RICHARD ENG: Racetracks are getting greedy

[trigger]

http://www.lvrj.com/sports/8128667.html

[BillW]

This is the same song Daruty has been singing from the beginning. "The customer isn't paying enough for our product". He seems to think their product is excellent to the extent that we should be happy to pay more for it.

[boomman]

Just an educated guess, but much more likely that Eng will be talking more about this in the future as opposed to just another "soon to be a distant memory" Magna exec.....:D

Boomer

[kenwoodallpromos]

All I really know about this issue is that when a % increase in anything is asked for it needs to be questioned on principal; Racebooks I have seen in Vegas or Reno have taken up a lot of space and been very plush. You get more than the stiff table and chairs and grungy floors. As opposed to some racetracks I have seen, racebooks actually look Attractive!
As far as Eng saying racing does not put enough money into promotion, I can tell you that I know from advertising that today at the Alameda County Fair is Dachshound Racing Day sponsored by Der Weiner!! (The big ones are at Los Alamitos!).
2006-"The color and pageantry on Saturday night made the Wiener Nationals the ****biggest event in terms of attendance at the racetrack this year with 7,105 fans packing the grandstand".

[trying2win]

TRIGGER:

Good article. Thanks for sharing. I've sent emails to some Churchill Downs tracks in the past, telling them what I think of their stingy policies.

So, here's a challenge to PACE ADVANTAGE members and lurkers... don't be a wimp and just complain here at the PACE ADVANTAGE site about CHURCHILL DOWNS or MAGNA ENTERTAINMENT racetrack executives...SPEAK UP! Send an email to these so-called 'enlightened' racetrack executives at these two places. Seems to me theiir policies are too self-serving. Tell them what you think of some of their policies. Too many of these racetrack executives tend to forget who actually pays the bills...yes that's right...THE CUSTOMER!


T2W

[Premier Turf Club]

Most of the posters in this string are customers and we continue to get new PA customers everyday.

If cutting edge software, customer service and fair pricing is important to you as a horse player, please support us by signing up for an account. Anyone that has can tell you what we've promised we have delivered on. Horse players need to vote with their wallets. If we don't stand up for ourselves now, believe me no one is going to look out for our interests ever again.

I hope more of you will join us.

[rrbauer]

If you want to reward the tracks that have worked to reduce takeout (damn few) and reward the tracks that have abolished or at least reduced breakage (damn few) and p*ss on the rest (most of them) then get ready for:

www.trackthieves.com

This one will curl more hair than irons and rollers combined! Tracks, horse owners' groups and pols who have collaborated to screw the horseplaying public are going to be on stage 24/7.

Stay tuned.

[Premier Turf Club]

If you want to reward the tracks that have worked to reduce takeout (damn few) and reward the tracks that have abolished or at least reduced breakage (damn few) and p*ss on the rest (most of them) then get ready for:

www.trackthieves.com (http://www.trackthieves.com)

This one will curl more hair than irons and rollers combined! Tracks, horse owners' groups and pols who have collaborated to screw the horseplaying public are going to be on stage 24/7.

Stay tuned.

I am not so sure that 24/7 would cover it. Any chance you can work more hrs/days per week?

[trigger]

This is the same song Daruty has been singing from the beginning. "The customer isn't paying enough for our product". He seems to think their product is excellent to the extent that we should be happy to pay more for it.

I guess you guys are just plain blindly anti anything TrackNet related.
The issue here is about a more equitable split of the takeout that will not cost the horseplayer anything but ,if TrackNet is successful, would improve racing by increasing the funds the content providers (i.e. the tracks and the horsemen, etc.) would receive.
Right now, Vegas keeps 16-17% of the average 20% takeout (or upwards of 85% of the takeout!!). This is guaranteed no-risk gross revenue for the casinos and does not include peripheral gambling and other expenses incurred by horseplayers while in Vegas.
In the meantime, Vegas provides about $1500 each to the tracks and horsemen for every $100,000 bet at their race books (keeping $16,000+ for themselves).
It seems to me that Eng has it backwards as to who is greedy.
IMHO, unless TrackNet is successful in these types of endeavors, racing, in general, will be in an even deeper mess than it is now.
OK, I have donned my fire retardant suit .

