Tuesday, February 26, 2013

Go Ahead, Make Our Day

HALLANDALE BEACH, Florida, February 26, 2013—The news emanating from the Golden State this year has been so bad on so many levels that I can’t even begin to count the ways. Alas, since I am paid to try, let’s concentrate on this for now.

According to a Daily Racing Form report last week, the takeout rate on the popular and successful Players Pick 5 could rise sharply at the Betfair Hollywood Park April 25 unless the track and the Thoroughbred Owners of California can reach an agreement on revenue distribution.

Jack Liebau, the fan-friendly Hollywood Park president indicated that without such an agreement, the promotional 14 percent takeout rate could rise to the standard exotic takeout scale of 23.65, a tax increase of 59.19 percent.

While Liebau did not break down figures specifically, he stated a majority of the 14 percent goes toward purses and that the track receives a nominal share. He was quoted to say that he is “hoping there will be a fairer arrangement in respect to the spread.”

Lou Raffetto, president of the Thoroughbred Owners of California, told DRF in the same story that he’s “confident we will work it out… based on our discussions we’ll come to some sort of agreement.”

Of course, it’s expected and acceptable that the two sides in a negotiation should play their cards out of public view, but two things would seem apparent just looking at those numbers.

At 14 percent, the track very likely is being under-compensated at best if it’s indeed the case that the major share of the split is going to purses. Even as a horseplayer with a vested interest in takeout, I admit there’s not much wiggle room at that rate.

Raffetto’s statement seems an admission that there probably is some inequity because of the special rate and, of course, the slice of the pie cut by the state of California exacerbates this revenue issue because it further reduces the amount that goes to the track and horsemen.

Everyone with an interest in Thoroughbred racing understands the problem and is trying to be fair-minded. But when looking at past performances, certain patterns emerge.

First, low takeout promotional wagers, from Tampa to Los Angeles, are an unqualified success when handle is the measure. Churn notwithstanding, low takeout bets are among handle leaders wherever they’re offered, a tribute to their popularity.

Of greater significance might be that because of the wager’s complexity and higher-cost nature, the amount of work that bettors put into handicapping the wager has resulted in increased handle on individual races within a given sequence; and a trickling more into sequential sub-sets--Pick 5 into Pick 4 into Pick 3, etc.

Low-cost wagers that allow handicappers to win a lot for a little if they consistently outwork their parimutuel opponents are the greatest gift ever given horseplayers. Horseplayers, also known as customers.

Without customers, of course, all those fancy pedigrees, the horse sales, well-heeled owners and bloodstock commissions--the good living made by even the most middling of practitioners--would fail to exist.

All industry factions know this and all factions either pay homage or lip service to the plight of these customers. Now to delve a little further into the PPs.

As everyone has known for some time, Hollywood Park is thisclose to closing its gates forever. And anyone who has paid attention has come to learn that Mr. Liebau seems to understand the economics and politics of takeout and the dire consequences when takeout rates are abused. But already on the brink, his track needs more revenue.

There are two places from which this revenue can flow; one is from the purse account, the second is from the customer’s pocket. The fairest answer probably is--as much as it pains this horseplayer to say so—that it will need to come from both. Everyone takes a haircut.

This sounds great except for this: Of all the groups; from powerless customers to successful but hurting tracks to owners whose pockets only run so deep to horse trainers with a finite amount of sweat equity left to give in their 365/24/7 lives, it is horsemen whose sense of entitlement will bring this whole thing down.

A look at the PPs of the TOC and its horsemen indicates that for some, purses and commissions can never be high enough. Prove to them and colleagues everywhere that, when adjusted for inflation, national handle is half of what it was less than a decade ago, they won’t care, their sense of entitlement beyond all reason.

Build it and the suckers will come worked 50 years ago. But the suckers have been bled dry and the numbers of those that have stopped coming are growing by the day. And the cure for this is what, higher taxes?

To increase takeout almost 60 percent on a wager that in a measurable way has helped stem the tide of decline inevitably will prove to be the end of California racing as the sport’s history has known it. A takeout increase at this point in time is not just bad business; it’s gluttonous insanity.

For grassroots horseplayers, this will not stand. Keep giving horseplayers the economic equivalent of a raised middle finger and reap the ill wind of boycott.

And who knows, maybe this will be the final straw for remaining players to join their brethren who’ve already moved on for the action available in a casino, sports book or card room, where the rake is much, much lower.

