Saturday, October 11, 2008
A Stimulus Package for Lagging Thoroughbred Handle
Compared to the rest of the world economy, thoroughbred racing in the United States is not doing all that bad.
The National Thoroughbred Racing Association and Equibase Company Thursday released the “Thoroughbred Racing Economic Indicators“ for United States and Canadian pari-mutuel wagering on U.S. Thoroughbred racing.
The figures released covered the third quarter of this year and how it reflected on purses and number of racing days.
During the third quarter, pari-mutuel handle decreased 9.85 percent from last year‘s seasonal figures. As compared to what on the Dow Jones average, 40 percent from October to October?
As a result of reduced handle, purses in the third quarter of 2008 were down 2.3 percent compared to the third quarter of last year, while race days were 1.2 percent fewer.
For the nine months that ended September 30, wagering was down 5.75 percent compared to 2007 levels, with purses dipping 0.04 percent and race days by 0.87 percent.
Thus far, $10.7 billion has been wagered this year as opposed to $11.4 billion in the first nine months of 2007, those figures including worldwide commingled wagering on U.S. racing and separate pool Canadian wagering on American races.
If the current trend continues, total betting for the year would fall below the $15 billion-mark, the annual average handle this decade.
Should this trend continue, the contribution that parimutuel taxes makes to state coffers where racing is conducted would be reduced sharply, which traditionally results in a loss of services via budget cuts, especially in the area of education, which can ill afford it.
The good news is that there’s a way to reverse the trend, possibly as soon as the middle of 2009.
But unlike the recent Congressional “bailout,” there’s no pork attached to this measure, not if the goal is to raise revenues as soon as next year. The taxpayers, read horseplayers here, would garner instant rewards, too, infusing their added income into the thoroughbred economy.
This is the tide that can lift all boats, those of the customer’s, racetrack’s, horsemen and states where betting on horses is legal. And where does this infusion come from? What can reverse the current trend and stimulate an industry that contributes to so many economies?
It’s called a tax reduction; lowering parimutuel takeout. Whenever and wherever lower takeout has been enacted, over time it’s resulted in increased handle--read revenue to all here. For the groups mentioned above, it’s a win, win, win, win. Less is more; a little smaller slice of a much larger pie
Brains, vision and guts, based on positive past performances. What could be easier?
Written by John Pricci
Friday, October 10, 2008
Even Post-Race, It’s Caveat Emptor
The sensational performance of the sensational Zarkava notwithstanding, last Sunday’s Arc was a little bit of a mess, wasn’t it.
First there was the American payoffs snafu, hubbed through Arlington Park, posting show payoffs that were incomplete, incorrect, or both, the result of a failure to acknowledge the dead heat for show.
Then, in a lovely bit of irony, along came the owners of It’s Gino, one of the dead-heaters, to say that it wasn’t a tie at all, that their horse clearly won the battle for third.
All anyone had to do, they said, was to look at the reverse mirror image displayed by the photo finish camera showing that the number 9, It’s Gino, a clear third in front of number 6, Soldier of Fortune.
We did just what the owners suggested. And what is it they say in the NFL? Oh, yeah, inconclusive
Of course, there was more at stake than the show payoffs. Trifecta and superfecta wagering was conducted on the Arc, and It’s Gino was 150-1.
According to Arlington Park, the information regarding a dead heat was not communicated to the hub that handled all U.S. simulcast wagers. Arlington had posted the original result with Soldier of Fortune finishing third, It’s Gino, fourth.
Although I’m not sure whether they conducted an exhaustive Richard Kimball-type search, Arlington communicated to the Equidaily web-site that they were “looking for patrons at all wagering sites affected by the mistake who bet #9 to show, the 16-1-9 trifecta, and the 19-1-9-6 superfecta.”
Once they informed their simulcast partners, Arlington then recommended that fans contact the manager at the point of purchase to receive payment.
Of course, that’s if those patrons who were told #6 Soldier of Fortune had finished third hadn’t discarded their “losing” tickets on It‘s Gino.
As an aside, bettors who discarded their tickets might have some recourse by asking managers to check self-service bet machines to verify the tickets sold on that machine by checking the sequential order in which bets were made, providing they had other sequential tickets or other means to prove they were betting on that machine, at that time.
Otherwise, it’s caveat emptor
and hasta la vista
As we blogged yesterday, the Governor of the Commonwealth of Kentucky this week took legal action to shelter the racing industry from competition, a measure he hopes will make online gambling go away. Advantage: corporation.
However, for horseplayers caught up in the Arc payoff fiasco, the wager would have been protected. Placing online horse bets leaves a digital trail. Arlington said that anyone who wagered online would be notified by his wagering provider and would automatically receive a credit. Advantage: player.
As a result of the dead heat, payoffs were, as expected, significantly different. The 16-1-6 trifecta returned $145.20; the 16-1-9 $1592.20. The Dime superfecta combining 16-1-6-9 paid $491.70, compared with $2212.68 for the 16-1-9-6.
Players that either bet online or were able to produce tickets with the #9 third will make out a lot better than the owners of It’s Gino. Here’s why.
The photo [posted on the Equidaily site] of the reverse image of the Arc show finish clearly indicates that It’s Gino had his nose on the finish line. However, second finisher Youmzain, racing outside both It’s Gino and Soldier of Fortune, obscured the view of Soldier of Fortune’s nose.