[BillW]

How is it possible that we will not pay if the price goes up? We are the only ones that are paying, are you expecting Gov't subsidy?

[/b]

I guess you guys are just plain blindly anti anything TrackNet related.
The issue here is about a more equitable split of the takeout that will not cost the horseplayer anything but ,if TrackNet is successful, would improve racing by increasing the funds the content providers (i.e. the tracks and the horsemen, etc.) would receive.
Right now, Vegas keeps 16-17% of the average 20% takeout (or upwards of 85% of the takeout!!). This is guaranteed no-risk gross revenue for the casinos and does not include peripheral gambling and other expenses incurred by horseplayers while in Vegas.
In the meantime, Vegas provides about $1500 each to the tracks and horsemen for every $100,000 bet at their race books (keeping $16,000+ for themselves).
It seems to me that Eng has it backwards as to who is greedy.
IMHO, unless TrackNet is successful in these types of endeavors, racing, in general, will be in an even deeper mess than it is now.
OK, I have donned my fire retardant suit .

[rrbauer]

[/b]

I guess you guys are just plain blindly anti anything TrackNet related.
The issue here is about a more equitable split of the takeout that will not cost the horseplayer anything but ,if TrackNet is successful, would improve racing by increasing the funds the content providers (i.e. the tracks and the horsemen, etc.) would receive.
Right now, Vegas keeps 16-17% of the average 20% takeout (or upwards of 85% of the takeout!!). This is guaranteed no-risk gross revenue for the casinos and does not include peripheral gambling and other expenses incurred by horseplayers while in Vegas.
In the meantime, Vegas provides about $1500 each to the tracks and horsemen for every $100,000 bet at their race books (keeping $16,000+ for themselves).
It seems to me that Eng has it backwards as to who is greedy.
IMHO, unless TrackNet is successful in these types of endeavors, racing, in general, will be in an even deeper mess than it is now.
OK, I have donned my fire retardant suit .

Yeah, right. Everybody gets more and the horseplayer pays more. Start by getting all takeout reduced to less than 20% then have your p*ssing matches with your simulcast network partners over how much their signal should cost. If tracks and horseowners can't make it on less than 20% takeout, then they should either get out of business or go to their state pols and get subsidized (because their industry is SO IMPORTANT to their state) by the general TAXPAYERS (see how high that one flies).

You take 25% off the top, hit me with $6 plus for a can of beer, $4 for a hot dog and I'm supposed to be happy? This is entertainment? (Yeah, I know. You're laughing all the way to the bank.) OBTW average takeout is 20%? Since most bet pools are exotics and most exotic bets have takeouts in excess of 20% how does the takeout AVERAGE 20%? Is this some euphimistic presentation designed to make horseplayers think that they're paying less than they really are?

You people had better start worrying a little more about where the pie is coming from instead of just how you're going to cut it up.

[Premier Turf Club]

Pricing is an interesting topic. A couple of points.

1) The 3% signal fee is a number that you see thrown around, but even the smaller tracks charge ADWs more than that. The premium signals are at least twice that. That 3% ship sailed at least 2 years ago.

