Bigger Takeout for Exotics...

[DSB]

Originally Posted by PaceAdvantage

Maybe I missed it, but in your last major reply, did you account for the fact that there are, today, countless more options available for the gambling dollar compared to 1957 when racing was the only legal game in town?

Maybe you're right. Maybe facts are a bitch.

I would have, if it were relevant.

I was asked to compare handles of yesteryear to those of today in order to prove a statement I made. I did just that.

Now, if you want to address how additional betting options have affected racing, that is another question.

Unfortunately, it just also gives support for my thesis.

If racing offered good value to bettors, they wouldn't have left in droves for alternative forms of wagering. Who can blame the guy who wants to roll the dice and give up 1.5% on his bet than to wager on a horse and give up more than 10 times that amount? Once again, "the math of racing is why nobody bets horses anymore."

But it goes even deeper than that.

When Garden State burned down on Thursday, April 14, 1977, there were 8,000 fans in attendance.

A typical weekday crowd at GSP was double that 20 years earlier.

What alternative betting can you point to that caused such a steady decline?

Casinos? NJ didn't even have one until around '76, and it was a pisspot operation. Negligible effect.

The lottery? Do you really think that a lottery caused half the people to give up on racing? Minor effect on handle, negligible effect on attendance.

RACING WAS IN STEEP DECLINE LONG BEFORE THE ALTERNATIVE FORMS OF GAMING YOU GIVE CREDIT TO EVEN EXISTED.

The only sure thing that can explain the decline is that racing simply lost its popularity. But the question is, why?

For one thing, takeouts rose steadily from the early fifties from 10% w,p,s, to around 17% at most places by the mid sixties.

Secondly, whereas tracks once had one daily double with a 20% takeout, gimmicks were steadily incorporated into the betting menu. Bettors were enticed to abandon w,p,s, (hard enough to win at 17%) for what appeared to be more lucrative exotic pools - pools with takeouts of 20%, 25%, even 30%. They were lucrative alright - for the track.

Initially, racing was responsible for its own decline. They made it harder and harder for a bettor to leave the track with money.

Other factors hastened or contributed to it, but were hardly the cause of it.

[PaceAdvantage]

If we look at the following graph, would the term "steep decline" still apply? Sure, it doesn't go all the way back to 1957, but then again, it covers a pretty good swath of time.

[ArlJim78]

So the stands were packed back in the day because of lower take-out? I highly doubt it.

Takeout may be a factor for a certain percentage of real gamblers, but its not the make or break factor for the average person when deciding to go to the track or not.

[DSB]

Originally Posted by PaceAdvantage

If we look at the following graph, would the term "steep decline" still apply? Sure, it doesn't go all the way back to 1957, but then again, it covers a pretty good swath of time.

I love the quote attributed to Mark Twain:

"There are three kinds of lies: lies, damn lies, and statistics"

Using your graph, the total money bet in 2007 is 12% less than the total bet in 1997, when adjusted for inflation.

Looks like an increase, doesn't it?

btw, the 10 year period you chose was one of relatively low inflation.

If you had a graph which showed handle in terms of real dollars, there would be a decline over the same 10 year period.

These facts notwithstanding, gross betting amounts are meaningless because they dont take into account relevant data, such as the number of races that were run to generate the total.

This could mean that there were simply more betting opportunities in say, 2002 than there were in 1997, or (dare I say it?) the other way around.

More indicative would be to chart the per race handle of a particular track over a 10 or 20 year period and adjust the dollars for inflation.

[DSB]

Originally Posted by ArlJim78

So the stands were packed back in the day because of lower take-out? I highly doubt it.

Takeout may be a factor for a certain percentage of real gamblers, but its not the make or break factor for the average person when deciding to go to the track or not.

You're entitled to your opinion, even if it doesn't take facts into account.

I didn't say tracks were packed because of lower takeout, I said that bettors left as takeouts rose and made it more difficult to win.

There is a difference.

And I agree. The average bettor doesn't take tax into account when deciding to go to the track. But he does take into account whether or not he's been leaving the track with any money when deciding to go back.

Make it harder for bettors to leave the track with money and it is going to have an effect eventually. They don't know why they have had trouble winning at the track (obscene takeouts), they just know they aren't winning.

[Cangamble]

I have to agree with DSB in this argument. Forget inflation for a second. And we can forget about population increases too for the moment.

Those are total handle numbers. 10 years ago, you pretty much had to be at the track or OTB to bet, now you can bet from anywhere, anytime, unless you live in Arizona
And lets not forget about whales. Take whale handle out of the picture and we would see a pretty good decline from 10 years ago.

