Indulto

"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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Monday, August 27, 2012


Safety for Three Year Olds: Several Suggestions


The inspiration for this piece was provided by fellow HRI commenter, Don Reed, whose commentary on racing spans multiple websites. Not only is he usually good for a chuckle or three, but also for cryptic remarks I enjoy trying to decipher.

In response to Bodemeister’s announced retirement at the “Paulick Report”, and the subsequent comments mourning the dearth of this year’s Triple Crown survivors, he wrote, “The ‘stars’ of 2012 look like the New York Mets.”

I ‘m not sure what he meant, but any mention of the Mets always reminds me of their much-maligned catcher, Clarence “Choo-Choo” Coleman, whose career was extended by MLB expansion. Those Mets filled the void created by the carpet bagging Dodgers and Giants and provided the necessary alternative to the enormously successful Yankees.

It now seems that racing’s 3-year-old stars are also disappearing into the sunset, but not to compete against other equine athletes in California. Rather they’re headed for the sidelines and early retirement; ostensibly due to injuries that appeared after their Triple Crown event appearances. The list includes the winners of all three legs and the second place finisher in the first two.

Paynter, who finished 2nd in the Belmont Stakes before winning the Haskell, was sidelined for the Travers, as was Hansen, the Breeders’ Cup juvenile champion who barely beat eventual Belmont winner, Union Rags, in the 2011 Juvenile.

Both horses subsequently were uncompetitive in the 20-horse cavalry charge on the first Saturday in May. Then so were 13 others. Derby survivors Alpha and Liaison started in this year’s Travers, as did Belmont third, fourth, and fifth place finishers; Atigun, Street Life, and Five Sixteen, respectively.

But there were no participants from the Preakness participants Optimizer, who started all Triple Crown races, returned to the turf on the Travers undercard while the Derby pacesetter, Trinniberg, sprinted in the Grade 1 King’s Bishop.

Gov. Cuomo appeared sufficiently concerned about injuries to $7,500 claimers to initiate an independent study on the issue. Shouldn’t he or his racing staff be scrutinizing what seems to be a career-cancelling circumstance surrounding our classiest competitors, and mandate a first safety step, in what is quickly becoming the Cripple Crown?

A few months ago, HRI executive editor John Pricci once again opined that Triple Crown races needed better spacing. I and a few other HRI regulars took a position against “fixing what isn’t broke.” Indeed, had this year’s Derby and Preakness winner been able to win the Belmont – or even compete in it – the situation might not seem as critical.

But now that so many Triple Crown horses are winding up on only three good legs of their own, people might be more ready to reconsider extending the time between TC events and preps. This is, after all, not a one-season phenomenon.

Despite creating a rivalry resembling that of Affirmed and Alydar, I’ll Have Another and Bodemeister both failed to show up for the Belmont after three races in six weeks for the former and three in weeks for the latter.

Changes to eligibility for next year’s Kentucky Derby may relate to this issue. Starters are expected to be more accomplished as a result of being forced to compete in fewer qualifying events -- in particular the major 9-furlong preps three to seven weeks prior to the Derby.

Will the “lucky” qualifiers be less likely to suffer loss of limb and/or life?

Churchill Downs could force a change just by moving the Derby back to give an extra week’s from the preps offering the most points. Hopefully, Pimlico and Belmont would widen their respective intervals to accommodate a schedule change.

Imagine if racetracks were willing to protect the careers of their athletes? However, I’m not going to hold my breath waiting for Churchill Downs to lead the way while they are the biggest beneficiary of the status quo.

If there’s going to be any movement on spacing, it will have to start with the “New NYRA”. Are you listening, Gov. Cuomo?

Innovation that preserves tradition as needs arise is in order. When the same horse wins the Derby and Preakness, the Belmont would remain at 12 furlongs; even if the candidate scratches.

Otherwise, it could be shortened to 9.5 furlongs; the second leg of a bonus-incentivized New York Championship Series for three-year-olds (NYCS) that starts with the 9-furlong Wood Memorial.

When a less likely classic Triple Crown attempt is scheduled for a Saturday, then the Discovery would be run at 9.5 furlongs as Leg 2 of the NYCS on Sunday. If the Classic candidate does not start, the purse for the 12-furlong Belmont would revert to the Grade 1 minimum.

The 3rd leg of the proposed NYCS would be the Travers at 10 furlongs with spacing similar to that between the first two. The first three finishers in legs two and three would receive bonuses based on in-the-money finishes in prior legs. Once the series proves successful, the Jockey Club Gold Cup at 12 furlongs for 3YOs & Up could be added as a 4th incentivized leg in October.

