"Players Up" blogger Indulto is a retired computer programming residing in SoCal and has been betting Thoroughbreds since the days of Kelso, cashing his first ticket at Saratoga while in college.

Indulto is well known in racing's cyber world as a participant on the Ragozin Sheets message board, the PaceAdvantage Forum, Paulick Report, and has made important contributions to the industry's audience as an HRI Readers Blog contributor.

Indulto was active in the formation of the Horseplayers Association of North America and with former HANA colleagues worked on the Players' Boycott of California racing when takeout rates were increased by the legislature there.

Taking his nickname from the King Ranch color-bearer of the 1960s, Indulto now devotes his time to advocate for the recreational player and hobbyist, but prefers lower takeout rates for all rather than subsidized rebates for the few.

Indulto supports the creation of a centralized racing authority to establish uniform rules for racing and wagering and for those standards to be enforced consistently.

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Thursday, April 05, 2018

Will Keeneland’s Incremental Takeout Rollback Result in Handle Uptick?

With the opening of Keeneland’s spring 2018 meet tomorrow, racing industry observers will begin keeping a close watch on the extent to which its management has succeeded in rebuilding the track’s once fan-friendly image.

In February, the track announced it would lower takeout rates in some wagering pools. Great news, right?

Well, for many of us, not so much because this sudden "largesse" follows their infamous takeout increase in all pools but one at the fall 2017 meet.

Last year, Matt Hegarty reported, "Keeneland … will raise its takeout ... from 16 percent to 17.5 percent on win, place, and show wagers and from 19 percent to 22 percent on all other bets ..."

This year, he wrote, "Takeout rates on win, place, and show wagers will be reduced from 17.5 percent to 16 percent, the rate that preceded the increase. ... On exactas ... from 22 percent to 19.5 percent ... higher than the rate prior to the increase…

“All other takeouts on exotic wagers ... will remain 22 percent ... the pick five will remain at 15 percent … lowered last year with the takeout increases in several other pools…

“When Keeneland raised its takeout rates, it split the extra revenue from the increases with host sites. Most host sites that award rebates to their biggest customers then increased the size of the awards so that rebated players did not play against the full increase in the takeout rates."

So, then, the bottom line here is that exotic wagers, which offer small bankroll bettors, minnows, the biggest bang for their buck, remain at the higher rate.

But the resultant squeeze on the profitability of those wagers, however, doesn't affect big-bankroll bettors, whales, because they are subsidized with a rebated percentage of their wagers.

Win or lose -- that keeps their EFFECTIVE takeout rate at a much lower level.

The main advantage of this subsidy is derived from the strategy of accumulating significant profits as tax-free--unreported rebates despite varying degrees of break-even, minimal losses or gains on pari-mutuel payoffs.

Only a tiny, well-informed subset of the non-rebated majority of bettors can show a profit from straight bets; the more-predictable but lower-payoff option.

Minnows have a much better chance for a big day with the most popular and affordable exotic wagers; exactas, trifectas, superfectas, doubles, Pick 3s and Pick 4s. Only now the whales' advantage in those pools is even more pronounced.

Hegarty also pointed out that "Keeneland’s reputation as a fan-friendly venue was significantly tarnished by the decision, with players complaining that the racetrack had betrayed one of its core constituencies."

Indeed, the number of recreational players who boycotted the fall meet was sufficient to reduce handle by 8.5% even as the privileged rebatees continued on their predatory path to profits.

Although the decline in handle did not decrease Keeneland’s revenue from the increased takeout rates, the improved handle at other racetracks indicated that Keeneland missed out on the initial boon attributed to the tax law changes.

Is there any doubt that, as a result of the increase, Keeneland lost considerable business to its competitors?

Whatever the motivation, it was enough to make Keeneland have second thoughts about having sacrificed its fan-friendly brand.