2) One thing that I NEVER see talked about is the disparity between what different TYPES of pari-mutuel providers pay. ADWs get the short end of the stick, despite the fact that probably 40% on all U.S. handle comes through ADWs. Here is typical pricing for the 2007 GP meet:


Vegas Casinos: Flat Fee

NYC OTB:2.55% (remember they refused to take wagers when GP tried to increase rate to 2.75%

U.S. Horse Tracks: 2.5-3%

U.S. Dog Tracks: 3-4%

U.S. Non-Rebate ADWs:5%

Rebate ADWs (all off-shore): 6.50%-7.50%


I think this is where the model breaks down. The major providers are right, their, product is worth MUCH more than 3%, maybe even as much as the 6-7% charged rebaters. Why then does NYC OTB get it for 2.55%? Why can dog tracks buy it for 3% and then rebate customers under the table? What about horse tracks that pay 2% and then offer rebates to their best customers? The problem with the signal fees is the lack of uniformity. If the industry bumped up their track to track fees and their fees to the OTBs by even 1% it would create about $75,000,000 in additional income to the host tracks. There is an inflection point around the 6.50-7% mark after which the increased percentage is more than offset by the fall-off in handle. The basic model is something that needs to be addressed. Not only isn't ever talked about, I would be shocked if there were any more than a handful on this board that even knew those distinctions existed. It is NOT an ADW only issue.

Food for thought, with a 22% gross take, plus a 5% surcharge less just 2.5% in signal fees can anyone explain to me how NYC OTB loses money?

[trigger]

Pricing is an interesting topic. A couple of points.

1Food for thought, with a 22% gross take, plus a 5% surcharge less just 2.5% in signal fees can anyone explain to me how NYC OTB loses money?

Yea, loss is from massive patronage and mismanagement.....a typical scenario for government run activities that should be operated in the private sector.

[Premier Turf Club]

Yea, loss is from massive patronage and mismanagement.....a typical scenario for government run activities that should be operated in the private sector.

It was a rhetorical question, but geez how do you lose money with a 24% net margin (take - host)? We laugh about it, but it's a problem for the industry. The tracks refuses to raise the host fees to other tracks and operators like NYC OTB and figure that they'll just pass on their cost structure to the ADWs and the day-in day-out players that are the heart and soul of the racing business.

[trigger]

How is it possible that we will not pay if the price goes up? We are the only ones that are paying, are you expecting Gov't subsidy?


Once again, The price is not going up...the takeout % is staying the same!!! Tracknet wants a bigger piece of the EXISTING takeout.

[DarrenClarke]

Trigger, no need for the fire suit. You are the only one who understands how misguided this column is. I live in Las Vegas and I can add some additional information. One, you must realize that Mr. Eng is associated with a radio program that originates from LAs Vegas entitled "Race Day Las Vegas", it is hosted by Ralph Siraco and Mr Eng did a nightly results recap for this show, although I believe the recap show has been cancelled. The point of this is Race Day Las Vegas is little more than an infomercial for Station Casinos and Coast Resorts. Also, If you may remember Mr. Eng and Mr. Siraco until recently penned a sunday Las vegas column in the DRF. It was always pro-casino. So if you're looking for objectivity about racebooks in Las Vegas, Richard Eng is not the person to listen to.#2, As a former casino executive I was privileged to see the daily figures from each area of the casino including the racebook. Because of the popularity of exotic wagers, the actual split between casino and Ractrack is closer to 20% casino, 3% racetrack. Obviously this is a business model that cannot continue for the tracks to survive. Also, when you see "free" contests and bonus money for horse contests in Las Vegas, the tracks certainly must feel like they are footing the bill (only because they are). Takeout will not rise because Vegas casinos are forced to pay a more realistic market rate. The problem is they have had it too good for a long time and of course will scream at being forced into 2007 reality. This is what Richard Eng's propaganda, err, column is about.

[trigger]

Yeah, right. Everybody gets more and the horseplayer pays more. Start by getting all takeout reduced to less than 20% then have your p*ssing matches with your simulcast network partners over how much their signal should cost. If tracks and horseowners can't make it on less than 20% takeout, then they should either get out of business or go to their state pols and get subsidized (because their industry is SO IMPORTANT to their state) by the general TAXPAYERS (see how high that one flies).

You take 25% off the top, hit me with $6 plus for a can of beer, $4 for a hot dog and I'm supposed to be happy? This is entertainment? (Yeah, I know. You're laughing all the way to the bank.) OBTW average takeout is 20%? Since most bet pools are exotics and most exotic bets have takeouts in excess of 20% how does the takeout AVERAGE 20%? Is this some euphimistic presentation designed to make horseplayers think that they're paying less than they really are?

You people had better start worrying a little more about where the pie is coming from instead of just how you're going to cut it up.

The CHRB puts out some annual statistics on a track by track basis that indicates the average takeout is in the 19.5 to 20% range.....check out their meeting minutes. Also, WPS pools are charged less takeout (17%+) and WPS pools probably average about 1/3 of a specific races total pool...higher at the premium tracks like Belmont, etc.
In any event, if you want to use 25%, the Vegas casinos are even more greedy.
There is no doubt that the track takeout needs to be substantially reduced in order to compete effectively with other forms of gambling......but I don't see this coming until the tracks gain more control over pricing their product and there is a shake out in the industry that leaves only a few major tracks in the US that will attract huge handles thus allowing for a lower takeout (something like Hong Kong or even Australia).

[BillW]

Once again, The price is not going up...the takeout % is staying the same!!! Tracknet wants a bigger piece of the EXISTING takeout.

trigger,

When the price goes up, it's got to come from somewhere, usually the customers. Do you think NYOTB is going to take a bigger loss due to their costs go up?

One of the bigger problems I see with the industry is that the take is too high (along with disgust for their customers, and general mismanagement etc. etc. etc.). I just don't see how having as a number one priority of raising the signal rates is going to address any of my concerns. Another monopoly in the industry won't go very far either.

[alysheba88]

Once again, The price is not going up...the takeout % is staying the same!!! Tracknet wants a bigger piece of the EXISTING takeout.

Maybe its because horseplayers are a step ahead and know what is coming next. We have seen it time and again. When parties fight over takeout the compromise is almost always on the back of horseplayers. Just like California increased takeout to help out the trainers and owners, just like Ny-OTB forced NYRA to increase takeout slightly. The "solution" when there is one, never benefits horseplayers. Never

[Premier Turf Club]

Not tying to beat a dead horse, pardon the pun. I thought more people would have interest in discussing the disparity in pricing that costs the industry more than $75 million a year. Closing that gap would go a long way to make the industry stronger and doesn't place all the burden on the ADWs.

[alysheba88]

Not tying to beat a dead horse, pardon the pun. I thought more people would have interest in discussing the disparity in pricing that costs the industry more than $75 million a year. Closing that gap would go a long way to make the industry stronger and doesn't place all the burden on the ADWs.

If they wanted to get serious about the issue they could cut cut takeout on all wagers to 10-15%. They cost themselves far more than $75 million a year with their mismanagement

[Zman179]

Vegas Casinos: Flat Fee

NYC OTB:2.55% (remember they refused to take wagers when GP tried to increase rate to 2.75%

U.S. Horse Tracks: 2.5-3%

U.S. Dog Tracks: 3-4%

U.S. Non-Rebate ADWs:5%

Rebate ADWs (all off-shore): 6.50%-7.50%


Food for thought, with a 22% gross take, plus a 5% surcharge less just 2.5% in signal fees can anyone explain to me how NYC OTB loses money?

Firstly, NYCOTB is the golden goose. They have the highest handle of any single entity in the country. OTB asks for the lowest rate because they offer the highest bulk. Whenever NYCOTB takes away a track, or adds one, it is immediately felt in the bottom line of the racetrack's handle.

Finally, the surcharge doesn't go to NYCOTB; they do not touch even a single penny. That money goes directly to the coiffers of the City of New York to fund other departments and projects (yes, the City owns NYCOTB, but to understand our bureaucracy would have to involve a university professor and one or two term papers.) OTB loses money because they pay over-the-market rates for rents due to the undesirables that the branches attract, the tellers union is super strong and hold NYCOTB by the shorthairs, not to mention the corruption that goes on in the agency. Total all of that together and you have the only bookie that loses money.

