August 14, 2018--In the day, I always looked forward to attending the Jockey Club Round Table conference in Saratoga. You know it was long ago because mainstream media was formally invited back then, outlets had an actual place at the table.

And it mattered little that the press were seated in the back on the room. But when sports editors were replaced by younger employees with little or no knowledge of racing, the sport got less and less space in newspapers.

Fans of the sport began to be considered a niche that newspaper budgets could ill afford, and this was pre-cyberspace. Horseplayers had become disposable readers because political correctness was all the rage. Today, full time racing coverage no longer exists in print.

While the times have changed, passionate fans and serious horseplayers are getting some attention via cyberspace and cable television, and this is the good news because the Jockey Club appears to have picked up the ball and is beginning to run with it. It had no choice.

If the Jockey Club wants to continue living up to its mission, time has come for it to be woke. When an industry loses about one of every three dollars that supported it only seven years ago, action is the only alternative.

Since 2011, 11 racetracks have gone out of business and the Jockey Club wants to reverse the trend now that it appears the bottom has stabilized. It intends to use its deep pockets to affect change; no more regressions to the mean. The time for “study” is over.

The austere racing organization made its position quite clear last Sunday morning in Saratoga Springs. Now it needs to walk its talk.

And it appears that the Jockey Club, the sport’s titular leader, finally is starting to look for love in all the right places, from providing grants and loans to smaller tracks, to growing the fan base, increasing track revenue and, finally, giving the paying customer more of what it wants.

To avoid a continual erosion of market share, which was a mere four percent of all gambling before it commissioned a recent study but since has fallen to three percent, it seeks to create new fans and better serve the ones it has with a little unintended but welcome help from its British counterparts.

In fact, the idea of possibly buying floundering tracks has worked well across the pond. The Jockey Club of Great Britain has acquired 15 racetracks since the 1960s and its tracks now present four of Britain’s five premier events.

Admittedly, this has been easier “over there.” Seven of every 10 Brits are well aware of the sport of horse racing and indeed pay dearly to attend the races—and they have as many, if not more, betting parlors than the U.S. does. And this diverse audience, something this country sorely lacks, serves them well.

Horse racing is a much easier sell in Great Britain because it is marketed as a social experience, colorful and exciting, a portal to lifetime devotion. By putting the horse before the cart, the BJC is engaging customers via its main product: Horseracing.

And they have educated their consumers. They have mainstreamed the education of consumers, showing them how equine welfare works, rather than have them learn about horses via the taunts of animal rights activists.

Racing anywhere is not a perfect world, but the fact that raceday medication is not permitted in Europe is a good look. The fact that Thoroughbred racing actually has a season helps define it as a sport like any other.

The Jockey Club addressed some of these issues and offered several concepts on the weekend. Like everything in life, there were winners and losers. The following is some of what was discussed, including an HRI take on some of the issues:

# Track Experimentation with Lower Straight Pool Takeout Rates

Since it is daring to take a leadership role, the time has come to strongly suggest that tracks experiment with lowering takeout on straight pool wagers as a means of increasing handle through churn and as a gateway introduction to would-be new fans.

Lower takeout on win, place and show is a win-win. A commissioned study indicates that 15.8% is the number that can help grow revenue. Right now nine of every 10 tracks have rates that are about 2% higher. Lower takeout over an extendedperiods has always proven fruitful.

Frankly, these “experiments” never were given a fair airing. When they were tried in New York over a sustained period decades ago, handle and revenue increased over time. But the industry has not involved itself with significant rate cutting aside from short race meets.

Takeout rates also faces substantial pressure from widespread use of rebates to well-financed big bettors, effectively lowering takeout rates for them but leaving no wiggle room for rewarding average rank and file players. However, lowering takeout rates in multiple pools is a revenue loser for racetracks.

This problem is exacerbated by the use of computerized robotic systems using sophisticated algorithms to arbitrage betting pools by eliminating a small handful of no-hopers while betting varying amounts on logical contenders to ensure a profit.

What is unfair is racetracks allowing robotic players direct access to bet-processing networks. Resultantly, huge computer-aided last-minute wagers cause wild odds fluctuations that makes knowledge of approximate payoffs extremely vague.

This issue, coupled with high takeout and the prevalence of super trainers, has caused many veteran players to abandon the game. A recent fan poll indicates that 71% of the respondents agree that something must be done to address the robotic betting problem.

