The Racing Industry Needs a Growing and Viable California

[HalvOnHorseracing]

Excerpt:

If Organizations like the NTRA, the Jockey Club, Americas Best Racing, and the Breeders' Cup believe that California racing is vital to the industry, they can help promote California racing as a "Test Jurisdiction" for selling horse racing as a Gambling Game of Skill.

What does that support look like? It looks like social media promotion along with weekly monitoring of handle/revenue under the new changes.

As most of you know the new changes are meant to grow the game by promoting high churn lower takeout wagers like WPS and two horse exotics. We believe that WPS breakage should pay to the penny, and as a trade-off to the industry the minimum payoff on Show wagers should be reduced to $2.05 to help with minus pools. Takeout on exacta wagers should be reduced to 16%.

As part of the promotion the alphabet organizations, TVG, and other racing media outlets would help by constantly telling people who are new to the game or who only bet a few times a year that the best way to learn the game and the best chance of winning is to concentrate on high churn wagers. A $1 three horse exacta box and $2 WPS on the longest shot of your selections is an example of a high-churn strategy and to get the new Customers coming back. As people bet and cash they will learn to adjust these wagers for a more optimal outcome, and just as important they will learn to read the PP's and learn to recheck their wins and losses, just as we all did at one time.

California Racing is in trouble. Field size will likely drop in 2017, and handle has trended downwards. The drop in field size makes it all the more important to pay to the penny on WPS breakage and lower exacta takeout to 16%. People will bet on shorter fields at the right price.

For the whole story click on the link: http://blog.horseplayersassociation.org/2016/12/the-racing-industry-needs-growing-and.html …

[Augenj]

Churn baby, churn! It's an idea that seems incomprehensible to the fiefdom that controls racing in California.

[EasyGoer89]

Excerpt:

If Organizations like the NTRA, the Jockey Club, Americas Best Racing, and the Breeders' Cup believe that California racing is vital to the industry, they can help promote California racing as a "Test Jurisdiction" for selling horse racing as a Gambling Game of Skill.

What does that support look like? It looks like social media promotion along with weekly monitoring of handle/revenue under the new changes.

As most of you know the new changes are meant to grow the game by promoting high churn lower takeout wagers like WPS and two horse exotics. We believe that WPS breakage should pay to the penny, and as a trade-off to the industry the minimum payoff on Show wagers should be reduced to $2.05 to help with minus pools. Takeout on exacta wagers should be reduced to 16%.

As part of the promotion the alphabet organizations, TVG, and other racing media outlets would help by constantly telling people who are new to the game or who only bet a few times a year that the best way to learn the game and the best chance of winning is to concentrate on high churn wagers. A $1 three horse exacta box and $2 WPS on the longest shot of your selections is an example of a high-churn strategy and to get the new Customers coming back. As people bet and cash they will learn to adjust these wagers for a more optimal outcome, and just as important they will learn to read the PP's and learn to recheck their wins and losses, just as we all did at one time.

California Racing is in trouble. Field size will likely drop in 2017, and handle has trended downwards. The drop in field size makes it all the more important to pay to the penny on WPS breakage and lower exacta takeout to 16%. People will bet on shorter fields at the right price.

For the whole story click on the link: http://blog.horseplayersassociation.org/2016/12/the-racing-industry-needs-growing-and.html …

I prefer short fields, if I see a 6 or 7 horse field anywhere at the tracks I normally follow, I'll handicap it, takes less time to cap shorter fields and while bigger fields beget bigger exotic prices, there's no extra 'value' per se in the big field.

I looked quick at gulf and saw too many monster fields so I just didn't look at their races at all, my opposition to big fields is just not having time to handicap them, takes too long.

[HalvOnHorseracing]

I prefer short fields, if I see a 6 or 7 horse field anywhere at the tracks I normally follow, I'll handicap it, takes less time to cap shorter fields and while bigger fields beget bigger exotic prices, there's no extra 'value' per se in the big field.

I looked quick at gulf and saw too many monster fields so I just didn't look at their races at all, my opposition to big fields is just not having time to handicap them, takes too long.
Did you read my piece in the HANA magazine on field size? I argue that 8-10 horses is ideal for most races.
http://horseplayersassociation.org/nov16issue.pdf

[ronsmac]

Excerpt:

If Organizations like the NTRA, the Jockey Club, Americas Best Racing, and the Breeders' Cup believe that California racing is vital to the industry, they can help promote California racing as a "Test Jurisdiction" for selling horse racing as a Gambling Game of Skill.

What does that support look like? It looks like social media promotion along with weekly monitoring of handle/revenue under the new changes.

As most of you know the new changes are meant to grow the game by promoting high churn lower takeout wagers like WPS and two horse exotics. We believe that WPS breakage should pay to the penny, and as a trade-off to the industry the minimum payoff on Show wagers should be reduced to $2.05 to help with minus pools. Takeout on exacta wagers should be reduced to 16%.

As part of the promotion the alphabet organizations, TVG, and other racing media outlets would help by constantly telling people who are new to the game or who only bet a few times a year that the best way to learn the game and the best chance of winning is to concentrate on high churn wagers. A $1 three horse exacta box and $2 WPS on the longest shot of your selections is an example of a high-churn strategy and to get the new Customers coming back. As people bet and cash they will learn to adjust these wagers for a more optimal outcome, and just as important they will learn to read the PP's and learn to recheck their wins and losses, just as we all did at one time.

California Racing is in trouble. Field size will likely drop in 2017, and handle has trended downwards. The drop in field size makes it all the more important to pay to the penny on WPS breakage and lower exacta takeout to 16%. People will bet on shorter fields at the right price.

For the whole story click on the link: http://blog.horseplayersassociation.org/2016/12/the-racing-industry-needs-growing-and.html …Why not make the minimum show payoff $ 2.02?

[EasyGoer89]

Did you read my piece in the HANA magazine on field size? I argue that 8-10 horses is ideal for most races.
http://horseplayersassociation.org/nov16issue.pdf

I read it, i agree.