Eventually, the Metropolitan, Suburban, and Whitney could also comprise a bonus-incentivized NYCS for 3YOs & Up, with in-the-money finishers in the Gold Cup being rewarded for all their “money” placings in any of the six preceding events. Such a progression of races would make 12 furlongs at Belmont the true test of champions and stamina.

The immediate advantage to NYRA would be that a berth in the Wood Memorial starting gate would become at least the second most sought-after in racing; likely requiring special eligibility conditions of its own.

Another would be the occasional opportunity to host a 3-day festival anchored by a Brooklyn-Belmont-Discovery sequence that could be expanded to a mini-Breeders’ Cup type series.

Still another is the potential for the Gold Cup to challenge both the Breeders’ Cup Classic and Kentucky Derby as the most important race in North America.

Owners of championship caliber 3-year-olds would immediately benefit from a potentially safer, realistically more lucrative, alternative path to a divisional championship. It would also lessen the control imposed by CDI through its new Kentucky Derby qualifying process.

Finally, it would keep their horses, and the organization, in the public limelight from April through August.

The much-needed benefit to the industry would be the opportunity to promote the positive steps being taken to offset the recent wave of charges against it of insensitivity to--if not lack of concern for--the welfare of thoroughbred horses.

At the very least, there would be more well-known older talent available to race in subsequent years; possibly fueling an NYCS for older horses. Consider the following scenario:

The Wood winner prevails in both the Derby and Preakness, and his connections start contemplating the appropriate course of action. Not since the Zenyatta–Rachel Alexandra controversy are fans so passionately divided.

Traditionalists square off against the progressives, dominating the media as they await the decision.

Written by John Pricci

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Saturday, August 18, 2012


Rebates v Takeout: On Leveling the Playing Field


August 17, 2012--Bennett Liebman, Governor Andrew Cuomo's consultant on all things gaming, equates gambling on races to purchasing consumer items and regards rebates as “free-enterprise ingenuity.” What he didn’t consider, perhaps, is that racing’s customers aren’t simply consumers, they’re competitors.

Unlike fixed-odds events in casino games and sports betting whose customers “play against the house,” racing’s customers themselves determine what the payoff for winners will be. Thus the “free market” is already built-in to racing and it is being tampered with to make it likelier that bettors with the biggest bankrolls will be profitable.

The “ingenuity” that spawned rebating is the same as that which divined off-shore bank accounts, tax shelters, skimming, and other vehicles to divert funds away from their intended destinations.

Even if the ethics involved weren’t suspect, the capacity of rebating to support money laundering, book-making, and excess Advance Deposit Wagering profits (at host track expense), should be a sufficient deterrent.

The rebate “problem” is a takeout problem. Rebates are possible only when direct takeout rates are too high. If rates weren’t excessive, there would be no “wriggle-room” to subsidize a favored few while fleecing the rest.

Not all venues want to keep the playing field tilted against recreational bettors, but they are reluctant to lower takeout rates; afraid of a precipitous drop in revenue if the rates decrease doesn’t immediately fuel a handle increase. They also fear the formerly-rebated will reduce their play without their virtually insurmountable advantage.

Although I was unsuccessful in accessing any examples, perhaps Mr. Liebman subsequently explored alternatives to selective rebating of individuals that could be considered more equitable approaches for ALL bettors/customers. I can suggest at least three and, hopefully, this article will inspire more.

I’ll use the term “Qualifying Pari-mutuel Pool” (QPP) to represent any pool in which an equitable adjustment to payoffs will be authorized once defined levels of handle are reached:

(1) Paying rebates at an equal rate to all participants of any QPP regardless of an individual’s wager size
(2) Paying bonuses at an equal rate to all winners in a QPP
(3) Dynamically lowering equal direct takeout for all participants in every QPP
(4) Others to be determined

Multiple objectives are involved:

(a) Restore a level playing field on which competitors of all bankroll sizes have an equal opportunity to come out ahead given sufficient skills, information, and good fortune.
(b) Increase long-term handle at levels capable of supporting purses, operations, and capital improvements as well as generate revenue for appropriate taxing entities.
(c) Minimize short-term cost of adjustments to existing process
(d) Increase popularity of racing and attendance through greater opportunity and transparency

What is required is a commitment to continually experiment with takeout strategies to find the “optimal” level of direct takeout in support of (b) for each wager-type/race-condition combination at each race meeting. As the relationship among wagering competitors changes so should the distribution of wagers. Depending on the priorities established, some combination of (1) through (4) may be appropriate.

One approach to experimenting, while attempting to minimize negative initial impact, would be to first concentrate on pools where whales actually participate. The TRPB should already know that by now. Handle thresholds for each member of the QPP subset could be established to automatically adjust takeout rates once handle reaches the next defined level.

