"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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Wednesday, May 16, 2018

Counterpoint: Winning Races Should Qualify the Derby Entrants

LOS ANGELES, May 14, 2018—The fact that the heavens opened two years in succession to rain on the Kentucky Derby post parade -- and thrice since the reign of vindictive venue restriction began – might suggest to some that the cosmos has colluded with climate change to compromise the proceedings on Derby Day.

Even if a higher power isn't manifesting its displeasure, genuine concern would not be misplaced over what has arguably become a calendar-confining, creativity-crushing qualification process that imposes Churchill Downs’ concept of candidate correctness on all Derby starters.

By casting the road to the Kentucky Derby in concrete, with little accommodation for individual development and adversity, CDI may be guilty of competition constraint and career contraction among its equine campaigners.

The 144th “Run for the Roses” was the sixth time starter eligibility was determined through performances in a selected series of qualifying prep races with preference given to participation within six weeks of the main event.

No longer is eligibility based on total earnings accumulated in any combination of graded stakes races. While the latter had been independent of surface, distance, gender, and venue, the former removed turf routes, all sprints, all filly races, and certain tracks, from the equation.

Was it the success and popularity of the Kentucky Derby that emboldened the operators of the host track to usurp the power to dictate where and when runners could qualify for their race?

Or was it the determination of deep-pocketed owners to pursue their Derby dreams at almost any cost that encouraged CDI to take control of prep participation as well as the main event?

Among the eligibility inequities fans hoped would be eliminated by a new system based on points, was the effective guarantee of starting gate berths to top finishers in all the highest purse preps; some of which were seldom the source of commensurate talent; most egregiously the UAE and Sunland Derbies.

That “reform” never materialized, as CDI assigned excessive point awards to the same races, effectively making them “Win And You’re In” (WAYI) events; thereby lowering the significance of earlier preps -- even in combination -- due to the disparity in points each contributed to eligibility.

Ironically, the BC Juvenile became undervalued in the rush to reduce the relevance of races for two-year-olds.

Whatever their motivation and intent, CDI has created conditions which, in its first six years of implementation, have produced results too consistent to be considered coincidental:

1) Six consecutive Kentucky Derby-winning favorites.
2) All won a maximum points prep in its last start within 5 weeks of the Derby.
3) Three won the Florida Derby.
4) Two won the Santa Anita Derby
5) Jockey Victor Espinoza won twice
6) Trainer Bob Baffert won twice
7) Trainer Todd Pletcher qualified 21 starters including the winners of 4 Florida Derbies, 3 Wood Memorials, 2 Arkansas Derbies, 2 Louisiana Derbies, and 1 Blue Grass.

This year Pletcher engineered victories in 4 of the 7 maximum point preps; all the more impressive since he also managed to avoid running those he qualified against one another.

The flip side of Pletcher’s Derby prep successes, however, is that neither of his two Derby winners subsequently won a race, and only his Belmont winner, Palace Malice, won a Grade I stake against older horses. Incredibly, all three Florida Derby-Kentucky Derby doublers have also failed to win another race since 2013.

The obstacles created by 20-horse fields seldom deter the connections of less accomplished and/or talented performers from sacrificing their futures. Neither do they seem to have any difficulty ignoring the new reality dominated by race timing and significance reinforced annually by conditioners capable of exploiting them.

Is racing in North America sustainable with a handicap division devoid of accomplished and recognizable talent being squandered if not injured along the Triple Crown trail?

Like 2016, this year’s top three betting choices finished 1-2-3. While perpetual predictability produces popular winners, it precludes exciting upsets, and huge payoffs in many pools. That only last prep winners represent the real competition for Triple Crown aspirations under the new system is evident.

For example, the 2013 Florida Derby winner (Orb) went on to win the Kentucky Derby as the 2nd-ranked eligibility point earner. The runner-up (Itsmyluckyday) finished 15th in Louisville as the 12th-ranked qualifier.

Similarly, the 2018 Santa Anita Derby winner (Justify) won the Kentucky Derby as the 9th-ranked qualifier while the 7th-ranked runner-up (Bolt d’Oro) finished 12th, and the 26th-ranked outsider (Instilled Regard) finished 4th.

Note that in both races, the Superfecta included two horses exiting the same final prep; a pattern that has now repeated itself three times in succession.

Not only have the last prep also-rans in the above grid never won, they rarely reversed relative finish order with their fellow same last prep contestants unless trouble was a factor. Perhaps this phenomenon is due to the relative lack of incentive to attempt qualification earlier than March with so few points attainable from September through February.

Perhaps Derby fields could be strengthened by a) ensuring that such also-rans are eligible only if they're also earlier prep winners, and b) not forcing multiple early prep winners to continue developing and maintaining their fitness in qualifying races alone.

Trainers still need distance, spacing, and surface options to adjust for individuality, injury, or inclement weather.

One might wonder whether we’ll ever see another fascinating upset featuring a frantic stretch run like Mine That Bird’s in the mud, or a brilliant speed display like Secretariat’s in the sunshine as he lowered the track record by running successively faster quarters. Neither won their last prep race, and both qualified on the strength of their campaigns as two-year-olds.

In my opinion, the currency of eligibility should not be earnings or points, but victories. Derby starters should be preferred by total wins in qualified preps. Such races should be increased in number, and their significance distributed more equitably over the eight months preceding the Derby.

A horse incapable of winning at least one prep probably doesn’t belong in the Derby, but winning only one prep should not guarantee a starting berth. Points tiers would still be useful in ranking horses within each victory total level, but too great a differential between them would not support a preference based on win total.

Hopefully, Churchil Downs will consider the following changes:

1) Retain, but modify three tiers awarding 100, 50, and 10 points to winners (PTW), respectively, to 50, 40, and 30, so that any two wins would be worth more than any one of them.
2) Assign higher tiers to certain Juvenile races: 50 PTW for the BC Juvenile, and 40 for the Champagne, Breeders’ Futurity, Frontrunner, and Los Alamitos Futurity.
3) Award points only to top-four finishers who beat at least four horses
4) Add potentially high-quality opportunities to win a prep, e.g., the BC Juvenile Turf, Illinois Derby, and Frederico Tessio,with 40 PTW.
5) Either reserve the rail post in 20-horse fields for the starter with the lowest eligibility point total, or else draw for it first among the group with the lowest win total.

As Vince Lombardi is often quoted, "Winning isn’t everything; it's the only thing."

Written by John Pricci

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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)


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