Knowing that takeout has increased hasn't caused people from stop betting at the track, but the affect of takeout did.

Back in the 60's and early 70's, takeouts were 10-14%, there were hardly any exotic bets as well. Many gamblers left with money to come back the next day. Because there were only 2 exactors and one daily double, and no other tracks to blow money on, it was all about churn churn churn, and there were some noticeable winners who had followers. The followers would often bring friends and family to the tracks as well.

[PaceAdvantage]

Originally Posted by DSB

btw, the 10 year period you chose was one of relatively low inflation.

I didn't choose anything. This was all that was available to me on the Jockey Club website.

So you're saying that "steep decline" would also apply over the period covered in the graph?

[PaceAdvantage]

I find it interesting that in 1997, pari-mutuel handle accounted for over 25% of the TOTAL GAMING revenue in the US (this includes lotteries, casinos, legal bookmaking, charities, bingo, Indian reservations and card rooms).

In 2007, while pari-mutuel handle increased approximately 20% over its 1997 figure, it now only accounted for 16% of the TOTAL GAMING revenue in the US.

Direct proof of the impact of additional venues for the gambling dollar. People did not leave racing IN DROVES for those other forms of gambling. Pari-mutuel handle INCREASED by almost 20% over the ten year period, yet TOTAL GAMING revenue (minus pari-mutuel) increased almost 106% over the same time period.

It wasn't just people leaving racing in droves. If that were the case, handle would have DROPPED over the ten year period, not increased.

Gaming revenue source:

http://www.americangaming.org/Indust...etail.cfv?id=8

[DSB]

Originally Posted by PaceAdvantage

I didn't choose anything. This was all that was available to me on the Jockey Club website.

So you're saying that "steep decline" would also apply over the period covered in the graph?

Ok, the graph the JC chose... sorry.

Once again, the chart is meaningless except for gross wagering.

For argument's sake, if the same number of races generated $13 billion in 1997 and $15 billion in 2007, that would represent a 12% decline when adjusted for inflation.

I suppose it's how you view the decline. Is 12% steep over a 10 year period?

It ain't good.

But it's nothing compared to a dollar of handle in 1957 vs. a dollar today.

It would take approximately $8 today to equal the purchasing power of $1 in 1957. So, a guy betting $2 today would be the same as the guy in 1957 betting a quarter. The fan betting a dime super today would be like somebody betting 1.25 cents back then.

As I showed in an earlier post, a track averaging $2 million in handle in 1957 would have to average about $16 million today to be even.

There were a few tracks that averaged $1 or $2 million back then. How many tracks are averaging $8 million or $16 million a day now?

[PaceAdvantage]

Originally Posted by DSB

There were a few tracks that averaged $1 or $2 million back then. How many tracks are averaging $8 million or $16 million a day now?

How many tracks existed back then compared to now?

[Imriledup]

There are so many different factors as to why people are leaving the game and not betting dollars at live racemeets. Here are a few that i came up with.

1) The best gamblers are getting better and better and have more information at their fingertips.

2) The takeout rate is high and doesn't appear to be getting any lower.

3) Breakage.

4) ALternative forms of gaming

5) Alternative forms of entertainment. Back in the day, there was no internet. Now, people can just sit around and surf and kill a few hours. Or, you can watch hundreds of cable channels on a really nice looking tv set. Back then, no one had these options. You either went out of your house to the track, or you sat at home looking at the walls pretty much.

6) Simulcasting. If you wanted to bet horses, you had to go live. Now, you can go to a simo center, there are plenty of them around.

7) Drugs. With banned chemicals, humans can get better at knowing which horses are the right horses without having to spend 20 years becoming an expert handicapper. Those humans who know who has the best drugs, can water down the winning mutuels enough to make it just that much harder for an honest horseplayer to get the money.

8) Auto travel. Back in the 50s, i dont think there was much traffic on the roads if you wanted to get to the track. Now, try driving from North Jersey to Belmont during the week. Or, try driving from the Arcadia California area to Hollywood Park during the week and then try heading home (by driving from Inglewood, Ca to Arcadia) at 430pm after the last race is over at the Hol.

One thing i'd like to ask the panel here is this.

Back in the 1950s with no simulcasting, phone betting or internet, the only way you can get a bet down was to physically go to the track. Didn't people work? Could you imagine how big the pools would have been back in the day if people could call in their bets on days they couldnt attend?

I would love to interview a horseplayer from the 1950s and find out how people, who were supposed to be working 9 to 5, found a way to bet 2 million dollars into the Belmont Park handle during the week in 1957.

