Sunday, January 01, 2012

Time to Turn the Page

SARATOGA SPRINGS, NY, DECEMBER 31, 2011—There’s a pivotal scene in “When Harry Met Sally” when the clock strikes midnight on New Year’s Eve, when hats fly, horns sound, confetti drifts in streams from out of nowhere and the familiar, traditional lyrics of “Auld Lang Syne” start to play.

Harry Burns then says to Sally Albright, and I’m paraphrasing here, “I never understood what the words to this song means. Should we forget old acquaintances, or should we remember not to forget old acquaintances..? ”

Actually, it is supposed to be about old friends who have parted, meet again, and lift a glass in friendship and recall a past gone by. So, Harry, the basic message is we should not forget old friends, and should take the time to celebrate a reunion whenever one occurs.

But these days, New Year’s Eve and day seem to be less about friendship and more about impending January whites sales, diets, and other resolutions that are even money never to see February. But also new beginnings; at least there’s still that.

Truth be told, I probably had a worse year than the three-year-olds. As far as 2011 is concerned, good f…ing riddance!

It wasn’t all bad, mind you. There was the condo in Plantation that Toni and I lucked into, and enough left in the 201K—a 401K pre-2008—to pay for it. They don’t give 30-year mortgages to 60-somethings, you understand. That’s if you can find a bank that still lends money.

And got to do the bucket list thing, too, buying a piece of my very first race horse. Doing OK, too, as the filly is paying her way. Hasn’t won yet but five starts and five checks; not too shabby. Hopefully, she gets the job done on the January 8. We shall see.

I’m not much of a New Year’s reveler; never was. But this New Year’s was cool. Toni and I were at home and at the struck of midnight we had a birthday party. Dubai’s Connection turned 7 on Sunday. We’re so proud.

But the rest of the racetrack year kind of, in the language of today’s young people, sucked. First of all, it was first losing year in the last four. They say that the photos and DQs even out. They don’t. The first bad beat came at Calder’s Summit of Speed this summer.

The investment was $24. The pool was the Pick 5 with its tempting 15% pari-mutuel takeout. Musical Romance had just split horses deftly beneath Juan Leyva to take the lead at 7-1 and with a half furlong left her length lead appeared safe. Over $5K for a song.

Sassy Image. The 3-2 favorite was least of 10 at head-stretch. But Mike Smith swung her to the far outside, 8 to 10 wide, and she came rolling, flying like some feline Turkoman. She got up by a neck. I was stunned. Couldn’t believe Musical Romance got beat; couldn’t believe Sassy Image got up.

Off that race, Sassy image finished sixth on the Ballerina and didn’t race again in 2011. After the Rooney, Musical Romance won the listed Barb’s Dancer, the Grade 2 Presque Isle Downs Masters and the Breeders’ Cup Filly & Mare Sprint. Guess she was the best filly; only not on July 9 at Calder.

Then came, well, New Year’s Eve, by now that was yesterday, it was another 50-Cent Pick 5, this was at Gulfstream, a bet that offers a consolation AND a carryover. And so we made a $48 investment, a 4x1x3x2x4.

Our single, ironically named Battle Hardened, did all the dirt work, stalking for the entire nine furlongs, taking the lead at head-stretch, battled the entire length of the stretch and held Big Screen safe, until the last jump, beaten a head. Battle Hardened was the 7-2 second choice; Big Screen the 5-2 favorite.

The Pick 5 with Big Screen and the other spread horses returned $6,871.20. It wasn’t a complete loss, though. The conso paid $51.20. The winner “wore down rival late.” The runnerup finished “gamely, just failed.”

“For auld lang syne, my dears, for auld lang syne, we'll take a cup o' kindness yet, for auld lang syne," and maybe drown a sorrow or two. It’s New Year’s Day; I’m even for 2012.

Written by John Pricci

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Thursday, December 29, 2011

You’re Entering the Wondrous Dimension of Imagination. . .Welcome to the Spin Zone

SARATOGA SRINGS, NY, December 29, 2011—When it comes to managing the fallout from the takeout error made by the New York Racing Association by which bettors were overcharged by more than $8 million over a 15-month period, it turns out that NYRA and several media outlets know more about spin cycles than a Maytag repair man.