[airford1]

California Horse racing has a plan that has been in effect for the last 10 years. Blame Slot Gambling and "HOPE" it gets better. There has not been any real push to help the Owners turn a profit or the players either. California Horse racing will be run at Del Mar, Los Alamitos ( getting the most days ), and Golden Gate. Santa Anita's property will sell one day and that will be the end of California's Racing.

[dilanesp]

The problem with MARKETING gambling as a game of skill is that 95 percent or more of all players lose.

Which means there's a natural time limit on players trying to "beat" the game. They try, they fail, they run through their bankroll, and they quit.

That means that to make long term fans, you have to get people to enjoy the sport. It can be on a gambling level- one way to enjoy the sport IS to enjoy handicapping, just like you can enjoy poker strategy or playing a competitive game like chess. It can also be on a level of love of horses, love of competition, or love of the pageantry of a day at the track. (I was just at Del Mar yesterday. They didn't have a big crowd- maybe 8,000 or so-- but they were enjoying themselves, as Del Mar crowds often do.)

But "game of skill" doesn't get you there.

[LottaKash]

I believe that "churn" is greatly overlooked by the purveyors of our sport (the tracks)...

A good analogy of churn is akin to gambling on slot machines...

Some casinos have more than their fair share of "loose slots", while others are tight and just want their kash right away, rather than you get some bang for your buck...

Like, at least I like to get some of what I call "ass-time" before they finally get it all...Slots are mostly for entertainment for most people...The just want a good nite out, with the possibility of making a little score, and they need that ass-time to try and get it...Churn

One would think that the tracks would get hip to this ass time thing...

[dilanesp]

I believe that "churn" is greatly overlooked by the purveyors of our sport (the tracks)...

A good analogy of churn is akin to gambling on slot machines...

Some casinos have more than their fair share of "loose slots", while others are tight and just want their kash right away, rather than you get some bang for your buck...

Like, at least I like to get some of what I call "ass-time" before they finally get it all...Slots are mostly for entertainment for most people...The just want a good nite out, with the possibility of making a little score, and they need that ass-time to try and get it...Churn

One would think that the tracks would get hip to this ass time thing...

Horseplayers seem to think tracks never study takeout, and this is soooooo not true.

The studies do not say what horseplayers think they say (or perhaps want them to say). Slot machines, by the way, are different because you place many more bets in an hour. By definition, when the races are going off every 30 minutes (or maybe every 3 minutes, if you play all the simulcasts), the takeout/churn model is going to be quite a bit different.

[HalvOnHorseracing]

Horseplayers seem to think tracks never study takeout, and this is soooooo not true.

The studies do not say what horseplayers think they say (or perhaps want them to say). Slot machines, by the way, are different because you place many more bets in an hour. By definition, when the races are going off every 30 minutes (or maybe every 3 minutes, if you play all the simulcasts), the takeout/churn model is going to be quite a bit different.
Are you suggesting that the tracks know that as they raise the take they actually make less profit but they do it anyway? All you have to do is look at the tracks that lowered take on certain bets to see the relationship.

The well known formula for calculating gaming revenue is

Gaming Revenue = Volume x House Advantage

In other words, if you want to make more money you have two choices. Increase the house advantage while keeping volume the same, or increase the volume. Unfortunately, increasing the house advantage (or raising the take) usually has the effect of decreasing the volume. The arithmetic is the same whether we are talking about horseracing or table games or fantasy sports, and in the case of horseracing has been well documented. The more you take, the less you make.

Slots, once the cash cow of casinos, are fading like a bleeder in the stretch. This of course begs the question, why did it take 150 years to figure out there are quicker ways to lose money, but not many. Table games are similarly suffering. Many casinos, after consulting with the management of racetracks, decided to cut the premium for blackjack from 3/2 to 6/5, with the predictable outcome that the action slowed down even more.

So what do the studies say?

[dilanesp]

Are you suggesting that the tracks know that as they raise the take they actually make less profit but they do it anyway? All you have to do is look at the tracks that lowered take on certain bets to see

I'm suggesting that, without saying that current takeout rates are optimal, in general tracks have studied this and have not determined that they would make higher profits at a lower takeout. (Note that this is not refuted by arguing that handle will increase. It will, but the total revenue to the track could still be lower. Further note this is also not refuted by pointing to single bets with lower takeout. Such bets may attract players who care about takeout more, but there may be other players who are takeout- insensitive.)

Every business studies its price points carefully.

[Southbaygent]

Hmmm, I tend to think Los Alamitos family will sell their property and we will see SA & Del Mar exclusively here in SoCal.

[SuperPickle]

Hmmm, I tend to think Los Alamitos family will sell their property and we will see SA & Del Mar exclusively here in SoCal.

I was trying not be that guy on this thread. The whole starting point is already wrong. California racing is terminal.

Once two 80+ men (Stronarch and Allred) die Los Al and Golden Gate go. Santa Anita should be fine but no one can garantee it. The people of Arcadia would fight development to their dying death.

SoCal horseman have killed it. They have no long term vision of the game. They're welfare queens who's solution to everything is more takeout. They could have had exchange wagering years ago. They sabatoged it. They wanted a bigger cut.

Last month's CRHB meeting underscores both how screwed Cal racing is and how SoCal horseman are driving it.

Multiple critical issues were on the agenda. Pleasanton put stabling on the agenda and flat out said they can't afford year round stabling. They want out now. Los Al wanted to talk about how they are not committed to thoroughbred racing long term and how the horseman are not supporting the meet.

Which brings us to SoCal Horseman. In the wake of those two major items what did they want to talk about? They wanted to address people on track are using their phones to bet and since they get a smaller cut on off track they wanted the adws to stop it.

I can't make this up.

SoCal horseman are the passenger on the Titanic complaining about how their steak was prepared.

[HalvOnHorseracing]

I'm suggesting that, without saying that current takeout rates are optimal, in general tracks have studied this and have not determined that they would make higher profits at a lower takeout. (Note that this is not refuted by arguing that handle will increase. It will, but the total revenue to the track could still be lower. Further note this is also not refuted by pointing to single bets with lower takeout. Such bets may attract players who care about takeout more, but there may be other players who are takeout- insensitive.)