So, tell us, are you feeling lucky?

Written by John Pricci

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Tuesday, February 19, 2013


HALLANDALE BEACH, Fla., January 18, 2013--We’ve barely gotten out of the “Kentucky Derby Prep Season” and already there’s been lots of buzz surrounding the storylines that have developed thus far in 2013.

So here, in the Year of the Baker’s Dozen--and also the Year of the Snake (draw your own conclusions)-- are the Top 13 Buzzes of Year.

At least, this is what I’m hearing from the HRI faithful, racetrack sources, and the gamblers and fans assembled at Gulfstream Park this winter:

1. The Rainbow 6: Don’t care if you love it, hate it, whether the takeout is robbing you blind or there’s so much “free money:” and leverage for a Dime you’ve just got to play it. (C’mon critics, you know who you are)!

With the racing product improving as Gulfstream enters prime time, the emergence of better horses and a continued procession of Todd Pletcher-trained favorites should produce, theoretically, formful results.

Not even the obligatory $6,250 claimer at a flat mile or the $35,000 maiden claimers s on turf that end every racing day—Special Weight maidens on Saturday, woo-hoo--there could be plenty of gold at the end of this Rainbow.

As long as there is more than one winning ticket each day, I’ve heard estimates that put the carryover as high as $20 million by meet’s end, the Friday after Florida Derby. In any event, it might be the biggest P6 pool this country has ever seen.

2. Derby Point System: Love it or hate it, like the Rainbow Six, it’s working and it will get better over time. Churchill spokesman Darren Rogers has even said that the parameters need a little tweaking and that “there are some good ideas out there.

We’ve had only two from the get-go: Bury the hatchet with Hawthorne Race Course; the Chicago market deserves Derby prep. [BTW: Hawthorne moving its prep back to two weeks before the one in Louisville can make the Illinois Derby a quintessential Preakness prep; good thinking.

And, of course, the Breeders’ Cup Juvenile winner or Juvenile Eclipse champion should be an automatic Derby seed. The fact that it isn’t is absurd. The politics don’t even make sense. Sometimes business must suffer for the greater good.

3. Paynter: Back in training? Really? The reports were so dire, it was if we all had to live through Barbaro’s lengthy recovery and eventual demise all over again. Unbelievable story. Utterly remarkable. There are no words…

4. Rachel Alexandra: The street fightin' filly that's seemingly defying the odds again. The Internet support for the great filly warms the heart for sure.

5. Kentucky Derby Futures: Steven Crist has it right, something needs to be done. Confusion over the new points system or not, the pool on America’s great race never has grown. Because of the dreaded “all other 3-year-olds,” bettors land on a half dozen buzz horses, mainly based on early season or juvenile form that has little bearing on eligibility.

Make it attractive by lowering takeout, raising the prices on ALL nominees. A parimutuel pool is the only way. See some of the prices being offered in Las Vegas? Those people act like they’re scared to death of any exposure to insider horse knowledge.

A decade-old computer programming issue? Please don’t embarrass yourself or insult the intelligence of bettors. This isn’t the lottery or slots. Playing the races is the study of form; it’s called handicapping. It would be nice if track managers tried it. It’s a worthwhile pastime, even if the best practitioner gets it wrong two out of every three.

6. NYRA: Is the big investigative report on the Takeout Flap over yet? Will the Association ever get a new president? Inquiring minds keep asking. There are some great people working at NYRA. Too bad there’s no one to give them any direction.

7 Permissive Medication: So California trainers and others are not-so-subtly trying to pressure Breeders’ Cup to rescind its Lasix ban on this year’s event. Then how about this? How about if Breeders’ Cup does not cave on this so the world can see how many trainers are willing to become horsemen and not remain horse trainers?

Yes, like everything else, racing is a business, but I would love to know just how many trainers who say they love the game turn out to be no different than those Wall Street guys and are in it just for the Benjamins. Filled your gas tank lately, speculators?

8. Gary Stevens: Is this guy kidding? Apparently not. The first time I saw him a few weeks ago on HRTV since he returned from his Northwest Territory boot camp, he was decidedly leaner and healthier.

I didn’t see the middle leg of his three recent stakes wins but the first and third were classics, especially the one on Slim Shady. To return after a long absence at 49 is one thing; to return at such a high level remarkable. This Hall of Famer is a true renaissance man. Somehow I don’t think his story will end when he ultimately decides to hang it up for good. Jockey as inspirational leader; who knew?