After keeping a low profile for nearly a week during the Aqueduct Christmas hiatus, NYRA CEO Charles Hayward surfaced in a Daily Racing Form interview Tuesday. “I’m the CEO, ultimately I’m responsible,” before adding the qualifier “a lot of people both inside NYRA and the state [had a chance] to review [the statutory reduction] and the bottom line is that we missed it.”

In Thursday’s Saratogian, Adirondack Trust Co. president, CEO and board chairman Charles V. Wait, also a NYRA Board of Trustees member, said the incident was “clearly unintentional,” that “these things happen in business from time to time” and that no one should lose a job over this, only that “it’s something for the [NYRA Board] Audit Committee to review.”

Beneath the headline “NYRA’s Hayward says takeout reduction permanent,” somewhat akin to a NYRA press release on this situation last week (“NYRA lowers takeout)” came a second admission of culpability and a belated apology: “We’re trying to do what we can to fix that for the customers,” Hayward told the DRF, “but it doesn’t eliminate the fact that we made a mistake, for which I apologize.”

Hayward also said that the 2% compensatory takeout reduction on five exotic wagers would be permanent, “not for only 15 months as had been reported by some outlets.” Those outlets, however, were only reporting what the language led them to believe.

A New York State Racing & Wagering Board statement from a hearing on this situation read in part: “Chapter 115 of the Laws of 2008, Section 238 of the Racing Law… the matter remains under review; the Board approved the request to bring NYRA’s takeout on exotic wagers into compliance with statute. Furthermore, the Board approved the following actions in relation to approval of this request and consequences of the use of the excessive takeout rate for approximately 15 months.”

Those who blamed state racing law as being very complex seemingly knew what they are talking about. The language “approximately 15 months” apparently can be taken to mean forever, even if the minimum amount of reduction time proscribed must be in place for at least that length of time. If, then, NYRA does not request an increase back to higher pre-existing levels, the 24% takeout rate would remain in effect permanently.

The language in the statute relating to the Pick Six is also parsed, the bet defined as a “super-exotic.” All combination bets consisting of at least three elements up to five are termed merely “exotic.” Since NYRA is permitted to charge anywhere up to a 36% rake on the Pick Six—who conjured up that number?—the 26% rate Pick Six bettors were charged during the 15 months in question falls within the parameters of the statute.


HRI has not seen any language that governs what measures the state’s harness tracks or Finger Lakes Thoroughbreds must take to correct overcharges made on their customers. All simulcast organizations were unintended beneficiaries of the illegal rate. The SRWB did, however, instruct the state’s OTB corporations to follow NYRA’s lead to make bettors with documentation whole.

The 15-month error was in all probability an oversight, albeit one of enormous magnitude, falling between the cracks of a betting chasm as wide as the Grand Canyon. But it makes no sense, especially given that Genting’s New York City Casino on the grounds of Aqueduct Racetrack is a sign that happy days may be here again. That the Association would take such a gamble and show such utter disregard of racing law seems unreasonable, although history could contradict that notion.

However, it would have been better had Hayward’s apology come quicker, getting out in front of the flack before setting the spin cycle on high. It would have appeared more sincere had he not pointed out in the DRF story that the Association has been acting without a designated chief financial offer since October 5, or that takeout rates are published daily in the official track program, Daily Racing Form and off-track locations. This was not a time for playing the caveat emptor card.

Nor was it timely to state that NYRA was “opposed initially” to the 2008 takeout increase as part of the franchise agreement because “it was bad for business.”

And so the action taken by the Association “brings NYRA into compliance with the statutory provisions. NYRA states that they are requesting to lower the takeout rate an additional one percent to 24% to compensate their customers for the prior higher rate. It should be noted that the allowable range set forth in statute for exotic wagers is 15% to 25%. The requested rate is within the allowable range.”

That means that if it wanted, NYRA could request takeout reductions in “exotic” pools as low as 15%. But what are the odds, especially after Hayward declined to comment on whether NYRA would seek a takeout reduction on straight win, place and show wagers, and two-horse wagers such as the exacta and daily double?

