SARATOGA SPRINGS, NY, October 15, 2009--It wasn’t long before the wags were calling the recently concluded three-day simulcasting confab hosted by the TRA and HTA here this week the “Doom and Gloom Conference.”

The genesis for that was a Tuesday afternoon session entitled “Change--You Can Run But You Can’t Hide,” in which Eugene Christiansen, Chairman of Christiansen Capital Advisors, and Jeff Gural, owner of Vernon Downs and Tioga Downs in the western region of upstate New York, became the purveyors of dread.

Before getting the impression that this was a one-sided argument, not so fast my friends. There are plenty of well minded people in this industry who remain all in, willing to pursue any feasible solution to turn this game right side up.

The problem is that they may not have the juice to stem the negative tide. Or, even if they had, they may have waited too long.

“Racing as an industry is more resistant to change than anything we’ve ever dealt with,” said Christiansen, chief advisor for a 30-year-old New York City-based firm that has acted as consultant to a myriad of gambling companies worldwide.

There were enough good ideas relating to service that, if implemented, could lead to positive change--if only the home office home would heed their advice and execute effectively. Instead, the industry is rife with examples of failed execution.

Over three days I heard about what initiatives were working and what’s in the pipeline. I never heard a presentation that wasn’t grounded in the real world. But, technology and social networking notwithstanding, there really was nothing new. Everyone knows what the problems but find that magic bullet elusive, the author included.

“Once a racino opens, that company looks at racing as a loser,” said Gural. “Lobbyists for those tracks try to convince government to take the money back, allowing the racinos to get rid of racing…

“The horse industry doesn’t want to do anything to help themselves,” he continued. [It’s] happy to be a welfare recipient. They believe somehow they’re entitled.”

What Gural forgets, however, is that the tracks are entitled--not to welfare but to a piece of the action. Racinos see racing as a drag on the bottom line but never seem to recall that if it were not for racing there would be no ‘ino’ in racino.

“It’s unlikely,” Gural continued, “that horse racing will undergo any change. The industry is dominated by breeders… unless the breeding business collapses further there won’t be any change,” concluding that racing has failed to give customers what they want.

“The racing industry has been extraordinarily resistant to change,” agreed Christiansen, “even if someone creates an innovative product… The chances of change are slim to none.”

No amount of spin could dispel that basic tenet. While technology such as Trakkus, high definition video, aforementioned social networking media and the burgeoning use of the Internet to spread racing’s gospel, there have been no substantive changes.

Betting menus have expanded, popular because it gives customers more choice but problematic because betting pools become diluted. With new wagers having a higher degree of difficulty, coupled with high takeout, players are busting out at a faster rate. Times being what they are, they’ve been voting with their feet.

The industry has under-utilized technology. Fractional wagering should be expanded dramatically. If some newcomer wants to bet two horses to win for a total of $1, why not? Get him in the game at all costs.

The business never has given the new or event-driven customer a chance to affordably experience the thrill of victory and agony of defeat while they attempt to flatten the steep learning curve.

Today’s technology allows players to bet $2.43 to get back $9.17 if they wish. Pay the winners in full. There’s no good reason for breakage to exist in the modern era. The industry should have been fighting local governments for those pennies on behalf of their customers, instead of piling on.

To attract new players, new, less complex wagers need to be created. “Betfair is a very good example of voluntary change in the global betting business. Nobody in the racing industry really understood what a betting exchange was,” Christiansen said.

“The fundamental problem is consumer pricing. The amount of money taken from bettors is not sustainable.”

Unfortunately, no segment of the industry, from state regulators, to track officials, to the players themselves, truly fail to understand the inexorable mathematics of takeout.

“If I’m right, there won’t be voluntary change,” Christiansen added. “Economics will dictate involuntary change--fewer racetracks, fewer opportunities to race, and the end of any prospect for the rejuvenation of the fan base. If the fan base can't be brought back, the sport will die."

“The problem that needs to be addressed is how to recruit more consumers into this industry… This takes wholesale change, competitive pricing, new products and pain for a lot of people, including purse levels that may decrease by 50 percent.”

I reached Christiansen by phone at his Manhattan offices and asked exactly what experience he’s had in dealing with racing issues, and what he could recommend to reverse current trends.

“I’ve probably consulted for everybody in the industry, from racetrack feasibility studies to evaluating investment trends, purses… I’ve done lots of advisory work and made lots of speeches. But I’m not someone who makes recommendations in the press.”

He was asked: “If racing could correct just one problem, what should it be?”

Said Christiansen, without hesitation or equivocation: “Pricing is a threshold issue.”