[trigger]

Pricing is an interesting topic. A couple of points.

1) The 3% signal fee is a number that you see thrown around, but even the smaller tracks charge ADWs more than that. The premium signals are at least twice that. That 3% ship sailed at least 2 years ago.

2) One thing that I NEVER see talked about is the disparity between what different TYPES of pari-mutuel providers pay. ADWs get the short end of the stick, despite the fact that probably 40% on all U.S. handle comes through ADWs. Here is typical pricing for the 2007 GP meet:


Vegas Casinos: Flat Fee

NYC OTB:2.55% (remember they refused to take wagers when GP tried to increase rate to 2.75%

U.S. Horse Tracks: 2.5-3%

U.S. Dog Tracks: 3-4%

U.S. Non-Rebate ADWs:5%

Rebate ADWs (all off-shore): 6.50%-7.50%


I think this is where the model breaks down. The major providers are right, their, product is worth MUCH more than 3%, maybe even as much as the 6-7% charged rebaters. Why then does NYC OTB get it for 2.55%? Why can dog tracks buy it for 3% and then rebate customers under the table? What about horse tracks that pay 2% and then offer rebates to their best customers? The problem with the signal fees is the lack of uniformity. If the industry bumped up their track to track fees and their fees to the OTBs by even 1% it would create about $75,000,000 in additional income to the host tracks. There is an inflection point around the 6.50-7% mark after which the increased percentage is more than offset by the fall-off in handle. The basic model is something that needs to be addressed. Not only isn't ever talked about, I would be shocked if there were any more than a handful on this board that even knew those distinctions existed. It is NOT an ADW only issue.

Food for thought, with a 22% gross take, plus a 5% surcharge less just 2.5% in signal fees can anyone explain to me how NYC OTB loses money?

Just guessing, but I think that track to track fees are kept low as a recognition that the portion of the handle that stays at the guest track goes to sustaining the guest track and its horsemen, etc. So your proposal to increase track to track fees would just shift $75,000,000(or whatever) in funds from minor tracks to premium tracks---there would be no increase in funds to support racing. I don't think the racing industry is quite ready to start an all out signal price war between the have and have-not tracks just yet.
On the other hand, ADWs with ongoing operating costs that stabilize at a much lower level than tracks incur once the ADW initial software is built don't contribute any of their 15%+ gross takeout (after the host track/horsemen receive their 3% each from these ADWs ) to the support the racing industry expenses.....this 15% goes south as far as the racing industry is concerned.
With the entry costs into the ADW field now decreasing, the race tracks are trying to establish (or acquire) their own ADWs in order to capture this "lost" takeout ( causing a fair amount of concern on the part of the independent ADWs). We are talking about the racing industry here (like herding cats) so their success in this approach is up in the air but , on the other hand, independent ADWs may no longer be able to bank on the tracks not taking any action in this area. In the meantime, tracks ,especially premium tracks , will continue to put pricing pressure on the independent ADWs (or Vegas for that matter). IMHO, volume rebates or lowering takeout rates by the tracks won't take place until this situation is resolved.

[trigger]

Trigger, no need for the fire suit. You are the only one who understands how misguided this column is. I live in Las Vegas and I can add some additional information. One, you must realize that Mr. Eng is associated with a radio program that originates from LAs Vegas entitled "Race Day Las Vegas", it is hosted by Ralph Siraco and Mr Eng did a nightly results recap for this show, although I believe the recap show has been cancelled. The point of this is Race Day Las Vegas is little more than an infomercial for Station Casinos and Coast Resorts. Also, If you may remember Mr. Eng and Mr. Siraco until recently penned a sunday Las vegas column in the DRF. It was always pro-casino. So if you're looking for objectivity about racebooks in Las Vegas, Richard Eng is not the person to listen to.#2, As a former casino executive I was privileged to see the daily figures from each area of the casino including the racebook. Because of the popularity of exotic wagers, the actual split between casino and Ractrack is closer to 20% casino, 3% racetrack. Obviously this is a business model that cannot continue for the tracks to survive. Also, when you see "free" contests and bonus money for horse contests in Las Vegas, the tracks certainly must feel like they are footing the bill (only because they are). Takeout will not rise because Vegas casinos are forced to pay a more realistic market rate. The problem is they have had it too good for a long time and of course will scream at being forced into 2007 reality. This is what Richard Eng's propaganda, err, column is about.

