Wednesday, December 07, 2011

Curb Super-Exotic Madness or Continue Losing Handle

SARATOGA SPRINGS, December 7, 2011—A very interesting blog entry on the Horseplayers Association of North American site Tuesday indicating that, according to details in an exchange wagering application made by TVG in the state of California, the churn rate for wagering in the U.S. has fallen from a bellwether 7 times starting bankroll per wagering session to 4.

How alarming is this? Let's count the ways.

The example that was given for this phenomenon is easily understood and, if you missed the original blog post, it bears repeating:

If a crowd of people show up at a racetrack or simulcast facility with $100,000 to wager collectively, at a churn rate of 7, the crowd would push $700,000 through the windows. The same crowd and starting bankroll with a churn rate of 4 would produce $400,000 in total handle.


First and foremost, of course, are takeout rates which, with notably few exceptions, have been climbing steadily for a decade. The continued plummeting of U.S. handle is clearly tied to this factor.

The pari-mutuel hold is inexorable. To put it in yet another way: The less money returned on winning bets, the less money bettors have to wager in return.

The second factor contributing to the loss of handle is what is termed cashable bets
Every bettor, myself included, wants to win a lot for a little. The proliferation of super-exotic bets has fed this a-lot-for-a-little approach, especially bettors with limited bankrolls—virtually all bankrolls are limited to some extent.

Super-exotic bets are, by definition, exotic or high risk. They yield for bigger payoffs—scores, if you will--allowing players to stay in the game for longer periods of time, a cushion to absorb losing sessions that are sure to come.

My super-exotic weakness is the superfecta. For me, the degree of difficulty is more than commensurate with the added degree of difficulty, superfecta payoffs often returning four or five times more on average than a winning trifecta.

But bets such as the Super High 5 are bankroll killers, sucker plays. It's extremely ratre to see a three-digit ALL payoff in the superfecta. Empirically, it seems there almost are as many High 5 carryovers as Pick 6 carryovers.

But large High-5 payoffs seldom approach large Pick 6 returns. Given that the Super High 5 is priced at a one-dollar minimum, it’s one play most bettors really can't afford to make.

When it comes to takeout increases, greedy horsemen’s groups and unsophisticated off-track interests notwithstanding, the industry often falls victim to legislators who cannot pass a sensible state budget much less understand the nuances of the pari-mutuel system.

However, with tracks needing state approval to conduct its business, there is little that racetracks can do to stem the tide of quick fixes so popular in states where pari-mutuel horse racing is conducted.

But there is something tracks can do, and that’s to stop worshipping at the altar of super-exotics. There should be fewer of them, not more. If a track offers Pick 4s, Pick 5s and the Pick 6, wagers like the Rolling Pick 3 become not only unnecessary but churn killers.

The Pick 3 is the quintessential trap. In practice, it’s much more difficult to win than it appears at first blush. Further, if a track is offering the exotic Pick 4, 5 and 6, there’s no need for a Rolling Pick 3. Rolling Doubles are much more player friendly and still offer a chance for a sizable payoff because takeout is extracted once, not twice, as is the case with parlays.

Another benefit to offering bets that players can win more often is the positive effect it would have on ever-sagging pool liquidity. Further, it is imperative to offer fractional wagering on any sequence involving a three-tier payoff and that includes the trifecta.

Tracks think they are doing their big customers a service by keeping minimums higher so that whales can throw more money to insure a win in a difficult sequential wager. But only by returning more money to winning bettors more often and increasing churn, can pool liquidity—and handle—stop reversing itself.

This helps big and small bettors alike, just as lowering takeout would act as a disincentive to competitive offshore rebate shops.

Written by John Pricci

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Monday, December 05, 2011

A Riddle Wrapped in an Enigma?

SARATOGA SPRINGS, NY, December 5, 2011— The cliché popularized by Mark Twain pertaining to the use of “lies, damn lies and statistics” is never more apt than when perusing the monthly handle figures for Thoroughbred racing.

November was a good month, I guess, since handle dropped “only” 3.47 percent, as compared to a median 7.13 percent for the entire year.

But for my life I cannot fathom with certitude whether this is a good thing or not, mostly because it’s unknown whether or not the slow-down is attributable to a greater number of racing days and thus more opportunities to wager.
Further, noting below that Wagering on U.S. Races reflects worldwide commingled handle, it’s difficult to know how much of an impact exporting the U.S. signal worldwide is helping the American game avert a slide of monumental proportions.

Of course, if you race more days, more money will be bet in the overall, although that helps bring average handle per card down as finite dollars are spread over a greater number of opportunities.

