MVR handle decline...

[dilanesp]

Originally Posted by Saratoga_Mike

Racing is in secular decline. Do you know Ron Geary? He's a great handicapper and presumably loves racing. He's a CPA by training, and he was the CEO of ResCare (built into a large company, at least for that industry; ultimately sold). With all his business successes, he couldn't really turn the business around at Ellis Park. Why is that? Now you may say, "that's an irrelevant point, as Ellis isn't located next to a population base of 10 mm or so people." True, but why couldn't he meaningfully turn the business? He tried a number of different things, including lowering takeout, but nothing was a magic bullet.

Here's my point: you and others like to imply that "if only you were running XYZ track, racing would prosper." I don't buy it. The secular forces are too much to overcome. Are there areas for improvement at most tracks, including NYRA? Absolutely.

But please list everything you'd change at NYRA. Don't go back in time. I want to know what you'd do differently now. Again, there are areas for improvement at any track, or business for that matter, but there's no magic elixir.

I agree horse racing is in decline. The problem, though, is that even a declining sport should be able to find fans in the New York City metropolitan area. That area is so big that they can get 20,000 people to attend a dog show every year.

I honestly don't know WHY NYRA so definitively alienated its customers. But I do know it happened earlier than it did in Southern California-- I went back there several times in the late 1980's and there was nobody at the track for big races, and this was at a time when Southern California tracks were still averaging 25,000 a day and drawing 50,000+ for big races.

[bob60566]

Originally Posted by dilanesp

I agree horse racing is in decline. The problem, though, is that even a declining sport should be able to find fans in the New York City metropolitan area. That area is so big that they can get 20,000 people to attend a dog show every year.

I honestly don't know WHY NYRA so definitively alienated its customers. But I do know it happened earlier than it did in Southern California-- I went back there several times in the late 1980's and there was nobody at the track for big races, and this was at a time when Southern California tracks were still averaging 25,000 a day and drawing 50,000+ for big races.

How many own racehorse in that area.

[castaway01]

Originally Posted by Saratoga_Mike

Racing is in secular decline. Do you know Ron Geary? He's a great handicapper and presumably loves racing. He's a CPA by training, and he was the CEO of ResCare (built into a large company, at least for that industry; ultimately sold). With all his business successes, he couldn't really turn the business around at Ellis Park. Why is that? Now you may say, "that's an irrelevant point, as Ellis isn't located next to a population base of 10 mm or so people." True, but why couldn't he meaningfully turn the business? He tried a number of different things, including lowering takeout, but nothing was a magic bullet.

Here's my point: you and others like to imply that "if only you were running XYZ track, racing would prosper." I don't buy it. The secular forces are too much to overcome. Are there areas for improvement at most tracks, including NYRA? Absolutely.

But please list everything you'd change at NYRA. Don't go back in time. I want to know what you'd do differently now. Again, there are areas for improvement at any track, or business for that matter, but there's no magic elixir.

Right now horse racing is the opposite of an "in" mainstream thing. It has a retro comeback every so often, and a lot of people like to dress up and drink on Derby day. But that's about it. And while horse racing has screwed up many, many things, it is also a relatively complicated, slow-moving form of gambling in an era where gambling competition has vastly, dramatically expanded. Gambling is more mainstream than ever, but horse racing is not. That's reality.

And it's not just takeout. Lotteries have insane takeout and does multi-billions in business. Why? Because it's what people do with their spare money (and not spare money). You throw a few bucks at it for a shot at $100 million. Casinos are (generally) doing just fine and you're not going to find many long-term video poker or slot machine winners. But the same senior citizens who 50 years ago would be throwing their money away at the track on a random Wednesday are now in front of the video poker machine.

How does racing get that back? I have no idea. Like you said, smart people have tried. You might need a time machine to make the right moves to keep mainstream relevance when they lost it, a real visionary who would bring horse racing into your home and establish it as a TV product. Track attendance would still be low, but handle would be a lot higher than it is now. But maybe the moment has just passed. Just like no one is making boxing one of the three biggest sports in the country again, and no one is making baseball surpass the NFL as the biggest sport again, there's no way to snap our fingers and market horse racing back to its salad days.

[Jeff P]

Actually, despite all the headlines created by Mega Millions and Powerball jackpot games --

A chart on p23 of the California Lottery 2016-2017 Annual Report shows that Scratchers Tickets (not giant jackpot games) accounted for 73.4% of total lottery sales in California during the 2016-2017 fiscal year.

Fyi, when you look at state lottery ticket sales nationally you will find similar numbers when it comes to instant/scratchers games vs. giant jackpot games.