Darren, I agree wholeheartedly (and I thoroughly enjoy going to Vegas and their race books whenever I can!).
However, with this crowd, I am going to keep my fire retardant suit on for now. (Watch out, you may need one too)
Good luck in your Vegas endeavors! Trigger

[Premier Turf Club]

I don't think the racing industry is quite ready to start an all out signal price war between the have and have-not tracks just yet.

No, they clearly are not, but that doesn't make the price discrimination right, or even legal for that matter. There is compelling evidence that the practice violates the Clayton anti-trust act (see below). Not a road PTC would want to go down, but IMHO, as someone with a significant amount of corporate law experience, potential exposure for the industry.


The Clayton Act bars





price discrimination between different purchasers if such discrimination substantially lessens competition or tends to create a monopoly in any line of commerce (Act Section 2, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 13 (http://www.law.cornell.edu/uscode/15/13.html));
sales on the condition that (A) the buyer or leaser not deal with the competitors of the seller or lesser "exclusive dealings", or that the buyer also purchase another different product ("tying", also covered by the Sherman Act, Section 1), but only when these acts substantially lessen competition (Act Section 3, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 14 (http://www.law.cornell.edu/uscode/15/14.html));
mergers and acquisitions where the effect may substantially lessen competition (Act Section 7, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 18 (http://www.law.cornell.edu/uscode/15/18.html));

[boomman]

No, they clearly are not, but that doesn't make the price discrimination right, or even legal for that matter. There is compelling evidence that the practice violates the Clayton anti-trust act (see below). One day, such an action will be brought by someone.

The Clayton Act bars


price discrimination between different purchasers if such discrimination substantially lessens competition or tends to create a monopoly in any line of commerce (Act Section 2, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 13 (http://www.law.cornell.edu/uscode/15/13.html));
sales on the condition that (A) the buyer or leaser not deal with the competitors of the seller or lesser "exclusive dealings", or that the buyer also purchase another different product ("tying", also covered by the Sherman Act, Section 1), but only when these acts substantially lessen competition (Act Section 3, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 14 (http://www.law.cornell.edu/uscode/15/14.html));
mergers and acquisitions where the effect may substantially lessen competition (Act Section 7, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 18 (http://www.law.cornell.edu/uscode/15/18.html));


Ian: I'm no lawyer, but have felt that ever since the day that Track Net was formed by Churchill and Magna with what appears to be the sole purpose of withholding content from the ADW'S and others (unless they agree to be held hostage in obtaining the signals at whatever exorbitant fees or rates are being thrown out there by this entity) that it was without a doubt at the very least a violation of the intent of anti-trust laws barring monopolies. I also have no doubt that some individual or group in the future will be willing to put this to the "legal test" and feel that the only reason they haven't to this point is the logical concern of how ending up in federal court could affect horse racing's "exemption" which of course, is an entirely separate issue in itself.......Boomer

[trigger]

No, they clearly are not, but that doesn't make the price discrimination right, or even legal for that matter. There is compelling evidence that the practice violates the Clayton anti-trust act (see below). Not a road PTC would want to go down, but IMHO, as someone with a significant amount of corporate law experience, potential exposure for the industry.

