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View Full Version : Has Paulick Jumped the Shark? Is His Article a Paid Advertisement?


andymays
11-16-2010, 06:22 AM
http://pullthepocket.blogspot.com/2010/11/has-paulick-jumped-shark.html

Excerpt:

But today, it looks to this observer like the Paulick Report has jumped the shark.

In an editorial titled "California's Push for Purses", he extolls the virtues of a purse increase in California which reads almost like an advertisement in itself - which I guess is fine. However, several quotes are not up to his standard.


Here is the article in question by Ray Paulick:

http://www.paulickreport.com/blog/californias-push-for-purses/

andymays
11-16-2010, 08:54 AM
By the way Ray commented under his article. It's comment #27

http://www.paulickreport.com/blog/californias-push-for-purses/

Comment excerpt from Ray Paulick:

27. I knew in writing this piece it would find few if any sympathetic ears in the horseplayer community (the only possible exceptions being those horseplayers who also own horses and understand the economic burden of putting on the show because they have to pay the bills). However, I am insulted and offended by remarks suggesting I have no understanding of pari-mutuel wagering or could care less about horseplayers and gamblers.

OTM Al
11-16-2010, 09:14 AM
So he disagrees that takeout is the be all end all to the "woes" of horseracing. Frankly I don't think he coached his argument well, but I also don't think he is entirely wrong. Certainly reducing takeout increases handle, he does not deny that, but that does not guarantee an increase in revenue, or as I've pointed out before, profit, which is what really matters.

Profit functions can be represented normally as an inverted parabola. The peak represents the maximized level of profit. Lowering takeout past the optimal point will reduce profit or equivalently raising takeout when below the optimal level will increase profit. Draw the picture to demonstrate it for yourself, takeout on the x-axis, proft on the y.

Of course such a simplified picture assumed the principle of ceteris paribus, with all else equal. If all else is not held equal, then other answers can happen. Increases in field size also have effects. Can they outweigh a takeout increase? Theoretically yes. If indeed this money can be funnelled in a way to increase field size enough, an increase in takeout could be more than offset by an increase in field size.

Do I think this will actually happen? No I don't. I think what is being done is a mistake. But instead of blind attacks on Mr. Paulick, who frankly I have never cared for, perhaps it's time to present some actual proof. I am still yet to see it. And you can be sure that big players and ADWs don't want that proof.

Horseplayersbet.com
11-16-2010, 09:18 AM
"And you can be sure that big players and ADWs don't want that proof."

What does this mean?

OTM Al
11-16-2010, 09:28 AM
"And you can be sure that big players and ADWs don't want that proof."

What does this mean?

It means a reduction in takeout destroys margins for the ADWs and reduces the available rebates to big players. These are 2 sides of the same coin. A rebate trumps a takeout drop, especially in win pools.

Horseplayersbet.com
11-16-2010, 09:33 AM
It means a reduction in takeout destroys margins for the ADWs and reduces the available rebates to big players. These are 2 sides of the same coin. A rebate trumps a takeout drop, especially in win pools.
I guess for most ADWs. I personally welcome takeout decreases as I believe they are good for the overall health of the game.

The big players that I've heard of all would rather have takeout reductions because it is felt that there would be more horseplayers eventually to build the pools, and existing horseplayers would bet more as well.

I don't think a rebate trumps a takeout decrease either. I think they are pretty much the same thing. For example, if you get a rebate of 5% on WPS, and your ROI is .98 before rebate, if takeout were to decrease by 2%, the rebate would most likely be reduced by 2% as well, but because of the extra value in the win pool from the takeout drop, your ROI now is 1.00 before rebate.

cj
11-16-2010, 09:52 AM
I don't buy the rebate trumping a takeout drop either. Any big bettor that thinks this is true is probably losing. For the record, all "whales" don't win. Plenty lose lots of money, just less due to rebates.

OTM Al
11-16-2010, 10:00 AM
I guess for most ADWs. I personally welcome takeout decreases as I believe they are good for the overall health of the game.

The big players that I've heard of all would rather have takeout reductions because it is felt that there would be more horseplayers eventually to build the pools, and existing horseplayers would bet more as well.

I don't think a rebate trumps a takeout decrease either. I think they are pretty much the same thing. For example, if you get a rebate of 5% on WPS, and your ROI is .98 before rebate, if takeout were to decrease by 2%, the rebate would most likely be reduced by 2% as well, but because of the extra value in the win pool from the takeout drop, your ROI now is 1.00 before rebate.

"It's felt that there would be more..." is a nice thought and a possibility. But what if there isn't? The growth here is the key component to the arguement about dropping takeout, but what if the supply of horseplayers is fairly inelastic? Small gains would be made to be sure, but again, there is no proof that the gains would cause the offset needed. This is especially troubling if there is an industry wide drop. It's possible that initial individual tracks could gain greatly by a drop (though I've also heard a very well reasoned arguement why a single mover would get killed), but they would simply be taking action away from others, not creating anything new, so if everyone followed suit, we'd end up with a tragedy of the commons type outcome where all the tracks actually end up worse off in the end.

