Davidowitz: Of Betting Boycotts; The Failure of the CHRB and some Alternative Ideas

[andymays]

For those of you who don't know Roger Way is rwwupl on this board and is also the California State Representative for HANA. I was also involved in the email exchange and will post my comments as well.

The emails usually go out two or three times a week and always include prominent members of the CHRB board, TOC, CTT, and Racing Executives. Many times one of them will hit "reply to all" and that is how these exchanges get started.

Several posters on this board are also on the email lists. It was also linked on Equidaily this morning.
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http://www.gradeoneracing.com/davidowitz.htm?read=40

Excerpt:

The remarks posted here, including my column were extracted from an Internet E-mail exchange that began when Roger Way , a concerned Californian asked the question:

Excerpt:

My Personal View of what is going on in California racing.

Many caring people, many people in and out of horse racing, have no trouble understanding the issues and problems facing California racing.

[andymays]

In the exchange Jerry Jamgotchian replied to me thinking I was another person who made a comment. This is my reply to him and everyone else on the list.

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Jerry, that’s a different Andy.

I’m on the fence about any suspension of play (boycott). Most of the people calling for a suspension of play (boycott) do not play California racing anyway so it’s an easy proposition for them. If a suspension of play (boycott) is called then the person or persons calling for it has to be absolutely sure that they have the high volume players on board who do bet into the California pools on a regular basis. Unless you can show beyond any doubt that handle has gone down at least 15% over the normal trend then the people who have been running and wrecking California racing will “spin” it as a failure. You have to remember that California will still have lower takeout overall than a place like New York (excepting doubles and exactas). Why aren’t we boycotting New York Racing? You also have to remember that Horseplayers in most states can get significant rebates whereas California players do not. California really does treat the Horseplayers it expects to attend live racing poorly when it comes to rebates.

For me the Santa Anita meet prior to synthetic surfaces (junk) was where I’ve made my best scores. Going to Santa Anita for the weekend is about as good as it gets in my book and I’ve refused to go there since they put in synthetic. I’ve been waiting for several years for them to go back to dirt. For me a suspension of play/boycott for the upcoming Santa Anita meet is a big deal. For people who never play there it’s easy.

There are things that California Racing can do but they seem to have no interest in anything but raising the takeout. How many of these so called “leaders” will be able to say they left Horse Racing better than they found it? Not too many!

How about some low takeout exotic wagers on the wagering menu? On any given Saturday there are well over 50 high takeout exotic wagers on the card. Do you mean to tell me that they can’t offer one or two low takeout exotic wagers like a Horseplayers Early Pick 4 with a 10% takeout?

There should be at least two Horseplayers/Gamblers on the board of the CHRB. Horse Racing is mainly about gambling. It is in decline because betting on Horse Races is not a good bet anymore. It was the greatest gambling game of skill ever created but it has been ruined because far too many of the people in charge know nothing about gambling.

Why isn’t there a Horseplayers organization comparable to the TOC in California? Correct me if I’m wrong but isn’t the TOC partly funded by takeout? Why can’t Horseplayers get the same deal? We all know the answer to that. They don’t want the Horseplayers to have a say.

Thanks,

Andy

[The_Knight_Sky]

I just came to post that article linked on EquiDaily.
I was disappointed to read Mr. Davidowitz (whom I hold in the highest regards):

What is the optimal takeout?

My view: No higher than 15 percent on all single bet wagers;

17 percent on Exactas, Quinellas, Trifectas, Daily Doubles;
18 percent on multi race wagers involving three to five races;
20 percent on Superfectas, Pick Sixes and the Place Pick All.
______________________________

While there are significant reductions and worth gravitating towards in the future, these rates are far above the levels of 8% to 12% that were in effect during horse racing's hey day the 1950's and 60's.

Furthermore, if racetracks want to experiment with takeout reductions, they can not be limiting themselves to a) on-track reductions only b) for a brief two week period c) for a particular type of wagering pool.

I look forward to a racetrack which is bold enough to offer sweeping pricing reforms in an age which the nation's bettors have long been clamoring for.

Unlike the leaders in California I know there are few racetrack executives that feel reductions instead of takeout increases is the best route for long term success.

[OTM Al]

I just came to post that article linked on EquiDaily.
I was disappointed to read Mr. Davidowitz (whom I hold in the highest regards):

What is the optimal takeout?

My view: No higher than 15 percent on all single bet wagers;

17 percent on Exactas, Quinellas, Trifectas, Daily Doubles;
18 percent on multi race wagers involving three to five races;
20 percent on Superfectas, Pick Sixes and the Place Pick All.
______________________________

While there are significant reductions and worth gravitating towards in the future, these rates are far above the levels of 8% to 12% that were in effect during horse racing's hey day the 1950's and 60's.

Furthermore, if racetracks want to experiment with takeout reductions, they can not be limiting themselves to a) on-track reductions only b) for a brief two week period c) for a particular type of wagering pool.

I look forward to a racetrack which is bold enough to offer sweeping pricing reforms in an age which the nation's bettors have long been clamoring for.

Unlike the leaders in California I know there are few racetrack executives that feel reductions instead of takeout increases is the best route for long term success.

There is nothing to prove that the takeout rates in the 50s and 60s were optimal. Conditions were very different then and whatever the optimal level was then may not be the case now.

[The_Knight_Sky]

There is nothing to prove that the takeout rates in the 50s and 60s were optimal. Conditions were very different then and whatever the optimal level was then may not be the case now.


Al -

I understand where you're coming from.
But I'm looking down the road to about 10 years from now,
when today's big guns who are aged 50 to 70 are no longer around.

Cultivating newer segment of bettors starts by lowering the bar significantly. Mr. Davidowitz proposed rates do not go low enough to entice the newcomers to the game.

The basic wagers for newbies: Win - Place - Show priced at 15% probably would not cause the nations experienced bettors to suddenly loll in the loot. So I do not figure many newcomers to suddenly cross over to the flat-bet ROI side either.

The basic win-place-show wagers should be around 10 to 12%. That is a pricing structure that would help both the established bettors and the newcomers to learn the ropes with their bankrolls staying solvent. WPS pool totals are sure to increase.

Time is of the essence. The horse racing industry cannot afford to wait 10 years with "slight reductions, some of the time".

[PhantomOnTour]

Not to go off topic but Davidowitz's website is awesome. Tons of great info for free as far as I know.

[Robert Goren]

There is nothing to prove that the takeout rates in the 50s and 60s were optimal. Conditions were very different then and whatever the optimal level was then may not be the case now.They were too high back then.

[Horseplayersbet.com]

There is nothing to prove that the takeout rates in the 50s and 60s were optimal. Conditions were very different then and whatever the optimal level was then may not be the case now.
They were probably too high back then too. Especially since most wagers were WPS. There were very few exactors or any other exotic wagers on the menu let alone every race.

We can only look at something like Betfair when it comes to optimal takeout. If Betfair believed they would make more money bottom line at 7% or 10%, we would see their scoop to be that high. It obviously isn't.

As I stated in another thread, there are different optimal rates for each type of bet. And there is a difference when we look at the big race crowd (who comes once a year or less) versus the regular crowd.

The optimal rate for the big race crowd is much higher, because it doesn't matter what the takeout is to them in any sense, especially churn. The operator is best to take as much money from them as possible.

The problem is that track operators have been charging the regulars this rate for years as well. A big no no if you are looking for growth.

[DeanT]

It no doubt would have been found 80 years ago if we were a perfectly competitive business. We would have had to, or died. That's the problem with monopolies - they average cost price; and when they finally have to price to marginal cost they would rather hold on to the old, until you pry it out of their hands. If we hear "we have to put on the show" one more time, I think some people's heads are gonna explode :)

Some folks are trying - Hong Kong is right now. Australia did for some time, and so does New Zealand. In other areas like the UK pricing is left to the bookies because horse racing gets revenues from gross profits there - so it is priced along an elastic curve there for the most part (i.e. 6% take on win bets).

We are certainly 100 years behind here tho.

[The_Knight_Sky]

Some folks are trying - Hong Kong is right now. Australia did for some time, and so does New Zealand.




Q: Is there a list of countries which offer parimutuel wagering available, online?

I would love to see how many racetracks are located within their geographical boundaries and the number of races they run annually.

[FenceBored]

Q: Is there a list of countries which offer parimutuel wagering available, online?

I would love to see how many racetracks are located within their geographical boundaries and the number of races they run annually.

I don't know about a list restricted to parimutuel countries, but the International Federation of Horseracing Authorities website (http://www.ifhaonline.org/home.asp?lang=e) might be a place to poke around. The International Cataloguing Standards book has a few statistical tables and the end, and there's a section of their website that deals with wagering facts and figures (e.g. http://www.ifhaonline.org/wageringDisplay.asp?section=15&statsyear=2008&report=D)

[rwwupl]

I just came to post that article linked on EquiDaily.
I was disappointed to read Mr. Davidowitz (whom I hold in the highest regards):

What is the optimal takeout?

My view: No higher than 15 percent on all single bet wagers;

17 percent on Exactas, Quinellas, Trifectas, Daily Doubles;
18 percent on multi race wagers involving three to five races;
20 percent on Superfectas, Pick Sixes and the Place Pick All.
______________________________

While there are significant reductions and worth gravitating towards in the future, these rates are far above the levels of 8% to 12% that were in effect during horse racing's hey day the 1950's and 60's.

Furthermore, if racetracks want to experiment with takeout reductions, they can not be limiting themselves to a) on-track reductions only b) for a brief two week period c) for a particular type of wagering pool.

I look forward to a racetrack which is bold enough to offer sweeping pricing reforms in an age which the nation's bettors have long been clamoring for.

Unlike the leaders in California I know there are few racetrack executives that feel reductions instead of takeout increases is the best route for long term success.


Steve Davidowitz has modified his position(on takeout numbers) since writing this due to a critic and I forwarded the Cummings report for review. No one knows the optimum price point of a bet because we have not tried to find it through real time experience,..but I think he was a bit high.

The important theme(IMO) was that we are on the same page for a lot of things... read the comments.

Your day is coming(Mine too) for take out reductions,but not fast enough.

rwwupl

[andymays]

Steve Davidowitz has modified his position(on takeout numbers) since writing this due to a critic and I forwarded the Cummings report for review. No one knows the optimum price point of a bet because we have not tried to find it through real time experience,..but I think he was a bit high.

The important theme(IMO) was that we are on the same page for a lot of things... read the comments.

Your day is coming(Mine too) for take out reductions,but not fast enough.

rwwupl

What did he modify his numbers to?

[InsideThePylons-MW]

What did he modify his numbers to?

His original numbers, which was "his view", were moronic and proved just how out of touch someone who is a long time horseplayer can be when they have no clue about takeout.

If his numbers are now modified, at least that shows he's not a stubborn moron.

The stubborn morons in the industry are the main problem.

[rwwupl]

What did he modify his numbers to?

I think he has said "Eric" makes a good point and Eric was much lower.

Eric's critique of the takeout percentages that I suggested makes a good point.

While I personally would love even lower takeouts, economically there is a need to provide some balance for players and horsemen and track owners and the state too.

17 percent for daily doubles, Exactas and Trfiectas might even be lowered a tick or two more, but even at 17 percent, that too would lower existing nationwide pars to effect a larger net impact that regular players would notice in their bottom line.The 15 percent takeout I suggested also might be a tick or two higher than optimum, but at present it is creeping upwards over 18 percent in most states and the rarely 'breakage'---discussed---is all in the state's favor, instead of being structured to finance the Player's Appreciation Day at 10-12 percent I think should be offered at least once per race meet. While I would love to see a 10-12 percent takeout across the board, I believe that is not a feasible possibility for tracks to consider. For one thing, the horsemen would not get enough even with expected handle increases to finance a strong purse structure.

Of course, beyond the takeout issue, which IS important, there are other major problems California (and every other racing state) is neglecting to address, of course. But, while takeout rates are rising foolishly and are self destructive, a good first step would be to legislate and/or authorize lower, sustainable takeouts.

I guess it is how you read it, but I thought he was backing off gracefully but slow.
"Eric".. was closer to the Cummings Associates report at 10-12%, but no one really knows without real time proof. There is no doubt that he thinks takeout is important and that it is too high and wants it lower.