Change or Turn out the Lights

[DeanT]

Tuesday, October 13, 2009

If Customers are Not Brought Back......

..... Racing will die.

So goes the sobering panel at today's Simulcast Conference in Saratoga Springs, New York.

Quotes:

“Participants in the horse industry don’t get it but they’ll learn soon,” said Gural. “The horse industry doesn’t want to do anything to help themselves. The horse industry is very happy to be a welfare recipient. They believe somehow that they are entitled.”

Eugene Christiansen, the Chairman, Christiansen Capital Advisors,, echoed these comments.

"The chances of change are slim to none,” said Christiansen. “Racing as an industry is more resistant to change than anything we’ve ever dealt with. If the fan base can’t be brought back, the sport will die.”

“The fundamental problem is consumer pricing,” he said. “The amount of money taken from bettors is not sustainable."

Eric Johnston, Vice President of Racing, Sam Houston Race Park in Houston, Texas, gave an example of why the business model which gives horsepeople a large percentage of wagering revenues, is counter-productive.

“For years we ran promotions to get people out to the track,” he said. When we analyzed the numbers, we realized we’d have been better off to hand every person a $10 bill at the door and tell them to go home.”

“If the industry fails to reach new customers, 20 years from now, all the lights will go off. This takes wholesale change, competitive pricing, new products and pain for a lot of people, including purse levels that may decrease by 50%.”

Full story at link.

[boomman]

Let me see if I get this straight Eric: You say that you ran promotions that increased handle by 50% and on track attendance by 50% @ Sam Houston, yet you were better off running customers off and handing them a $10 bill to leave???????

Huh??????????

Boomer

[offtrack]

The other half of the thought is to give the customers $10, let them go home, and have them bet from wherever they want.
Mobile internet access can help racing grow. Racing needs a killer app that people want to use.
Customer cant get to the racetrack? Cant play on-line Poker? Just take a few minutes and bet/watch a race!!!

[rokitman]

Stop the parasitic behavior, stop the bullshit stories, start the exchange, make past performance information available for free, and get the fock out of our way.

[DeanT]

Originally Posted by offtrack

Racing needs a killer app that people want to use.

I agree. Some sort of app with mobile betting is something that could make a real difference. Some thoughts on mobile wagering, and the future here. http://www.r2collective.com/content/...le-generation/

[Jeff P]

If customers are not brought back...

Racing absolutely needs to find a way to attract new customers and keep them.

Ever stop and make a careful analysis of just why it is so hard to do that?

High takeout is even more problematic for the track newbie than it is for the player with a fair amount of experience under his or her belt.

Below is a data sample for races in my database for the first half of calendar year 2009. Other time periods show similar results.

First, all starters in the sample:

     Data Window Settings:
     999 Divisor  Odds Cap: None
     Surface: (ALL*)  Distance: (All*) 
     From Index File: C:\2009\Q1_2009\pl_2009_0716_June30.txt


     Data Summary         Win     Place      Show
     Mutuel Totals  168396.40 167657.70 167899.10
     Bet           -224064.00-224064.00-224064.00
     Gain           -55667.60 -56406.30 -56164.90

     Wins               13772     27440     40336
     Plays             112032    112032    112032
     PCT                .1229     .2449     .3600

     ROI               0.7516    0.7483    0.7493
     Avg Mut            12.23      6.11      4.16

Next, the same data broken out by rank for Bris Prime Power:

     By: Prime Power Rank

     Rank       Gain       Bet       Roi   Wins  Plays     Pct     Impact
        1   -4139.30  27996.00    0.8521   4371  13998   .3123     2.5402  
        2   -3739.40  27800.00    0.8655   2896  13900   .2083     1.6948  
        3   -6077.20  27964.00    0.7827   2028  13982   .1450     1.1799  
        4   -6071.30  27786.00    0.7815   1493  13893   .1075     0.8742  
        5   -6478.30  27646.00    0.7657   1100  13823   .0796     0.6473  
        6   -6334.10  25584.00    0.7524    812  12792   .0635     0.5164  
        7   -7653.60  21186.00    0.6387    467  10593   .0441     0.3586  
        8   -5391.10  15844.00    0.6597    297   7922   .0375     0.3050  
        9   -4431.90  10750.00    0.5877    156   5375   .0290     0.2361  
       10   -3129.90   6788.00    0.5389     95   3394   .0280     0.2277  
       11   -1195.80   3166.00    0.6223     40   1583   .0253     0.2056  
       12    -962.50   1376.00    0.3005     14    688   .0203     0.1655  
       13    -114.40    126.00    0.0921      2     63   .0317     0.2582  
       14     -42.00     42.00    0.0000      0     21   .0000     0.0000  
       15      -2.00      2.00    0.0000      0      1   .0000     0.0000  
       16     101.20      2.00   51.6000      1      1  1.0000     8.1348  
       17      -2.00      2.00    0.0000      0      1   .0000     0.0000  
       18      -4.00      4.00    0.0000      0      2   .0000     0.0000  
       19+      0.00      0.00    0.0000      0      0   .0000     0.0000

