Pick 5 Base Minimum

[dilanesp]

Originally Posted by thaskalos

My general feeling, as it pertains to horse racing as a business enterprise, is the exact OPPOSITE from what you state here. IMO...the racetracks are as clueless as an operator can get when it comes to running a profitable business

Here's the thing though. There are things I have a deep knowledge about. Obviously certain areas of the law and law practice, but also a few other things. And in each of those areas, I can tell you 100 percent that although insiders have their flaws and biases, outsiders are almost always way, way, way off about how things work.

And further, one of the things that has happened over more than two decades of law practice is that I've gotten to see internal financial documents and communications of many, many businesses, including, for example, a great many entertainment companies. This is what happens in discovery.

And what I can tell you is that there are literally close to zero idiots in decisionmaking positions in large corporations. They all have access to tons of data, including tons of stuff that is kept confidential. They have internal discussions. IF YOU HAVE THOUGHT OF IT, THEY HAVE THOUGHT OF IT.

Indeed, I have learned that the general public can get very, very arrogant about this. For instance, one of my hobbies is train travel. And there's enormous evidence that Amtrak is managed very very well and that there are certain truths about what does and doesn't work. But most of the people who obsess about trains hate Amtrak and are convinced that Amtrak is out to screw them. They are convinced that they know how to run a railroad and that the people in Amtrak really don't. They are convinced that Amtrak's numbers are wrong. Etc.

Believe me, if you were so great at running a racetrack, you'd be running one. If it were so easy HOW to run a racetrack profitably that any horseplayer could figure it out, then the actual people running racetracks, who have both far more business education and vocational training than the average horseplayer AND access to all sorts of data the average horseplayer doesn't have, would have done these easy things long ago.

It takes a great emotional maturity to admit this, but we don't know everything. We can only be an expert in a few things. If you are an expert in profitably gambling on horse races, than you are probably not an expert in racetrack management. You don't become an expert on the law by reading a few cases and articles online. You don't become an expert in political strategy by watching debate shows on CNN.

The reality is everyone in the industry wants to run their tracks profitably, they have access to very sophisticated game-theoretical models of bettor behavior, and if the secret to making money running a racetrack was to do everything the gamblers on PA want to see done, that's what they would do. But it's not.

When you see a 35 year trend, over multiple racetracks, of lowering minimum bets, that doesn't mean everyone running every track is an idiot. It means that there is some real business logic and logical success at lowering minimums.

Now this DOESN'T mean that nothing that a racetrack ever does is wrong. (For instance, I suspect there ARE ways the industry could get a little smarter about takeout.) But it does mean you should operate from an assumption that longstanding business practices have a reasonable rationale and that there are no magic bullet solutions.

Because when an outsider is saying "all these powerful people being paid lots of money to do important things missed this simple thing that I thought of", the outsider is close to 100 percent likely to be delusional.

[Jeff P]

I think thaskalos and dilanesp are both right - and that the answer lies somewhere in between.

From what I've seen in just about every racing jurisdiction in North America:

Cases where Track Management gets final say over policy decisions (takeout, rebates, source market fee, implementing promotional changes to the wagering menu, increasing the number of out of state races that can be simulcast daily at a brick and mortar location, allowing a new ADW access to the track signal, rules changes, etc.) is just about always the exception rather than the rule.

It's almost always the horsemen who get final say.

Imo --

Not because the horsemen are right or have the first clue about what's best when it comes to managing a racetrack for the long term.

But because track management seldom has the stomach to tell their horsemen "We've decided to try something new."



-jp

.

[thaskalos]

Originally Posted by dilanesp

Here's the thing though. There are things I have a deep knowledge about. Obviously certain areas of the law and law practice, but also a few other things. And in each of those areas, I can tell you 100 percent that although insiders have their flaws and biases, outsiders are almost always way, way, way off about how things work.

And further, one of the things that has happened over more than two decades of law practice is that I've gotten to see internal financial documents and communications of many, many businesses, including, for example, a great many entertainment companies. This is what happens in discovery.