All those people who bet that 2 million did not have a job that was a typical 9 to 5 job. (or, maybe they did and were off that day?)

This is a factor in all this analysis. Now, it doesn't matter what your hours of employment happen to be, its pretty easy to get a bet down, even if you are working.

[DSB]

Originally Posted by PaceAdvantage

I find it interesting that in 1997, pari-mutuel handle accounted for over 25% of the TOTAL GAMING revenue in the US (this includes lotteries, casinos, legal bookmaking, charities, bingo, Indian reservations and card rooms).

In 2007, while pari-mutuel handle increased approximately 20% over its 1997 figure, it now only accounted for 16% of the TOTAL GAMING revenue in the US.

Direct proof of the impact of additional venues for the gambling dollar. People did not leave racing IN DROVES for those other forms of gambling. Pari-mutuel handle INCREASED by almost 20% over the ten year period, yet TOTAL GAMING revenue (minus pari-mutuel) increased almost 106% over the same time period.

It wasn't just people leaving racing in droves. If that were the case, handle would have DROPPED over the ten year period, not increased.

Gaming revenue source:

http://www.americangaming.org/Indust...etail.cfv?id=8

So what your numbers say is that over that 10 year period, much more money was being bet, it just wasn't being bet on horse racing.

Not exactly rendering my points moot, is it?

The best you can say using these figures is that racing remained stagnant through a time of great boom for other forms of gambling. woo hoo.

Using the period of 1997-2007 to provide proof that fans didn't leave in droves for alternative forms of gambling is erroneous. The fact is, many of them left long before this period.

Ask anybody who follows racing in NJ, and they will tell you that casinos wiped out two tracks in this state, and they did it in a 20 yr. period beginning in 1977. Anyone connected with racing knows that patrons left in droves.

Casinos in Aycee almost wiped out Delaware Park and Philadelphia too, and would have if those tracks hadn't been given slots. The point is, most of the people who "left in droves" did it before 1997.

In addition, the illusory "increase" in handle you quote may be the result of greater per capita betting, not an increase in bettors. After all, the dollars bet are constantly losing value due to inflation, so it would make sense that handle would increase, even if the value of the dollars decreases.

However, the increase in gross betting is not keeping pace with inflation, so, it still represents a decline, doesn't it?

[Imriledup]

Originally Posted by DSB

So what your numbers say is that over that 10 year period, much more money was being bet, it just wasn't being bet on horse racing.

Not exactly rendering my points moot, is it?

The best you can say using these figures is that racing remained stagnant through a time of great boom for other forms of gambling. woo hoo.

Using the period of 1997-2007 to provide proof that fans didn't leave in droves for alternative forms of gambling is erroneous. The fact is, many of them left long before this period.

Ask anybody who follows racing in NJ, and they will tell you that casinos wiped out two tracks in this state, and they did it in a 20 yr. period beginning in 1977. Anyone connected with racing knows that patrons left in droves.

Casinos in Aycee almost wiped out Delaware Park and Philadelphia too, and would have if those tracks hadn't been given slots. The point is, most of the people who "left in droves" did it before 1997.

In addition, the illusory "increase" in handle you quote may be the result of greater per capita betting, not an increase in bettors. After all, the dollars bet are constantly losing value due to inflation, so it would make sense that handle would increase, even if the value of the dollars decreases.

However, the increase in gross betting is not keeping pace with inflation, so, it still represents a decline, doesn't it?

If the casinos in NJ were responsible for the downfall of racing, how come tracks in the area who now have slots haven't seen a major increase in horse handle? If a person left horseracing to bet slots, you would think that those players, now given the option to bet slots and horses at the same time, would come back and also bet races.
I really haven't seen a tie between horse handicappers and slots players. One game is a skill based game that's undertaken by a certain type of individual with a certain type of mindset.......a person who doesn't mind doing hard work to come up with winners. The other person is a mindless ninny who wants to throw his or her money away on a mindless activity. Anyone who is a true horseplayer, who loves the handicapping challenge, isn't going to toss his form away and run to play slots instead.

[PaceAdvantage]

Originally Posted by DSB

Not exactly rendering my points moot, is it?

The only point I was arguing was your statement that racing was/is in a "steep decline."

"Steep decline" does not produce a ten-year graph such as the one from the Jockey Club site...inflation or no inflation.

Then again, that graph is for all pari-mutuel racing. Perhaps dog racing is making a bigger comeback than we all realized.

[gopony]

Originally Posted by the little guy

Right.

Except that when I bet on the first race (exacta), I know the odds. I don't know the odds until after I've bet and the first race finishes.