*** CORRECTION ***
Just realized I mistyped the odds-based formula for the Kelly Criterion. It should read:
edge = (final odds+1)/(fair odds+1) – 1
f = [(final odds+1)/(fair odds+1) – 1]/(final odds)
Sorry for any confusion.
Btw, there was a good example of both the merits and the pitfalls of the Kelly formula Saturday at the Spa. During the seminar, Jerry said that Tenango looked 50/50 to win the 7th race. The DD Will Pays indicated the horse was going to go off around 3-1, which is exactly where he ended up.
Calculating the expected value and the corresponding Kelly bet,
edge = (final odds+1)/(fair odds+1) – 1 = (3+1)/(1+1) – 1 = 1.0 = +100% (a very big edge)
f = edge/odds = 100%/3 = 33%
So with a 100% edge getting 3-1 odds, one should wager 33% of his current bankroll (assuming the size of the wager doesn't affect the odds).
The horse never had an anxious moment and paid $8.20. Finding and wagering on horses with big edges like that can increase your wealth pretty quickly using Kelly.
But what if you aren't as good as Jerry at assessing your edge? What if you identified similar horses that you thought were 50/50 to win but were actually properly priced at 3-1? Then you'd be betting 33% of your bankroll on horses where you really had no edge at all and shouldn't even be betting. If you lost 3 races in a row on such horses, which could easily happen when the chances of winning are that low, you'd do severe damage to your bankroll.
That is why it is so important to be able to get your fair odds absolutely right. If you misjudge your edge by even a small amount, you can easily end up overbetting your bankroll to the point of near-ruin.
Making accurate fair odds estimates is much harder to do than predicting final odds accurately, but it is just as important. Most Kelly practitioners make their own fair odds lines and keep detailed records of how well the horses they've deemed overlays actually perform with respect to the fair odds they've given them. Doing so ensures that they're not overestimating their perceived edge and consequently overbetting their bankroll.
Rocky
Have to say its hard to believe the system says to bet a third of your bankroll on one bet. So if he was longer than 3-1, it could have you betting half your bankroll on a 50/50 proposition, albeit a big overlay?
Anecdotal evidence to prove a point is fun, isn\'t it?
First of all, completely agreed that any system that has you betting 33% or even 15% of your bankroll should be set aflame instantly. Anyone who has spent time playing poker or sports betting will tell you the same story. No matter how sure you are about odds of success, you have to practice sound bankroll management, and most ppl would say to never have more than 5% of your bankroll in play at any time.
The other part of this discussion that is downright laughable is that there is an absolute right/wrong answer about \"fair odds\" on a horse. You could put 100 very astute handicappers in a room and undoubtedly get at least 5-10 different opinions on what the \"fair odds\" of a particular horse would be, assuming we are calling 6-5 different from even (which you have to if we are talking mathematical precision of your formula).
Taking subjective concepts and treating them like factual data points is a flashing warning light for a flawed methodology.
That is true, but it\'s not a linear progression, so it\'d have to be a really big overlay.
For instance, with an edge twice as large (fair odds 5-1, +200% edge), Kelly says to bet 40% of your bankroll. At 10-1 (+450% edge), it\'s 45%. Even at 100-1 fair odds, Kelly is just shy of 50%.
Having said that, I agree it seems like a big number. The reason is twofold:
1) The size of the overlay. A +100% edge is pretty rare. Most work out to be much less than that, typically +5% to +50% at best.
2) The low fair odds. This is a danger of Kelly. High probability horses by definition call for large Kelly wagers. That\'s one of the reasons why a lot of people use \'half Kelly\' or even \'one third Kelly,\' especially when dealing with horses they\'ve deemed odd-on propositions.
Tread - you are absolutely right, there is no \"correct\" fair odds line.
The important thing is that your own particular fair odds are performing as they should over time. That is to say, you\'re overlays are winning at the rate you think they should be. This is why it is so important to keep records so that you know you aren\'t overestimating your edge and overbetting your bankroll.
After putting a little more thought into this I confirmed that the Kelly formula does indeed turn out to be the optimal wagering strategy in this case. The key is that it calls for betting a fraction of your current bankroll, not of your original bankroll, so you never really run the risk of ruin, at least not in theory anyway.