Every business studies its price points carefully.
You might have a point if I hadn't talked to a number of track managers and come to the conclusion that they only have the barest minimum understanding of the parimutuel game. Example after example in the real world proves that as you raise the take in any gambling game, the high probability outcome is for handle to decrease to the point where revenue decreases. Check the result the last time California thought raising the take on certain bets would increase revenues. Give me one example of a jurisdiction raising the take and seeing handle either remain steady or only decrease enough to have revenues increase.

[Nitro]

You might have a point if I hadn't talked to a number of track managers and come to the conclusion that they only have the barest minimum understanding of the parimutuel game. Example after example in the real world proves that as you raise the take in any gambling game, the high probability outcome is for handle to decrease to the point where revenue decreases. Check the result the last time California thought raising the take on certain bets would increase revenues. Give me one example of a jurisdiction raising the take and seeing handle either remain steady or only decrease enough to have revenues increase.
Dare I suggest the Hong Kong JC as the premier platform and model for horse racing in the 21st century?
I’ve mentioned this many times before, but as far as I’m concerned until the racing jurisdictions in the U.S. wake up and offer even a semblance of their product the racing industry in the U.S. will continue its decline.

Just to mention a few items to consider:
1) They have a relatively high take-out & the O.A. handle continues to rise.
2) Their field sizes on average include 12 entries per race.
3) They offer primarily Turf racing with maybe 10 to 15% racing on the All-weather surface.
4) Every race is a Handicap or Stakes race (There are No claiming or Allowance races!)
5) Horses are brought into condition after layoffs with Trial races (non-betting) as are 1st time Starters.
6) Jockeys are held accountable for not only poor riding, but lethargic rides as well.
7) NO DRUGS of any kind allowed, and Trainers caught are very heavily fined or permanently suspended.
8) Complete transparency of all related horse racing information including PP’s, and array of statistics.
9) Individual horse information including the actual weight of each entry at race time, and a journal of physical ailments.
(All the information is FREE and available or their Web site)

They basically offer an integrity to the game which their patrons obviously recognize. The betting totals are incredibly large! With only 2 active race days per week (and ~ 42 weeks of racing) their handle is $3 (U.S.) Billion higher than ALL the betting combined for every track in No. America for an entire year.

The local U.S. racing jurisdictions will eventually have to come to grips with reality and realize that in a system of “supply & demand” they’ll have to consolidate and reorganize their programs to suit their Customer’s needs. Their overhauled programs must demonstrate a veracity to preclude any customer’s apprehension about playing.

But I won’t hold my breath!
I’ve been playing HK for the last 3 years and for me it’s like a horse-player’s Shangri-La.

[HalvOnHorseracing]

Dare I suggest the Hong Kong JC as the premier platform and model for horse racing in the 21st century?
I’ve mentioned this many times before, but as far as I’m concerned until the racing jurisdictions in the U.S. wake up and offer even a semblance of their product the racing industry in the U.S. will continue its decline.

Just to mention a few items to consider:
1) They have a relatively high take-out & the O.A. handle continues to rise.
2) Their field sizes on average include 12 entries per race.
3) They offer primarily Turf racing with maybe 10 to 15% racing on the All-weather surface.
4) Every race is a Handicap or Stakes race (There are No claiming or Allowance races!)
5) Horses are brought into condition after layoffs with Trial races (non-betting) as are 1st time Starters.
6) Jockeys are held accountable for not only poor riding, but lethargic rides as well.
7) NO DRUGS of any kind allowed, and Trainers caught are very heavily fined or permanently suspended.
8) Complete transparency of all related horse racing information including PP’s, and array of statistics.
9) Individual horse information including the actual weight of each entry at race time, and a journal of physical ailments.
(All the information is FREE and available or their Web site)

They basically offer an integrity to the game which their patrons obviously recognize. The betting totals are incredibly large! With only 2 active race days per week (and ~ 42 weeks of racing) their handle is $3 (U.S.) Billion higher than ALL the betting combined for every track in No. America for an entire year.

The local U.S. racing jurisdictions will eventually have to come to grips with reality and realize that in a system of “supply & demand” they’ll have to consolidate and reorganize their programs to suit their Customer’s needs. Their overhauled programs must demonstrate a veracity to preclude any customer’s apprehension about playing.

But I won’t hold my breath!
I’ve been playing HK for the last 3 years and for me it’s like a horse-player’s Shangri-La.
How is this an example of a jurisdiction raising the take and seeing a concomitant rise in revenue?

As I've opined on a number of occasions, there are myriad reasons Hong Kong is not comparable to American racing jurisdictions, not the least of which is that the HKJC essentially controls all the gambling on the island and the closest casino competition is an hour away by boat. I won't go through them (again) but you're living a dream if you think it's a matter of just having the will to be Hong Kong.

It's great you do so well at Hong Kong, and doing some of the things they do should be considered by American jurisdictions, but the problems of American racing are much more complex than making every race a stakes race.

[Rex Phinney]

How is this an example of a jurisdiction raising the take and seeing a concomitant rise in revenue?

As I've opined on a number of occasions, there are myriad reasons Hong Kong is not comparable to American racing jurisdictions, not the least of which is that the HKJC essentially controls all the gambling on the island and the closest casino competition is an hour away by boat. I won't go through them (again) but you're living a dream if you think it's a matter of just having the will to be Hong Kong.

It's great you do so well at Hong Kong, and doing some of the things they do should be considered by American jurisdictions, but the problems of American racing are much more complex than making every race a stakes race.

Well if we acknowledge that the closest alternative betting being an hour away by boat is a good thing for Hong Kong racing then how can we ignore the impact of increased betting alternatives for potential California racing patrons.

The gambling industry as a whole is slowly circling the drain. If you don't believe me go count up the square footage that Vegas casinos are dedicating to gaming vs. restaurants, bars and shopping. They are pulling machines and tables in favor of restaurants and retail space as fast as the contractors can do the work.

Now that doesn't change the way that the hardest of hard core bettors and gambling professionals see things, that crowd is in it to win it and isn't quitting. The masses though, that's another story.

I think Nitro makes MANY good points, I know that all the full time bettors think lower takeout will save the game but IMO it doesn't make a single ounce of difference. Until you get more people betting on races the decline will continue. Much of what Nitro has pointed out would go a long way towards getting more money to the windows.

