OP-Ed item in the January 17 Edition of the TDN
KENTUCKY SLOTS
by Barry Irwin
Bill Finley penned in the January 17 TDN an editorial that is the most chilling piece of racing journalism in a long time. For import and vision, the only comparison I can make was a piece Jimmy Kilroe wrote for \"Sports Illustrated\" in 1967, when he said one day nobody would go to a track to see the races, but would watch them at a tele-theatre. Who could imagine such a thing ever happening?
Just as Kilroe foreshadowed racing\'s future back then, so has Finley given our sport a glimpse of the future, and it ain\'t pretty.
In case you missed Bill\'s piece, he wrote about Fort Erie trying to kill off live racing and stick with slots,which originally were put in to bolster an ailing local industry.
I realize it\'s heresy, especially for a racing man living in the Bluegrass, to take a stance against other forms of gambling that can add to purse money, but this is the case. My position is that the introduction of slots or other forms of casino gaming in the racing environment is a short-term fix that eventually will suck the life blood out of our game until it has been reduced to a sideshow at country fairs or seen only on a computer monitor in a virtual format.
Those in the State of Kentucky that would have slots at racetracks justify their stance based on positions that are incorrect. They admit that in the best of all possible worlds racing would not need slots, but now that the \"genie is out of the bottle\" Kentucky needs alternative gaming in order to compete with neighboring states.
Also, if purse levels at Kentucky tracks decline, it will adversely impact the state\'s \"signature industry,\" because horse breeders and owners will decide to move their stock elsewhere.
This is incorrect.
Kentucky is the racing and breeding center of the world. It owes this status to the commitment of those participants that have decided to locate themselves
here. Just because Pennsylvania, for example, will generate a considerable sum of money to enhance purses from alternative gambling does not mean that,for example, B. Wayne Hughes is going to sell Spendthrift Farm and move his stallions, broodmares and young horses to Pennsylvania. The notion is preposterous.
The people that choose to ply their trade or participatein horse racing in Kentucky have chosen to do so because of the lifestyle it offers. There is no other place in North America like Central Kentucky. Newmarket is grand and Chantilly is nothing to sneer at. But none boast the infrastructure of the bluegrass or its human expertise and pool of talent.
Here are two pet theories of mine: 1) racing is a leisure time activity and 2) no owners, except serious commercial breeders, are involved in racing to make money.
Oh, sure, every owner will tell you they are in the game to turn a profit. But I happen to know, from 40 years of experience, that the real reason people choose
to play the game is because of the lifestyle. Those protesting that they are running a business are giving you the business. It\'s their way of trying to justify it to themselves, their spouses and their accountants.
No place in North America can offer the lifestyle of Kentucky if one is a die-hard participant in this endeavor. When I started in racing, one of my first bosses liked to say \"racing is the greatest game played outdoors.\"He was right.
Nowadays not many folks are playing it outdoors. They are sitting in front of monitors or TV sets watching and (God forbid) listening to a bunch of talking
heads as they try to keep pace with video over which they have precious little control.
Of all the places in North America, or even the world for that matter, that have the best chance to avoid the trap of caving in to alternative forms of gambling, Kentucky is it.
Kentucky has arguably the most beautiful and well-attended racing meets in the nation at Keeneland. Kentucky has The First Saturday in May. Kentucky has the Keeneland and Fasig-Tipton sales. Kentucky has Rood & Riddle and Hagyard, Davidson and McGee. Kentucky has the Kentucky Farm Managers Club. Kentucky
has Kentucky Equine Management Interns. Kentucky has the TRF Maker\'s Mark Secretariat Center. Kentucky has the Thoroughbred Charities of America. Kentucky has the Race for Education. Kentucky has Bloodstock Research and Equibase. Kentucky has the University of Kentucky and the Gluck Center and the Grayson Foundation and The Jockey Club. Kentucky has the NTRA. Kentucky has TOBA.
If the horse people and politicians concentrated all of their energy on promoting the game instead of focusing it on slots, Kentucky could turn things around and
show the nation how to make the game work again. They not only can buck the trend, but turn it around. I want them to take this challenge. Customers that want to make racing their leisure time activity seek to enjoy the sport-you heard me-the sport of racing. They also want to be able to bet a small amount of money and have a chance to win a lot of money.
Men who have wives or girlfriends want to be able to bring them to a track that presents itself and its sport in such a manner that it makes the men proud to be in attendance. There are ways to do this.