And what I can tell you is that there are literally close to zero idiots in decisionmaking positions in large corporations. They all have access to tons of data, including tons of stuff that is kept confidential. They have internal discussions. IF YOU HAVE THOUGHT OF IT, THEY HAVE THOUGHT OF IT.

Indeed, I have learned that the general public can get very, very arrogant about this. For instance, one of my hobbies is train travel. And there's enormous evidence that Amtrak is managed very very well and that there are certain truths about what does and doesn't work. But most of the people who obsess about trains hate Amtrak and are convinced that Amtrak is out to screw them. They are convinced that they know how to run a railroad and that the people in Amtrak really don't. They are convinced that Amtrak's numbers are wrong. Etc.

Believe me, if you were so great at running a racetrack, you'd be running one. If it were so easy HOW to run a racetrack profitably that any horseplayer could figure it out, then the actual people running racetracks, who have both far more business education and vocational training than the average horseplayer AND access to all sorts of data the average horseplayer doesn't have, would have done these easy things long ago.

It takes a great emotional maturity to admit this, but we don't know everything. We can only be an expert in a few things. If you are an expert in profitably gambling on horse races, than you are probably not an expert in racetrack management. You don't become an expert on the law by reading a few cases and articles online. You don't become an expert in political strategy by watching debate shows on CNN.

The reality is everyone in the industry wants to run their tracks profitably, they have access to very sophisticated game-theoretical models of bettor behavior, and if the secret to making money running a racetrack was to do everything the gamblers on PA want to see done, that's what they would do. But it's not.

When you see a 35 year trend, over multiple racetracks, of lowering minimum bets, that doesn't mean everyone running every track is an idiot. It means that there is some real business logic and logical success at lowering minimums.

Now this DOESN'T mean that nothing that a racetrack ever does is wrong. (For instance, I suspect there ARE ways the industry could get a little smarter about takeout.) But it does mean you should operate from an assumption that longstanding business practices have a reasonable rationale and that there are no magic bullet solutions.

Because when an outsider is saying "all these powerful people being paid lots of money to do important things missed this simple thing that I thought of", the outsider is close to 100 percent likely to be delusional.

I don't know anything about trains...because I prefer to travel by car or plane. But I dare say that I too have "deep knowledge" about a few things in this life, because I haven't exactly wasted all of my 58 years on this planet. And, one of the few things that I happen to know is that you can pretty much tell how competent a management team is by the results that this team's decisions bring about in the marketplace...and how quickly they respond to any negative feedback.

We may be "outsiders", dilanesp...but this doesn't disqualify us from rendering an opinion on an internet chat room. Look at you, for instance. You argue with TLG about the inner nuances of this game...even though we can all agree that TLG's expertise in this area dwarfs yours in comparison. And you've argued plenty with me about NL Hold'em...even though you rarely play the game, while I play the game for a living. And yet...neither TLG nor I would ever presume to muzzle your "outsider" opinions in these areas.

If we gave only "insider" opinions on this board...then I dare say that this place would be a ghost-town.

[thaskalos]

Originally Posted by Jeff P

I think thaskalos and dilanesp are both right - and that the answer lies somewhere in between.

From what I've seen in just about every racing jurisdiction in North America:

Cases where Track Management gets final say over policy decisions (takeout, rebates, source market fee, implementing promotional changes to the wagering menu, increasing the number of out of state races that can be simulcast daily at a brick and mortar location, allowing a new ADW access to the track signal, rules changes, etc.) is just about always the exception rather than the rule.

It's almost always the horsemen who get final say.

Imo --

Not because the horsemen are right or have the first clue about what's best when it comes to managing a racetrack for the long term.

But because track management seldom has the stomach to tell their horsemen "We've decided to try something new."



-jp

.

IMO...this is the epitome of business incompetence. When the ship is sinking, then you try something new...even if this offends some of your minor business partners.

[o_crunk]

Above is NYRA avg and median TRI payoffs grouped by the number of betting interests. I've arbitrarily gone backward to 1/1/2007 to give the "before the 50 cent introduction" a similar period of time to the "after the 50 cent introduction". As far as I know, the 50 cent tri was introduced on 10/19/2013. As you can see, as the field size increases and uncertainty increases, the average payoffs have declined with 50 cent trifecta.