I ran a small simulation under which wagers are made only on the rare situation's like Saturday's Tenango example, where you have a +100% edge on a 50/50 proposition calling for a Kelly bet of one third of your bankroll. I looked at what would happen if you had a really horrific start and lost the first 6 bets in a row (an extremely unlikely 1.5% chance of occurrence), followed by a more normal 50% alternating win/loss sequence for the next 50 wagers. With a tiny initial bankroll of $1,000, ignoring the effect on the pool, the results would look like this:
1) Wager $333. Lose. Balance: $667
2) Wager $222. Lose. Balance: $445
3) Wager $148. Lose. Balance: $297
4) Wager $99. Lose. Balance: $198
5) Wager $66. Lose. Balance: $132
6) Wager $44. Lose. Balance: $88
7) Wager $29. Win $87. Balance: $175
8) Wager $58. Lose. Balance: $117
9) Wager $39. Win $117. Balance: $234
10) Wager $78. Lose. Balance: $156
11) Wager $52. Win $156. Balance: $312
12) Wager $104. Lose. Balance: $208
13) Wager $69. Win $207. Balance: $415
14) Wager $138. Lose. Balance: $277
15) Wager $92. Win $276. Balance: $553
16) Wager $184. Lose. Balance: $369
17) Wager $123. Win $369. Balance: $738
18) Wager $246. Lose. Balance: $492
19) Wager $164. Win $492. Balance: $984
20) Wager $328. Lose. Balance: $656
21) Wager $219. Win $657. Balance: $1,313
22) Wager $438. Lose. Balance: $875
23) Wager $292. Win $876. Balance: $1,751
24) Wager $584 Lose. Balance: $1,167
25) Wager $389. Win $1,167. Balance: $2,334
26) Wager $778. Lose. Balance: $1,556
27) Wager $519. Win $1,557. Balance: $3,113
28) Wager $1,038. Lose. Balance: $2,075
29) Wager $692. Win $2,076. Balance: $4,151
30) Wager $1,384. Lose. Balance: $2,767
31) Wager $922. Win $2,766. Balance: $5,533
32) Wager $1,844. Lose. Balance: $3,689
33) Wager $1,230. Win $3,690. Balance: $7,379
34) Wager $2,460. Lose. Balance: $4,919
35) Wager $1,640. Win. $4,920. Balance: $9,839
36) Wager $3,280. Lose. Balance: $6,559
37) Wager $2,186. Win $6,558. Balance: $13,117
38) Wager $4,372. Lose. Balance: $8,745
39) Wager $2,915. Win $8,745. Balance: $17,490
40) Wager $5,830. Lose. Balance: $11,660
41) Wager $3,877. Win $11,661. Balance: $23,321
42) Wager $7,774. Lose. Balance: $15,547
43) Wager $5,182. Win $15,546. Balance: $31,093
44) Wager $10,364. Lose. Balance: $20,729
45) Wager $6,910. Win $20,730. Balance: $41,459
46) Wager $13,820. Lose. Balance: $27,639
47) Wager $9,213. Win $27,639. Balance: $55,278
48) Wager $18,426. Lose. Balance: $36,852
49) Wager $12,284. Win $36,852. Balance: $73,704
50) Wager $24,568. Lose. Balance: $49,136
51) Wager $16,379. Win $49,137. Balance: $98,273
52) Wager $32,758. Lose. Balance: $65,515
53) Wager $21,838. Win $65,514. Balance: $131,029
54) Wager $43,676. Lose. Balance: $87,353
55) Wager $29,118. Win $87,354. Balance: $174,707
56) Wager $58,236. Lose. Balance: $116,471
Comparing the Kelly results to other wagering strategies under this same scenario:
1) Kelly(33% of current bankroll): Min Balance: $88. Final Balance: $116,471
2) Betting 5% of current bankroll: Min Balance: $734. Final Balance: $6,699
3) Betting 2% of current bankroll: Min Balance: $886. Final Balance: $2,288
4) Flat Bet of $50 on each race: Min Balance: $700. Final Balance: $3,200
5) Half Kelly (16.5% of current bankroll): Min Balance: $335. Final Balance: $88,641
Even with an almost impossibly horrendous beginning where you lost over 90% of your original bankroll, you still would come out vastly farther ahead in just 50 bets using Kelly. Other percentage or flat betting strategies don't even come close.
Although it can be extremely volatile, full Kelly is clearly the optimal course of action if you have tested the performance of your overlays and are sure your edge is what you think it is.
The benefits of \"half-Kelly\" are also clearly evident. It captures much of the upside of full Kelly, while greatly reducing the volatility and max drawdown, thereby providing somewhat of a cushion for misjudgements in perceived overall edge or final odds, which is why so many practitioners use it rather than full Kelly.
The other thing to note is how quickly you reach pool size limitations when you have such a big edge like this. With a more typical edge like +10% to +25%, the swings would be much more moderate and it would take much longer to reach pool size limitations.
Do you have data that shows the rate at which 33% wager suggestions actually hit instead of making up hypotheticals? If I were cashing 50% of the bets I made on 3-1 to 5-1 horses, I wouldn\'t need Kelly to show a profit.
You\'re kinda missing the point. What he\'s talking about has nothing to do with handicapping, only betting. If your handicapping is off no betting system can help you.
I get the method behind the madness. But in reality, it\'s not going to work. Running simulations is one thing. I agree with betting more when you are winning and betting less when you are losing (percentage of bankroll). But anything that has you betting 33% of your bankroll on any single bet is going to wipe you out. I could almost guarantee it.
One big assumption here that is not being discussed is that you actually get the odds you think are going to get. So what happens when your 3-1 horse drops to 8/5 in the last flash after the leave the gate and you have 33% of your bankroll on it?
If you can find and bet with a reliable bookie or offshore site you could maybe eliminate some of this risk, but you are going to lose the vig and they probably have edge already built in anyway, or you may lose bigger when they shut down the site with your bankroll in hand. The wise money will eat a bookie up on horse racing anyway, and they know that. There was a place called the Sport of Kings years ago that had a lot of money behind it and would take any size bet on a horse race. I don\'t remember how long they lasted but it wasn\'t long.
You could maybe just focus on big races with big handles on big days to eliminate some of that last flash stuff. But even then, I remember putting a pretty big bet on Monarchos in the Florida Derby with 2 minutes to post at 5/2, and he wound up dropping to 8/5 after the gate opened.
I get the theory. But in practice it won\'t work. Just my two sense anyway.
mjellish Wrote:
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> One big assumption here that is not being
> discussed is that you actually get the odds you
> think are going to get. So what happens when your
> 3-1 horse drops to 8/5 in the last flash after the
> leave the gate and you have 33% of your bankroll
> on it?
mj - I couldn\'t agree more that being able to predict final odds accurately is vital to the Kelly formula - that\'s what got me started on this whole discussion in the first place. As I pointed out in my other posts, it can be done with surprisingly good accuracy by calculating the equivalent win parlays from the DD Will Pays:
Robo Betting (https://www.thorograph.com/phorum/read.php?1,82034,82201#msg-82201)
Is Kelly Dead? (https://www.thorograph.com/phorum/read.php?1,82455,82455#msg-82455)
Best,
Rocky
On their opening day, Sport of Kings took an enormous bet on an overnight race at Keystone . . . needless to say, the horse got there, by daylight, paid around 5-2, and it was all downhill, from there.
Mathcapper,
I went back and read your earlier posts.
I do think you can often predict approximate Win Odds by using the double pool. But the problem is they are approximate, and not always accurate. All it takes is one plunger in the double pool or win pool to shake things up. So when trying to use a money mgmt. system with a fixed set of rules, it doesn\'t matter if it is accurate 80% or 90% of the time. You need 100%, and you aren\'t going to get it. And my gut tells me that if you followed this system, there are going to be too many times where you are going to wind up with 33% of your bankroll or more on a bet (shear lunacy anyway) when after the last flash it turns out you should have had no more than 5%. A junk in = junk out type of deal. This is exactly why the math whizzes still haven\'t beat the game and probably never will. A true math based system really requires 100% certainty.
That being said, I really like what you have to say, and I think there is a lot of merit to it. Sound money mgmt. is very important. Excellent work, and a good discussion.
mj – Thanks for the kind words, glad I'm able to add my little bit to the vast compilation of knowledge you guys have put up on this board over the years.
Believe it or not, the math whizzes actually have beaten the game. Although not much is written about it publicly, what they've done is considered to be the most successful professional gambling efforts of all time.
I've got a good deal of research on the subject (whatever I could dig up anyway) if anyone's interested, but the article in the link below called "Horse Sense" provides an excellent synopsis of much of it (the sidebar entitled \"How to Play the Smart Money\" discusses Kelly, although they incorrectly state that you should bet your edge when it should be your edge/odds).
As far as predicting final odds (and more importantly, estimating fair odds), you don't need to be right 100% of the time, you just need to be sure that your estimates are in-line on average over the long-term.
The example I gave that called for wagering 33% of your bankroll is a very rare occurrence that only comes up when you have a really big edge coupled with a very high probability of winning. As the simulation I ran showed, you never really run the risk of ruin anyway because you're only betting a fraction of your current bankroll, not your original one. So as crazy as it may sound, following the Kelly formula is still the proper course of action in that case to optimize your bankroll in the long-run.
As my \"worst-case\" simulation showed though, it can be extremely volatile, which is why even the math whizzes use half-Kelly instead of strictly following full Kelly. It's really a moot point anyway, because that situation only comes along once in a blue moon. A 20% edge on a 5-1 shot calling for betting 4% of your bankroll is much more typical of the kind of wagering you'd end up doing under Kelly.
Contingencies (http://www.contingenciesonline.com/contingenciesonline/20090506#pg23)
Have you read Chapman\'s paper I assume?
Did Woods and Benter ever use their programs on U.S. races?--I was unclear on that from the article but didn\'t think they did based on what I read.
Fair - I have read the Chapman paper, yes. It\'s a strictly academic treatise though and the math is pretty deep. Benter\'s follow-up paper called \"Computer-Based Horse Race Handicapping and Wagering Systems: A Report\" is a much more lucid and informative piece readable by us laymen. They can both be found in Efficiency of Racetrack Betting Markets.
From what I understand, Benter has been playing in the North American market for at least a decade now. He has a staff of only 3-4 people and has said himself that a typical team wagers around $1M per day across roughly 150 races, or around $350-$400M per year. Woods never left Hong Kong.
Rocky
Efficiency of Racetrack Betting Markets (http://www.amazon.com/Efficiency-Racetrack-Betting-Markets-Edition/dp/9812819185/ref=sr_1_1?ie=UTF8&qid=1378331930&sr=8-1&keywords=efficiency+of+racetrack+betting)
Not to belabor the point, but your \"worst case\" scenario depicted a person who was absolutely perfect at identifying fair value even money horses, because those horses won 50% of the time.
I would love to see a significant amount of data captured around horses that were identified at fair value of even money and how often those horses won, by person, to see who is truly good at assessing fair value and who isnt. Where you assessed the value before the race and documented it, regardless of whether or not you placed a bet, and then how often those horse actually won.
If you got 100 astute handicappers and did this long enough, say a couple hundred even money horses identified per person, Im betting that the results would be all over the map in terms of %won.
Although if you averaged all of them out, you are correct that it might approach something like 50%, that doesn\'t help ME as an individual in following the criteria if my specific results are something much more or much less than 50%.
It\'s too bad it is not practical to do a study like this, because I think the results would be very interesting.
Not my observation. You keep saying it, but I look at these quite often and there is wide variance in the \'will pay implied odds\' vs the wins odds in the next race.
Better than nothing but not reliable at all if you\'re looking for near exact odds to use.
Boscar - How exactly are you calculating the implied odds?
If you\'re using the first leg winner's odds along with the DD Will Pays from that winner it\'s inadequate.
For one thing, if that winner\'s odds weren\'t quite the same in the win pool as they were in the DD pool, then the implied odds for all the horses in the 2nd leg will be off.
The implied odds can also be off when you only use the DD Will Pays for just one horse, especially if the winner of the first leg was a longshot (favorites in the 2nd leg tend to get underbet in the doubles, while longshots get overbet). I\'ve found that using an average of the first 3 favorites from the first leg yields the best results.
Also, you need to make sure you\'re making the necessary adjustment for takeout when calculating the equivalent win parlays used to estimate the implied odds.
At NYRA tracks, the DD\'s should pay +15.5% more than the equivalent win parlays because of the difference in takeout (16% on win bets, 18.5% on DD bets) and the fact that you\'re only getting hit with the takeout once:
DD payout = (1-.185)/(1-.16)^2 - 1 = +15.5% more than equivalent win parlay
The process above really necessitates the use of a spreadsheet, but it is a closed-form solution and I find very good overall correlation with it. There are always some horses that are a bit off, but getting individual precision is not what's important, it's the overall averages that are important. For instance, when I look at all the horses that were 7/2 in the doubles over time, I find that the average final odds for all those horses was exactly 7/2. Same for 2-1, 10-1, 4/5 and pretty much everything else.
Please forgive me if these are things you're already aware of and have already taken into account.
Best,
Rocky
TreadHead Wrote:
-------------------------------------------------------
> I would love to see a significant amount of data captured...where you
> assessed the value before the race and documented it, regardless of
> whether or not you placed a bet, and then how often those horses actually won.
Tread – This is exactly what you need to do for yourself if you want to use the Kelly Criterion effectively.
What you almost certainly will find is that your overlays are not winning at the rate you think they should be.
Until you've gotten your handicapping to the point where you see that your overlays are winning close to the rate at which your fair odds imply, you don't want to even think about using the Kelly formula (or any other progressive wagering strategy for that matter).
\"From what I understand, Benter has been playing in the North American market for at least a decade now. He has a staff of only 3-4 people and has said himself that a typical team wagers around $1M per day across roughly 150 races, or around $350-$400M per year. Woods never left Hong Kong\"
A computer whale rebater out of the Dakotas claims there is no way for US pools to absorb the volume of a Benter type handle.Know of at least two math based computer software groups that went bust in the last few years in spite of very sophisticated \"Benter\" type software being employed.
Believe TGJB may also know of bust outs with a similar profile.Bee says the Bowery upscale now,so I\'ll guess the \"math/computer\" horse players
are now hanging under the Brooklyn Bridge.
Given the onerous takeout,pool size and the ever present X factor, US racing is indominiteable regardless of any system/discipline.
Not sure if or how the US pools are able to absorb that kind of volume, but those words came directly from Benter\'s mouth when he was asked what a typical computer team might bet in the North American market.
I\'m not surprised to hear other computer teams have gone bust. Many would-be copiers have tried but could not get their R-squared high enough to show a consistent profit.
As far as the U.S market being indomitable,according to Benter that\'s not true:
\"Teams are playing around the world in most of the big racing markets very successfully. I made a telephone call last night to a fellow and asked him if he\'d ever come across a racing market he couldn\'t beat with a computer system and he said no. In all of the ones he tried, which were many, they\'ve always been able to beat it using one of these systems. So this seems to be something which works more or less everywhere.\" - Bill Benter, 12th International Conference on Gambling & Risk Taking
Yes, I am aware of all those factors.
And while it may be true that on AVERAGE, the odds converge, individual races will have a wide variance, which was my main point.
I don\'t think Kelly works well under that scenario, but since I don\'t use it, I leave that problem to those that do.
I see some very large batch bets come in, at all mtp times , that routinely CRUSH the returns on exacta/dd combinations.
Unless these combinations were massive overlays to begin with , I don\'t see how they are not squeezing the value right out of them.
Something paying 200 when it would have paid 350 without you, well, you better be good. Could be they are agnostic about the payoffs, concerned only about the net return on the race.
\"Could be they are agnostic about the payoffs, concerned only about the net return on the race\"
Box,
You just described the rebate whale who is working with a software program.
Mike
Yes, I knew that, but still, on occasion , they absolutely crush certain numbers to the point of absurdity.
And they rarely win.
It may not be just the arb guys trying to grind out rebates. What could also be happening is that because these fundamental modeling-based computer teams are betting so much money, pool size is their limiting factor. So rather than using the Kelly formula of edge/odds, they use a formula that maximizes their expected value.
So if they assess fair odds for a particular exacta combination at 12-1 and it's currently 20-1, they don't just bet it down until it's no longer 20-1, they bet it down to the point that maximizes their expected return, which might be, say 14-1.
The specific formula used is quite daunting, so don't say I didn't warn you, but here it is:
Maximum EV = -Ai + sqr rt{[Aip(Σ(Aj) – Ai)(1-T)]/(1+p(1-T))}
Don't ask me what the variables mean because I have no idea, all I know is that it maximizes their return on the bet.
Box,
Agree,but the pro rebater is so far hedged into the pool that the \"crush\" of a certain combo doesn\'t matter. At the end of the race,if they can collect 90+% of their total wager outlay,they beat the race, assuming a rebate of 10+%.Huge grind, no guarantee of long term profit.
If you are a player, light a candle for all whale rebaters who add great liquidity and depth to the shrinking US pools, down app 2 billion from its peak.
Mike
Boscar – I understand your point, but that kind of individual-race precision is unnecessary. No one's ever been able to be that precise. There have always been last minute changes in odds, yet Kelly practitioners have been and continue to use the formula with great success as long as they know that their overall edge is what they think it is.
Some Kelly users don't even look at individual races. They base their bets on their overall edge and their overall odds. For instance, they may know that their long-term ROI on win bets is +10% and that the average odds of all the horses they wager on is 5/2. So their Kelly bet is the same for every race: +10%/2.5 = 4% of their bankroll. This isn't the best way to utilize Kelly, but it's another way to do it.
Regardless, the final odds of any particular race isn't all that important. If you have a +10% edge and you're only betting what you think will end up being 5/2 shots, it doesn't really matter if one particular horse goes off at 2-1 or 8/5, while another one goes off at 3-1 or 7/2. That just means that sometimes your edge is a little bigger than what you thought it was going to be and sometimes it's a little smaller. What's important is that on a long-term basis, your edge really is +10% and not -5% or -10%. The fact that they go off at 5/2 on average indicates that you have optimized your returns using the Kelly formula.
I\'ll tell you, man, if the NYRA thing and that insane surtax on ADW bets go through, the game may be in real trouble. Overall this is one amazing clusterf--k, how not to run a business. How to run it into the ground.
Agree with much of what Crist says but NYRA needs to get real. The self praise reaped upon itself by NYRA CEO Chris Kay during the \"average\" statistical SPA meet is transparent and insulting to the the many who support NY racing at the windows.An all out NYRA shill-fest from CEO Kay to the talking heads on the TV feed...NYRA racing is wonderful.Many of us who wager $millions do not agree!
It seems that NYRA\'s primary mission is to get the financials in order so that Cuomo/Skorton/Megna et al can execute their plan to jettion NY racing.
DRF
Steven Crist:State making NYRA a tough sell
People who work at the New York Racing Association understandably bristle when anyone says that the annual Saratoga meeting is essentially a foolproof operation that runs itself. When I worked there more than 15 years ago, I bristled, too, arguing how hard the employees worked and how much time and effort it took to put on the show.
The truth is that both of these arguments are correct. Everyone at the NYRA does work hard during Saratoga, but it's still pretty hard to mess things up. Yes, there's too much racing and particularly too much bad racing, and a host of small annoyances that customers must navigate, but the numbers year in and year out suggest that the whole proposition works pretty well regardless of who is running the place. Over the last three years, Saratoga has posted essentially the same business numbers under three entirely different management scenarios – under an entrenched and experienced management team in 2011, under a leaderless and shorthanded crew in 2012, and under a whole new board and chief executive for this year's 40 days of sport.
The 2013 Saratoga meeting will be best remembered for two things: extremely good racing in its biggest events, as is often the case, and almost freakishly good weather, which is rarely the case. Just as the weather finally returned to its usual poor form on closing weekend, however, the meet also ended on some unsettling notes – not on the racetrack, where stellar performances by rising stars in the juvenile ranks concluded the meet on a hopeful note, but in the boardroom, where the murky intentions of New York state, which took over the NYRA a year ago, became a bit clearer in an Aug. 28 board meeting.
Most of that meeting was devoted to an excessive video tribute to the meeting and replays of the many ceremonies and photo-ops staged by new management, but things suddenly shifted gears toward the end. The state's representatives laid out a specific goal of making NYRA profitable without the Aqueduct racino revenues that have buoyed the game for the last two years, a prelude to a reprivatization plan that is supposed to be formulated by 2015.
Reprivatization is either the light at tunnel's end, or an oncoming train, depending on what you think it means. The best-case scenario is one in which the state realizes it has a good thing going and that the best plan ahead is to keep NYRA a non-profit operation, putting any profits back into the game, preserving a cherished cultural institution, and continuing to support hundreds of thousands of jobs in direct and related industries. The worst involves the delusional notion of some politicians that the enterprise can be repackaged and transformed into something that can be sold to private operators.
It seems to me that we already wasted more than a decade on the latter notion, when the state did everything it could to discredit NYRA and put the franchise out to bid. For those who have already forgotten, here's what happened: Nobody was interested in bidding unless they could operate casinos at the tracks and keep most of the profits. Those bidders professed some phony affection for the game that most people saw through from the start, and when it became obvious that there was no profitable racing enterprise to be sold, every interested bidder dropped out except one – the NYRA, which actually wanted to continue putting on the best racing and use casino profits only to improve the sport and the facilities.
Nothing has changed to make some sort of "sale" of New York racing any more viable in 2015 than it was in 2005 or 1995. The land and the possibility of doing something different with it are always going to be more valuable than anything the racing can generate. Any plan to sell New York racing is merely a long-term plan to replace it with something else.
Even if it were an attractive business proposition, which it never will be, you would be buying a phantom – something that can be transformed overnight by legislators from marginally profitable to virtually worthless. State government has repeatedly proven that even written contracts guaranteeing racing days or casino revenues can and will be changed at the whim of any incoming administration.
Still, here we go again. NYRA's primary mission apparently is going to be cutting costs, despite finally having the revenue to make critically needed improvements, so that the state can claim it has worked its political magic and created something of value to sell. It feels like the beginning of a long and doomed charade.
miff Wrote:
-------------------------------------------------------
> Agree with much of what Crist says but NYRA needs
> to get real. The self praise reaped upon itself by
> NYRA CEO Chris Kay during the \"average\"
> statistical SPA meet is transparent and insulting
> to the the many who support NY racing at the
> windows.An all out NYRA shill-fest from CEO Kay to
> the talking heads on the TV feed...NYRA racing is
> wonderful.Many of us who wager $millions do not
> agree!
>
> It seems that NYRA\'s primary mission is to get the
> financials in order so that Cuomo/Skorton/Megna et
> al can execute their plan to jettion NY racing.
>
>
> DRF
>
> Steven Crist:State making NYRA a tough sell
>
> People who work at the New York Racing Association
> understandably bristle when anyone says that the
> annual Saratoga meeting is essentially a foolproof
> operation that runs itself. When I worked there
> more than 15 years ago, I bristled, too, arguing
> how hard the employees worked and how much time
> and effort it took to put on the show.
>
> The truth is that both of these arguments are
> correct. Everyone at the NYRA does work hard
> during Saratoga, but it's still pretty hard to
> mess things up. Yes, there's too much racing and
> particularly too much bad racing, and a host of
> small annoyances that customers must navigate, but
> the numbers year in and year out suggest that the
> whole proposition works pretty well regardless of
> who is running the place. Over the last three
> years, Saratoga has posted essentially the same
> business numbers under three entirely different
> management scenarios – under an entrenched and
> experienced management team in 2011, under a
> leaderless and shorthanded crew in 2012, and under
> a whole new board and chief executive for this
> year's 40 days of sport.
>
> The 2013 Saratoga meeting will be best remembered
> for two things: extremely good racing in its
> biggest events, as is often the case, and almost
> freakishly good weather, which is rarely the case.
> Just as the weather finally returned to its usual
> poor form on closing weekend, however, the meet
> also ended on some unsettling notes – not on the
> racetrack, where stellar performances by rising
> stars in the juvenile ranks concluded the meet on
> a hopeful note, but in the boardroom, where the
> murky intentions of New York state, which took
> over the NYRA a year ago, became a bit clearer in
> an Aug. 28 board meeting.