I'll make the argument that if you were a complete newbie and didn't know a thing about horses or betting on horses - but wanted to try your hand at handicapping and just showed up at a track one day and started betting horses by way of making your best educated guess on who you thought would win each race... The horses you'd end up selecting and betting on your first few times... maybe even your first full season... or until you started keeping records as a way to figure stuff out... those horses (because you really have no idea what you're doing) might mimic or make you no better off than if you had made your picks using a random number generator.

Consider, the avg takeout in the win pool in the above sample is somewhere in the vicinity of 17%... which means that if our track newbie just randomly started betting horses to win he or she would get back about 83 cents on the dollar - right?

Umm... no.

The above numbers show an roi distribution that is slanted towards the top of the sample. Prime Power isn't a magic bullet. IMHO the best selections of most really good horseplayers should outperform something like Prime Power - right?

That covers most of you all. Grab a cold one and give yourself a pat on the back.

But what about the track newbie who finds himself or herself pretty much making blind stabs?

The above numbers show the track newbie making a blind stab in the win pool - if he or she made enough $2.00 bets - would have an expected return of just 75.16 cents for every $1.00 wagered.

Now if our track newbie somehow tolerates losing at an effective takeout rate of 24.84% long enough to get some experience... and eventually learned about things like form, speed, class, and the tendencies of human connections... he or she might start picking horses that made more sense...

And if our track newbie stuck around long enough to become a really good handicapper... after a few years his or her selections might have a win rate and flat win bet roi on par with Prime Power Rank=1 or Rank=2 horses.

That's the reality faced by about 98 percent of everybody who goes to the track their first few times...

It was my reality too - at least until I started doing R&D and keeping meticulous records.



My point is the win/loss experience is worse for the newbie racing customer than it is for someone with experience because they have no idea what they are doing.

Hint: I have numbers that say it's even worse for the newbie exotics player because of the even higher exotics takeout.


Consider this...

The newbie slot machine handle puller can expect to get back 92 cents for every $1.00 bet...

He or she doesn't need to think, work, or keep records... or worry about odds that change after the wheels stop spinning... or be left wondering whether or not the bearings housing for that middle wheel was or wasn't injected with grease before the handle was pulled.

All he or she needs to do is show up and feed tokens into a machine.

How in the world does racing compete with that UNLESS changes are made?


-jp

.

[Indulto]

http://www.bloodhorse.com/horse-racing/articles/52964/panel-racing-not-capitalizing-on-advantages?source=rss
Panel: Racing Not Capitalizing on Advantages
By Tom LaMarra October 13, 2009

… “We’re in the gambling business, and we have to stop apologizing for it,” said John Pricci, executive editor of HorseRaceInsider.com and an adviser to the Handicappers Association of North America. “We’re not aggressive. The lotteries are aggressive, and they’re rip-off outfits.”

Pricci said there are “one hundred life-changing scores” possible each day at the racetrack. He said he recently wagered $32 and missed winning $109,000 in the final race of a pick sequence.

“Is a day at the races out of step with the video game generation?” Pricci said. “Perhaps, but you have the ultimate video game here.”

… “The ultimate video game is not being marketed to people who are used to manipulating data,” Dorr said.

… “There is a tremendous amount of data, but where is the real information (for individuals learning the game)?” Amo said. “New fans need education; it’s critical. You have a lot of talking heads, but are they really educating?”

Pricci said racing damages itself by allowing the wrong message to be sent. For instance, the media will have an excuse not to cover racing when it’s announced only 7,000 people were on hand for the Jockey Club Gold Cup (gr. I) program at Belmont Park, he said, but in reality there probably were tens of thousands of people wagering on and watching those races in the New York City metro area either off track or in their homes.

“I think the mainstream media would say we can’t afford to overlook (that many) people,” Pricci said.

