Sunday, November 22, 2015
Angst of Bloodhorse Has It Right on CRW
HALLANDALE BEACH, FL., November 22, 2015—When I first learned that the Jockey Club was buying a controlling interest in “Bloodhorse” magazine, I feared the worst.
My initial reaction was that the austere organization would follow the lead of many racetracks which limit media credentials in an effort to manage the news, making reporters more dependent on information disseminated via press release.
Then I took a different tack, that The Jockey Club, whether you agree with its policies or not, yields immense influence, e.g., their laudable efforts on the discontinued use of raceday medication.
I now believe my initial concerns were unfounded, especially if the "new" editorial policy permits a column such as the one authored by Frank Angst five days ago. After all, creating a commotion isn't the Jockey Club's default position.
But you know an item is on point when it stirs controversy, considered a dirty word inside the industry--even when its point of view is trying to correct something that is unfair on its face, and that's computer-robotic wagering.
Like changes in medication policy that may negatively impact handle in the short term, so would the elimination of computer aided batch-wagering that gives unfair advantage to bettors placing wagers at near exact odds milliseconds before post time.
That leaves the other 99% of bettors completely in the dark by comparison, allowing the majority little or no time to adjust to a significant odds shift.
On balance, computer-robotic wagering, CRW, has hamstrung the search for “value,” real or imagined, for the individual handicapper.
Empirically, I can attest that my winning straight wagers yield lower payoffs, after making my within-three-minutes-to-post-time wager, eight or nine times out of 10. Eliminating myself from the equation, sophisticated bettors who recognize true value when they see it can’t react because time doesn't allow for it.
If that regularly happens to double-and-triple-digit-per-race bettors, they will walk, if believing they’re playing a game that’s rigged against them, even without possible chicanery.
(Recall that several large, highly sophisticated Wall Street trading firms had to skuttle their last-second automated orders or the unfair advantage their modeling created).
Angst made two key points: That race betting has become less attractive to sophisticated new bettors who wager significant amounts, and that recent actions taken by lawmakers against fantasy sports companies whose activities may be illegal because it tilts the playing field dramatically.
According to the author, one of every five dollars wagered on horses last year came from CRW and if the practice were made illegal it would have a devastating effect on short term handle.
But like the elimination of permitted use of race-day medication, it is in the industry’s best interests long term that betting becomes as attractive as possible to gamblers.
And gambling in this country is as omnipresent as gun ownership: Gambling doesn’t create degeneracy, people do.
As Angst demonstrated, instantaneous knowledge of probable payout and the ability to wager thousands of different combinations in milliseconds before the race give CRW bettors an unfair advantage because of their special access.
Lack of time does not afford the 99% an equal opportunity to adjust to odds shifts. In a skill-based game like handicapping, knowledge is power, and the power to take advantage of precise information is a way for privileged players to prevail long term.
As presently constructed, the chances of converting new players into regulars is extremely difficult, if not impossible. Recognizing overlays is the staple of successful race wagering. If horseplayers--old or new--tap out, they’re gone. Want-to has nothing to do with it.
In order to accommodate those who account for 20% of present handle, the industry can't or won't fight statehouses over high takeout rates that enables rebating of well financed CRW types, or whales in general. Neither group has stemmed the tide of decreasing handle.
Whales eat a lot of things, but they don’t buy hot dogs, drink beer, or buy past performance programs at the track. There’s a lot more to successful racetrack life than simply catering to the 1%.
Racing’s best marketing, recruitment, and socialization tools are still tied to a day at the races, not sitting in a living room in pajamas betting online or on the phone.
The youthful gambling demographic is not scared away by critical thinking. Young people have lots of ways to spend their money; losing money at the races doesn’t occur to them because, among other things, it’s a costly pastime.
Winning poker players are matched against a handful of peers, a “game of people, not cards.” In racing, thousands of bettors depend on the same basic information.
It's no secret that horseplayers who win consistently are better informed. Coupling knowledge with special technological access and rebates give privileged bettors an inside track to attain true value, which becomes more illusive with each passing day. The betting market is choking on high takeout.