9. Animal Kingdom: HRI’s Tom Jicha will get into this more at week’s end but it’s been a long time since anyone saw a horse not named Zenyatta or Rachel Alexandra showered with the kind of admiration before a race than 2011 Kentucky Derby winner received prior to the Gulfstream Park Turf Handicap, just wave after wave of cheers and applause followed him around the walking ring. It brought to mind a flashback of the 70s when Big Red and the Black Stallion graced the stage of America’s racetracks.

10. The Pletcher 3-Year Olds: Love him, hate him, admire or jealous of him, I’m not sure another horseman, given the new Derby eligibility rules, the sheer number of talented runners and the disparate, influential people he trains for could juggle it all.

In four decades of cruising the backstretch of more racetrack than I can remember, I’ve never seen as operation as large as this—if there WERE any as large as this—run so efficiently. I keep looking but there seems some to be an undotted I’s or uncrossed T anywhere. You know that somehow he’ll figure it all out.

11. Bill Mott: In 40 years of training and a member of Racing’s Hall of Fame, there probably have been runs like the one Mott’s currently on but I don’t remember any. There were the Cigar years, the Saratoga meets he dominated the turf course the way Chad Brown did last year, and championship fall seasons like the one two years ago at Churchill Downs when he won not one but two Classics.

But this winter at Gulfstream he’s even winning with first time starters, forgodsakes, and is doing some of his best work ever. “I hope I don’t trip over a brick,” Mott told Daily Racing Form’s Mike Welsch before sweeping three stakes last weekend. If he had tripped, he likely would have landed on his feet, anyway.

12. SA Low-Takeout Pick 5/On-Track P6 Bonus: At least the SoCal tracks are trying very hard despite the rancorous political climate. Thanks to initial efforts by Jack Liebau of Betfair Hollywood Park who gave the “Players Pick 5” with low takeout a chance, the bet that has proven extremely successful at all three major venues. Liebau continues to be a proponent of low takeout and now handle is climbing at his crosstown rival, too. Rising tides, as opposed to trickle downs, work.

13. Eblouisante: The name says it all; “brilliant, remarkable.” Indeed, in that she is a run-alike, style-alike and big-alike sister of the mighty Zenyatta, providing another are-you-kidding-me Moment of the Young Year. Of course, she could not be in better hands than John Shirreffs’.

Written by John Pricci

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Tuesday, February 05, 2013

Ray, Et Al, You’re Going to Have to Trust Me on This

HALLANDALE BEACH, FLA. February 5, 2013--As horseplayers go, Ray Paulick is an excellent journalist who probably never had to depend on betting for a living. We are only acquaintances, however, and, as such, I don’t know that is for sure.

But I certainly would categorize both of us as old school, in the best sense of the term but on this issue Mr. Paulick is out of touch; not necessarily philosophically but in all practicality.

The way the game is played today, making scores in exotic and super-exotic pools is not only an exciting way for the action crowd to participate in horse racing but the only way the average horseplayer can survive.

Until straight wagers are raked at a realistic max of 12 percent and a full frontal promotional assault is made on Wall Street gamblers--especially day-traders—increasing churn via straight wagering is as practical today as high-button shoes are fashionable.

In a recent blog post, Paulick began with a quote from the ivory-towered Charles Cella, who holds dominion over all things Oaklawn: “I think exotic wagering is the worst thing in the world for horse racing.”

At one time, Cella was onto something when he said that wagers with a lesser degree of difficulty kept players around a lot longer.

Given today’s dwindling betting base and high blended takeout rates, however, tracks no longer have the luxury of churning their way to profitability in the traditional sense.

And isn’t profitability still the only way all of us--big, small and weekend warrior; owner, trainer and casual fan keep score?

As Larry the Liquidator of “Other People’s Money” fame once said, the quickest way to go down the tubes is getting an increasing share of a shrinking pie.

Given the shortage of customers and “recreational” money, what remains are people who know what they’re doing. Of course, there are various levels of expertise.

But bettors who win consistently are still those that outwork the competition and, given that, the biggest problem for horseplayers trying to survive and advance is remaining focused on the task.

Expertise and undisciplined greed notwithstanding, lack of focus and exhaustion from today’s stress-filled lifestyles are the enemies of all horseplayers seeking success on a consistent basis.