The Clayton Act bars

price discrimination between different purchasers if such discrimination substantially lessens competition or tends to create a monopoly in any line of commerce (Act Section 2, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 13 (http://www.law.cornell.edu/uscode/15/13.html));
sales on the condition that (A) the buyer or leaser not deal with the competitors of the seller or lesser "exclusive dealings", or that the buyer also purchase another different product ("tying", also covered by the Sherman Act, Section 1), but only when these acts substantially lessen competition (Act Section 3, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 14 (http://www.law.cornell.edu/uscode/15/14.html));
mergers and acquisitions where the effect may substantially lessen competition (Act Section 7, codified at 15 U.S.C. (http://en.wikipedia.org/wiki/Title_15_of_the_United_States_Code) § 18 (http://www.law.cornell.edu/uscode/15/18.html));

In your opinion, how does the TVG exclusivity deals with specific race tracks stack up to the Clayton act?

[Premier Turf Club]

In your opinion, how does the TVG exclusivity deals with specific race tracks stack up to the Clayton act?

Good question. I am under the assumption that this isn't a violation of the Clayton Act as long as TVG reasonably re-markets the signal and doesn't discriminate in its pricing.

[foregoforever]

I can't speak for all of them, but many simulcasting agreements between tracks are reciprocal in nature and thus fundamentally different than the one-way agreement between a track and an ADW company. I see no reason why the rates should be the same for the two types of agreements.

I also subscribe to the notion that the price of something is determined by the seller, not the buyer. So I come down on trigger's side on the issue, in general.

It does get a bit sticky, though, when a track starts operating their own ADW service. Both tracks and ADW's operate under a maze of state regulations, most of which were developed to handle companies that were one or the other. When a track launches its own ADW, the regulations have to be reviewed to make sure that this doesn't create an unfair situation. This is currently a problem in Virginia.

As for TrackNet, it's their reported practice of requiring that ADW's NOT carry some other signals as a condition for getting theirs that bugs me. That strikes me as an uncompetitive practice.

[Premier Turf Club]

I can't speak for all of them, but many simulcasting agreements between tracks are reciprocal in nature

No, they are not. I've got a stack of them on my desk here I am reviewing. They are stand-alone agreements. In fact a quid-pro-quo might be a violation of the Act. 'You sell me your signal cheap, I'll sell you mine cheap but we'll charge others a much higher price.'


I see no reason why the rates should be the same for the two types of agreements.

Really, the federal government might feel differently. The tracks don't see any reason for it either. The fact that it might violate federal anti-trust law never enters into their thinking. The only price discrimination allowed under the Act is for volume discounts.

Don't get me wrong, I can see where on the face of it it might seem logical that tracks can sell their signals to other tracks at a discount to the ADW price because the other tracks support live racing. I don't even have a problem with paying a REASONABLE premium. I'm just saying the practice probably doesn't stand up if it ever gets in front of a federal judge. Remember, simulcasting exists only because of the good graces of Congress Horse racing as a unique exemption from the wire act that no other forms of interstate gaming have. My guess is by nature of that they would be held to even a higher standard than some other industries might be held.

[trigger]

Originally Posted by Premier Turf Club (Partial quote): Food for thought, with a 22% gross take, plus a 5% surcharge less just 2.5% in signal fees can anyone explain to me how NYC OTB loses money?

Yea, loss is from massive patronage and mismanagement.....a typical scenario for government run activities that should be operated in the private sector.


"Instead, New York's OTB's are run by government and not just one government. There are six separate OTB companies in the state, which has created dozens of unnecessary layers of bureaucracy. There isn't just one highly paid OTB president but six
Of course, that's the way most politicians want it. It sometimes seems that OTB's sole purpose is to provide cushy patronage jobs for friends, relatives, neighbors and cronies of every politician in the state. That's the reason OTB has clout and that nobody in power has ever blown it up. What former New York City Mayor Rudy Giuliani once called the "world's only money-losing bookmaker" survives for political reasons and nothing else. There hasn't been a governor or mayor (including tough guy Giuliani) out there yet with the fortitude to take on OTB and the many politicians in bed with it."
http://sports.espn.go.com/sports/horse/columns/story?columnist=finley_bill&id=2917023