Fantasy sports players, meanwhile, study voluminous stats which are provided free, as opposed to fans who spend $8 for racing’s paper of record just to stay informed about the sport.
Angst points out that state’s attorney’s general have referenced unfair advantages to a handful of well healed fantasy players who gain most of the winnings because they can create hundreds of lineup cards, not dissimilar to the way CRW works.
To his credit, the author suggests that “it’s time for racing to shake its unfair model” and it should do so before law enforcement decides to get involved.
Angst’s best idea was to offer optimal takeout rates so that all players can compete on equal footing. Not a single study ever refuted that lower takeout results in greater handle and revenue over a sustained period. Optimal takeout is akin to a universal rebate, the only way to grow the game.
Written by John Pricci
Tuesday, November 17, 2015
Jeff Gural: HRI’s Executive of the Year
HALLANDALE BEACH, FL., November 17, 2015--Jeff Gural and I have had only two brief conversations in our life, one of a social nature the night New Meadowlands celebrated Tom Durkin, their former longtime harness announcer. It was shortly after Durkin announced his intention to retire.
But we celebrated the Lord of The Meadowlands long before that night in East Rutherford. I never met a racing executive who walked his talk more than Gural, from his unabashed love for the game to putting up his own $120 million to revive a track that had lost much of its luster.
We’ve written about how he takes integrity matters into his own hands by hiring a former state trooper to bolster track security by instituting an in-house integrity program at the glitzy venue a 25-minute ride from Manhattan’s lower West Side.
He had trainers suspected of using illegal drugs which were being administered at a Jersey Turnpike rest stop before they exited at 16W and entered the new receiving barn he built to house and monitor all horses racing that night.
He’s shipped split drug samples to Hong Kong on his own dime after instituting an unannounced out-of-competition testing program because he believes that “if you’re not doing out-of-competition testing, you’re not testing at all.”
Gural takes full advantage of private property provisions of the law, something all tracks could do if they truly had the will to do so and were willing to put the customer first. His policies are in place at his other harness tracks, upstate New York’s Tioga and Vernon Downs.
A horse owner, he believes that horsemen and tracks should be subservient to the good of the game. Citing an apparent lack of will and dwindling state budgets, Gural, a member of the Water, Hay and Oats Alliance, recently called on Thoroughbred tracks to follow his lead.
While he thinks USADA would be an effective, independent regulator, the simplest solution is for track owners to follow his initiatives, challenging the operators of America’s top five Thoroughbred venues--Churchill Downs, Gulfstream Park, Keeneland, Santa Anita and Saratoga--to make a game-changing impact.
Here are some excerpted remarks he made at a recent address: “…The only solution is real simple, for track owners to step up and say: ‘Enough is enough. We have a moral obligation to our customers and to these animals. It’s as simple as that’…”
“I haven’t solved the entire problem but I can tell you that by and large there are no known drug trainers at the three tracks I own. There may be people using drugs that we don’t know about, but we keep trying, keep testing, and keep sending samples…
“We’ve tried using hair samples, have done surveillance, found a reliable lab. I guarantee if the five track owners got together, hired a couple of retired FBI and DEA guys and found a reliable lab, we would not be talking about this anymore…
“If the track owners don’t do something about it, the fact of the matter is that they simply don’t care. They can say what they want…
“I lose $3-million a year. If I can afford to spend $150,000 a year to try to keep the drug guys out, I would think Keeneland, NYRA, Churchill and Mr. Stronach–he loves horses, he knows what I am talking about–can afford to do it and that would be it. We’ll worry about Lasix [another time].
What Gural is talking about, then, is greater reliance on existing laws to be used as a deterrent.
Gural doesn’t stop at the needle’s edge. An owner, he handicaps, bets his money and follows the races closely. At his track Friday night, Gural saw something he wouldn’t allow to stand: Brian Sears’ drive behind Bee A Magician, the 1-2 favorite in the TVG Open Mare Trot [see Meadowlands 2nd race replay, Friday, Nov. 13].