It is here where the racetracks choose to play the short game. Robotic wagers now account for nearly one of every five dollars wagered, or well over $2 billion in 2017, double the market share when the phenomenon began seven years ago. High rebates to those players is what makes it all possible.

Tracks have tried to combat bad PR and stem the tide of revolt by permitting fractional wagering, combined with relatively low takeout rates in some of the more popular horizontal pools. Most of the marketing by bet-takers, especially Television Games Network, is feeding this hard-to-win beast.

It’s the industry’s way of sustaining the rebate model: Feeding minnows to the whales. The fix is to grow the handle that comes from the average player. Lowering takeout in the straight pools is no luxury; it’s necessary for long-term sustainability.

# Subsidizing or Buying Troubled Racetracks

If that’s what it takes to save smaller tracks in many locales, then do it. Small tracks in remote regions are the gateway to growing the fan base. There are, after all, other, cheaper ways to gamble that require little or no learning curve.

In effect, this is what the Jockey Club of Great Britain did when it began collecting racetracks in the 1960s. By this standard, the concept of Jockey Club racetrack ownership could be a successful long-term strategy.

An aside: A survey conducted at the behest of the Jockey Club indicated that nearly one of every two lapsed racing fans stopped going to the track because they no longer lived near one. Of the 35 major U.S. cities, only five host big league racing; 12 have no track within hailing distance.

# Cross-Promoting Horse Racing and Sports Betting

While the numbers are not major league, it is well known that many horseplayers bet on sports, but not the other way around. Certainly not with the same frequency, anyway.

Since the racing world would never accept smaller wagering menus and simpler bets on a daily basis, education programs for horse racing and sports handicappers could change all that.

Racing and sports betting could and should be integrated for the benefit of both, especially since horse racing has more events to offer. Integration is done now in New Jersey, where bettors can play a Pick 4 consisting of two races and two games.

# Fixed Odds Wagering:

Why this doesn’t already exist everywhere is indefensible. If someone wants to lock in his price, that bettor should be able to do so, just like sports bettors. Later, when the odds change in either the fixed or traditional pools, value bettors likely would dive back in; it’s arbitrage, only on a much smaller scale.

Betting against oneself is not the gambling taboo it once was. Arbitraging is done every day, via sophisticated computer robotics or by recreational players making a $1 exacta box. Less value? Sure. Greater liquidity? Most probably.

# Expansion of Live Racing Programming and America’s Best Racing

Racing needs all the mainstreaming it can get. America’s Best Racing serves the digital crowd quite well and would do better with sensible, creative expansion. Expanding racing’s digital footprint doubtlessly would improve badly needed diversity among the fan base.

Televising more live events—albeit three decades late—is no-brainer life beyond the Triple Crown, and a more informed conclusion to end-of-season championships. Racing’s older demographic is watching more television than ever; the game needs to better exploit that trend.

However, only one of every three racetracks currently send out their signal in high definition, considered an essential when broadcasting all sports events anywhere and everywhere. This could be Jockey Club money well spent.

# Introduction of Single-Pool Wagering with Betting Partnership:

Single pool wagering is the redistribution of monies wagered in one betting pool into another, e.g., money bet in exactas could be distributed to win bettors, or vice versa.

Single-pool wagering is supposed to mimic Wall Street limit orders. But the model is inscrutably esoteric and good only for the company that created it and rebated whales who already enjoy a huge edge. Pasadena!

# Introduction of Flexi-Betting

Unlike single pool, this is a good idea that helps the majority of players. First, it has worked well in other more progressive segments of the betting world. It’s an option that would make difficult multi-race wagers friendlier.

Let’s say a player fashions a Pick 6 ticket costing $200 to cover all the combinations he needs to win, but can’t afford to make the play. The Flex ticket allows him to cover the same horses for $50. Should the bettor win, he would receive 25% of the posted payout.

# Intra-Race Betting

Already legal in New Jersey via Betfair, it could be a useful hedge should your horse speed horse break badly, or if your closer is left with too much work to do. The assumption is that the odds would adjusted accordingly via a prescribed algorithm based on running-style dynamics.

Whatever racing does via Jockey Club auspices, it needs to act while it continues to study. The consensus guess is that black market sports wagering in the U.S. is around $300 billion annually. What if the integration of racing and sports could tap into a couple of percentage points of that?

Clearly, some action must be taken on some forward ideas. As stated above, market share of four percent is now down to three. Without action, how low the limbo stick goes is anyone’s guess.