But the real difficulty regards the purse increase figures for November 2011.

How can purses go up when handle goes down over a greater number of days? And where does Racino handle fit into all this?

Is there a Breeders’ Cup effect? It’s not so much there were 15 races this year, the most ever, but perhaps tracks nationwide raced more days surrounding the event to gain maximum exposure of their own product in the local market?

To a degree, the year-over-year numbers make more sense. Overall purses should be higher on a percentage basis given fewer racing days, and presumably fewer racing opportunities results in bigger fields.

I’ve seen five furlong turf races that are easier to decipher than these figures indicate.

November 2011 vs. November 2010

Indicator November 2011 November 2010 % Change

Wagering on U.S. Races* $874,386,107 $905,848,904 -3.47%

U.S. Purses $101,876,670 $95,522,074 +6.65%

U.S. Race Days 392 375 +4.53%

YTD 2011 vs. YTD 2010

Indicator YTD 2011 YTD 2010 % Change

Wagering on U.S. Races* $9,970,704,337 $10,736,200,808 -7.13%

U.S. Purses $987,513,084 $971,187,788 +1.68%

U.S. Race Days 4,953 5,159 -3.99%

* Includes worldwide commingled wagering on U.S. races.

Written by John Pricci

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Saturday, December 03, 2011

Tis the Season

SARATOGA SPRINGS, NY, December 3, 2011—Unofficial winter is here. Gulfstream Park and Tampa Baby Downs opened, today also being the first Saturday of racing on the Aqueduct winter track. Add Fair Grounds to the mix and the change of season is complete.

At Gulfstream Park, the Spectacular Bid, now a race for two-year-olds with the meet opening in December instead of January, was won by favored Ancient Rome in a photo over For Oby, whose rider appeared a tad overconfident leaving the furlong grounds.

The time for six furlongs was 1:08.95 over a surface that produced a track record setter at 5-1/2 furlongs earlier on the card. It was a Delaware production as the colt was trained by Tony Dutrow and ridden by Joe Rocco Jr.

At Aqueduct, meanwhile, Dutrow’s brother Rick won the six furlong Garland of Roses with turnback C C’s Pal, coming back on short rest--decidedly anti-profile for Dutrow—and hitting the finish in full stride after finding his best pace inside the final sixteenth.

At Tampa, where the featured Lightning City attracted a full field of turf sprinters going 5 furlongs, Rosemary Homeister Jr. timed Jenny’s So Great’s late rally perfectly, making her move to the lead with 100 yards to go and holding off Supreme who came with a flying finish for the place.

In the Crescent City, five Claiming Crown races were run with It Happened Again taking the centerpiece, the Claiming Crown Jewel, over a fast Fair Grounds strip. Steve Asmussen gave a leg up to Shane Sellers, the veteran pushing all the right buttons to get the job done.

The series once was very popular when first instituted at Canterbury Park, drawing oversized fields form all over the country for horses that had run for a tag sometime during a specified timeframe. The day’s five races featured but 36 betting interests combined.

TRAINERS IN THE NEWS: Long since retired jockey Robbie Davis, with his daughter Jackie in the boot, won his first career race as a trainer when 39-1 Sandyinthesun got home first, breaking his maiden, too, at 1-1/16th miles on the turf. Lots of smiling people were seen observing an especially happy winners’ circle gathering...

“To me, it’s better than any win I ever rode” Davis said. ”It was just an incredible race. It’s unimaginable, the feeling. We got him at Saratoga, paid $700 for him. We’ve kind of been nursing him along.

“We put the blinkers on him and he responded well with them. He looks around. He plays around – he’s a real slow learner. I don’t remember racing on the turf in December, so I thought, we have one last shot on the turf so let me get the blinkers on him.”


After six decades as a trainer, Ramon “Mike” Hernandez hung up his stopwatch at age 86 earlier this week. His departure left Hall of Famer Frank Martin as the oldest active trainer in New York. Martin celebrated his 86th birthday today.

Hernandez helped put state-bred racing on the map in New York as trainer for the Assunta Louis Farm of Dr. Dominic DeLuke, a pioneer in the New York breeding program. In the early days, the filly Vandy Sue and colt Fratello Ed were earning the headlines and divisional championships with Hernandez calling the shots
The legacy he leaves behind is twofold: No one ever I ever heard questioned his ability as a horseman, and everyone he’s met has had nothing but good things to say about the man: A real old school horse trainer and true gentleman.

Hernandez compiled a worthy 603-644-706 slate from 5,418 career starters, his horses earning $18,820,126.

Written by John Pricci

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