The median does NOT show the same effect. It's a bit all over the place but generally, I'd lean that it shows payoffs are larger with the 50 cent min.

I think this part is important because it shows what many people believe. That chalk payoffs pay a little bit better with the 50 cent minimum but the tail payoffs are significantly lower because the premium for including more horses is lower.

But here's the more interesting part to me. NYRA handle during these two distinct periods per race is relatively the same.

1/1/2007 - 10/18/2013 - $983,988 per race.
10/19/2013 - 11/21/2019 - $1,010,189 per race.

Simply a 1% increase.

The trifecta at NYRA has decreased 18% per pool, roughly about $30K for each pool offered since the introduction of the 50 cent tri.

Yes, NYRA offers more various bets now than before but keep in mind that for a period of time before the introduction of the 50 cent tri, takeout was *higher* than it is now for the duration of the 50 cent trifecta era.

[AndyC]

Originally Posted by o_crunk

Above is NYRA avg and median TRI payoffs grouped by the number of betting interests. I've arbitrarily gone backward to 1/1/2007 to give the "before the 50 cent introduction" a similar period of time to the "after the 50 cent introduction". As far as I know, the 50 cent tri was introduced on 10/19/2013. As you can see, as the field size increases and uncertainty increases, the average payoffs have declined with 50 cent trifecta.

The median does NOT show the same effect. It's a bit all over the place but generally, I'd lean that it shows payoffs are larger with the 50 cent min.

I think this part is important because it shows what many people believe. That chalk payoffs pay a little bit better with the 50 cent minimum but the tail payoffs are significantly lower because the premium for including more horses is lower.

But here's the more interesting part to me. NYRA handle during these two distinct periods per race is relatively the same.

1/1/2007 - 10/18/2013 - $983,988 per race.
10/19/2013 - 11/21/2019 - $1,010,189 per race.

Simply a 1% increase.

The trifecta at NYRA has decreased 18% per pool, roughly about $30K for each pool offered since the introduction of the 50 cent tri.

Yes, NYRA offers more various bets now than before but keep in mind that for a period of time before the introduction of the 50 cent tri, takeout was *higher* than it is now for the duration of the 50 cent trifecta era.

Thanks for the info. It certainly answered a lot of questions I had.

[dilanesp]

Originally Posted by Jeff P

I think thaskalos and dilanesp are both right - and that the answer lies somewhere in between.

From what I've seen in just about every racing jurisdiction in North America:

Cases where Track Management gets final say over policy decisions (takeout, rebates, source market fee, implementing promotional changes to the wagering menu, increasing the number of out of state races that can be simulcast daily at a brick and mortar location, allowing a new ADW access to the track signal, rules changes, etc.) is just about always the exception rather than the rule.

It's almost always the horsemen who get final say.

Imo --

Not because the horsemen are right or have the first clue about what's best when it comes to managing a racetrack for the long term.

But because track management seldom has the stomach to tell their horsemen "We've decided to try something new."



-jp

.

As much as I can't stand a lot of the positions that horsemen take, I should mention that track management is in a difficult spot because the horsemen really can screw a track over.

For instance, I am still highly doubtful that Santa Anita is going to be able to make its Lasix ban stick- it is supposed to apply to 2 year olds starting this year. Because what is the track going to do if it can't fill races because the horsemen pull their horses and run somewhere else?

Regulators can stand up to horsemen. But track management has a very hard time doing so.

[dilanesp]

Originally Posted by thaskalos

I don't know anything about trains...because I prefer to travel by car or plane. But I dare say that I too have "deep knowledge" about a few things in this life, because I haven't exactly wasted all of my 58 years on this planet. And, one of the few things that I happen to know is that you can pretty much tell how competent a management team is by the results that this team's decisions bring about in the marketplace...and how quickly they respond to any negative feedback.

Pick some consumer-oriented business that you consider well-run. Any business.

Now go on Yelp and read the consumer comments.