Reportedly driving to instructions, Sears drove his mare conservatively to a fault, making no attempt to be aggressive at any stage, which flies in the face of accepted, albeit unofficial, harness practice to drive odds-on horses aggressively. Trainer “Nifty” Morgan instructed Sears to not race her on the lead because the mare ties-up after racing.
In slow splits of: 28 1/5, 59 1/5, 1:25 4/5, Shake It Cerry moved out from a perfect, pocket-trip third on the final turn and won “wrapped up” in 1:53 3/5. She is a defending trotting champion with career earnings of over $2.3 million.
Bee A Magician was allowed to trot through the lane, finishing fourth under little or no urging from Sears.
Outraged, Gural met with Sears the next day. Presiding Judge John Tamasello later suspended Sears 15 days for the drive and his "lack of judgment in his driving performance," on Bee A Magician.
To be fair, Gural and Sears have a history. Sears was barred from driving at any of Gural’s tracks last year for perceived disloyalty to The Meadowlands in favor of racing at Yonkers Raceway for bigger racino-infused purses. To date, Sears has driven 9,398 winners with lifetime career earnings of $168.4 million.
The following night all drivers were summoned to “a required meeting for horsemen wishing to compete at The Meadowlands… It is important that all parties who will be competing at The Meadowlands this year attend this meeting,” the track stated in a release.
In his effort to protect the betting public, Gural met with several trainers and together worked to cobble out a new house rule:
Going forward, every trainer will be obligated to give the racing office an update on how the horse they are entering has been training so that information can be provided to the public. The information will be printed in the official program and available on the “race review” section of the track’s website.
“This policy is being implemented to protect the betting public as they are the reason we are all here,” said Gural in a statement. Indeed, how many Thoroughbred track owners can say the same with the credibility to match?
HRI will continue to laud any racetrack executive who, like Gural, demonstrates an unfailing willingness to provide a clean product and a clean sport, particularly those willing to do so at their own expense.
Jeff Gural is HRI’s Racing Executive of the Year because in the end it’s deeds, not breeds, which matter most.
Written by John Pricci
Sunday, November 15, 2015
Stop Betting? You Talkin’ to Me?
HALLANDALE BEACH, FL., November 15, 2015—So, Kent Desormeaux thinks Turf Writers shouldn’t bet. Who does he think he is, the New York Times editorial board?
Tell you what, Kent. You’re a public figure, thus subject to scrutiny, especially in an industry that is supported by and allowed to prosper because of gambling.
Make you a deal. I’ll give up betting when you give up styling…but on second thought, scratch that: What I’m doing is legal and breaks no rules. The same cannot be said when you don’t go all out, all the time.
So that we’re clear, we’re not suggesting excessive use of the whip here, and no one is saying you shouldn’t “take care” of horses when something apparently goes amiss, far from it.
In your defense, and in defense of all jockeys riding in California, any serious effort you make to win in a close, hard fought battle is severely compromised by the California Horse Racing Board rule that puts jockeys in damned-if-you-do damned-if-you-don’t whip limbo.
Now that I’ve witnessed enough races to have an opinion on the matter, while the three-strikes-and-out rule is well intentioned, it is ill-advised. Competent stewards--and therein may lie the rub--should use good judgment with respect to excessive whipping.
Call it the pornography rule: Simply recognize excessive whipping when you see it and when it does occur, fine the rider meaningfully, not in slap-on-the-wrist fashion.
As presently administered, the current rule punishes owners, trainers, jockeys and the value of the animal. Worse, it punishes the public at large, something the industry can ill afford.
In 2004, national handle reached a high watermark of $15 billion. Last year it was $10.5 billion. There are other factors at work—read excessive takeout here--but that trend will worsen if horseplayers lose all confidence in the officials who are tasked to protect them.
This loss in confidence again became an issue when the California stewards failed to take any action whatsoever against Desormeaux who appeared to slacken off two jumps before the wire. His mount lost by nose when an onrushing rival got up in the last jump.