By offering an insignificant rollback in rates that still victimizes 90% of players, who now contribute only 10-20% of handle, they managed to convince some horseplayer advocates into thinking their resistance produced meaningful results.

Gaining advocate support to repair its image was a shrewd move, but DON’T BE FOOLED! The figures above show that rank and file customers are the ones still bearing the brunt of Keeneland’s raised rates.

Indeed the game that many of us found so intriguingly entertaining through the millennium has been turned inside-out by simulcasting into a series of parallel puzzles where robots handicap people handicapping horses; rendering the toteboard useless to the latter.

The net result may be, in a fashion, that money is being laundered more than exchanged.

Keeneland is not the only provider of welfare for whales, but it is the ideal place for recreational bettors to start regaining equal opportunity for financial success. Their recent walk-back backtracking is a sign of weakness that should be exploited.

The nature of Keeneland’s short meetings doesn’t allow them to wait for a weakening of our resolve. Getting the playing field leveled has to be the customer’s top priority.

It’s not about takeout per se; it’s about EFFECTIVE takeout rates. High rebates for all should be the new mantra. Isn’t loyalty also based on how many gambling sessions a customer makes?

Shouldn’t rebates be also about how often a customer supports the game, and not just how much he wagers?

Written by Indulto

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Tuesday, February 20, 2018

Non-Professional Players Demand Parimutuel Justice

Diversity of opinion is what makes horse racing possible. Everybody has one and, parimutuelly speaking, unpopular opinions can even make one rich.

But horseplayer advocacy deals with issues that can’t be settled with a finish line and a camera, and consensus among its practitioners is rare.

So I was surprised when two of HRI's tested, trusted, thoughtful, and talented turf writers, Tom Jicha and John Pricci, respectively, told recreational bettors in tandem that the Keeneland boycott should be considered a success, albeit a small one.

"Victory! Vindication!

Keeneland has caved to the horse player’s boycott many said was an exercise in futility with no chance to succeed. (You know who you are.)

… This is the first time in memory a concerted action by horseplayers, with leadership from HANA (Horse Players Association of North America), has succeeded in getting a major racetrack to back off an increase in takeout.”

Several players I know and respect online and on social media categorized the recently announced takeout reduction for the upcoming Keeneland spring meet as a Pyrrhic victory.

While the notion has some validity given the sliding scale reductions, the assessment above is unfair.

… In the final analysis, horseplayers made progress on a policy and price disagreement with track management. How often does that happen? We’re nowhere close to being sick of winning yet, but walking before running is a good start on the road to relationships.”

If I weren’t already familiar with other efforts by these two self-admitted politically diverse gentlemen, I might have interpreted the preceding as deployment of the current White House occupant's technique of using hyperbolic oversimplification, resulting in questionable issue resolution at best. So consider this an “opposition party response.”

The only “victorious” aspect for rank and file players that I could see was a partial acceptance of former NYRA and HKJC executive Bill Nader's recommendation that all tracks reduce takeout on high churn wagers to stimulate handle, resulting in customer satisfaction and proving a useful recruitment tool.

Keeneland's application of Nader’s suggestion would have been more laudable had it been done before it raised takeout, not after, and leaving the higher rates intact on popular exotic wagers for players who bet their money without the benefit of rebates.

And, so, the grand experiment could now begin. But will it? Should targeted minnows now be expected to simply shrug off Keeneland’s shenanigans while whales continue to hold their advantage?

I suspect that this battle is hardly over and, in the immortal words of John Paul Jones, the horse-playing majority has “not yet begun to fight.”

Jumping at any opportunity to characterize Keeneland's behavior as horseplayer friendly -- and thereby worthy of reconciliation following their spectacular betrayal -- would be at best, disturbing, and at worst, destructive.

Rather than back off our resistance to high takeout, I believe this newly-exposed crack in Keeneland’s not-so-protective armor should be exploited, encouraging the betting majority to redouble its efforts!