I for one believe less racing is the way to go. Fewer days, bigger races.

[HalvOnHorseracing]

Well if we acknowledge that the closest alternative betting being an hour away by boat is a good thing for Hong Kong racing then how can we ignore the impact of increased betting alternatives for potential California racing patrons.

The gambling industry as a whole is slowly circling the drain. If you don't believe me go count up the square footage that Vegas casinos are dedicating to gaming vs. restaurants, bars and shopping. They are pulling machines and tables in favor of restaurants and retail space as fast as the contractors can do the work.

Now that doesn't change the way that the hardest of hard core bettors and gambling professionals see things, that crowd is in it to win it and isn't quitting. The masses though, that's another story.

I think Nitro makes MANY good points, I know that all the full time bettors think lower takeout will save the game but IMO it doesn't make a single ounce of difference. Until you get more people betting on races the decline will continue. Much of what Nitro has pointed out would go a long way towards getting more money to the windows.

I for one believe less racing is the way to go. Fewer days, bigger races.
Anyone who follows my blog knows that I've written about how to start focusing on the next generation of gamblers previously.

http://halveyonhorseracing.com/?p=2406

The point is that millennials are as interested in gambling as previous generations, and that it is a head scratcher why horse racing hasn't captured their imagination. My article has an answer for capturing new players, and I'll tell you if you think you will capture new players without a fair take you are deluding yourself. Saying we need more players and then saying making the game more friendly to players would have no difference doesn't make sense.

Racing will eventually consolidate, even if it is forced. HKJC is the only game in town. American racing has to compete with a lot of different gambling sources. Some of what Nitro suggested will help, but to make a real difference you need to make horse racing the sport of choice for the new generation of gamblers.

I don't want to lose the original focus here. Jurisdictions do not help themselves by raising the take, and that's true for horse racing, slots, black jack or other gambling.

[HalvOnHorseracing]

1) They have a relatively high take-out & the O.A. handle continues to rise.
By the way, takeout averages 18.5%, marginally less than the US average, but in the same general range as most US tracks.

When you are the only game in town, when you don't have to compete with the lottery or casinos, when you get all the revenue that comes off the take to distribute, and when you have a population that seems to have a genetic predisposition to gamble, it isn't nearly as tough to generate volume at any take out rate.

[dilanesp]

How is this an example of a jurisdiction raising the take and seeing a concomitant rise in revenue?

That's a silly question.

Raising takeout directly will generate bad publicity. Plus takeout is often subject to state regulation. So there are reasons not to raise it.

I will tell you that I have no doubt whatsoever that both the Kentucky Derby and the Breeders' Cup COULD raise takeout and increase revenue. Think about it.

This is a bit like the people who believe in supply side economics. There are people who have an almost mystical, theological belief in tax cuts raising revenue. Meanwhile, their actual effects have been repeatedly studied, and their actual effect on revenue is usually negative.

[dilanesp]

I was trying not be that guy on this thread. The whole starting point is already wrong. California racing is terminal.

Once two 80+ men (Stronarch and Allred) die Los Al and Golden Gate go. Santa Anita should be fine but no one can garantee it. The people of Arcadia would fight development to their dying death.

SoCal horseman have killed it. They have no long term vision of the game. They're welfare queens who's solution to everything is more takeout. They could have had exchange wagering years ago. They sabatoged it. They wanted a bigger cut.

Last month's CRHB meeting underscores both how screwed Cal racing is and how SoCal horseman are driving it.

Multiple critical issues were on the agenda. Pleasanton put stabling on the agenda and flat out said they can't afford year round stabling. They want out now. Los Al wanted to talk about how they are not committed to thoroughbred racing long term and how the horseman are not supporting the meet.

Which brings us to SoCal Horseman. In the wake of those two major items what did they want to talk about? They wanted to address people on track are using their phones to bet and since they get a smaller cut on off track they wanted the adws to stop it.

I can't make this up.

SoCal horseman are the passenger on the Titanic complaining about how their steak was prepared.

This is basically right.

Fundamentally, we only have enough horses and betting for one circuit. And we have one track (Los Al) which loses tons of money and will eventually get rid of thorougbred racing, and fair circuit that basically uses revenues from the fairs to subsidize horse racing (which is slowly going away-- several fairs have stopped their horse racing entirely).

Meanwhile, our horsemen are like the business owners in "Jaws" who just want to keep the beaches open no matter what. They want 2 year round circuits so they can continue to win their 6 horse fields with their doped horses.

Los Al is going to stop. Santa Anita and Del Mar are viable, but neither one of them want the Los Al dates-- they both already have too many dates. That means that there's going to be big holes in the Southern California schedule. Hopefully what happens then is Southern California trainers start shipping up to Golden Gate during the breaks, and Golden Gate starts carding races that are attractive to Southern California horsemen.

Eventually all the fairs except maybe two of them (Pleasanton and Santa Rosa) are going to stop offering thoroughbred racing. (Ferndale might continue too but they aren't important because they don't draw a lot of horses from the two main circuits.)

And at that point Stronach, or whoever owns GGF and SA, will have a great opportunity to cut racing dates and line them up so that the tracks don't overlap.

That's the long term future of California racing.

[Rex Phinney]

The point is that millennials are as interested in gambling as previous generations, and that it is a head scratcher why horse racing hasn't captured their imagination. My article has an answer for capturing new players, and I'll tell you if you think you will capture new players without a fair take you are deluding yourself. Saying we need more players and then saying making the game more friendly to players would have no difference doesn't make sense.



It makes perfect sense.

If I gave you $100 for every millennial you could find at a racetrack or even betting on Derby Day who knew what the takeout rate was (or even what the term means) you'd have exactly zero dollars.

This is one of the reasons I could never buy into the takeout rate effect on the game and it's current decline. The people that are showing no interest don;t have a clue about takeout. Noone under the age of 35 is staying away from racing because the takeout is too high.

The dedicated gamblers and maybe some sharks it's going to matter sure, but not potential newbs.

[cj]

It makes perfect sense.

If I gave you $100 for every millennial you could find at a racetrack or even betting on Derby Day who knew what the takeout rate was (or even what the term means) you'd have exactly zero dollars.

This is one of the reasons I could never buy into the takeout rate effect on the game and it's current decline. The people that are showing no interest don;t have a clue about takeout. Noone under the age of 35 is staying away from racing because the takeout is too high.

The dedicated gamblers and maybe some sharks it's going to matter sure, but not potential newbs.

Not knowing anything about takeout doesn't make you immune from the effect it has on your wallet.

[HalvOnHorseracing]

That's a silly question.

Raising takeout directly will generate bad publicity. Plus takeout is often subject to state regulation. So there are reasons not to raise it.

I will tell you that I have no doubt whatsoever that both the Kentucky Derby and the Breeders' Cup COULD raise takeout and increase revenue. Think about it.

This is a bit like the people who believe in supply side economics. There are people who have an almost mystical, theological belief in tax cuts raising revenue. Meanwhile, their actual effects have been repeatedly studied, and their actual effect on revenue is usually negative.
That was the question I asked. What is the relationship between take and handle?

That's the best you got? On racing's big days you could get away with raising the take? CD DID raise the take and watched their handle diminish overall for the meet. Not even the Derby could save them.

The Laffer contribution to supply side economics was to suggest lower tax rates would create more government revenue by generating more economic activity. This is not the same concept as the relationship between take and volume.

I've already explained that increases in take in the real world result in less volume, and decreases in take result in an increase in volume. I'm not sure what more evidence I can offer than the reality of what has happened.

[dilanesp]

Not knowing anything about takeout doesn't make you immune from the effect it has on your wallet.

True, but the problem with that argument is that the effect of short-term variance is much higher than the effect of takeout.

I see that in poker all the time. The average regular, not very good poker player is extremely aware of his or her short term wins and losses. The player will know that he or she won $450 today, and lost $1,120 last week.

But the effect of an additional $1 of rake (in Southern California, about a 14 percent increase of the takeout) is going to be barely noticed. That $450 win? She probably won nine pots in her session. So it would have been $459. And the $1,120 loss? It would have been $1,111. Players just don't notice this, at all.

Very skilled players who play a lot of hours and keep detailed records can definitely see the decreases caused by takeout. But not the general public.

[cj]

True, but the problem with that argument is that the effect of short-term variance is much higher than the effect of takeout.

I see that in poker all the time. The average regular, not very good poker player is extremely aware of his or her short term wins and losses. The player will know that he or she won $450 today, and lost $1,120 last week.

But the effect of an additional $1 of rake (in Southern California, about a 14 percent increase of the takeout) is going to be barely noticed. That $450 win? She probably won nine pots in her session. So it would have been $459. And the $1,120 loss? It would have been $1,111. Players just don't notice this, at all.

Very skilled players who play a lot of hours and keep detailed records can definitely see the decreases caused by takeout. But not the general public.

Don't really agree. It doesn't take too long for anybody to figure out the odds are depressed due to takeout with today's short fields.

By your argument, why not just make takeout on the Derby 80%? It doesn't matter, right? The biggest problem with takeout reductions is that people are playing lots of tracks, and the benefits (more turnover) don't necessarily go to the tracks that lowered the rake. Until the tracks work together, they'll never know the true results of takeout reduction. However, they all know the results of takeout increases...lost money. That has been proven many times over.

[dilanesp]

That was the question I asked. What is the relationship between take and handle?

That's the best you got? On racing's big days you could get away with raising the take? CD DID raise the take and watched their handle diminish overall for the meet. Not even the Derby could save them.

The Laffer contribution to supply side economics was to suggest lower tax rates would create more government revenue by generating more economic activity. This is not the same concept as the relationship between take and volume.

I've already explained that increases in take in the real world result in less volume, and decreases in take result in an increase in volume. I'm not sure what more evidence I can offer than the reality of what has happened.

The relationship between takeout and revenue is as follows:

Like any other activity, there is an elasticity of demand. That manifests itself as a demand curve. Elastic demand's curve looks like a steep slope. As price increases, you go steeply down the slope, and quantity demanded goes down.

Inelastic demand looks like a gradual incline. As price increases, you go gradually down the slope, and quantity demanded only goes down a little. Where there is inelastic demand, sellers can get away with price increases. Where demand is elastic, they can't.

But it's more complicated than that. Every buyer has his or her own demand curve. And they have different slopes.

For instance, a compulsive gambler may have a very inelastic demand curve. He doesn't care about takeout. He wants the action and will do play at any price.

In contrast, the sharpest minds on this board, who look for tracks who provide the best takeout situation, probably have pretty elastic demand curve. Up the takeout 2 percentage points and they might switch to another track; reduce it a couple of points and they may play more.

And then there are in between gradients.

Where different consumers have different elasticity, a business makes the most money when they can PRICE DISCRIMINATE. For instance, the airline industry does all sorts of things with its fare rules to ensure that business travelers, who have to travel and will pay full freight to do it, pay a higher fare while price sensitive leisure travelers pay a low fare.

Tracks price discriminate too. Rebates are one way this happens. Another way this happens is through special lower takeouts like the "Player's Pick Five" here in California.

But price discrimination is NOT proof of the popularity of lower takeout. Quite the opposite. It is proof that the industry thinks that there are some bettors who care about takeout and others that don't. That's why two different prices are offered. (Similarly, this is why some jurisdictions have bigger takeouts on exotic wagers than on other wagers-- their market research shows that exotic bettors care less about takeout (probably because those bets are favored by compulsive gamblers).)

Believe me, THEY KNOW THIS STUFF. Tracks aren't run by a bunch of idiots who never took an economics class. They know precisely what would happen if they lowered their takeout. The fact that they don't do it, or only do it in fits and starts and sometimes in price discriminatory ways, tells you what their research is telling them.

And finally, on Churchill. You missed my point. I didn't claim Churchill could raise takeout on every race, but that they could do it on the Derby specifically. Substantially.

Why? Because every horseplayer in America wants to bet that race. There's no way they wouldn't make a ton more revenue if they had a special higher Derby takeout. Sure, some cost-conscious handicappers might stay away, but most people would still bet the Derby for all the reasons they do it now.