Literally EVERY business gets tons of complaints. Complaints CAN mean something (1,000 people writing in to United Airlines saying the toilet seats are uncomfortable on the 777 probably means the toilet seats are uncomfortable on the 777), but they don't necessarily mean something, and plenty of very successful businesses ignore or give perfunctory responses to many complaints where they know the complaints are either unfounded or that their business model will be less successful if they addressed them.

We may be "outsiders", dilanesp...but this doesn't disqualify us from rendering an opinion on an internet chat room.

Never said it did. That's not my argument.

My argument is that relatively simple fixes and maxims proposed by outsiders that depend on everyone in an industry being stupid are generally wrong and often delusional. But you can offer any opinions you want.

Look at you, for instance. You argue with TLG about the inner nuances of
this game...even though we can all agree that TLG's expertise in this area dwarfs yours in comparison.

This is actually somewhat wrong. Obviously Andy has SOME more expertise- but note, he is not, actually in track management. He's a handicapper and television personality. That will of course expose him to some information the average person doesn't have, but it's not the same thing as if Tim Ritvo came in and explained stuff to us.

Indeed, in many ways, Andy is in a particularly poor position to comment on racetrack management. Because his job means he can't really voice serious criticisms of NYRA, but he also doesn't have access to the sort of insider information that could help explain NYRA decisions.

None of that is to say that Andy isn't a valuable contributor here. He's more valuable than i am. I know this. But he isn't a font of information about racetrack management.

And you've argued plenty with me about NL Hold'em...even though you rarely play the game, while I play the game for a living.

I've actually both played more NLHE than you think, and have STUDIED a ton of NLHE. Plus I've studied a ton of gambling psychology. I understand leaks very well. I'm not an expert in the same sense that, say, Tom Dwan is an expert. But I definitely have expertise, and in fact, probably know more about the psychological and mathematical aspects of the game than many of the people who call themselves "professionals" here in LA.

I don't play NLHE that much because I dislike NLHE. I find it boring and slow and full of bad conduct by players. But I played enough of it to establish that I was a significant winner over a significant sample in 500NL and 1000NL. And I still run hands through solvers and play an occasional game of online midstakes NL.

At any rate, keep giving your opinions. Nobody's saying you can't give them. What I'm saying is that when you find it's "me, with the simple solution, against all the insiders", well, the insiders are almost always right in that situation.

[the little guy]

Originally Posted by dilanesp

This is actually somewhat wrong. Obviously Andy has SOME more expertise- but note, he is not, actually in track management. He's a handicapper and television personality. That will of course expose him to some information the average person doesn't have, but it's not the same thing as if Tim Ritvo came in and explained stuff to us.

Indeed, in many ways, Andy is in a particularly poor position to comment on racetrack management. Because his job means he can't really voice serious criticisms of NYRA, but he also doesn't have access to the sort of insider information that could help explain NYRA decisions.

None of that is to say that Andy isn't a valuable contributor here. He's more valuable than i am. I know this. But he isn't a font of information about racetrack management.

With all due respect, and this is one of the reasons your posts are frequently problematic, you have absolutely no idea what I do or don't know. No idea. I understand there may be some logic to what you are guessing here, but that doesn't mean you guessed correctly.

[dilanesp]

Originally Posted by the little guy

With all due respect, and this is one of the reasons your posts are frequently problematic, you have absolutely no idea what I do or don't know. No idea. I understand there may be some logic to what you are guessing here, but that doesn't mean you guessed correctly.

Andy, with all respect, you aren't in the management in NYRA. What you do there, in broad terms, is public information.

So I described your position accurately- you aren't, for instance, privy to the internal e-mails of senior NYRA management. On the other hand, you are likely to know more about NYRA management that a pure outsider.

Now notice, I said this (and have now said it twice). You haven't denied it. "You have absolutely no idea what I do or don't know" is not a denial.

If you think I misdescribed your position, you can obviously say what your actual position is. A non-denial denial means I correctly described it.

[thaskalos]

Originally Posted by dilanesp

Pick some consumer-oriented business that you consider well-run. Any business.

Now go on Yelp and read the consumer comments.