If Mr. Pricci is correct that horseplayers “won” something through their collective “inaction” with respect to Keeneland, then why wouldn't more of the same produce even better results?

Not only might Keeneland truly “cave” after consecutive challenges to its weaseling, other tracks might finally start to worry that they could be next should the horse-playing majority sustain its resolve. I think this could be the most desirable final outcome.

Indeed, it might take several of Keeneland's boutique meets to expose its vulnerability to relenting pressure by the attention-challenged masses before conclusive results on high-churn wagers can be known with a level of certainty.

Three consecutive HANA-led boycotts at different venues; Santa Anita in 2010, Churchill Downs in 2014, and Keeneland last year have all failed to reduce revenue generated by higher takeout rates. The reason for this is clear and incontrovertible: REBATES.

Rebated players are virtually immune to takeout increases because their “effective rates” don't actually increase as they do for the majority of rank and file bettors. Indeed, because there’s more money to dole out, higher rates can result in even larger rebates.

As long as rebate-subsidized professionals keep pumping money into its pools, any track will be profitable to some degree providing, of course, that a good number of minnows are devoured in the process.

It’s absolutely fair to posit that the exodus of Keeneland handle went to other major venues that grew their handle. Of course, the new tax laws helped but its contribution has been overstated by industry organizations that helped justify their own existence.

So, again and again, it’s time to ask: Why wouldn't nationwide handle grow if all players bet into lower takeout rates? Why shouldn't the average player have the same opportunity to grow its bankroll, regardless of size?

And why haven't we stood up for ourselves before instead of allowing wealthy interests to tilt the playing field against the majority of fans?

For this, we will need leaders from among the non-rebated to establish and advocate for specific objectives worthy of financial AND ideological support from the rest of the underappreciated and underfunded source of handle.

The boycott of Santa Anita revealed the Thoroughbred Owners of California (TOC) and the members the California Horse Racing Board (CHRB) as the real threat to the wallets of recreational bettors; not the racetracks.

However, the losers were not only those horseplayers whose payoffs were reduced but also horsemen who seldom received any benefit from the purse increases that went to the handful that bred, owned or trained higher-priced well-bred stock.

But horseplayers didn’t keep the pressure on, and look what happened: Foal crops, racing dates, field sizes and jobs in racing all declined severely. On the contrary, TOC leaders still seem to be making money.

Although a different situation exists in Kentucky, Keeneland’s management has failed to justify its targeting non-rebated players to fund its overstated albeit underwhelming “mission.”

If horseplayers don’t keep applying the same pressure tactics, we will surely lose any perceived advantage that we may have actually achieved.

If we did it before we can do it again. And again. Until our message is finally received: “Equal, effective takeout rates for ALL.”

Written by Indulto

Comments (27)


Tuesday, January 16, 2018

On Letting Santa Anita Be Santa Anita

LOS ANGELES, January 15, 2018--The last major racetrack executive with the authority and desire to reduce takeout -- and actually succeeded -- was New York Racing Association board chairman, Barry Schwartz, in 2001.

The Stronach Group Chief Operating Officer, Tim Ritvo, appeared to have the same objective for Santa Anita, until he found his path blocked by an obstacle known as the Thoroughbred Owners of California with its Interstate Horseracing Act-enabled veto power.

Former NYRA and Hong Kong Jockey Club executive, Bill Nader, recently proposed lowering takeout by all major tracks, but collectively and cooperatively rather than independently:

"... There has been a steady shift from single-race to multi-race (horizontal) bet types such as Pick 3, 4, and 5, where the takeout is applied only one time and the payment to the industry (purses and tracks) is minimized as the wagering dollars can be tied up over multiple races.

“... Takeout reduction should be in the single-race (vertical) bet types, ... allow[ing] the betting dollar to turn over with greater frequency ... The key is … bringing greater liquidity and churn to the single-race pools through … lower takeout as it relates to field size.