While it appeared that It’s Gino was ahead of his show rival, the photo doesn’t show it conclusively because the hindquarters of Youmzain’s rider, Richard Hills, hid Soldier of Fortune’s nose from view.
When no determination of a close finish can be made with certitude--routinely with horses that finish between rivals--stewards everywhere have no choice but to declare the result a tie.
Written by John Pricci
Thursday, October 09, 2008
Meet the New Boss, Same as That One
“People are making and cancelling bets on horses after races have begun. Let me repeat that: PEOPLE ARE MAKING AND CANCELLING BETS ON HORSES AFTER RACES HAVE BEGUN.
“Does anyone have a problem with that?” asked Ray Paulick, which you must admit is a fair question.
Paulick, erstwhile editor of Bloodhorse magazine and presently doing good work on his web-site, “The Paulick Report,” was blogging live earlier this week from a subcommittee hearing on integrity, part of the “Task Force on the Future of Horse Racing in Kentucky.”
And what did Paulick learn? He learned that calling a meeting is no guarantee that all the attendees will show up.
The integrity subcommittee couldn’t gather a quorum when three of its six voting members failed to show up for their first session this past Monday. And, according to subcommittee chairman Ned Bonnie, they were prepared to address the problem but couldn’t. Dare we call it a profound lack of interest?
Sub-chairman Bonnie was joined by fellow Kentucky Horse Racing Commission members chairman Robert Veck Jr., Robert Vance of Kentucky’s Environmental and Public Protection Cabinet, and KHRC executive director Lisa Underwood.
Either too busy or too disinterested to attend were fellow members Tracy Farmer, Brian Lavin and Duncan Pitchford.
The Task Force is the brain-child of Kentucky Governor Steve Beshear, whose recent argument for cracking down on illegal Internet gambling was reviewed by a Franklin Circuit Court judge the day after the failed Task Force meeting.
Gov. Beshear filed a lawsuit in September that would block Internet access within the commonwealth to 141 online gambling websites. After the suit was filed, Judge Thomas Wingate filed a seizure order requiring that the domain names of these sites be transferred to the state, according to a http://www.courier-journal.com
It’s not clear there’s legal precedent for such an action. After unsuccessful attempts by Beshear to have the General Assembly to put a constitutional amendment before voters to legalize casino gambling, his Internet lawsuit opponents challenged Kentucky’s jurisdiction, its legal right to change international and interstate commerce laws, claiming it didn’t allow due process in the seizure of the domain names. Under state law web-sites are not defined as gambling devices.
Apparently the governor won’t allow due process to interfere with websites he terms “leeches on our communities” that hurt Kentucky’s horse industry. Too bad he couldn’t impress that same urgency on Task Force members who would protect horseplayers instead of concentrating on insulating the horse industry from competition. If you can’t exploit it, shut it down. By any means necessary.
All this has implications beyond gambling. The Beshear lawsuit was the impetus for an emergency meeting called by parties interested in keeping the Internet deregulated, online gambling or not.
According to the story, think tank Bluegrass Institute, the Interactive Media and Gaming Association, the Internet Commerce Association, representing domain-name investors and developers-- potentially you and me--and the Poker Players Alliance--one million strong in the U.S.--are among several more organizations having no wish for government to decide the future of Internet commerce.
Perhaps no other sport and/or gambling industry has its future survival and growth so inexorably tied to the Internet, an industry whose lifeblood is wagering. In Kentucky, where horse racing is preeminent, leadership appears more interested in what horseplayers bring to the table than the horseplayers themselves.
Professional horseplayer Mike Maloney, a “whale” in gambling parlance, has been testifying before any group with an interest in learning about how the wagering component in horse racing works, and he’s been trying to expose the lack of wagering pools security.
Like Wall Street investors, horseplayer confidence has been eroded by a mid-20th Century tote system that has been--and continues to be--exploited by hackers and thieves, a scenario exacerbated by some unregulated off-shore bet shops, a network of disparate simulcast sites, and outdated regulations.
It’s no surprise, then, that parimutuel handle in the U.S. is down nearly five percent. Not all of it can be blamed on bad weather, gaming competition, or the recessionary economy.
“According to Keith Chamblin,’” wrote Paulick, quoting an NTRA source, “the attitudes of racing’s best customers can be summed up in five words: ‘Our core fans are pissed’.
“Consumers are pissed because they feel cheaters continue to win races at an alarming rate by using performance enhancing drugs. They are convinced people are making or cancelling bets after races begin. And they see racing commissions, task forces and blue ribbon panels as pointless exercises conducted by mindless political appointees who are too out of tune to understand the problems, or too apathetic to fix them…
“It should be noted that a majority of the ex officio non-voting members of the integrity subcommittee were on hand in Kentucky this week, including owner-breeder Gary Biszantz, [Maloney], and businessman Frank Kling, who spent a great deal of time and effort working on wagering integrity issues as a member of the Kentucky Horse Racing Authority, a panel dissolved by Beshear earlier this year and replaced with the current racing commission.”
“What are [industry leaders] going to do address the concerns of racing’s best customers?” Paulick finally asked.
Good question, Ray. Here’s another: When will racing learn that parimutuel takeout rates that approach usurious levels are helping to tap out racing customers at a dizzying rate?
Written by John Pricci