Of all the recent innovations in simulcasting, the panelists said the Trakus system in use at Keeneland and Woodbine is extremely valuable to patrons.

http://www.horseraceinsider.com/blog.php/John-Pricci/comments/10142009-industry-must-talk-to-each-other-then-the-rest-of-america/#comments
Industry Must Talk to Each Other, Then the Rest of America
By John Pricci October 14, 2009

…

Actually, racing can’t compete with poker. The cost of the racing product and the learning curve is too high. Racing can do something about both but, admittedly, that will take some time and time is running out.

But there is something we can do right now, however: We’re in the gambling business and we have to stop apologizing for that. …

… Why is it that, on balance, we give people a good shake for their money; offer great odds, opportunities for potential scores, but we never brag about that. What are we afraid of here, a vast right-wing religious conspiracy?

… Horseplayers have an opportunity to make a life-changing score maybe 20 times a day. Our odds are much better, but nobody knows that, because every time we talk about gambling entertainment we do it with our hat in our hands.

Is a day at the races--the most fun that intelligent, successful and social people can have--out of step in the video game age, a mountain too steep to climb?

Perhaps, but simulcasting is the ultimate video game that offers a different kind of instant entertainment and gratification, and a chance to make a lot of money….

The drawback, of course, is that your customers have to be willing to think. If they are, this thing of ours still works, and it works big-time. In fact, the thinking part, like chess or bridge, is the fun part.

… Mainstream media corporations look at our attendance figures and think we’re history. We can show them that they’re wrong.

What if every OTB or simulcast venue put in, say, a turnstile, for the sole purpose of counting the number of people that participate in the racing experience by making a bet, or two, or 20, every day?

Would the media ignore--I don’t know--100,000 people a day in New York City, or Los Angeles, or Miami? Wouldn’t they try to find a way to exploit that market instead? …

[JustRalph]

Why has nobody mentioned the fact that you have to sit through 50 races a day to get 5-6 that are worth betting?

TOO MANY TRACKS! NOT ENOUGH GOOD HORSES!


7-8 DOLLAR WINNERS RACE AFTER RACE WILL NEVER KEEP A NEWBIE ENGAGED LONG ENOUGH TO LEARN ANYTHING! SMALL FIELDS AND RACES WHERE ONLY TWO HORSES FIGURE.........WON'T KEEP ANYBODY AROUND!

THE FLIP SIDE IS A PLACE LIKE KEENELAND OR ARLINGTON WHERE HORSES CAN POP UP AND WIN FOR NO APPARENT REASON! THESE RUN OFF PLAYERS LIKE ME............THERE HAS TO BE A HAPPY MEDIUM............LESS TRACKS LARGER FIELDS............THE ONLY ANSWER TO THE MECHANICS OF THE GAME!

[Imriledup]

You know what i notice when i go to popular racetracks on 'big days'? I notice one thing that every single person seems to be interested in far and above handicapping, watching horses warm up, figuring out how to cash in on the next winner, etc. and do you know what that is?


its eating.

every single person is stuffing their faces, drinking their eyeballs out. If you go to a track like Santa Anita on a typical Saturday with a good card of racing and a stakes race or two, you can't get near the food lines. Everyone has a burger or a coke/beer.

What this means going forward i have no idea, its just an observation.

[andymays]

If I remember right there used to be a horse by the name of GriefandAggravation.


Enough said!

[RichieP]

Originally Posted by JustRalph

TOO MANY TRACKS! NOT ENOUGH GOOD HORSES!

[JimG]

It is tough because the people running the industry are very resistant to change and stuck in the 60's and 70's, which were racing's heyday.

The promotion of the sport as a place to spend the day, bring your family, and watch the horses run is a dead end. Families have weekends together. They go to children ball games and related events and possibly a professional baseball or football game, or Nascar if they are affluent. Horse racing wants 50,000 in the stands on a regular basis but it is never going to happen. There are too many other sporting event options for non-gambling families.

Horse racing should promote itself as a gambling entity that is a game of skill, not luck. It should market itself as an alternative to poker and sports betting. It should be embracing technology and doing whatever it can to foster bringing in additional gamblers. They should heavily showcase existing gamblers that have success and use that to promote the sport. Instead of listening to the droning of trainers that do not want to talk to the media following a big win ("gotta check on the horse"), talk to a winning gambler about why he liked the horse and what kind of money he made on the race.

In short, instead of operating the sport around independent contractors like the owners, trainers, and jockeys...revolve it around the customer, the gambler. Coordinate post times, get scatches out well in advance, upgrade technology to eliminate the shifting of odds after a race starts. Talk to existing gamblers and listen and implement needed changes.