Of course, bet cancelation policies would be a factor, but - as the rebaters have already demonstrated – where there’s a will there’s a way. We just need guys in white hats establishing the criteria, ensuring they are legitimately met.

It’s my understanding that rebated players were not affected by the 1% overcharge to NYRA customers that the Administration deemed a “scandal” justifying its intervention. That 1% is dwarfed by the 5% minimum rebate that the average player is effectively also overcharged; making rebates racing’s real takeout scandal.

If the state is going to run racing in New York, then there is no justification whatsoever for its providing an “edge” to a tiny subset of its customers comprised predominantly of professional gamblers that is not extended to the overwhelming majority of recreational bettors that includes New York residents, voters, and taxpayers.

Level the playing field, Mr. Liebman, for horseplayers as well as for horsemen.

It should be clear to anyone who has actually sampled the wealth of Liebman’s work available on the Internet, that the man has carefully considered, clearly articulated, and occasionally debated a preponderance of the issues that need to be addressed by the NYRA Board and executives.

The optimist in me believes that at least some needed reform will result from the Cuomo-Liebman connection. On the other hand, there is no guarantee that the Governor will agree with his advisor’s recommendations and priorities, or that he has the political will to overcome established opposition to some of them.

The Governor, the Senate, and the Assembly should not make their chosen board appointments a “fait accompli” without feedback from concerned parties outside the government, politics, and “Old” NYRA – all of which Liebman himself has been a part. The sooner the Administration resumes open communication with the media regarding the takeover of NYRA, the more likely it is that the entire racing community will benefit from the Governor’s act.

Written by Indulto

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Friday, August 17, 2012


Rooting for Bennett Liebman and New York Racing


August 16, 2012--As the process of finding “new” NYRA Board appointees continues outside the hearing and view of the media, the resulting information vacuum has so far spurred more negative speculation than positive expectation. Indeed the prolonged silence from long-standing, transparency-in-New-York-racing advocate, Bennett Liebman, leaves the impression he is being held incommunicado.

With nearly a quarter-century’s experience dealing with racing’s administrative, political, legal, and ethical issues - documented through extensive public communication of his positions on those issues – Liebman is certainly the best-known (and arguably most-qualified) advisor on racing that New York Gov. Andrew Cuomo could have chosen. Not many merit a favorable endorsement, such as Paul Moran’s “Appointing Liebman a good start” (http://espn.go.com/blog/new-york/horse-racing/tag/_/name/bennett-liebman)

Perhaps by reviewing some of Liebman’s archived opinions, we can anticipate the characteristics of new NYRA board members and what their objectives might be. Prior to becoming Cuomo’s Deputy Secretary for Gaming and Racing, Liebman himself served on the NYRA Board as an appointee of Gov. David Paterson.

Liebman’s lone vote against pay raises for NYRA executives proved prophetic. It may have also reflected his thoughts from a February, 2006 article, “NYRA Trustees and the Duty of Loyalty: The Koala in the Board Room,” (http://www.governmentlaw.org/files/nyra_trustee_loyalty.pdf), in which he wrote, “The concept that board members owe a duty of loyalty to the New York Racing Association ought to be an issue for every one concerned with New York racing. …

The NYRA Board’s federal monitor – working with the State Comptroller and the NYRA board itself – should be establishing specific guidelines and standards … Board member understanding of their duties at NYRA can only help create a more transparent, better-governed NYRA, which should be in the best interest of the sport of horse racing in New York State.”
In his September, 2007 “Prepared Remarks to the New York State Senate Committee on Racing Gaming and Wagering” (http://www.governmentlaw.org/files/LarkinPresentation.pdf), Liebman confirmed his credentials as a champion of racing’s customers’ interests.

“What we want in a franchise holder is what is best for the fans of horse racing.

"That means the best quality racing at the best price, at the best facilities, and with an assurance of fairness in the racing.… it’s the one sport where the fans through their wagering dollars are true participants in the game. If we aren’t working for the fans of racing in government, we’re not working at all.”

Fewer of Liebman’s quotes appeared in other writers’ articles during his tenure on the NYRA board, but his perspective as a racing fan was expressed more frequently in his own blog for the N.Y. Times. Among the issues he covered in “Reasons for the Decline of Horse Racing” (http://therail.blogs.nytimes.com/2010/06/06/reasons-for-the-decline-of-horse-racing/), was…

“…Takeout Issues. Again, maybe this didn’t matter when racing was the only game in town, but how with a 20 percent overall takeout does it compete with slots (a 5 to 10 percent takeout), and many table games (skill games such as blackjack and poker) which give you an even better chance at winning. When you hear from the major rebate shops, that without the rebate, even their most skilled players almost never beat the takeout, you wonder why you play the game.”

