My Advice to Magna Entertainment Corp.

[trying2win]

--I was just reading an article about Magna Entertainment Corp's huge 3rd quarter operating loss. The link is below:

http://news.bloodhorse.com/viewstory.asp?id=19105

--After reading that article, I have some advice for Magna Entertainment Corp to increase their revenues:

1. Lobby the U.S. Federal Government to eliminate all income tax payable on racetrack winnings. We don't pay income tax on racetrack winnings here in Canada!

-- That would stimulate more wagering at U.S. racetracks.

-- Subsequent financial benefits for U.S. horsemen, other racetrack employees, racetrack supply industries etc.

-- Bettors would get to keep more of the money won on high- paying gimmicks.

-- That would entice less bettors to wager with offshore facilities.

-- That would encourage more Canadians to wager with U.S. betting companies, than at present.


2. Lower the track takeout some more at your Magna-owned racetracks.

-- Again, that would stimulate more wagering by bettors, because they would be getting more "bang for their buck", so to speak, by getting bigger returns on their winning bets....HELLO MAGNA...The law is, you have to GIVE BEFORE YOU RECEIVE!

3. Cut down the number of racing days at some Magna tracks, from five-days-a-week to four and/or shorten the length of some Magna track race meets.

-- Magna's Northern California racetracks of Golden Gate Fields and Bay Meadows, are prime example of what I'm referring to...too many short fields of 5 or 6 horses. How can that attract big mutuel handles?

--If Magna Entertainment Corp. would invoke any or all of the above ideas, I believe it would help their bottom line. With the increased profits, Magna could could send me a thank you cheque if they wanted!

--Anybody else got any advice for Magna Entertainment Corp?


Thanks,

Trying2win

[Whirlaway]

Get a clue, would be my advise to Magna. Stop making grandiose promises you have no intention of keeping (see newly proposed Detroit racetrack.) Stop trying to run your tracks into the ground so that state legislators will feel pressure to "save" the local racing community by legalizing slots at racetracks. Stop trying to raise the takeout in California (takout increase is coming in January, from all indications.) Stop trying to add more racedays to your tracks, thereby diluting a sadly diminished product even more.

California racing is in a very precarious position right now. The Oak Tree meet was a disaster. Only 18,000 people on track for Cal Cup Day on a beautiful day vs. 30,000 in past years. Ontrack handle and attendence declines accross the board. Weekday cards that were a sad joke.

Hollywood Park is quickly becoming a minor league track. Lousy quality of racing, lousy purses, dangerous neighborhood, and clueless Churchill Downs management that thinks Governor Arnold is going to bail them out by legalizing slots at the place.

Bay Meadows is going to be closed as soon as the owners of the property get their development plans through the local planning boards (may take a while, this is California after all.)

The last thing California needs is a takeout increase, yet that's exactly what the tracks want, and the poor bettors (fewer and fewer every year) are going to get. Just unbelievable.

[Brian Flewwelling]

My suggestion would be for them to increase their keep on the Simulcast feed.

They could announce a new fee structure PUBLICLY along with a phase in scedule. Larger increases for off-shore sites, of course.

Dedicate some of that increase to purses. Some of the increase would stick to their fingers, some would make it better for stockmen, hence more horses.

The point of announcing publicly their rates and schedule would be to allow other tracks the opportunity to do the same. i am sure most tracks think the fee should be higher but are reluctant to make the first move. They have enough of the market to make the first move.

The net effect being more betting money into the Horse industry from the pockets of Betting only organizations, including off-shore interests.

and they could send me a little cheque for thanks :)

Fleww

[WINMANWIN]

Frank Stronach's primary focus when buying these tracks was legalized gambling in every state he acquired tracks in. It may not happen, As quickly has he forecasted, but his thought process was, Buy these tracks, and in X amount of years, Slots, Cards will be the bail-out for my company and the states coffers. In Fla
Gulfstream was bought for the land value, As the palm meadows training ctr, can replce Gulfstream, Stronach needs the right politicians, to make is plan work in the future. He was gonna buy the N.Y.C. OTB'S 2 years ago, and almost pulled it off with
former Mayor Giuliania's help, But the new Mayor, Bloomberg
killed the deal, Because he's personal friends with the NYRA CEO Barry Schwartz.