[dilanesp]

Don't really agree. It doesn't take too long for anybody to figure out the odds are depressed due to takeout with today's short fields.

By your argument, why not just make takeout on the Derby 80%? It doesn't matter, right? The biggest problem with takeout reductions is that people are playing lots of tracks, and the benefits (more turnover) don't necessarily go to the tracks that lowered the rake. Until the tracks work together, they'll never know the true results of takeout reduction. However, they all know the results of takeout increases...lost money. That has been proven many times over.

You can't set it at 80 percent. But that's, with all respect, cj, the demagogic Arthur Laffer argument on taxes. "You can't charge 90 percent", when people are arguing about 40 percent.

Let's say instead that Churchill upped takeout on the Derby three percentage points. What do you think would happen to handle? Would it really decrease betting enough to CUT revenue?

[cj]

You can't set it at 80 percent. But that's, with all respect, cj, the demagogic Arthur Laffer argument on taxes. "You can't charge 90 percent", when people are arguing about 40 percent.

Let's say instead that Churchill upped takeout on the Derby three percentage points. What do you think would happen to handle? Would it really decrease betting enough to CUT revenue?

I don't know, but I would guess yes. It would get plenty bad publicity and would hurt them all the other days of the year too. Maybe in 1980 they could get away with it, but not in 2016. Plenty of people would know and it would be a story.

[HalvOnHorseracing]

You can't set it at 80 percent. But that's, with all respect, cj, the demagogic Arthur Laffer argument on taxes. "You can't charge 90 percent", when people are arguing about 40 percent.

Let's say instead that Churchill upped takeout on the Derby three percentage points. What do you think would happen to handle? Would it really decrease betting enough to CUT revenue?
Many businesses apply premium pricing at specific times. Airlines do it. Hell, baseball teams do it when the Yankees come to town. I looked at hotels on New Year's Eve - pricing is 4 times the normal rate. But if your argument is that tracks could get away with charging a premium price on one or two days a year, I would say, SFW. The growth in the game is about pricing the product correctly on every regular day, and if you believe that the pricing is irrelevant on all those regular days you fly in the face of every study and every real world example. That's not supply side economics. There is a very predictable curve for showing the relationship between price and demand, and the reason the curve isn't applicable on special days is that demand goes through the roof. Just like traveling on Thanksgiving. You want to fly that badly, you pay the freight.

[thespaah]

I prefer short fields, if I see a 6 or 7 horse field anywhere at the tracks I normally follow, I'll handicap it, takes less time to cap shorter fields and while bigger fields beget bigger exotic prices, there's no extra 'value' per se in the big field.

I looked quick at gulf and saw too many monster fields so I just didn't look at their races at all, my opposition to big fields is just not having time to handicap them, takes too long.
Ok...So you prefer a quick nickel. That's cool I guess.
IMO those races with short fields and an odds on favorite have little value as it is close ot impossible to get a good price and smaller volume players are getting crushed by the larger volume players. So I stay away from those.
In fact, the only good point of short fields is i can take those races "off" and not bother with them...To each his own...

[thespaah]

California Horse racing has a plan that has been in effect for the last 10 years. Blame Slot Gambling and "HOPE" it gets better. There has not been any real push to help the Owners turn a profit or the players either. California Horse racing will be run at Del Mar, Los Alamitos ( getting the most days ), and Golden Gate. Santa Anita's property will sell one day and that will be the end of California's Racing.
Wait a minute ( sound of stylus scratching across vinyl album)....What makes you believe Santa Anita will be sold?
This one should be a wing dinger...

[thespaah]

Dare I suggest the Hong Kong JC as the premier platform and model for horse racing in the 21st century?
I’ve mentioned this many times before, but as far as I’m concerned until the racing jurisdictions in the U.S. wake up and offer even a semblance of their product the racing industry in the U.S. will continue its decline.

Just to mention a few items to consider:
1) They have a relatively high take-out & the O.A. handle continues to rise.
2) Their field sizes on average include 12 entries per race.
3) They offer primarily Turf racing with maybe 10 to 15% racing on the All-weather surface.
4) Every race is a Handicap or Stakes race (There are No claiming or Allowance races!)
5) Horses are brought into condition after layoffs with Trial races (non-betting) as are 1st time Starters.
6) Jockeys are held accountable for not only poor riding, but lethargic rides as well.
7) NO DRUGS of any kind allowed, and Trainers caught are very heavily fined or permanently suspended.
8) Complete transparency of all related horse racing information including PP’s, and array of statistics.
9) Individual horse information including the actual weight of each entry at race time, and a journal of physical ailments.
(All the information is FREE and available or their Web site)

They basically offer an integrity to the game which their patrons obviously recognize. The betting totals are incredibly large! With only 2 active race days per week (and ~ 42 weeks of racing) their handle is $3 (U.S.) Billion higher than ALL the betting combined for every track in No. America for an entire year.

The local U.S. racing jurisdictions will eventually have to come to grips with reality and realize that in a system of “supply & demand” they’ll have to consolidate and reorganize their programs to suit their Customer’s needs. Their overhauled programs must demonstrate a veracity to preclude any customer’s apprehension about playing.

But I won’t hold my breath!
I’ve been playing HK for the last 3 years and for me it’s like a horse-player’s Shangri-La.
I agree...The Asian markets horse racing business model is galactically superior to that of North America,. Yet, no racing jurisdiction will ever consider taking a page from the Hong Kong or Japan book. Hell these bozos don;t even know it exists.
Now, the problem with your idea is that there are some 23 states with different rules and different methods of doing things. Then there are various racing associations within states.
Trying to get these people to cooperate with each other, you may as well try herding house cats.

[Nitro]

I agree...The Asian markets horse racing business model is galactically superior to that of North America,. Yet, no racing jurisdiction will ever consider taking a page from the Hong Kong or Japan book. Hell these bozos don;t even know it exists.
Now, the problem with your idea is that there are some 23 states with different rules and different methods of doing things. Then there are various racing associations within states.
Trying to get these people to cooperate with each other, you may as well try herding house cats.And I totally agree with your conclusion. It’s a pretty sad commentary considering that we live in a free capitalistic society where innovation is generally rewarded. I find it very discouraging that none of the local jurisdictions are willing to revamp their programs even slightly to better suit the only people who really support this game.