Literally EVERY business gets tons of complaints. Complaints CAN mean something (1,000 people writing in to United Airlines saying the toilet seats are uncomfortable on the 777 probably means the toilet seats are uncomfortable on the 777), but they don't necessarily mean something, and plenty of very successful businesses ignore or give perfunctory responses to many complaints where they know the complaints are either unfounded or that their business model will be less successful if they addressed them.



Never said it did. That's not my argument.

My argument is that relatively simple fixes and maxims proposed by outsiders that depend on everyone in an industry being stupid are generally wrong and often delusional. But you can offer any opinions you want.




This is actually somewhat wrong. Obviously Andy has SOME more expertise- but note, he is not, actually in track management. He's a handicapper and television personality. That will of course expose him to some information the average person doesn't have, but it's not the same thing as if Tim Ritvo came in and explained stuff to us.

Indeed, in many ways, Andy is in a particularly poor position to comment on racetrack management. Because his job means he can't really voice serious criticisms of NYRA, but he also doesn't have access to the sort of insider information that could help explain NYRA decisions.

None of that is to say that Andy isn't a valuable contributor here. He's more valuable than i am. I know this. But he isn't a font of information about racetrack management.



I've actually both played more NLHE than you think, and have STUDIED a ton of NLHE. Plus I've studied a ton of gambling psychology. I understand leaks very well. I'm not an expert in the same sense that, say, Tom Dwan is an expert. But I definitely have expertise, and in fact, probably know more about the psychological and mathematical aspects of the game than many of the people who call themselves "professionals" here in LA.

I don't play NLHE that much because I dislike NLHE. I find it boring and slow and full of bad conduct by players. But I played enough of it to establish that I was a significant winner over a significant sample in 500NL and 1000NL. And I still run hands through solvers and play an occasional game of online midstakes NL.

At any rate, keep giving your opinions. Nobody's saying you can't give them. What I'm saying is that when you find it's "me, with the simple solution, against all the insiders", well, the insiders are almost always right in that situation.

I wish i could dissect your post the way you did mine, so I could respond separately to every point you've made...but I haven't figured out how to do that yet. So...I'll just reply by telling you that I never pretended to have any "simple solutions" to the many problems that our game is currently faced with. Nor do I feel that I should have solutions before I can complain about whatever problems I happen to see. When I go to a restaurant and order a meal, and my food comes back unsatisfactory...I feel that I have the right to complain to the management without proving to them that I have any better "solutions" for the problems that they might be having in their kitchen.

Yes, it's true...no matter what business we talk about...there are bound to be many customer complaints. Go to Amazon and search for the movie The Godfather...and you will find that about 5% of the customers there have given this outstanding movie ONE STAR OUT OF FIVE in their reviews...for a variety of reasons. But the problems that our game is currently facing cannot be attributed to the fickleness of its customer base. The problems that this game is facing are REAL...and the vast majority of the long-time customers have agreed that this game has become much less desirable to them than it once was. And, in spite of this, the game's leadership persists in implementing changes which amount to nothing more than a band-aid on a bullet wound. And that, to me, wreaks of leadership mismanagement...because the truest test of business acumen comes when problems arise.

[Zman179]

Originally Posted by dilanesp

Indeed, I have learned that the general public can get very, very arrogant about this. For instance, one of my hobbies is train travel. And there's enormous evidence that Amtrak is managed very very well and that there are certain truths about what does and doesn't work. But most of the people who obsess about trains hate Amtrak and are convinced that Amtrak is out to screw them. They are convinced that they know how to run a railroad and that the people in Amtrak really don't. They are convinced that Amtrak's numbers are wrong. Etc..

Amtrak in certain aspects is indeed managed well; however, politics has mandated that money losing lines be maintained so that their constituents aren’t deprived of a service...that they rarely use. So the Northeast Corridor, which is extremely profitable, winds up subsidizing 95% of the system and therefore the network shows an overall loss. As a consequence, it is far more expensive to take the train in the NEC area than it is to drive, take the bus and even more than a plane.

[AndyC]

Originally Posted by dilanesp

........This is actually somewhat wrong. Obviously Andy has SOME more expertise- but note, he is not, actually in track management. He's a handicapper and television personality. That will of course expose him to some information the average person doesn't have, but it's not the same thing as if Tim Ritvo came in and explained stuff to us.