People that play the races don\'t play slot machines or play the lottery, because those are mindless activities that do not involve intellect. Horseplayers are not dummies. They are proud of their handicapping skills and they want to be able to use them in an atmosphere where the sport of racing is the centerpiece. Look (as our new President likes to say when making a point)--racing has shot itself in the foot more times than any other major sport with the possible exception of boxing. We gave up on TV early so that \"we wouldn\'t give our product away.\" We failed to embrace the state-run lotteries that could have brought our game into every household in America. We blew our chances to make friends with the American Indians. All we have left are our fans.
Putting some VTLs at the racetrack is not going to bring in any new fans and it is not going to help us keep our current fans.
We are in the entertainment industry. CAN YOU HEAR ME OUT THERE?
I said entertainment!
Barry-- I agree with you about slots, and that most owners aren\'t in the game to show a profit. But I disagree with you on a couple of points.
Without betting, there is no sport. And it\'s a mistake to lump serious bettors in with owners-- many indeed are here to make a living. Specifically, the biggest bettors, who are the most important people in this industry, bar none. You take out the five biggest bettors and we would be in very big trouble.
The people who will go to the track more often because it\'s more fun do not bet a lot of money, and from a business point of view are basically irrelevant. We are in the gambling business. The portion of the market that we have to grow is exactly the one sitting in front of televisions and computers, betting seriously. And the best ways to do that are
a) lower takeout, or do it in the form of the tracks offering rebates to big bettors. Our industry has allowed a completely separate industry to grow simply because we don\'t understand our own business, and the rebate shops do. All the money the rebate industry is making could be made by racetracks, with some going into purses.
b) Eliminate performance enhancing drugs (I know you\'re on the same page for different reasons). They have created a system of insider trading, where those with knowledge of who is running \"hot\" are taking money from the pockets of those who do not through the parimutuel system, which is a true market.
TGJB Wrote:
-------------------------------------------------------
> Barry-- I agree with you about slots, and that
> most owners aren\'t in the game to show a profit.
> But I disagree with you on a couple of points.
> We are in the gambling business. The
> portion of the market that we have to grow is
> exactly the one sitting in front of televisions
> and computers, betting seriously. And the best
> ways to do that are
>
> a) lower takeout, or do it in the form of the
> tracks offering rebates to big bettors. Our
> industry has allowed a completely separate
> industry to grow simply because we don\'t
> understand our own business, and the rebate shops
> do. All the money the rebate industry is making
> could be made by racetracks, with some going into
> purses.
>
> b) Eliminate performance enhancing drugs (I know
> you\'re on the same page for different reasons).
> They have created a system of insider trading,
> where those with knowledge of who is running \"hot\"
> are taking money from the pockets of those who do
> not through the parimutuel system, which is a true
> market.
JB, I wont argue on b) anymore. Total elimination of those who will want to
take an edge, veterinary/pharmaceutical or otherwise, is an unattainable goal,
as probably is the total elimination of insider trading. The fact that P.
Biancone (banned on 2 continents, yet only suspended for 1 year in the US) is
back plying his trade shows how serious American racing is about cleaning up
its image.
With regards to TV/Internet wagering, it is the future of Racing. The future
will not be bright if the continuing turf wars/pissing contests over signal
access continue. More than surface issues, more than the Recession, more than
the generally dismal quality of Racing, my participation has been decreased by
Racing\'s inability to deliver signals from quality tracks to Living Room Downs.
Racing needs a solid TV presence. Tennis has a cable network. Golf has a cable
network. Baseball and Hockey have their own networks. Motorsports and
Hunting/Fishing have a cable presence.
Racing needs a quality TV presence to service existing players and to draw in
new shooters.
Racing needs leadership.
IMO, there was never a rational economic justification for using slots to save horse racing to begin with assuming you believe in free markets. The best thing that could happen from an economic perspective is exactly what might happen at Ft. Eire. All uneconomic tracks should be closed and the real estate should be used for other business ventures. If slots and other gambling ventures are profitable, they should be maintained in the smaller facilities that are required to run them.
For some strange reason the horse racing industry believes it is or should be immune to the type of restructuring that all other industries are required to make when there are changes to the business environment.
IMO, there is no reason for most racetracks to exist these days. Most people bet at simulcast centers, via home computer, via phone, at OTB etc.... and don\'t really care where the track is located. That trend is going to grow. If all the uneconomic tracks were closed, virtually the same total handle would be divided among the remaining tracks and produce massive increases in revenue per track with very little increase in expenses. That would enable the survivors to invest in premier facilities, raise their purses, lower the take, and still provide revenue to the government. (working out the details with all the state governments would probably be a challenge though)
Of course a restructuring like that would mean fewer jobs for breeders, jockeys, grooms, trainers, track executives etc... but that is the way the free market and economic growth work.
This debate reminds me of what\'s going on in Wall ST now. It seems that a lot of people are in favor of free markets until free markets threaten them. LOL
Rich, nice post, good points.