As for Desormeaux, I will say this in his defense of the criticism he levied on the media. References to your bouts with alcoholism were unfair and off point. Your condition is a disease that requires unfailing daily vigilance. As someone addicted to nicotine, I can relate.
Your illness duly requires that sobriety tests be conducted to safeguard the health of colleagues and animals alike but personal demons have little place in a story dealing with not putting forth 100% effort 100% of the time.
But that’s the media for you, Kent. Sensational overreach, especially in the Internet age, shouldn’t come as a surprise.
NEW YORK’S ATTORNEY GENERAL LIVES IN A WORLD OF FANTASY
And, so, NFL fanatics in the Empire State can still have their fantasy come true on the gridiron today, tonight, and for the foreseeable future.
There will be no ceasing nor desisting by the two leading daily fantasy sports sites, Fan Duel and Draft Kings, no matter what state attorney general Eric Schneiderman says, which means a half-million fantasy bettors at each site will be in action today.
According to Schneiderman’s interpretation of state constitutional law, he considers fantasy sports as presently constructed to be illegal gambling, which, in our view, it is.
Fantasy Sports is a game a chance predicated on the result of an uncertain outcome, certainly no more skillful in nature than divining today’s Late Pick 4 at Aqueduct.
Fantasy players have to deal with salary cap limitations; horseplayers have to deal with their bankrolls. Is there an appreciable difference here?
New York was the second state to declare fantasy illegal, Nevada’s Gaming Control Board being the first. Authorities in New Jersey, Pennsylvania and California could be the next to do so.
Here’s the real issue concerning the positions taken by Nevada and New York: They derive no monetary benefit from fantasy sports. With nothing to gain but something to lose, fantasy sports shouldn’t be allowed.
Legalities notwithstanding, neither FanDuel nor DraftKings has prevented New Yorkers from playing fantasy sports this weekend. Obviously, they are willing to take their chances in court someday…so bring it. They believe that the AG’s interpretation of gambling law is wrong and its players miscategorized.
But what both states are attempting to do here is restrain trade. The Nevada economy thrives because of legal casino betting and tourism; New York State presently controls the New York Racing Association and has been in no hurry to put it up for bid. It’s about to hand out four more casino licenses in the state.
This week, New York’s racinos; VLT-driven Finger Lakes, Saratoga Gaming and Raceway, and the Aqueduct-Resorts World casino complex have joined the AG’s fight because they apparently have no wish to compete in the same gambling space as fantasy sports.
If you can’t beat’em or join’em, shut’em down. But unfettered by the same competitive restraints, one can’t blame them too harshly for trying.
Schneiderman called fantasy sports a “massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country” and that this industry will not stand “on my watch,” he said in a statement.
Let’s call this action what it is: Attempts to restrain trade and political grandstanding.
What’s so hypocritical is that New York and other states have little problem offering gambling games such as the lottery in which the chances of winning are about the same as being struck by a bolt of lightning.
Talk about fleecing. This includes all citizens, especially those who can least afford it. I guess as long as you include the “problem gambling” disclaimer at the bottom, everything’s Jake.
According to Bloomberg News, the vast majority of daily fantasy prizes are won by high-rollers who enter an average of 330 lineups per day, no different than racing’s batch bettors responsible for those late odds drops that have chased many rank-and-file horseplayers away.
And why should fantasy sports get a pass and not Thoroughbred racing with its high state-mandated takeout rates? Maybe because Comcast, the NFL Players Association, and prominent NFL owners such as Robert Kraft and Jerry Jones, to name a few power players, don’t have a vested interest in racing’s survival. Quite the opposite one would think.
I wouldn’t have a problem with horse racing joining the world of fantasy sports leagues by creating one for racing as a means to attract the younger gambling demographic. But what that will become would simply be more grist for the batch-betting mill.
The only thing wrong with racing’s product, integrity and drug issues notwithstanding, is that it’s too damn costly to play. At current takeout rates, it’s a game that with few exceptions only state houses can win.
Written by John Pricci