Additionally, many states (including California) have engineered successful turnarounds for their state lotteries by passing statutes that gave their lottery commissions the authority to increase the prize payout percentages for their games - as opposed to the outdated model where significantly lower prize payout percentages had historically been mandated by state law.

In California, the specific statute was AB142.

Unlike horse racing (which took the opposite approach and raised racing takeout with SB1072) the CA Lottery has been able to leverage LOWER TAKEOUT to drive brand recognition and generate significant increases in both sales and total revenue for Education.

Here's a quote from Linh Nguyen, Acting Director, California Lottery:

"Increasing the prize payout percentage improves the product's value to the consumer, provides us with a powerful message that gets consumer attention, and gives us a tool to drive sales and profits.

A relatively small increase in prize payout percentage can be leveraged into a much more significant increase in top-line sales.

Although the increase in prize payout percentage leaves a smaller percentage to be transferred to education, the total dollars going to our beneficiary goes up. And at the end of the day, you can spend a dollar, but you can't spend a percentage. So these changes have resulted in increased funding to education and that's what our constituents care most about and the reason the Lottery was created in 1984."

Read more at the link: Public Gaming Interviews Linh Nguyen Acting Director, California Lottery

I know nobody in racing wants to hear it, but...

You get the idea.






-jp

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[rrpic6]

Keeneland's handle for the 2019 Spring Meet was down 5.4% from last year. Since I work for both MVR and Keeneland, I'll accept most of the blame for the handle decreases. Mark McGwire hit 49 home runs in 1987. In 1988 he hit 32. In 1998 he hit 70. In 1999 he hit 65. Stats fluctuate in all sports. Garbage in, garbage out.


RR

[Robert Fischer]

Saratoga is a nice social atmosphere, and some of the big race days do draw a nice crowd.

$ignificant off-track/computer handle

You have to go to an event day, and preferably a beautiful day, and you can have the social thing.

Could NYRA do more in general to create a social population of players? Probably. Incentive based, and deprioritized NotImportant/notUrgent womp womp...

but sure, there is some market for creative ideas and execution. I'm all for it.

Originally Posted by dilanesp

This is basically why, no matter what NYRA says about handle, I think they did a horrible job for decades and should have been replaced as the manager of the tracks. It should be possible in New York City to find several thousand people who would like to attend the races. NYRA consistently can't despite having excellent facilities.

[dilanesp]

Originally Posted by Jeff P

Actually, despite all the headlines created by Mega Millions and Powerball jackpot games --

A chart on p23 of the California Lottery 2016-2017 Annual Report shows that Scratchers Tickets (not giant jackpot games) accounted for 73.4% of total lottery sales in California during the 2016-2017 fiscal year.

Fyi, when you look at state lottery ticket sales nationally you will find similar numbers when it comes to instant/scratchers games vs. giant jackpot games.

Additionally, many states (including California) have engineered successful turnarounds for their state lotteries by passing statutes that gave their lottery commissions the authority to increase the prize payout percentages for their games - as opposed to the outdated model where significantly lower prize payout percentages had historically been mandated by state law.

In California, the specific statute was AB142.

Unlike horse racing (which took the opposite approach and raised racing takeout with SB1072) the CA Lottery has been able to leverage LOWER TAKEOUT to drive brand recognition and generate significant increases in both sales and total revenue for Education.

Here's a quote from Linh Nguyen, Acting Director, California Lottery:



Read more at the link: Public Gaming Interviews Linh Nguyen Acting Director, California Lottery

I know nobody in racing wants to hear it, but...

You get the idea.






-jp

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I have heard this argument before, and it isn't very good.

First, the famous lottery games with 50 percent takeouts still bring in tons of money when the jackpots are high.

Second, "low" lottery takeouts are still like 30 percent or so. Which means this proves at most that 50 percent takeouts are on the wrong side of the Laffer Curve. Which is academic because we don't have any of those.

[Jeff P]

I submit to you the idea that racing has plenty of takeouts on the wrong side of the Laffer Curve.

I also submit to you the idea that being on the right side of the curve is even more important in today's environment than in years past because of increased competition on many fronts for the wagering dollar.

Yet, racing is still priced as if it were a monopoly.

At least state lotteries had the good sense to address their pricing problems. And (unlike racing) many (including California) were able to turn things around as a result.



-jp

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[Tom]

Originally Posted by dilanesp

I have heard this argument before, and it isn't very good.

First, the famous lottery games with 50 percent takeouts still bring in tons of money when the jackpots are high.

Second, "low" lottery takeouts are still like 30 percent or so. Which means this proves at most that 50 percent takeouts are on the wrong side of the Laffer Curve. Which is academic because we don't have any of those.

