PTC and the TOC

[Jeff P]

DJ,

IMHO, the gap between those running racing and its remaining customer base is WIDE. What hurts the most is that from what I can see they aren't even there's a problem. Below is a cut n paste of a post I made on my message board a few days ago. If you were to sit down with Joe Harper, start with the "Where The Game Is Broken" section of the HANA site mock up that I did. With regard to the TOC and the THG what I am most concerned about would be horsemen voting to not distribute track signals. Point out that this practice alienates customers in the worst possible way.

Horseplayers have become increasingly more and more fed up with the way the industry is being run. Horsemen withholding signals from ADWs, track management's disdain towards the customer, trainers who are constantly rewarded for cheating, and a tote system based on obsolete technology - these facets of the game and more have resulted in an industry that is, to put it kindly, no longer mainstream.

An entire generation now exists who could care less about racing.

Yet, over the past two decades while racing has been alienating itself from an entire generation of potential new fans, almost all other forms of gambling have seen explosive growth. Go to almost any casino and you will find a young vibrant crowd (the generation that racing failed to win over) having fun feeding tokens into slot machines.

There is a formula for success in business that I remember from a strategic management class I took in college. Ok. I turned 50 in the past year so I've been out of college and part of the real world for a while now. But what they taught us back in 1977 is every bit as valid today as it was back then:

Define your market space and target customer. Understand your target customer's needs and wants. Figure out how to satisfy those needs and wants and (amazingly) your business will grow.

Every successful Fortune 500 company practices this. By itself it doesn't guarantee success. But failure to practice it practically guarantees failure.

The reason I get so pissed off at the people who run the horseracing industry is that they so completely fail to put this into practice.

And failure to put this into practice just widens the chasm that exists between the industry and its customers. I am both amazed and disgusted by the way that horsemen and track management continually appear so completely clueless that a problem even exists at all.

A grass roots effort has been started over at the PA site to organize horseplayers. I have attended two meetings (conducted in the PA War Room) where we adopted a name and agreed to get a website started.

I was charged with creating the group's mission statement. The mission statemment that I wrote up has not yet been officially sanctioned by the group. And somebody else will probably end up doing the official site.

For the benefit of those interested I've created a mock up web page - a rough draft - that shows what we are working towards. Here's the link:
http://www.JCapper.com/hana/hana.html

Your thoughts and comments are welcome.

-jp

.

[GameTheory]

Is there *anybody* in track management that gets it? That guy who bought Ellis Park (can't remember the name)? Keeneland, maybe? If HANA could work with one track that was willing to listen and make changes for the better -- a track that could act as a model to others that would see the success -- I could see something actually happening. Of course, you've got myopic horsemen's groups to deal with as well, industry-wide outdated tote practices, etc etc. Heck, maybe we should be talking about buying a controlling interest in a track...

[BillW]

Originally Posted by GameTheory

Is there *anybody* in track management that gets it? That guy who bought Ellis Park (can't remember the name)? Keeneland, maybe? If HANA could work with one track that was willing to listen and make changes for the better -- a track that could act as a model to others that would see the success -- I could see something actually happening. Of course, you've got myopic horsemen's groups to deal with as well, industry-wide outdated tote practices, etc etc. Heck, maybe we should be talking about buying a controlling interest in a track...

The last I heard, Ellis's simulcast rights were under control of tracknet per a contract signed at purchase. I think Ellis regains control after 5 years. Other than a few bad mistakes, from what I understand Geary does "get it".

[sandpit]

Actually, some good news for a change. Ellis Park and Geary have got out from under the Tracknet umbrella and their signal for the upcoming meet will be available on both TVG and HRTV, and most online platforms. Hopefully the horsemen won't get in the way of this and they will have a good meet. It's always an uphill climb for them going up against Saratoga and Del Mar.

[trying2win]

Originally Posted by sandpit

Actually, some good news for a change. Ellis Park and Geary have got out from under the Tracknet umbrella and their signal for the upcoming meet will be available on both TVG and HRTV, and most online platforms. Hopefully the horsemen won't get in the way of this and they will have a good meet. It's always an uphill climb for them going up against Saratoga and Del Mar.

Sandpit:

Thanks for the tip. Hmmm...I wonder which tracks PTC will sign up next for their betting menu?...How about ELLIS PARK? (duh!)...Maybe the new PINNACLE track?...Perhaps EVERGREEN PARK? (well... dayatthetrack.com has this track on their menu...it's where the local Alberta harness horsemen are going to, since the recent NORTHLANDS PARK meet has finished).