I disagree with your assumption about ROI as well. It assumes that a 2% takeout decrease would be uniform in returns. I claim it won't be. Bigger returns will be realized on longer price horses and smaller on low price ones. My valuation of a horse that should be 5-2 based on it's chances to win is unchanged by the takeout level. Therefore, the low price horses are still much more likely to be bid down to almost exactly the same levels as with higher takeout, especially if more money is coming in as you predict.

Look, I'm only arguing these things because these are questions people aren't asking and ones I feel are very appropriate. Instead all I hear is "10% WPS" based on absolutely nothing. The position must be supported by more than insults if it has any chance of working.

cj
11-16-2010, 10:04 AM
Hasn't the takeout drop thing been proven overseas in real life?

Horseplayersbet.com
11-16-2010, 10:10 AM
If you are looking for empirical proof, there is none, because part of takeout reduction theory is that it takes time in order to create a bigger base, and also in today's environment it takes more than just dropping the takeout in one betting type as an experiment. In fact, it has to be done across the board, by most tracks in order to realize full impact because of churn from a low takeout venue going to a high takeout venue.

There is evidence though that lowering the price increases revenues. The California lottery just found that out. Slots found that optimum takeout isn't 15% but closer to 7%.

Horse racing has never bothered to try to find out what the optimum takeout is.

And of course, there are a few studies done by astute economists that show that takeout rate is far from optimum right now.

Greyfox
11-16-2010, 10:32 AM
The Paulick article is very well written and the depth of research into the economics of California racing versus other tracks is broad enough to raise suspicions that it could be "an informercial."Assuming for the moment that it wasn't a paid for ad, Paulick makes a very positive case for increasing take out.

He's right though. The vast majority of horse players do not want increased take out. I certainly don't. In the simplest scenario it just becomes that much more difficult to beat the ponies.
From another perspective though, I don't want to be betting 5 horse fields.
In fact I won't.

If increasing the purses for horsemen is correlated with better wagering opportunities, then in theory the shrewdest of players should still be able to do well. The flip side of that coin though is that the bar for being shrewd at the track will be raised by the takeout increase.

On a personal level, I'm just going to have to wait and see how the increase in takeout impacts my wallet at the end of each month. For all I know, there is a chance in doing better if wagering opportunities increase.
I won't join any boycotts until I've made that assessment.

chickenhead
11-16-2010, 10:32 AM
the best chance a track has, is for a major, either Cali or NYRA, drastically reducing takeout on track, increasing payouts on on-track simulcast as if all other tracks also had the same takeout, and having an integrated ADW open to all that does the same. Not via rebates, but through paying out winners as if takeout were lower. I have no doubt they would absolutely kill it.

Smaller tracks are along for the ride.

If there is an inelastic supply of horseracing dollars that probably is best addressed by limiting the supply, not by raising the takeout. Better to have a cluster of thriving profitable businesses than having the industry leaders moribund.

Set the takeout to maximize play by your best customers, set the number of races to match up with what smaller players will stay interested in and support, and you should get to the happiest place you can get too.

johnhannibalsmith
11-16-2010, 10:51 AM
The Paulick article is very well written...

...for a pamphlet.

andicap
11-16-2010, 11:19 AM
I've known Ray for close to 20 years, first when he participated on the Prodigy racing board and then as a free-lance writer for the Blood-Horse. And I know Ray would never sell out to anyone in return for renumeration.

Could his opinions coincide with those of an advertiser? Of course. That happens in all publications, from the Wall Street Journal to BusinessWeek to the Economist.

I may agree or disagree with his opinion in this case -- and frankly I don't know enough about the subject to comment -- but one thing I DO know: Ray Paulick has integrity and deeply cares for the horseplayer. But doesn't mean every column will agree with the likes of HANA -- he is also looking at the greater good of the entire industry.

Why does every disagreement in today's climate have to include a political or personal attack on the other party? No one can disagree in good faih anymore. Those on the other side are "traitors," or some such vitriol.

FYI, I am NOT questioning the rationale for the poll. The phrase "appear to be" is appropriate in this instance.

PaceAdvantage
11-16-2010, 11:23 AM
Why does every disagreement in today's climate have to include a political or personal attack on the other party? No one can disagree in good faih anymore. Those on the other side are "traitors," or some such vitriol.

FYI, I am NOT questioning the rationale for the poll. The phrase "appear to be" is appropriate in this instance.That's the way it is these days for some reason. It's that way in politics...it was that way in the Zenyatta vs. Rachel debate...it is very tiresome as you point out...

andymays
11-16-2010, 11:25 AM
I've known Ray for close to 20 years, first when he participated on the Prodigy racing board and then as a free-lance writer for the Blood-Horse. And I know Ray would never sell out to anyone in return for renumeration.

Could his opinions coincide with those of an advertiser? Of course. That happens in all publications, from the Wall Street Journal to BusinessWeek to the Economist.

