ones who are leaving the game each year. (The last one that I read says the net loss now averages 4% per year.)

The crowd attending the races when I first started going isn't there anymore. And as has been so eloquently pointed out elsewhere... in this post (http://www.paceadvantage.com/forum/showpost.php?p=1542274&postcount=22)
Guys don't worry about it.........nobody new is coming

Today you still have that same crowd, the 20 and 30 somethings I used to see at the track - only now they are the casino - where instead of minus 25 percent for WPS they are betting on games of chance where the prize payout percentages offered are significantly higher.

The built in house edge for roulette is 5.26%. I'll use that for example purposes because roulette is generally considered to be one of the worst gambling games you can play in a casino. If you study the layout of a roulette table, you'll quickly realize it's those two 'zeroes' that create the house edge and make roulette the bad gamble that it is.

Q. How many 'zeroes' do you have to add to a roulette wheel to turn roulette into the equivalent of what a newbie horse bettor faces? (Where random WPS selections produce long term net losses bordering on minus 25 percent?)

A. Believe it or not you have to add TEN ADDITIONAL ZEROES - until the layout itself has TWELVE ZEROES ON IT! – in order to turn roulette into the equivalent gamble (net losses of minus 25 percent) faced by a horse bettor making random WPS selections at 16 percent takeout!

TWELVE zeroes! (Mull that over for a few minutes until it sinks in.)

No one in their right mind is going to spend any serious amount of time immersed in study trying to develop a system to beat a roulette wheel with TWELVE freaking zeroes on it. (Can we at least agree on that much?)

While I agree that "marketing" can and will get new "fans" out to the track...

How can anyone in their right mind think that takeout isn't a huge part of the problem?... That "marketing" alone is all it takes to convert "fans" into horseplayers? When what we are marketing, from a prize payout standpoint, is a gamble equivalent to a roulette layout with twelve freaking zeroes on it?

I humbly submit to you the idea that no amount of marketing will ever be successful selling THAT.

In my mind the only way to convert first time race goers into long term horseplayers is to give them a realistic sense they can win.

How do we do that (with a straight face) given the above numbers?





-jp

.

[Stillriledup]

Bravo Jeff, Hall of fame post, one of the best i've ever read here.

If the newbie is betting with "12 zeros" than the rebate player is still betting with "6 zeros" so even with a large rebate, he or she is still up against it in a huge way.

The obvious problem with the game is the pricing. While horse trainers, jockeys and owners need to have some sort of expectation that if they're really good at what they do, they'll make money, the horse player is sitting under the crushing weight of being largely responsible to pay the salaries of the trainers and jocks and profits for the Jim Rome's of the world (who have turned this game into something pretty simple these days) that's a LOT to ask. And then, you have this thing in NY where they're hitting up the state's residents for an extra 5%, ya know, just for shits and giggles.

Its a hard game to sell when the gambling part of it is just for "entertainment purposes only" and its not priced for anyone to have a realistic shot at winning no matter how good you are.

Also, as Gus has pointed out numerous times, the game suffers from a huge integrity problem and if you, as a bettor, are going to be asked to pay a huge price to bet, you NEED to know the game is iron clad honest. You can't play into a 20 or 25% takeout knowing that some rich trainers and jockeys (and poor ones too) are essentially controlling enough of the results and taking advantage of those results thru the betting windows (which essentially makes the effective takeout even higher).

[proximity]

Bravo Jeff, Hall of fame post, one of the best i've ever read here.


jeff p made a pretty long post, but i'm glad i stayed with it because that bottom section was just tremendous!! :ThmbUp:

[Jasonm921]

Jeff P should be at the next NYRA Board Meeting.

[Stillriledup]

Jeff P should be at the next NYRA Board Meeting.

Those people think they've forgotten more about racing that Jeff will ever hope to know...if Jeff's lucky, they'll permit him to get them coffee.

[Jasonm921]

Well he could bring them water....for $4.50. See how they like it.