Ian of PTC has been kind of silent lately...wonder what he thinks of the TOC tranferring over ADW negotiations to the THG group?. I'm not implying anything, but it's strange how that acronym of THG is one letter short of a negative word. As for THG.. ...that group in my opinion, needs to look up the words like 'reasonableness', 'collaboration', and 'empathy' in the dictionary (to name a few), apply the definitions in a positive way for the good of the game, and also shed the 'My way or the highway!' type attitude.

T2W

[BigJake]

I read lots of posts and actually post very few. All the ones I've posted lately seem to be about Keeneland. As I read about the "boycotts" or the "picket lines" I think about how great it is to get to Keeneland 2 times a year. Speaking with your dollars is definately the loudest voice you can use. If HANA choose a list of "Handicapper Friendly" tracks and everyone played their money at these tracks, wouldn't that be better than trying to single out individual tracks to not play?

[Kelso]

Originally Posted by Jeff P

Judging by the way they act right now I'm not convinced those running racing are even aware of what a customer is.

Increasingly, they view their customer as some schlub pumping quarters into a machine. (The horse owners and track managers all prefer it that way, too ... seeing as the only folks they have to keep happy, then, are the politicians they buy.)

[DeanT]

Man, that is awesome Jeff, consider it forwarded to everyone I know.

[riskman]

http://news.bloodhorse.com/article/45726.htm

"But elsewhere in the country, “There’s a free-for-all going on (with ADW) that’s hurting the residents of your state,” he said.

Bettors that used to wager at the track or at simulcast facilities are increasingly attracted to the ease and convenience of account wagering by phone or computer, Couto explained to the NCLGS pari-mutuel committee. The percentage of revenue that tracks and horsemen used to get drops dramatically when the bet is placed through an ADW provider.

He said ADW companies now conduct wagering in 43 states and estimated that the service providers receive about 58% of the revenue realized through such bets.
“T
These are companies that contribute nothing – nothing – to the overall good of the industry,” Couto said."


What does Couto mean by the above statement in bold italics?
Lets say that PTC has received approval in Ca. and has decided to take wagers at Del Mar. I have an account with PTC and reside in New York. I make a $ 100 win wager on horse #2 in the 5th race. For simplicity, the take out rate is 15%. If I was on track 85.00 would go into the net pool. Now if the wager was made through PTC what % of the 15% take out is retained by PTC and what % goes to Del Mar ? This may sound like a stupid question but Iam trying to figure out
why Cuoto said ADW's contribute nothing to the industry.Cuoto states that "these service providers" keep 58% of the revenue"--I assume he means take out. Can someone clarify this? And why does Cuoto care what PTC or ADW's do with their share, ie. rebates?

[Indulto]

http://www.drf.com/news/article/95598.html
TOC may restrict Del Mar signal
By MATT HEGARTY6/18/2008

… Couto said that if the agreement is not extended and TVG does not increase its payments to horsemen from out-of-state bets, the group will use its rights under the Interstate Horseracing Act to deny the signal to the out-of-state account-wagering customers of TVG and Youbet.

"We have the right under federal law to consent or not or set the terms of the contract, and that's what we intend to do," Couto said.

John Hindman, TVG's general counsel, declined to comment specifically on the TOC threat, but he said that TVG "is evaluating the results of the experiment, and we are exploring our options."

He would not say whether TVG would support an extension, a topic that is on the agenda of the CHRB's next meeting on June 27.

Craig Fravel, the executive vice president of Del Mar, said on Wednesday that Del Mar has told the CHRB that it supports the extension. He declined to comment on the TOC's threat because he had not yet been told of the TOC's position.

… Aside from influencing the discussion at the June 27 CHRB meeting, the TOC threat will likely generate hard feelings among account-wagering horseplayers who have faced numerous signal blackouts this year. The blackouts are principally related to the lack of an agreement between the Thoroughbred Horsemen's Group and TrackNet, a simulcast-marketing partnership owned by Churchill Downs Inc. and Magna Entertainment. Churchill owns Twinspires.com, and Magna owns XpressBet.

As a result of the dispute, the signals controlled by Churchill Downs and Magna have been blacked out on every national account-wagering company since spring. THG has pressed TrackNet to provide horsemen a third of the revenue from account-wagering bets, but TrackNet has balked.

THG officials have stated that the one-third split is fair for horsemen. Purses typically receive approximately one-fifth to one-fourth of the revenue from account-wagering bets, depending on the contract and source-market fees. ...