Richie mentions the word \'racing\' a few times in his post. Who exactly IS racing? We know who the NFL is, but who is \'racing\'? Rich said racing needs leadership. I agree with that, the problem is that every track and every owner is out for themselves and they are all fighting for the same small customer base.
If horse racing had his own Roger Goodell, who would listen to him? If you were Frank Stronach, would you want to have a guy telling you what to do? Of course not. Why should he?
The only way that \'racing\' is going to start curing its ills is to have a head czar that makes decisions and whatnut.
of course, there are so many problems with implementing a commish you can\'t even begin to list them all. Is the state government of any particular state going to listen to some \'head guy\' when he says takeout must be lowered? Why should the state of NY (for example) listen to a racing czar who says they need to lower their takeouts to 10% across the board?
Right now, the bettors of horse racing have a certain amount of money to invest. With the economy, that amount is much lower than i was a couple of years ago. The people in charge of putting on the show are all looking for more money. Everyone wants a \'raise\'. Owners want more. Tracks want more. State governments want more. Simo operators want more. ADWs want more and the list of people with their hands out is great.
The pie is only so big. No one cares about the other person\'s slice as long as they get theirs.
Jerry mentions that this game would be in trouble if the 5 biggest bettors stopped betting. Actually, that might be false. The pools would go down in the short run, but eventually they would get back to realistic levels because more people would be winning. These 5 biggest bettors (or betting groups) are winning so much money per year, that it just makes it that much harder for the average joe to even have a shot to win a little. It makes a lot of break even bettors losers.
Back in the old days before \'sheets\' and beyer figs, horses who were supposed to pay 8 bucks could, on occasion, pay 10 bucks. There was some meat on the bone, there was value to be found. Not anymore. That 8 dollar winner is paying 8 dollars.
All this slot money that has been disbursed to american horse racing owners, has this infusion of money made more owners? How does more owners create more bettors? how does giving slots money to owners thru purses entice bettors to bet more money into the pools? I guess the theory is that higher purses will entice better horses and better horses will entice gamblers to invest more money on the races. Slots tracks like Philly Park and Delaware, have we seen their betting handle significantly go up? I\'m not sure we have.
There is a lot of slots money being pumped into the game, but i\'m not sure its being pumped into the right places.
Jerry,
I have another installment of this story that I will write next week.
In it I will mention two pillars that will form my platform for the future.
One you will already have guessed. The second you will love.
I am in no way lumping horseplayers in with owners.
Of course horseplayers are in it for trying to make money. And my plan will make this more of a likelihood.
Stay tuned. . .
Speaking of nonsense, I see John Conte won the contest and 500k by pulling a rabbit out of a hat.
But that\'s not what I want to comment on.
Most of the reports refer to his \'sheet\' as a tout sheet or a tip sheet.
How come when those crooks at Goldman Sachs pimp a company it\'s \'analysis\'?
Just asking.
\"Speaking of nonsense, I see John Conte won the contest and 500k by pulling a rabbit out of a hat.
But that\'s not what I want to comment on.
Most of the reports refer to his \'sheet\' as a tout sheet or a tip sheet.
How come when those crooks at Goldman Sachs pimp a company it\'s \'analysis\'?
Just asking\"
Box,
Horses don\'t have financial statements, I guess thats why. The wall street crew have a special place in hell for what they did to so many hard working people.
Speaking of contest winner John Conte,(The Grass is Greener), I used to read him in the NY post many years ago.Spoke to two NYers who were in the finals and they told me that they just could not get any \"bombs\" home which is kinda mandatory if you are gonna win or place high up.Also was told that there appears to be several \"groups\" who are hedging if one of them won. Can\'t stop that, it\'s legal, but it could get ugly for someone alone against a \"group\" late in the contest and high on the leader board.
One participant thought the leader board should only be shown at the end of day one and then at the end of day two.What would the pure odds stabbers do if they had no idea where others stood.
Kinda ridiculous that they expect people to handicap as many as 7 tracks and 130 possible races over two days. Is it a stamina contest?
Wish they would cap the odds @like 10 or 12-1 to win, no place,ALL 30 races mandatory, reasonable buy in.You might actually get a \"real\" handicapper to win instead of the stabbing contest player type that wins every year.
Mike
hey now, some of us on this board work at Goldman Sachs and are the ones offering such analysis...... be nice :)
Cov,
... just talking about the excessive risk taking scumbag CEO\'s that have this country facing the worst financial crisis in history, not the analysts giving an honest rating.
Mike
hah, no worries at all. I share all of your feelings but there are a few of us trying to make an honest living on Wall Street :)
Man, Mondays are a big letdown after a big weekend of racing like this past one.