I may agree or disagree with his opinion in this case -- and frankly I don't know enough about the subject to comment -- but one thing I DO know: Ray Paulick has integrity and deeply cares for the horseplayer. But doesn't mean every column will agree with the likes of HANA -- he is also looking at the greater good of the entire industry.

Why does every disagreement in today's climate have to include a political or personal attack on the other party? No one can disagree in good faih anymore. Those on the other side are "traitors," or some such vitriol.

FYI, I am NOT questioning the rationale for the poll. The phrase "appear to be" is appropriate in this instance.

Andi, I visit Rays site 20 times a day and I like it because of the format and the breaking news but when it comes to his opinion on certain things he almost always seems to give the benefit of the doubt to some but not to others. In particular he gives the benefit of the doubt with anything to do with Keenland or Del Mar. Here is an article from earlier in the year. Where are the tough questions? In particular where is the follow up to the excerpt shown here?


http://www.paulickreport.com/blog/paulick-report-forum-brought-to-you-by-breeders-cup-a-glass-is-half-full-kind-of-guy/

Excerpt:

In terms of takeout we are significantly lower than most jurisdictions. NYRA’s three-horse wagers are 26%, compared with 20.68% for Del Mar. That 20.68% is on superfectas, pick threes, pick fours and pick sixes. Monmouth’s takeout is 25% on those three-horse bets. We still have plenty of room to be price competitive.

cj
11-16-2010, 12:48 PM
It just points out, again, that we have no real reporters in horse racing outside of Andy Beyer, and to a lesser extent, Steve Crist. The rest should be labeled PR men before reporters.

Stillriledup
11-16-2010, 01:15 PM
I don't buy the rebate trumping a takeout drop either. Any big bettor that thinks this is true is probably losing. For the record, all "whales" don't win. Plenty lose lots of money, just less due to rebates.


They don't lose less money necessarily, they just lose their money slower. There's a difference.

andicap
11-16-2010, 02:05 PM
It just points out, again, that we have no real reporters in horse racing outside of Andy Beyer, and to a lesser extent, Steve Crist. The rest should be labeled PR men before reporters.

Exactly. Bloggers are not reporters. Reporters dig to uncover relevant information that the powers-that-be try to keep secret. Investigative reporting in any arena -- not just racing -- is all but dead in this country because of the near-death of the publishing industry. Digging for the truth takes time, patience and a certain doggedness, none of which lend itself to how news is presented on the Internet -- for racing or any industry.

from a former journalist

cj
11-16-2010, 03:16 PM
Exactly. Bloggers are not reporters. Reporters dig to uncover relevant information that the powers-that-be try to keep secret. Investigative reporting in any arena -- not just racing -- is all but dead in this country because of the near-death of the publishing industry. Digging for the truth takes time, patience and a certain doggedness, none of which lend itself to how news is presented on the Internet -- for racing or any industry.

from a former journalist

Say what you will, but posting that article next to an ad for the CHRB was poor judgment at best, plainly stupid most likely, and possibly a tip-off as to the integrity of the article at worst.

JustRalph
11-16-2010, 04:14 PM
It just points out, again, that we have no real reporters in horse racing outside of Andy Beyer, and to a lesser extent, Steve Crist. The rest should be labeled PR men before reporters.

exactly right. Most of these "reporters" can't be objective, they are too close to it.

It seems to be a hard place to be for most though. I believe that most are real fans of the game. Over time that becomes a problem.

Horseplayersbet.com
11-16-2010, 05:01 PM
The reality is that there isn't a lot of ad revenue in horse racing going around these days. Breeders aren't grooving, for example. Marketing budgets for tracks have tightened up as well.

Unfortunately, it seems that today's racing journalist has to walk on egg shells more today than ever before.

Beat writers have always had it tough too. Say a bad thing about a jockey and good luck getting an interview from almost any jockey in the colony.

Greyfox
11-16-2010, 06:13 PM
Say what you will, but posting that article next to an ad for the CHRB was poor judgment at best, plainly stupid most likely, and possibly a tip-off as to the integrity of the article at worst.

Good observation.
It does like "He who pays the piper calls the tune."
However, that doesn't rule out the possibility that Paulick's views in the article may be very genuine and in sync with the CHRB decision.

andicap
11-17-2010, 09:03 AM
Say what you will, but posting that article next to an ad for the CHRB was poor judgment at best, plainly stupid most likely, and possibly a tip-off as to the integrity of the article at worst.

Yes, bad judgment, definitely, but I'll still defend Ray's integrity.

Stillriledup
11-17-2010, 01:31 PM
Yes, bad judgment, definitely, but I'll still defend Ray's integrity.

I agree with this. While his opinion might have been swayed because he accepted money from California interests, he's still got a backbone...after all, he's one person who doesnt shy away from negative stories, he will call out someone who deserves to be called out...most racing 'media' will just give you the creampuff stuff and never call anyone out. DRF and TVG are two that come to mind who are not willing to rock the boat and ask the tough questions and report on the tough facts. Ray gets credit for doing so.