Written by John Pricci

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Wednesday, December 21, 2011

When Will the Industry Finally Bet On Itself?

SARATOGA SPRINGS, NY, December 20, 2011—It matters not which side of the exchange betting argument you’re on, the fact that several jockeys were recently barred for “race-fixing” in Britain does little to advance the cause of Betfair or any other outfit to bring an alternative form of horse betting to America, even on a limited basis.

In fact, the latest just might have killed the chances of ever getting exchange betting in this country.

But let’s be honest. In games of chance such as horse racing, or other more popular sports in which betting is part of the landscape--albeit underground--there’s always someone willing to take an edge. Just ask Tim Donaghy.

Or ask Mark Cuban if he thinks “the whistle” once cost him an NBA championship. Come to think of it, why do “Jordan rules” exist?

Can any NFL bettor recall an incident when one bad call didn’t tilt the course of a winning pointspread?

Judgment calls, whether tied to gambling results or not, will always be subject to suspicion. Why is it widely accepted that some umpires give pitchers the low strike zone, or others three inches outside? Isn’t a strike a strike? Need I go on?

How about “fixing” a horse race? Try having the trainer not draw the feed tub before his horse races that afternoon? How about having him give the wrong instructions and watch the jockey as he burns the horse out on a needlessly fast early pace?

But the easiest way to make a score at the track, honestly or otherwise, is betting against a bad favorite, something that’s done each and every day without having the outcome predetermined.

But isn’t this why it’s called gambling in the first place?

In a poll taken after the jockey fix story broke in Britain, seven out of every 10 bettors said they “trusted” horse racing as a wagering sport.

In a Racing Post online story, British Horseracing Association official Paul Scotney said that racing is generally perceived in a favorable light. This came on the heels of a BHA investigation that found 11 people benefitted from betting against losing favorites never allowed to do their best. All were banned for a period of from six months to 14 years depending on their involvement level.

Scotney would not lay the blame on the exchanges, however, telling the Post “betting exchanges offer another way of cheating and that's a fact - anyone can lay a horse to lose. But I think if [exchanges] didn't exist there would still be people trying to cheat simply because there is money involved…

“I do want to stress that we are not talking about racing having a serious problem, but I think it's important people out there see that if there is cheating we will go after [the cheaters…] and throw them out of racing.”

It’s widely accepted horse racing needs to develop other wagering paradigms because handle is down 25 percent in recent years, trending to fall under $11 billion this year, the lowest since 1995. And those are not inflation-adjusted dollars.

If exchange betting, which wagering company Betfair and the Thoroughbred Owners of California are pushing for some time in 2012, is met with resistance, fixed-odds betting is another possibility to help grow handle.

Neither concept will jumpstart sagging handle if not given an excellent chance to succeed. Only through lower takeout could that occur quickly and more effectively.

Takeout on the Betfair exchange in Britain averages about 3%, depending on the size of the winnings. [An exchange pits one bettor against another, establishing a narrow range of market prices upon players can bet either on or against the odds. Takeout is extracted only from the winner.

If enacted in California, the hold would be 10 percent. A big improvement over standard pari-mutuel rates, yes, but whether that number is low enough to truly jumpstart the new concept quickly is arguable

There is another option, recently discussed at the annual Arizona University symposium and widely perceived as a safer “risk” to bettors; fixed-odds wagering. The concept is based on pari-mutuel principles but allows bettors to lock-in the win payoff at the time a wager is placed.

Fixed-odds wagering could stand alone, but given that the industry and many of its fans are resistant to change, it probably should be used to complement the existing pari-mutuel model. Both options can be made available at racetracks, bet shops and online.

By creating a fixed-odds market, overall handle could grow because of the arbitraging possibilities fixed-odds betting affords. It also is a way to eliminate last-minute odds fluctuations since the price you take at the time you bet doesn’t change.

Fixed-odds wagering should be explored as an alternative to exchange betting if the latter isn’t embraced, for whatever reason. It’s time for the industry to take a chance.

Written by John Pricci

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