[JBmadera]

From a business standpoint I do not get the horse racing powers to be: making it harder and more expensive to attract to new players is crazy. Sent Mr. Couto this note....

Mr. Couto,



It was with great displeasure I read the DRF article dated 6/18. It is really beyond me as to why you want to make it more difficult for horse racing to compete for the public’s wagering dollar.



As a life long horse player and former quarter horse owner you’ve GOT me. However, this game will die if new players and fans are not attracted to the sport. Given the current economic environment horse racing needs to ensure its survival by creating its own new revenue streams – not relying on Congress, Casinos, etc. and the only way to do that is to make it EASIER for people to get involved and WAGER. ADW’s provide an excellent way for those people who cannot get to the track or OTB facility to become horse racing fans.



All one needs to do is look at the explosion of Casino gaming and especially the popularity of poker – what do they have in common: EASY access and virtually ZERO cost to the player. At the same time this is going on horse racing is increasing the barriers to entry for players and increasing the cost to players. WHY?



Horse racing might be the sport of kings but in this day and age its survival is dependent upon us serfs – and we want the type of low cost, universal access ADW’s provide.



Sincerely,

[Premier Turf Club]

Originally Posted by riskman

http://news.bloodhorse.com/article/45726.htm


What does Couto mean by the above statement in bold italics?
Lets say that PTC has received approval in Ca. and has decided to take wagers at Del Mar. I have an account with PTC and reside in New York. I make a $ 100 win wager on horse #2 in the 5th race. For simplicity, the take out rate is 15%. If I was on track 85.00 would go into the net pool. Now if the wager was made through PTC what % of the 15% take out is retained by PTC and what % goes to Del Mar ? This may sound like a stupid question but Iam trying to figure out

why Cuoto said ADW's contribute nothing to the industry.Cuoto states that "these service providers" keep 58% of the revenue"--I assume he means take out. Can someone clarify this? And why does Cuoto care what PTC or ADW's do with their share, ie. rebates?

Give or take for a premium signal like DMR 7% of that 15% (or 46%) would go to DMR. Of the 8%, roughly half would go back to the customer as a reward. Of the remaining 4%, 1% would go the pay state pari-mutuel taxes and tote fees. The final 3% would need to cover our overhead (rent, comm charges, R&D, management salaries, data costs, equibase license, etc., etc.). We make very little on every wager.

I'd also like to point out if we do not have the DMR signal and you play the non-PTC signals through bookmakers like many of our customers do DMR will get 0% of that $100 wager. But then maybe they could make it up in volume...

[ezrabrooks]

Originally Posted by Premier Turf Club

Give or take for a premium signal like DMR 7% of that 15% (or 46%) would go to DMR. Of the 8%, roughly half would go back to the customer as a reward. Of the remaining 4%, 1% would go the pay state pari-mutuel taxes and tote fees. The final 3% would need to cover our overhead (rent, comm charges, R&D, management salaries, data costs, equibase license, etc., etc.). We make very little on every wager.

I'd also like to point out if we do not have the DMR signal and you play the non-PTC signals through bookmakers like many of our customers do DMR will get 0% of that $100 wager. But then maybe they could make it up in volume...

You mean 'illegal bookmakers'?

[Premier Turf Club]

Originally Posted by ezrabrooks

You mean 'illegal bookmakers'?

1) I didn't want to use what some might perceive to be a prejorative term.

2) There are some PA members (non-US) that can use these bookmakers legally in their jurisdiction.

But, yes, you are correct. The only form of internet wagering that is legal in the United States is pari-mutuel (i.e. playing into the pools) wagering on horse racing, covered in the Interstate Horse Racing Act of 1978. That law clearly states that the money must go into the pools.

That being said, unless the tracks and the horsemen give players a legal and readily accessible outlet to bet into the pools they have to accept that there will be enormous amounts of money that is wagered illegally.

[riskman]

Originally Posted by Premier Turf Club

Give or take for a premium signal like DMR 7% of that 15% (or 46%) would go to DMR. Of the 8%, roughly half would go back to the customer as a reward. Of the remaining 4%, 1% would go the pay state pari-mutuel taxes and tote fees. The final 3% would need to cover our overhead (rent, comm charges, R&D, management salaries, data costs, equibase license, etc., etc.). We make very little on every wager.

I'd also like to point out if we do not have the DMR signal and you play the non-PTC signals through bookmakers like many of our customers do DMR will get 0% of that $100 wager. But then maybe they could make it up in volume...

Thank you for your reply.I had it right--you confirmed it .