>
> Most of that meeting was devoted to an excessive
> video tribute to the meeting and replays of the
> many ceremonies and photo-ops staged by new
> management, but things suddenly shifted gears
> toward the end. The state's representatives laid
> out a specific goal of making NYRA profitable
> without the Aqueduct racino revenues that have
> buoyed the game for the last two years, a prelude
> to a reprivatization plan that is supposed to be
> formulated by 2015.
>
> Reprivatization is either the light at tunnel's
> end, or an oncoming train, depending on what you
> think it means. The best-case scenario is one in
> which the state realizes it has a good thing going
> and that the best plan ahead is to keep NYRA a
> non-profit operation, putting any profits back
> into the game, preserving a cherished cultural
> institution, and continuing to support hundreds of
> thousands of jobs in direct and related
> industries. The worst involves the delusional
> notion of some politicians that the enterprise can
> be repackaged and transformed into something that
> can be sold to private operators.
>
> It seems to me that we already wasted more than a
> decade on the latter notion, when the state did
> everything it could to discredit NYRA and put the
> franchise out to bid. For those who have already
> forgotten, here's what happened: Nobody was
> interested in bidding unless they could operate
> casinos at the tracks and keep most of the
> profits. Those bidders professed some phony
> affection for the game that most people saw
> through from the start, and when it became obvious
> that there was no profitable racing enterprise to
> be sold, every interested bidder dropped out
> except one – the NYRA, which actually wanted to
> continue putting on the best racing and use casino
> profits only to improve the sport and the
> facilities.
>
> Nothing has changed to make some sort of "sale" of
> New York racing any more viable in 2015 than it
> was in 2005 or 1995. The land and the possibility
> of doing something different with it are always
> going to be more valuable than anything the racing
> can generate. Any plan to sell New York racing is
> merely a long-term plan to replace it with
> something else.
>
> Even if it were an attractive business
> proposition, which it never will be, you would be
> buying a phantom – something that can be
> transformed overnight by legislators from
> marginally profitable to virtually worthless.
> State government has repeatedly proven that even
> written contracts guaranteeing racing days or
> casino revenues can and will be changed at the
> whim of any incoming administration.
>
> Still, here we go again. NYRA's primary mission
> apparently is going to be cutting costs, despite
> finally having the revenue to make critically
> needed improvements, so that the state can claim
> it has worked its political magic and created
> something of value to sell. It feels like the
> beginning of a long and doomed charade.
Why is Crist afraid to spotlight the blatant re-trade the state reps are trying to do? He hints at it, but does not cast the spotlight on it. Also, where is Drape? The guy cannot move fast enough to heap scorn on the NYRA for its alleged wrongdoing, but vanishes when it is the innocent victim.
What business ON EARTH would surrender an enormous share of its revenues in exchange for nothing? As I understand it, the NYRA is currently entitled to revenue from the slots -- earning that entitlement by (agreeing to allow) (not challenging) the embedding of the slot business within it. Now, the NYRA just wants to give up the revenue that it is dearly entitled to? Isn\'t that pretty close to insanity?
What if whatever state government body that owns state parks just decided to start auctioning off parks for private development? Jones Beach is now being taken away from the people and being sold off to the rich? The outcry would be deafening. The state body with jurisdiction over Jones Beach State Park owes its fealty to the people of New York who enjoy that park. That body, whatever it is, would and should vehemently fight any attempt by the state to take Jones Beach away from the people and sell to the rich. And, if board members of that body tried to do the opposite, they would be sued into oblivion.
This is basically what the NYRA is doing -- they have board members recommending hari-kari. If it were the Jones Beach situation, how fast would board members making these suggestions be sued? Two seconds? The only difference here is that it is a different group of people who enjoy the beach versus the group that enjoys horseracing. One group is politically acceptable and the other is despised.
If my analysis wrong, what am I missing/getting wrong? Realize I am preaching to the choir here, but in any other field of human endeavor, the outcry would be immediate and defeaning.