Indeed, in many ways, Andy is in a particularly poor position to comment on racetrack management. Because his job means he can't really voice serious criticisms of NYRA, but he also doesn't have access to the sort of insider information that could help explain NYRA decisions.

None of that is to say that Andy isn't a valuable contributor here. He's more valuable than i am. I know this. But he isn't a font of information about racetrack management.

First off, I would appreciate it if you would use Andy's forum name (the_little_guy or TLG) as opposed to using what could be confused with my forum name of AndyC.

Secondly, how the hell do you know what knowledge and expertise TLG has about racetrack management? He may be a handicapper and a television personality but you are, after all, only an attorney.

Originally Posted by dilanesp

At any rate, keep giving your opinions. Nobody's saying you can't give them. What I'm saying is that when you find it's "me, with the simple solution, against all the insiders", well, the insiders are almost always right in that situation.

Every year there are thousands of business failures big and small. The insiders probably would have done much better listening to their customers. The knowledge of the diverse group of posters on this forum never ceases to amaze me. Ditto for the stupidity.

[dilanesp]

Originally Posted by thaskalos

I wish i could dissect your post the way you did mine, so I could respond separately to every point you've made...but I haven't figured out how to do that yet. So...I'll just reply by telling you that I never pretended to have any "simple solutions" to the many problems that our game is currently faced with. Nor do I feel that I should have solutions before I can complain about whatever problems I happen to see. When I go to a restaurant and order a meal, and my food comes back unsatisfactory...I feel that I have the right to complain to the management without proving to them that I have any better "solutions" for the problems that they might be having in their kitchen.

Yes, it's true...no matter what business we talk about...there are bound to be many customer complaints. Go to Amazon and search for the movie The Godfather...and you will find that about 5% of the customers there have given this outstanding movie ONE STAR OUT OF FIVE in their reviews...for a variety of reasons. But the problems that our game is currently facing cannot be attributed to the fickleness of its customer base. The problems that this game is facing are REAL...and the vast majority of the long-time customers have agreed that this game has become much less desirable to them than it once was. And, in spite of this, the game's leadership persists in implementing changes which amount to nothing more than a band-aid on a bullet wound. And that, to me, wreaks of leadership mismanagement...because the truest test of business acumen comes when problems arise.

I suspect the three things that have affected the horse racing business most are two things the industry has no control over and a third that was inevitable and which was hugely convenient for bettors anyway.

The two outside the industry's control:

1. The rise of the animal rights movement. This is pretty self explanatory, but 50 years ago, if a track had a rash of breakdowns, it might have generated some publicity and some criticism, but it wouldn't have created a crisis, because there wasn't this large constituency of people who held human activities to a standard of "no harm to animals".

2. Changes in public tastes. Horse racing isn't the only sport that is less popular than it used to be. So are boxing, baseball (to some extent), and track and field. And I am sure there are others. Meanwhile, soccer, pro football, basketball, beach volleyball, and mixed martial arts, among others, have gotten more popular. Tastes just change, and fewer people want to watch horses run around tracks than used to.

The one that was in the industry's control, but was inevitable:

3. Simulcasting/internet wagering. It's much more convenient to players, but it destroyed the virtual monopoly that local tracks had. You can bet where you want, which means if the local track is not offering an attractive product, you can just avoid it. This has significantly contracted the sport.

There are also some other issues, such as increased legalization of gambling, so there's more competition, and of course the weakening of the breed.

But you take those 3 I mentioned, and I don't see how even the most brilliantly managed industry wouldn't be having real problems.

[dilanesp]

Originally Posted by AndyC

Every year there are thousands of business failures big and small. The insiders probably would have done much better listening to their customers. The knowledge of the diverse group of posters on this forum never ceases to amaze me. Ditto for the stupidity.

Nope. The reason most businesses fail is because capitalism runs on creative destruction. Most small businesses have to fail, to create the competition that allows a few to succeed.

Your comment is like saying "if all gamblers gambled rationally, everyone would win". Nope. Only a small percentage CAN win, due to the mathematics that govern the process. So if everyone gets more intelligent, the same percentage still has to lose.