We are so worried about how to bring new people to the sport. GAMBLING is the attraction. Embrace the concept...make it as easy as possible to gamble...showcase winning players. Make the gamblers the stars of the sport and people will start to line up and play. Kinda sounds like poker doesn't it. Last I heard, poker was thriving.

Jim

[Horseplayersbet.com]

Horse racing knows that they can't focus on winning gamblers like poker or the lotteries do because it would be false advertising. Almost every winner we have today is receiving rebates and they don't want to go there because it is an admission that the price of the game is too high.

As for life changing scores, if a person hits a $150,000 pick six because they invested $300, it just isn't the same as winning $2 million from a $10 investment in the eyes of the public. Plus the fact that if a serious bettor hits the $150,000, there is no guarantee that person is a winner in the long run.

[Bobzilla]

Originally Posted by JimG

It is tough because the people running the industry are very resistant to change and stuck in the 60's and 70's, which were racing's heyday.

The promotion of the sport as a place to spend the day, bring your family, and watch the horses run is a dead end. Families have weekends together. They go to children ball games and related events and possibly a professional baseball or football game, or Nascar if they are affluent. Horse racing wants 50,000 in the stands on a regular basis but it is never going to happen. There are too many other sporting event options for non-gambling families.

Horse racing should promote itself as a gambling entity that is a game of skill, not luck. It should market itself as an alternative to poker and sports betting. It should be embracing technology and doing whatever it can to foster bringing in additional gamblers. They should heavily showcase existing gamblers that have success and use that to promote the sport. Instead of listening to the droning of trainers that do not want to talk to the media following a big win ("gotta check on the horse"), talk to a winning gambler about why he liked the horse and what kind of money he made on the race.

In short, instead of operating the sport around independent contractors like the owners, trainers, and jockeys...revolve it around the customer, the gambler. Coordinate post times, get scatches out well in advance, upgrade technology to eliminate the shifting of odds after a race starts. Talk to existing gamblers and listen and implement needed changes.

We are so worried about how to bring new people to the sport. GAMBLING is the attraction. Embrace the concept...make it as easy as possible to gamble...showcase winning players. Make the gamblers the stars of the sport and people will start to line up and play. Kinda sounds like poker doesn't it. Last I heard, poker was thriving.

Jim

Super post Jim! I couldn't agree more with everything you wrote. I wish you had been a guest speaker at the Simulcast Conference.

I have to believe there is still a sizeable segment of the gambling population that would enjoy a game that rewards those who approach their game of choice as an intellectual pursuit, and not just one of random luck. It's amazing all the different opinions sharp players can arrive at when working with the same set of data. Many gamblers by their very nature are opinionated, especially in today's culture, and I've always felt horseracing could market itself better by tapping into this, something along the lines of "hey, ya gotta an opinion?, think you're smarter than the next guy?, prove it!, If you're right, get the other guy's money. You earned it!" Dave Litfin wrote something along these lines some years ago. Combine that with lowering the costs of doing business and I have to think it could be a step in the right direction. I think there are still many people out there who could become interested in handicapping and horseplaying if they were only more aware of it and how it can be an alternative to games of chance, and also if there was awareness that there are some winning players.

Jim, can you think of any way handicapping tournaments could be used to attract attention to the game? When I'm in a tournament my face is buried in the pps, my right hand is constantly marking up the pps and my left hand is working a calculator. Doesn't make for interesting entertainment the way poker tournaments can be. I think televised poker tournaments have done much to get younger people interested in poker but I don't see the same potential for handicapping tournaments. I don't know if there is much potential there.

[cj]

Originally Posted by JustRalph

Why has nobody mentioned the fact that you have to sit through 50 races a day to get 5-6 that are worth betting?

TOO MANY TRACKS! NOT ENOUGH GOOD HORSES!


7-8 DOLLAR WINNERS RACE AFTER RACE WILL NEVER KEEP A NEWBIE ENGAGED LONG ENOUGH TO LEARN ANYTHING! SMALL FIELDS AND RACES WHERE ONLY TWO HORSES FIGURE.........WON'T KEEP ANYBODY AROUND!

THE FLIP SIDE IS A PLACE LIKE KEENELAND OR ARLINGTON WHERE HORSES CAN POP UP AND WIN FOR NO APPARENT REASON! THESE RUN OFF PLAYERS LIKE ME............THERE HAS TO BE A HAPPY MEDIUM............LESS TRACKS LARGER FIELDS............THE ONLY ANSWER TO THE MECHANICS OF THE GAME!

This is exactly what I posted in another thread. Takeouts could survive cuts if the game was more attractive to the gambler, with much bigger pools. You get that with less races and better fields.