Add to this the large betting menus of today’s simulcast marketplace, where nine of every 10 dollars are wagered, conflicting post times and lack of a uniform payout structure requiring a few extra seconds of thought are needless distractions.

Parenthetically, time come for all payoffs to be posted at the uniform rate of one dollar since that’s how odds are commonly posted. Further, all fractional wagers should posted at the lowest denominator, i.e. Dime Supers and, where available, 50-Cent Pick 5s, 4s, 3s, trifectas, etc.

Posting trifectas, superfectas and sequential wager payoffs at a $2 rate insults the intelligence of horseplayers everywhere and is a disingenuous and deceptive promotion that should be stopped.

Tracks should know that even whales take advantage of the leverage provided by fractional wagers and, believe it or not, horseplayers are capable of simple multiplication.

Continuing this digression, guaranteed minimums are real and provide a basis for players getting involved in certain pools, especially large bettors, but over-the-top shilling by simulcast hosts suggesting that players are getting something extra, or that you could win a million bucks for a dime is, at best, sophomoric.

Paulick correctly notes that it’s very likely that more exotic players are losing today and winnings are winding up in the hands of fewer players, which is why today’s average bettor has to outwork parimutuel opponents to mitigate potential bankroll gaps.

It’s no secret that larger professional players and serious recreationalists are betting through rebate shops, including some well-known industry types that keep this fact on the down low.

Further, racing’s biggest gamblers can buy sophisticated batch betting models that guarantee a profitable return if the handicapper can consistently eliminate four or five horses in a 12-horse field, far easier than identifying four or five top contenders.

While there’s nothing illegal about it, batch wagering can only succeed if the projections are based on accurate odds. That accuracy can only be guaranteed at the end of any wagering session.

In a game where late-odds fluctuations are routine, even at America’s biggest venues, late-odds changes are anathema to straight win players who must have value--disproportionately higher reward than risk—to survive. Grinding out straight value plays consistently is virtually impossible
Exotics make the game harder because of the higher degree of difficulty; no argument. But they also provide a means for the average player to leverage his smaller bankroll by giving himself more ways to beat a race or series of races.

In this fashion, average players can take advantage of mistakes when the big player overleverages his bankroll which consequently creates more value for his parimutuel rivals. When it comes to wagering in today’s game there’s no easy route to success.

Indeed, takeout levels originally increased with the proliferation of exotic bets, but with the success of tracks such as Betfair Hollywood and Tampa Bay Downs, to name just two, the pendulum is swinging the other way.

Tracks are making sequential wagers more attractive by offering some bets at a vastly reduced rate which in turn increases pool size and provides opportunities for higher payoffs because lower takeout is a rebate for all.

Where Paulick’s logic gets faulty is in not realizing that a 14% Pick 5 does not tie up money for five races; it actually increases intra-race handle and wagering in other sequentials such as the Pick 4 , Pick 3 and Rolling Double.

Saver wagers are no longer regarded as throwing good money after bad. If the whale is using his money to leverage his wagers and increase his chances of profitability, so, too, can the average player given the benefits of combining low-takeout sequentials with fractional buy-ins.

Back when life was simpler, when illegal sports betting wasn’t as mainstream as it is now, there wasn’t a casino or OTB parlor on every corner, no simulcasting, and everyone went to the track to bet win, place, show and the daily double, insuring pool liquidity, it was possible to patiently grind out profits by churning bankrolls.

Exotics and super-exotics no longer are about competing with lottery or casino jackpot payouts, although that thinking prevails. Handicapping is an intellectual exercise, not unlike poker, only horses are used to beat other humans, not a deck of cards. So to compare betting on horses with other forms of gaming, sports betting notwithstanding, is to insult the handicapping process.

The digital age, with its quality-of-information explosion, coupled with the shrinking pie phenomenon, has made grinding out profits all but impossible.

Most successful horseplayers today take a portfolio approach to wagering. They begin with their preferred wager, usually a high risk-high reward bet, and use surrounding pools to grow profits via arbitraging. That’s horseplaying in the modern age.

Even for the recreational player, the game demands a long term approach. Straight betting, mind-numbing simplicity notwithstanding, will not sustain players in the long term under current market conditions and given the current blended tax rates.

Making a score no longer is cause for calling a travel agent, it’s simply the path to fiscal survival. But only if the would-be winning horseplayer insists on increasing his knowledge, honing his wagering skills and--I almost forgot—focus, focus, focus.

Written by John Pricci

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