My personal concerns with Liebman’s stated positions involve the issue of rebates, In his November, 2003 piece, “What Do We Do About Rebates?” (http://www.governmentlaw.org/files/rebate.pdf) and later in his March, 2004 presentation, “Rebates and Takeout: Can Racing Satisfy Its Biggest Customers and Still Survive?” (http://www.harnesstracks.com/2004_annual_meeting/Rebates_And_Takeout.htm), Liebman supported the practice of selective rebating based on wagering volume despite recognizing its opposition. The remaining quotes preserve the full context of Mr. Liebman’s remarks. His concept of “player equality” struck me as somewhat Orwellian.

In the earlier piece, Liebman wrote, “…Who wouldn’t want to get more bang from their gambling buck? Who wouldn’t want a 50% discount off the retail price of a bet? …

“If takeout at an average American [track] is 20%, the rebaters are likely to give between 5% and 12% back to their major bettors. …

“Proponents believe that it has the capacity to significantly increase handle in horse racing. Bettors who win or who lose far less are likely to increase the size and frequency of their bets. …

“Opponents of rebates believe that it creates a two-tier system in racing where only the $2 bettors pay more. They believe it ends the mutuality in the pari-mutuel system. …

"So the idea should be to devise a system of rebates that maximizes the benefits of the rebates while minimizing their downside. We want a system that encourages innovation, increases handle, contributes to the overall benefit of the industry, and treats all players equally. … To assure equal treatment of bettors, the determination of the size of rebates should be determined only by objective factors.”

In the later article, Liebman argued, “…Rebates are here to stay. Let’s make sure they work for the entire industry. Here are the five goals that a coherent, rational rebate system ought to fulfill:

Openness: Let’s develop a system where everybody knows where the rebates are. Let’s make sure that the rebates are open and available to all eligible customers. Let’s fully disclose the extent of the rebates to enable tracks and horsemen to make intelligent use of their simulcast decision-making status under the Interstate Horse Racing Act, and Let’s disclose the rebates to the customers so they know which rebate service or which track they should be betting at.

Fairness: let’s begin by recognizing that the free market has come to horse racing. Maury and Dave and others have just taken their business to Wal-Mart instead of Woolworth’s. They are buying their Calvin Klein jeans at Sam’s Club, not from the CK store. Under these circumstances, governments setting the takeout rates need to react so that racetracks don’t just turn into Woolworth. Fairness to bettors, who are also taxpayers, requires lower takeout rates. We have established a system where horse racing is largely uncompetitive with casino gambling. As casino gambling spreads throughout urban and eastern America, racing will need to lower takeout rates. They have to realize that a fair parimutuel system is one that does not gouge its customers.

Flexibility: overall legalization of rebates allows racetracks to be flexible. As I have said before, the market is now in control of racing. If racetracks want to be in the rebate game, there is no longer any reason for them not to be. It is absurd to see casinos and racinos offering rebates to their casino customers through player reward cards while being unable to offer rebates to their racing customers. Let’s s at least get our tracks in the game.

Mutuality: and I have not heard anyone discuss this. The reason for our parimutuel system is mutuality. All bettors are supposed to be treated equally. This has legitimized and distinguished our system of wagering from the old bookmaking system where bettors were not treated equally. In fact, there is an element of unfairness in offering rebates to a select few. My suggestion is to realize that mutuality does not require arithmetical, exact treatment. All it requires is that all people are eligible to have the opportunity to receive rebates. Make it the Discover card for racing--bet $100, get back two percent, bet $1000, get back five. Everyone can’t participate. Their level of participation determines the reward. What is wrong with that?

One thing that might be wrong is the criteria for a rebate. Now if I am running a track, and I can do anything I want to with a rebate, I am giving them to horsemen and owners. That will keep them racing as many horses as possible at my track. I am giving rebates to friends and contributors to the governor and leaders. Unfortunately, that is not what we want. That would be wrong. The criteria for rebates should be limited to the amount of wagering, the types of bets, and the tracks on which the player is betting. Again, the point of a responsible rebate system should be to preserve mutuality. Every bettor ought to be potentially eligible for the same rewards.

Integrity: this open mutuel system lets us see what is going on. We can tell if someone is sending their wagers through different hubs. We can track bets. We know what is happening. A rebate system with these elements can give players more confidence in the system and can help regulators track suspicious wagers more efficiently.”
The reader may recognize some “Doublespeak” in the preceding quote as defined by George Orwell in his novel, “1984.” If not, then perhaps the relevance to paraphrasing Orwell in another of his novels, “Animal Farm,” - All bettors are created equal, but some bettors are more equal than others - is more obvious.

TOMORROW: Rebates v Takeout, Leveling the Playing Field

Written by Indulto

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