Lots of over-generalizing going on these days...and it reflects the fact that most people don\'t really get what has happened and why.
Not all Wall Street people are crooks. In fact, there are quite a few companies (including Goldman Sachs) that are getting a bad rap.
However, this thread makes me laugh because...there is not all that much difference between what goes on when you are trying to make money on Wall Street...and what goes on when you are trying to make money at the track...even though Wall St. was formerly seen as being a lot more respectable!
HP
Miff-- there are a lot of things wrong with that contest.
I was advising Roger Neubauer, he did reasonably well, finished 70 something out of 300, had lots of seconds. Four of our guys finished in the top 20, best finish was third. From what I hear one guy who posts on this board has quite a story to tell, I\'ll let him tell it. If he ever comes out of his depression.
But yeah-- way too many races. The best contests are the real money ones, where
a) you all bet the same races
b) it\'s a limited number of races
c) betting strategy and money management come into play.
The way this contest is set up, with 300 players, only 2 days, and all those races, you can\'t play the way you would to make money in the long run, or play the way you would in the real world. With 120 races to choose from over 2 days you know there are going to be long shots, and someone is going to have them. So you have to try to find those-- it becomes a question of finding best available longshot, not best available play, especially if you are behind on day 2. I will bet you that many of those who bet the bomb in the last at Santa Anita would not have done so if they had to make all their picks at the start of the contest, not knowing where they would be-- or if they had to bet real money. This is not to say there is no skill involved-- there is-- but there is also a great deal of randomness with this setup.
JB,
I agree but think that the purity of this contest is very weak.Publishing a leaderboard, for example, only forces a player to \"stretch\" his handicapping based on what position he/she is in.
I wrote a note to Waldorp on behalf on several of my close friends who play in the contests all the time. It could be much better and it would be a real nice shot if they somewhat curtail the \"choas/random\" factor down so that it is not an insurmountable task to overcome a couple of bombs, ie smaller cap, no place bets.
I was helping a friend also who was too far behind but I gave out the last winner of the day on a pure stab in that he had won twice on synths in England. Had TG and he was slow, not totally impossible on the surface switch.
I had many winners in the mandatory races using TG but they were too short to play given the format of this contest.You can\'t play short priced lay-overs except in mandatory races and expect to have any chance.
They say 100,000 people played in all the contests and maybe they need to keep it a stabfest to allow the more casual player a better chance of just getting lucky.
Mike
Gentlemen - Thats too many optional races , they should be offered on a much more limited basis imo and unless using a \" live money\" type format with expanded wagering menu , a win or win / place contest with selections made 1 hr before post time probably is the way to go - with each contestant allowed to receive one \"uncapped \" full price payoff during the competition . The way I see it , using longshot is appropriate at times and in those instances , backers should get full value .
I was fortunate enough to make it to the Vegas field a few years back and have played in several of the larger contest with the current format, but the contest needs some reworking. The contest needs to incorporate money management, hence a live money contest. There are several live money contests out there, but the CTOTB-NEW Haven contest is probably the best model out there where you start off Day 1 with $20 and you are required to make at least 10 $2 wagers (limited to WPS only) from several tracks. Day 2 - you are given $30 plus your winnings from Day 1 to make a run at it. This format is more realistic of everyday handicapping.
A propos of the willingness of owners to absorb losses, I see that Frank Calabrese says he lost almost $2 million last year.
http://www.suntimes.com/sports/horseracing/1398753,CST-SPT-frank27.article
Calabrese is not happy about it, but, as Barry Irwin suggests, it seems clear that money is not what keeps him in the game.
That said, even if owners are not in the game for money, trainers and Churchill Downs certainly are, and any analysis has to take that into account.
I don\'t disagree that slots create incentives that are bad for the future of the game. I think Cartman has it right in terms of where the game should go, but I\'m not sure we can get there from here.
Had a friend who won the World Series of Handicapping at Penn National in the 1970/80\'s/ On the last race he bet $1000 win on every horse in the para mutual pool (except his contest choice) and his entire bankroll on his choice (who would have been the favorite). His choice won and he won $50,000. It was a Penn National only contest using live odds.
The NTRA/Las Vegas (racing world) needs either 2 formats or 1 that all contests agree to;
1. Handicapping contests
$2 Win/Place
Higher buy in/fee
3-4 tracks
20 races
10 races mandatory
10 optional
2. Gambling contests
contest buy in/fee
3 tracks a day limited rules
Right now there is a huge conflict.
Like Poker most have become a gambling event and not a skill contest.
It should be both.
The results at Red Rocks were nonsense.