[trying2win]

--I've seen some racetrack executives use that dumbbell approach before, of raising takeouts to solve their financial shortfalls. Pretty short-sighted if you ask me. The racetrack brass will say inane things like "It seemed like the best solution for eliminating our projected operating deficit over the next three years."

--It may raise revenues in the short term, but I believe in the long term it will backfire on them. What's that old saying?..."You can fool some of the people some of the time, but you can't fool all of the people all of the time." Winning horseplayers are keenly aware of takeout rates and the effects of them on their long term ROI.

--Racetrack executives would do well to heed some of the wise advice given by the late, great motivator Earl Nightingale. Earl used to mention some things about the subjects of service and customer satisfaction, that I thought were very astute. I know I've mentioned some of them before, but I think they're worth reviewing again. Some of Earl Nightingale's advice went something like this:

1. If you want to increase your rewards, increase your service.

2. The REAL BOSS IS THE CUSTOMER. They pay for your salary and everything you own. If you don't please him or her, they will take their business elsewhere.

Trying2win

[kenwoodallpromos]

In July Stonach asid they were going to keep spent to bringt in more entertainment. They probably thought entertainment was not bringing in the crowds. My suggestion- sell a title for each non-claiming race, like advertising. Like the Alpo allowance, the walmart mile, the Jane will you marry me sprint, the Ken Woodalkl Birthday gelding 10,000.

[brdman12]

Stronach is and has been positioning for slots. Its all about increased revenue . They have one hope....and gradually they will get it. Or horseracing will continue to decline. I hate to see it but...

[VetScratch]

I agree with Brian.

When straight wagers and exotic handles are combined, the average takeout is roughly 20%.

The "average" simulcasting fee is roughly 3%, which is usually split between the host track and horsemen in the host state. The remaining 17% of total average takeout is retained by the remote wagering provider and is subsequently shared with the horse industry (but only in the remote state).

It makes no sense to sell this product for 3% to North Dakota or an off-shore island where the 17% share of takeout retained by the remote wagering service makes practically no contribution to racing.

It's a sweet deal for such operations... they buy racing for 3% and sell it for 20% while pumping little or nothing back into the industry. This is the only reason such operations can offer rebates.

Some of the major host providers are able to charge more than 3% to locations lacking a horse industry (6% is what I've heard), but such locations should be paying 12% or more.

According to Blood-Horse, the percentage of handle that makes it way back into the horse industry has been declining since the early 1980s. Today, only about 5.9% of handle contributes to purses and the horse industry.

How can a racetrack invest in on-track customer service when the majority share of takeout never comes back to the track?Here are some samples of handles reported in Result Charts for Saturday, November 8th:

AQU_____________________________
Intra-state wagering $3,209,000 (from inside NY state)
Off-track wagering $7,030,436
Track $1,283,478
BEU_____________________________
Off-track wagering $430,635
Track $53,549
CD______________________________
Intra-state wagering $643,503
Off-track wagering $7,789,866
Track $1,013,662
CRC_____________________________
Intra-state wagering $307,030
Off-track wagering $2,456,954
Track $571,067
DEL_____________________________
Off-track wagering $1,152,017
Track $154,379
LAD_____________________________
Off-track wagering $2,353,790
Track $240,096
LS______________________________
Off-track wagering $684,960
Track $166,542
MNR_____________________________
Off-track wagering $1,591,582
Track $80,458
SA______________________________
Intra-state wagering $4,680,504
Off-track wagering $7,255,222
Track $4,138,935

[VetScratch]

BTW, I don't have specifics on the domestic Internet wagering services, but it is safe to assume they are congregating their physical web sites in Oregon because it is a favorable place to do business... I don't expect to see the foal crops in Oregon to surpass Kentucky any time soon! :eek:

[Figman]

Oregon takes 0.25% of every dollar flowing through their State as an "account wager" as a fee.

[VetScratch]

Figman,

Wow, that's a better deal than even North Dakota... no wonder BRIS, TSN, YouBet, and others "physically" locate their wagering operations in Oregon. On the one hand, they sell us products from their information sites, then they go to Oregon to offer wagering... not very supportive of the horse industry! :eek: