Tuesday, September 12, 2017

The 15-30 Takeout Solution

If the clown in the White House can a make a deal with ineffectual Congressional Democrats, then surely racing’s stakeholders can compromise and find a solution to the parimutuel takeout problem.

The problem of course is that it’s too high. It’s just one of several issues why lifetime horseplayers are walking away from the game, and racing can ill-afford to lose any more old-schoolers who choose to walk away.

Takeout might not be right on the top of the list but it’s the kind of problem that’s fixable. Cost-cutting is never a bad thing; it’s promotable, gambling-centric and a way to lure young adults who prefer to mix some critical thinking with their gambling.

If do-able, a deal that helps all of racing’s stakeholders--from horseplayers of every stripe, to racetracks, to horsemen—is one that makes sense and long overdue.

This industry is one that does not work collectively because at once there as many agenda as there are racing jurisdictions. Lowering takeout won’t fix the drug problem or equine and human safety concerns but its good business.

Just as climate deniers are famously not scientists, I’m no mathematician. I leave that to better analytical minds than mine. So if someone wants to tweak the numbers that follow so that they make more sense and dollars, please have at it.

As the deck is stacked now, the only horseplayers that catch any type of monetary break—one that still makes sense enough for them to continue playing the game--are the 1 percenters, the whales.

The math that follows is easy enough for me to understand: If you bet a million dollars a year, thoughtfully arbitrage your bets to break even, and get 8-to-10% on your money in the form of a rebate, that kind of return can support a family, even at today’s prices.

But that $80,000 to $100,000 is made at the expense of powerless rank-and-file players who can wager $500 per session and at the end of the day collect the dollar equivalent of bangles and beads.

A friend and grassroots activist made a suggestion that was thought provoking and makes sense. Think of takeout rates as the difference between a main course and dessert menu. Daily churners, the meat and potatoes guys, need help.

The bettors we’re talking about here are those who wager a couple of thousand dollars per week—every week, and receive the equivalent of shinier bangles and multi-stringed beads.

In its simplest terms, bet-takers won’t punish their best customers to help the serious middle-class players, fearing that takeout reductions will result in revenue reductions, which will happen in the short term. Their concerns are understandable.

But it takes time to convert added churn into higher revenue, and tracks have been unwilling to take haircuts for several years for their own long term growth and that will have a deleterious effect on the entire industry going forward.

So let the rank-and-file, the solid everyday churn player, meat-and-potatoes: The straight and duel multiple pools; daily doubles, exactas and quinellas.

Meanwhile, allow the whales, score-seekers, racetracks, ADWs, and the horsemen have their cake and eat it, too.

We’re aware of the catch, the reason this pipedream won’t happen: This entire industry is incapable of sitting down in one room and make a compact, a compromise; 38 racing jurisdictions sending one message to the states which give them license to operate.

Consider this: Drop the takeout on straight, place, show, exactas, doubles and quinellas to 15%. Simultaneously, increase the takeout on three-tiered and greater multiple wagers to 30%.

According to the HANA 2017 Track Ratings chart, average takeout on straight wagers at 64 North American racetracks is a quite high 17.25%. A 15% rake would increase payoffs by 13.01%.

The average cost of playing the Pick 4, considered by many the most popular horizontal wager especially given the number of guaranteed pools offered ubiquitously--as opposed to Pick 5 or Pick 6--is 22.28% at those same 64 tracks.

Raising the takeout on three-tiered and greater wagers to 30% represents a 25.7 percent increase which, with rounding, more than offsets “revenue losses” from the straight and two-tiered payouts.

The 15-30% solution—or whatever figure serve all stakeholders--accomplishes several goals. Everyday players who grind their money need bigger payoffs to survive by increasing churn; straight and two-tiered wagers are, simply stated, more winnable.

By returning more money to winning players, higher payoffs make the game an easier sell to thoughtful, upper scale Millennials. The 15% rate is still too high—10-12 percent probably is closer to optimal levels that GIVEN TIME, will increase revenue.

While 30 percent takeout from three-tiered and larger sequences makes bettors wince, the 25.8% increase will encourage most bettors to make less complicated, easier to win, churn-friendly wagers in straight and two-tiered pools.

This is especially true of exactas, by far the betting option of choice by a majority of players.

Since successful wagers in pools with three or more tiers requires a hearty capital investment, tracks and horsemen will be able to retain more handle revenue.

Promotionally—and there is a preponderance of multi-race, score-oriented advertising--betting precincts can offer higher rebates to everyone; per usual the biggest bettors would receive bigger rebates.

The rank-and-file would get a bigger share of rebate money too, providing bet takers put in language that guarantees them a bigger share of the new pie.

Since my personal handle represents a wide range, from a low of $25,000 per year to $50,000 or more, I personally prefer that Pick 5 takers would offer consolations, as is done at Gulfstream but not at NYRA tracks.

Big players and racetracks shun consolation pools, preferring perfect-only payouts that helps to generate carryovers and jackpots, resulting in higher handle both in terms of dollars and number of overall players jumping into those pools.

It follows that consolations probably should be eliminated in the new higher takeout multi-race world, except pf course in instances when no bettor completes a given sequence.

Admittedly, this approach is a little like trying to legislate morality; it gets a message across but doesn’t completely solve the problem.

But some sliding scale version of a takeout-decrease/takeout-increase/rebates-for-all process would be a good place to start. Even if sliding-scale-takeout rates based on degree of difficulty fails, at least horse-racing would be sending out a better message.

PLANTATION, FL, September 12, 2017

Written by John Pricci

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Sunday, September 03, 2017

Fifty Years Later, No Rabbit Redux in This Woodward

How ironic is it that on the golden anniversary of one of the greatest rivalries in Thoroughbred racing history, the New York stewards wouldn’t allow Ron Paolucci to do what it allowed Mrs. Edith W. Bancroft to do 50 years ago in the storied Woodward Stakes?

Mrs. Bancroft, of course, the breeder and owner of Hall of Fame champion Damascus, is the daughter of William Woodward Sr., the scion of Belair Stud, whose white silks with red polka dots graced the Belmont Stakes winners’ circle five times in the 1930s. The Woodward Stakes that bears his name has been run since 1954.

A notable aside: Mrs. Bancroft was also the breeder and owner of a swift stakes sprinter by the name of Hedevar which, thanks to the 1967 renewal of this storied race, arguably became the most celebrated “rabbit” in Thoroughbred history. Her son, Thomas W. Bancroft Jr., later became Chairman of the NYRA Board of Directors.

Hedevar’s mission, of course, was to sap the reserves of the great Dr. Fager, whose great speed gave him a tactical advantage over his arch rival. But his presence in the Woodward of 50 years ago just as well could have aided Buckpasser’s late surge but, as history shows, was no match for that of Damascus.

However, it appears that today’s stewards are now in the handicapping business and can predict exactly what will happen in a horse race, and they can, “in racing’s best interests,” help predetermine an outcome by preventing an owner in good standing from spending his money in a way that is within the rules and regarded as a time honored racing tactic.

By any handicapping standard, May. B, a seven year old gelding purchased by Paolucci after finishing second in a $35,000 Del Mar claiming race after winning a Los Alamitos starter-allowance sprint by 9-1/4 lengths in his previous start, had no reasonable chance to win Saturday’s Woodward.

Clearly on form, May B clearly did not have the class or ability to compete in the nine furlong Grade 1 route, and does not even measure up to the standards of rabbits past, but he was purchased and nominated to the race to do one job: Help insure a strong early pace for Paolucci’s late running War Story.

Instead, the New York stewards invoked the discretionary powers granted to them by racing rule 4025.2 and determined that the nomination and entry made by Paolucci would be revoked because they “feel all horses that enter should be able to win” and take issues like this on a “case by case basis.”

What the stewards failed to address is that they also had the discretionary power to couple May B. and War Story in the wagering, thus protecting the public and ensuring the rights of an owner in good standing who, as an aside, is regarded as one of racing’s good guys for his charitable work inside and outside the sport.

Now while May B. obviously lacked the credentials to beat any of his Woodward rivals, I personally never have encountered anyone who believed that Gallant Man couldn’t run down Bold Ruler in the 1957 Belmont Stakes without Nero’s assistance, or that Buckpasser needed his speedy mate, Great Power, that Loach was of comparable ability to Strike the Gold--or that Hedevar would out-finish Dr. Fager, Buckpasser and celebrated stablemate Damascus a half century ago.

But that didn’t stop all those politically acceptable owners from entering their rabbits to insure that their classier charges would have their best chances stolen from them by a comparable loose leader that would be allowed to set a snail’s pace.

Of course, rabbits do not prevent other late-running rivals from benefitting from fast fractions, and neither did the track veterinarian prevent a sound May. B from competing, albeit poorly, in Saturday’s seventh race against a full field of hard-hitting sprinters with its 22-and-44 speed types.

On its face, this ruling was a capricious and arbitrary call when the New York stewards could have coupled the Paolucci stablemates, just as they allowed Cautious Giant to be War Story’s rabbit in the Whitney at the same track four weeks earlier.

Had he surmised, Paolucci could have entered another speedster, Mo Don’t Know, who was good enough to win a stakes at Thistledown one week ago. But since May B.’s entry was denied at the last moment, it is unreasonable to expect that Mo Don’t Know would van to Saratoga from Cleveland, a racing situation that would have been fraught with as much “danger” as running May B in yesterday’s prestigious feature.

It is interesting to recall that these same stewards allowed a controversial Belmont week barn change prior to the 2016 renewal won by Creator. On that occasion, the speedy Gettysburg was transferred from Todd Pletcher to Steve Asmussen with the announced intention that Gettysburg would serve as a rabbit for late-running Creator, who won a tight photo finish from Destin.

Subsequently, Pletcher was miffed to the point that when the winning WinStar group offered Gettysburg back to Pletcher post-race, the trainer said thanks but no thanks. What made that sacrificial entrant OK? What reasonable chance did 55-1 Gettysburg have to win the Belmont? He was, however, good enough to earn $30,000 for finishing eighth.

As all racing fans know, Thoroughbred racing has a serious optics problem. This kind of double standard that gives certain owners first class consideration while giving other less well connected owners something less should not be repeated, especially when the stewards, whose first responsibility is to safeguard the public, had a viable coupling option.

When given the opportunity to respond to events, Paolucci told Daily Racing Form: “I’m not trying to make a mockery of the race. I love the sport. I don’t want this to be the headline.”

When Gun Runner underscored his Whitney tour de force by setting a Woodward Stakes record, the chestnut’s brilliance became the headline that matters. But his victory will come with an asterisk when someone asks: “So what ever became of tradition in the sport of horse racing?”

HALLANDALE BEACH, FL, September 3, 2017

Written by John Pricci

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Sunday, July 16, 2017

Vox Populi on Racing Issues; Saturday’s Big Horses Run Big

Taking the pulse of racing’s audience, a recent Paulick Report poll revealed some interesting results about how the sport’s practitioners and audience—horsemen and horseplayers—view racing’s most dominant issues.

Given the amount of advertising and the kind of promotion that supports the PR site, we assume that the largest segment of its audience are horsemen, the breeders, owners and trainers who put on the show. The results were at once predictable and surprising.

Judged least important by 10% of the responders is concern about competition from other forms of gambling. This category probably elicited a good portion of response from bettors who could care less about casinos, the occasional sports bet notwithstanding.

The next classification--converting casual fans into bettors--produced the first surprising result. If HorseRaceInsider is any measure, then 10% is a low figure. Everyone has an opinion about how to best market the game: It’s the HRI Faithful’s favorite pastime.

Racing needs more of an online presence, for one thing; more television for another; better education and greater social media exposure. Everybody even has an idea about what the game itself is; the old sport vs. gambling vehicle argument.

In our view, it would be unfair to say that the industry has not made some strides in the promotional arena. Of course, it can be made better. If I knew what it was I’d write it and declare myself a genius, but only the devil has all those details.

Next comes a shortage of horses and owners, in with 19% [all figures have been rounded]. This is reflected a smaller number of races being run each year, and while the top of the sales market is strong, no one sets out to buy a “cheap horse” anymore.

But the shortage is also a reflection of racing’s two biggest challenges, according to those who voted in the poll, and those challenges have been present from time in memoriam:

Nearly one of every four voters points to a lack of cooperation, national coordination, and infighting within the industry, even if common sense dictates that old-fashioned competition for market share is at the heart of this phenomenon. An example:

Tracks set out with the best intentions and a greater number have been staggering first-race post times. And they are not responsible for the conflicts that make adherence to schedule nearly impossible what with disqualifications, multiple close-photo finishes, injuries, etc., and the like.

However, when it’s done purposefully, it’s an irritant. Gulfstream Park has a deserved reputation for post-dragging and now other tracks, noting Gulfstream’s awesome growth in recent years, have started to follow suit both in scheduling and creating betting menus.

Parenthetically, post-dragging might be the only effective way to resolve conflicting post times--as long as this tack is not abused.

The number of races run daily, a new preponderance of turf racing leading to increased field size, a betting menu that helped popularize the spread of lower cost but higher takeout multi-race wagers with built-in degree of difficulty have all contributed to competition among racetracks.

Add to this that fewer race days, with more races scheduled on fewer days, makes for long afternoons at the track. Since the industry now caters more to its off-track simulcast audience, there is less “need” for a live audience.

Longer race days help capture market share by attracting a few more betting dollar but it’s the on-track experience that creates passion for a day at the races. Economics and job security demands track managers play the short game, but what of the long term?

Finally, if one tallies up and thinks about all the factors, they are tied inexorably to racing’s #1 challenge. More than one in every three racetrack practitioners and horseplayers point to cheating via a “culture of medication abuse,” or 36.03% as of 7/13.

It is a vexing situation since all medications, legal and otherwise, having disparate withdrawal times for different individuals, increased use of legal mega-nutrients, et al, is part of one equation. Like the issues themselves, solution are at once simple but difficult.

Ban raceday medications, including Lasix, lengthen withdrawal times, and stiffen penalties. Of course, this won’t happen as long as horsemen have the power over the simulcast signal.

True help will never come from within. Only Federal oversight gets this done. That question was absent from the survey.

It was a big Saturday for big horses from coast to coast, from morning till night, from one breed to another. A case by case look:

’s season, at least on social media, is as polarizing as political debate. She probably is the most disrespected nine-time Grade 1 winner of either sex in racing history, even if an older champion’s scant nose is what separates Songbird from a perfect career.

Her heart and class cannot be questioned, but her ranking among all-time great fillies can with no disrespect.

Songbird was a brilliant champion at 2 and 3, but reaching down deep in her titanic Distaff struggle with Beholder forced her reach bottom. That may be the difference with her as a four-year-old.

Her two brave victories this year underscore this point. She worked harder than almost everyone expected to win the Ogden Phipps, a prudent one-turn spot, and Saturday’s Delaware Handicap. She faced a tough, proven rival in New York but not so on Saturday.

Her challenge yesterday was a deep and tiring surface in her second run this year. Mike Smith said that 10 furlongs may not be her best go. That may be true. But she didn’t look distance challenged while drawing off to win the Alabama by 7 widening lengths last year.

Songbird galloping out after
her impressive 2016 Alabama score

On both the Thoro-Graph and Pricci Energy Scale, she never has been all that “fast on figures,” and has shown no development since her career best effort in the Cotillion at Parx, the race that preceded the Distaff.

We normally don’t champion the case for the upper-dog, but we’re very happy that Rick Porter, a great owner and fan, finally got his Delaware Handicap victory in his home state…

One race earlier, Frostmourne, the recent winner of the G2 Penn Mile, stretched out successfully to 9 furlongs and destroyed five overmatched rivals in the Kent Stakes. Arlington’s G1 Secretariat looks like the next logical stop…

If there ever was an appropriate time for Irap to regress it was yesterday at Indiana Grand. Instead, the G3 Indiana Derby win arguably was his most impressive victory of his career. Connections could keep going for the W Va. Derby cash but hope otherwise.

That race comes up three weeks hence. Instead, how about trying a mile and a quarter on Aug. 26 at Saratoga? This colt keeps getting improving and he’s earned a shot at the heavy heads again. Never know what will happen in the wide open sophomore division.
However, Irap will be meeting, among others if all goes according to plan, the Derby, Preakness, Belmont, Jim Dandy and Haskell winners and a Baffert or two to be named later. West Coast is already pointing there.

The latter just about ran the Travers distance in Saturday’s 9-furlong Los Alamitos Derby, such was the nature of his trip. The win was Bullet Bob’s sixth victory in the race. The late developer is no Arrogate but he’s pretty damn good enough for the Spa.

Crossing breeds, there were four tremendous performances at The Meadowlands Saturday night.

Defending juvenile trotting filly champion Ariana G. was dominant taking the Del Miller Memorial in 1:51 4/5 with last quarter in 27 2/5. Third vs. 3YO males in Pocono’s Beal July 1, she jogged home with Yannick Gingras in the bike, beating six overmatched rivals.

is a complete trotting freak, a powerful colt who earn his role as Hambletonian favorite. He won the Stanley Dancer Memorial with Tim Tetrick in 1:50 2/5, home in 27 1/5. Devious Man, who defeated Ariana G. at Pocono, was a good, albeit non-threatening runnerup…

Agent Q looks like a special pacing filly, taking the Mistletoe Shalee in a sparkling 1:48 4/5, sprinting home the final quarter-mile in 27-flat...

Huntsville is fast, genuine, and extremely game, proving all that by taking the Meadowlands Pace with Tetrick, his fifth win in this classic pace, in 1:47 4/5, home in 27 1/5 after early fractions of 26 4/5, 53 3/5 and 1:20 3/5.

Huntsville was used hard on the hot pace and runnerup Downbytheseaside gave him all he wanted in deep stretch, but the favorite ultimately would not be denied.

File Photo by Toni Pricci

Written by John Pricci

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