I know it may sound a bit dramatic and perhaps even farfetched, but perhaps its high time and the only way the entire racing landscape might change is to follow the lead of all professional major sports where a singular commission regulates the entire program. After all it’s not like a player living just about anywhere in the U.S can’t play the races in some other state’s jurisdiction of their choosing. We’re living in a world that includes international cyberspace. Maybe that’s the first thing these 23 some odd jurisdictions under a single commission would be able to deal with properly.

BTW I just wanted to add that if anyone really believes that reason the handle in Hong Kong is so incredibly large because it’s the only game in town; They’re forgetting that believe it or not these people have computers too and access to other forms of gambling. They can also bet at any other of a number of horse racing venues, like Australia, Japan, New Zealand, Korea, and Singapore to name a few.

[AlsoEligible]

Which brings us to SoCal Horseman. In the wake of those two major items what did they want to talk about? They wanted to address people on track are using their phones to bet and since they get a smaller cut on off track they wanted the adws to stop it.

To be completely fair, they don't want the ADWs to stop people from being able to use their accounts on-track or at OTBs. They just want the ADWs to geolocate customers using their accounts at those facilities, and report those wagers separately so the track can get their fair cut. Legislation to that effect has already been on the books, it's just never been enforced.

Not saying it's a bigger issue than any of the others you mentioned, or that the horsemen should be focusing on it in lieu of other issues. But they're not trying to stop ADW wagering.

[cj]

To be completely fair, they don't want the ADWs to stop people from being able to use their accounts on-track or at OTBs. They just want the ADWs to geolocate customers using their accounts at those facilities, and report those wagers separately so the track can get their fair cut. Legislation to that effect has already been on the books, it's just never been enforced.

Not saying it's a bigger issue than any of the others you mentioned, or that the horsemen should be focusing on it in lieu of other issues. But they're not trying to stop ADW wagering.

I think we all know why they are doing it. But all it is going to accomplish is that people will stay home and bet. Tracks not only won't get there cut, they won't get admissions, parking, and concessions. The reason people will stay home is that by tracks "getting their fair share", that means customers get less or no rebates.

[SuperPickle]

To be completely fair, they don't want the ADWs to stop people from being able to use their accounts on-track or at OTBs. They just want the ADWs to geolocate customers using their accounts at those facilities, and report those wagers separately so the track can get their fair cut. Legislation to that effect has already been on the books, it's just never been enforced.

Not saying it's a bigger issue than any of the others you mentioned, or that the horsemen should be focusing on it in lieu of other issues. But they're not trying to stop ADW wagering.

Yeah but you're leaving out the meat and potatoes...

First off to do it would be costly. They want every ADW to do it. Some would tell them to pound sand and leave so that $$$. Who pays for it? Certainly not the horseman. The ADW. When the ADW pays who are the costs trickled down to? You and me.

Second, the technology they want is expensive. Basically the ADWs would have to geolocate all their customers to ensure they're not in 100 acres in Arcadia. Also when it can't read your location you can't bet.

Basically they want someone else to spend thousands of dollars so purses can go up hundreds of dollars.

[dilanesp]

I think we all know why they are doing it. But all it is going to accomplish is that people will stay home and bet. Tracks not only won't get there cut, they won't get admissions, parking, and concessions. The reason people will stay home is that by tracks "getting their fair share", that means customers get less or no rebates.


I doubt this. I suspect that if someone goes physically to the track in this day and age, they want to be there and not at home.

[airford1]

Wait a minute ( sound of stylus scratching across vinyl album)....What makes you believe Santa Anita will be sold?
This one should be a wing dinger...The F/N Property is worth a FORTUNE. Split into single family home lots alone would CRUSH the money the place will make in the next 20 years. Each lot would go for more than $850,000
for the low end homes. Santa Anita sits on 320 Acres in the best Arcadia location. It will be sold.Do the Math.

[dilanesp]

The F/N Property is worth a FORTUNE. Split into single family home lots alone would CRUSH the money the place will make in the next 20 years. Each lot would go for more than $850,000
for the low end homes. Santa Anita sits on 320 Acres in the best Arcadia location. It will be sold.Do the Math.

Santa Anita is definitely worth a ton. (So is Del Mar, by the way.)

But so far we haven't seen a profitable racetrack in California get closed and sold. Hollywood Park was never closed when it was profitbale (even though the land has been valuable for years), and Bay Meadows was bleeding money when it was sold.

I suspect this is no accident. Local authorities have to approve the zoning changes to allow redevelopment. Their preference is going to be to keep the track open. If the track is losing money and may have to close, that's a different situation.

Unless Santa Anita becomes unprofitable, I'd fix the chances of its closure very, very low.

[Southbaygent]

There are (I believe) covenant restrictions with the city of Arcadia that would prevent a 100% real estate sale of Santa Anita. Same company already owns the (popular) massive shopping mall adjacent

[EasyGoer89]

There are (I believe) covenant restrictions with the city of Arcadia that would prevent a 100% real estate sale of Santa Anita. Same company already owns the (popular) massive shopping mall adjacent

There's some info here on this 'endangerment' scroll down to 'endangerment and reprieve'

https://en.m.wikipedia.org/wiki/Santa_Anita_Park

[airford1]

As much as I have loved Santa Anita from 1972 till now it is Doomed. The had a ton of money put into it and the sport hasn't returned the cost with 4,000 people ( on a good Day ) walking around in a race that will support easy 60,000. Management thinks a "Food Truck" day and Car Shows along with a failed Farmers Market will boost on track attendance. Not very aggressive with 5 and 6 horse fields. I would think they would be attacking the State Tax system to help the Track, Owners, and the entire Backside Jobs.

[dilanesp]

As much as I have loved Santa Anita from 1972 till now it is Doomed. The had a ton of money put into it and the sport hasn't returned the cost with 4,000 people ( on a good Day ) walking around in a race that will support easy 60,000. Management thinks a "Food Truck" day and Car Shows along with a failed Farmers Market will boost on track attendance. Not very aggressive with 5 and 6 horse fields. I would think they would be attacking the State Tax system to help the Track, Owners, and the entire Backside Jobs.