“Win, place, show, and exacta wagering has to become more attractive. The major tracks can come together and agree, for example, that on field sizes of six or less, takeout on these bet types is 14%. Fields of seven and eight, takeout is 15%. Fields of nine or higher, takeout is 17%. ...

“The burden of taking this leap of faith … should not rest on one track. It needs to be a shared vision."

Ritvo may not share Nader’s view, considering that much of Gulfstream’s success is driven by its 20-cent-minimum Rainbow Pick 6, which also fuels additional wagers within the sequence of races.

But even if Ritvo shared Nader’s vision, the TOC presents a huge impediment that other horsemen’s groups in do not. The TOC apparently doesn’t believe in Ritvo’s concerns for Santa Anita’s continued survival as a racetrack after Frank Stronach leaves the scene.

But change is Ritvo’s mission. Prevented from altering the wagering landscape in California, he’s now targeting the physical landscape. With little hope of increasing handle across existing race dates given the current equine population—Santa Anita’s 2018 handle is currently outpacing last year’s.

Ritvo’s approach involves expanding the main oval to accommodate a second turf course and building more barns to house additional horses. TSG is striving to attract horses from out of state and breed within it.

After reading the Ritvo interview, it was an amusing aside to immediately encounter John Cherwa’s argument that preserving the Pegasus concept was more achievable at Santa Anita:
"… the reason Gulfstream is a bad place for the race is the short run to the first turn...

“… But, hey, let’s move it to a track where every horse gets a fair chance, regardless of post position. Let’s move it to a track that can hold more than a handful of rich guys and give the race to the people."

I don’t understand why Cherwa thinks Pegasus at Santa Anita wouldn’t still be a gathering of "one-percenters" and their wannabees? Who else is filling racetrack seats on big-event days? They certainly aren’t being filled on days without stakes, and who besides rebated whales and robotic wagerers are generating significant handle off-track on weekdays?

And that begs another question: Why are tracks, ADWs, and horsemen still unwilling to allow rebates on the remaining 10-20% of handle that isn’t getting them now?" Why wouldn’t doing so grow handle from "the people" as well?

I’m not a big fan of Santa Anita’s all-too-frequent signature 6.5-furlong turf sprints that utilize the same outside, left-turn, downhill start as the 10-furlong turf routes. The sprints generally favor horses with outside posts.

At the same time, I am a proponent of not fixing what isn’t broken. In my opinion, any failure to preserve the beauty and traditions of this iconic venue is nothing short of sacrilegious.

The only current distance on Santa Anita’s main track where the starting gate is positioned too close to the first turn is the mile. But 1-1/16 miles, 1-1/8 miles and 1-1/4 mile races are all post-position neutral. Having witnessed the negative impact of a similar expansion at Hollywood Park, I shudder at the prospect of a nine-furlong main oval in Arcadia.

Pegasus is both a physical and spiritual manifestation of Stronach’s "vision" for Gulfstream Park. It has proven undeniably successful. While on-track slots help pay the freight, the racing side attracts unprecedented off-track handle volume on large fields that don’t require huge purses, high-wager minimums or a large live audience.

Ironically, it’s the absence of the slots funding option in the Golden State that has likely saved Santa Anita from already becoming the West Coast version of Gulfstream Park. That, and the culture of California owners that is characterized by an aversion--if not an allergy--to competitive racing.

The imposing Pegasus statue should remind the TOC of the ferocity with which TSG went after Calder in pursuit of coveted racing dates. And they should not forget the brilliant legal and financial maneuvering that landed the current TSG holdings in private hands following their acquisition via corporate resources.

I’ll be surprised if TSG puts money into their proposed expansion prior to establishing a new relationship with local horsemen. Once they do, financial success may still be achievable without compromising the aesthetics.

Then maybe Ritvo can get around to giving Nader’s reduced-takeout proposal the consideration it deserves.

Written by Indulto

Comments (20)


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