Comparing lottery betting to racing betting is not apples to apples.
One spend far less on lottery tickets than they do on racing.
Takeout mean nothing to lottery players. If you bet $10 in tickets and hit for $800 dollars, are you going to whine because you think you should have hit for $950?

And a lot of people just automatically buy a ticket or two to three every week or so when they shop. The lose 51 weeks a year and are happy as clams when they hit one week for $50, even though they lost $30 over the over the year.

[dilanesp]

Originally Posted by Jeff P

I submit to you the idea that racing has plenty of takeouts on the wrong side of the Laffer Curve.

I also submit to you the idea that being on the right side of the curve is even more important in today's environment than in years past because of increased competition on many fronts for the wagering dollar.

Yet, racing is still priced as if it were a monopoly.

At least state lotteries had the good sense to address their pricing problems. And (unlike racing) many (including California) were able to turn things around as a result.



-jp

.

My guess is that from a Laffer curve perspective, some takeouts are too high- specifically on races people don't want to bet on. Other takeouts- on the Kentucky Derby, for instance, are too low.

But the lottery's experience doesn't really tell us much here.

[Jeff P]

No, the lottery experience doesn't tell us where on the curve takeout for individual wagers belongs.

However (Imo) it absolutely does tell us we need to be smart enough to look.



-jp

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[castaway01]

Originally Posted by dilanesp

My guess is that from a Laffer curve perspective, some takeouts are too high- specifically on races people don't want to bet on. Other takeouts- on the Kentucky Derby, for instance, are too low.

But the lottery's experience doesn't really tell us much here.

It tells us that horse racing's attempt at creating huge jackpots through lottery-style bets that rarely pay off has achieved zero mainstream success because it's horse racing and the general public has zero interest in it, not because takeout is too high or the idea itself is bad. You could come up with 100 similar (no, not perfectly exact, but similar) analogies---for example, a store could offer a great deal on fashion that is 10 years out of style, but people aren't going to buy it because it's not the thing to buy. Horse racing is something most people don't want to buy right now. It's Fanta in a Coke world.

I will say that I've been receiving these "I am horse racing" links via email. It's a PR campaign out of California that profiles people in various areas in the industry. It's quite well done. But again, I'm already a fan. How you get the general public to watch and then change its overall opinion on horse racing---that is the trick.

[thaskalos]

If we conducted a survey on this very site...I am confident we would discover that over 90% of the posters here are now betting WAY less than they did in years past. And these are confirmed horseplayers...who have already decided that horseracing is a worthwhile game to play. Even the hardcore horseplayers are either abandoning the game altogether, or have greatly reduced their betting handle in recent years. Ask them why they have now lost interest in the game that they once were dedicated to...and the answer, however complicated, will reveal itself in short order.

[jay68802]

Yesterday at Fonner, I overheard a guy ranting about hitting a tri and it did not pay enough. He said he should go back to playing Keno because at least he knew what he would win. I told him he would eventually loose at Keno because the odds never change. In horse racing you can wait until the odds are in your favor and at least have a chance at winning in the long run.

[Jeff P]

Originally Posted by thaskalos

If we conducted a survey on this very site...I am confident we would discover that over 90% of the posters here are now betting WAY less than they did in years past. And these are confirmed horseplayers...who have already decided that horseracing is a worthwhile game to play. Even the hardcore horseplayers are either abandoning the game altogether, or have greatly reduced their betting handle in recent years. Ask them why they have now lost interest in the game that they once were dedicated to...and the answer, however complicated, will reveal itself in short order.

Gus, when HANA was first formed back in 2009 we did exactly that.

And afterwards, we put the full survey results up on our site - here:
http://www.horseplayersassociation.o...anasurvey.html

And we wrote about them on our blog (many times.)

And we posted about them here at Paceadvantage (many times.)

We also emailed a synopsis of the results out to our membership as well as to a number of industry alphabet groups.

Several years later, McKinsey & Company did a similar survey of their own design for The Jockey Club.

Strangely enough, both surveys (ours and the one by McKinsey) identified three core issues that horseplayers overwhelmingly identified as having potential to drive them from the game and/or cause them to bet less than they otherwise would.

In no particular order of importance those three core issues were:

• Parimutuel takeout rates
  
• Drugs (seen as an integrity issue)
  
• Tote System/Odds that change after the bell (also seen as an integrity issue)

Here we are ten years later. It's really hard for me to ask this next question with a straight face but I'm going to try.

What if anything have our industry stakeholders done to address the three elephants sitting in the room? (Takeout, Drugs, and Late Odds Changes?)

What if anything has changed about horseracing over the past decade that would make the three elephants sitting in the room (Takeout, Drugs, and late odds changes) any less important today than they were ten years ago?



-jp

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