That's silly. The track still makes a profit. It draws big crowds for its big race days (watch what happens on December 26).

[AlsoEligible]

Yeah but you're leaving out the meat and potatoes...

First off to do it would be costly. They want every ADW to do it. Some would tell them to pound sand and leave so that $$$. Who pays for it? Certainly not the horseman. The ADW. When the ADW pays who are the costs trickled down to? You and me.

Second, the technology they want is expensive. Basically the ADWs would have to geolocate all their customers to ensure they're not in 100 acres in Arcadia. Also when it can't read your location you can't bet.

Basically they want someone else to spend thousands of dollars so purses can go up hundreds of dollars.

It's really not an expensive cutting edge technology. I have dozens of apps on my phone that incorporate location services. If my free weather app made by a freelance iOS developer can figure out where I'm located, then surely it's not a large mountain for a major ADW company to climb.

It's not even new to the gambling industry; most of the books in Nevada will make sure you're on the premises before letting you use their apps, as do a lot of the shops in other countries. Hell, some of the ADWs we're talking about already do it. For those who don't, it's a one-time expense, which further negates the idea of it being too costly. Once the infrastructure is in place it's done, even if other states decide to follow California's lead.

One of the biggest knocks I see on the technical side of the industry (totes, ADWs, etc) is that we're all using antiquated technology. Then when a jurisdiction does make a push for those companies to get with the times, it's suddenly too costly.

ADW companies in Cali already operate with no margin (a couple even lose money in CA and make it up in other states). If they were going to tell the CHRB to pound sand they would have done it a long time ago. They'll set this up without a huge expense, the facilities we spend time at will make a little bit more from our wagers....and it'll have no impact on you or me besides having to allow their apps to see our location. The outcry over this is totally overblown imo.


EDIT: to add that you do make a good point about people being locked out if for whatever reason their device can't locate them. I don't really know what you do about that, but I would have to think hope?) that it's only a small number of people affected by it.

[airford1]

That's silly. The track still makes a profit. It draws big crowds for its big race days (watch what happens on December 26).
One day doesn't make a Season. In 2000, the racetrack was named to America's "Most Endangered Historic Places" list. The Santa Anita Racetrack was determined eligible for listing in the National Register of Historic Places in 2006,[21] but continued to be threatened by developer's plans. A themed entertainment complex proposal was aborted, but there were new plans are in the works for the parking and support areas adjacent to the historic race track and grandstands.[6]
In 2006, there was a proposal to close Santa Anita Park and use its location as the site of a new retail/entertainment complex. The Arcadia City Council approved a plan In April 2007 to develop an 830,000 square foot commercial, retail, and office complex in the south parking area, where the barracks that housed interned Japanese Americans during World War II are located. The proposal planned to tear down the South Ticket Gate and the 1938 Saddling Barn, and to install a simulcast facility in the center of the historic grandstand.[6] In April 2008, a plan was approved to use large parts of the existing track parking lot to construct a mall, the "Shops at Santa Anita" [22][23]
As of May 2011, the plans to build another mall next to Santa Anita Park were abandoned. Protests against the project by the Westfield group, owner of the adjacent Westfield Santa Anita Mall (built in 1974 on the site of the old barns and training track), and the bankruptcy of Magna International, owner of Santa Anita Park, were a factor in the decision.[24] my friend need to look at the Profit and Lost statements and then you will know . When Stonich gets tired of the bleeding it's gone.
PUT A FORK IN IT.

[AlsoEligible]

Another CHRB meeting in the books, and I don't think any progress was made on any of the agenda items. Kick the can to 2017. What a mess.

[dilanesp]

One day doesn't make a Season. In 2000, the racetrack was named to America's "Most Endangered Historic Places" list. The Santa Anita Racetrack was determined eligible for listing in the National Register of Historic Places in 2006,[21] but continued to be threatened by developer's plans. A themed entertainment complex proposal was aborted, but there were new plans are in the works for the parking and support areas adjacent to the historic race track and grandstands.[6]
In 2006, there was a proposal to close Santa Anita Park and use its location as the site of a new retail/entertainment complex. The Arcadia City Council approved a plan In April 2007 to develop an 830,000 square foot commercial, retail, and office complex in the south parking area, where the barracks that housed interned Japanese Americans during World War II are located. The proposal planned to tear down the South Ticket Gate and the 1938 Saddling Barn, and to install a simulcast facility in the center of the historic grandstand.[6] In April 2008, a plan was approved to use large parts of the existing track parking lot to construct a mall, the "Shops at Santa Anita" [22][23]
As of May 2011, the plans to build another mall next to Santa Anita Park were abandoned. Protests against the project by the Westfield group, owner of the adjacent Westfield Santa Anita Mall (built in 1974 on the site of the old barns and training track), and the bankruptcy of Magna International, owner of Santa Anita Park, were a factor in the decision.[24] my friend need to look at the Profit and Lost statements and then you will know . When Stonich gets tired of the bleeding it's gone.
PUT A FORK IN IT.

None of those plans called for closing the track. The historic landmark people are worried about Stronach doing what he did to Gulfstream.

[cj]

Another CHRB meeting in the books, and I don't think any progress was made on any of the agenda items. Kick the can to 2017. What a mess.


Other than, apparently, booting out some ADWs---which wasn't even on the agenda.

http://www.paceadvantage.com/forum/showthread.php?p=2087922

[airford1]

None of those plans called for closing the track. The historic landmark people are worried about Stronach doing what he did to Gulfstream.
O.K. you Win.

[nik21precious]

California Horse racing has a plan that has been in effect for the last 10 years. Blame Slot Gambling and hope it gets better. There has not been any real push to help the Owners turn a profit or the players either. :bang:

[thaskalos]

Hasn't the CHRB been saying for over a decade now that they are in the "entertainment" business...and that they don't have to compete with other gambling venues because their only competition comes from the "Clippers and the Lakers"?

Why would a horseplayer care if California Racing revives or not? SCREW THEM...I say.