SHOULD TV BETTING ANALYSTS HAVE “SKIN IN THE GAME”?

Andy Serling, a television handicapper for the New York Racing Association, recently opined (on At the Races with Steve Byk) that people whose job it is to recommend horses to bet on should have skin in the game.  That is, they should risk their own money on their picks.  What percentage of the on-air hosts at the various racetracks and at TVG do so is unknown, but the guess here is that the percentage is very small.

Is Mr. Serling correct?  I believe he is, with one modification: analysts should at least reveal to viewers if they have backed each and every pick with a bet.

On Cable television shows like Fox Business or CNBC, whenever guest analysts appear to discuss and recommend stocks to buy, a graphic is often shown to viewers depicting whether the analyst or a member of his/her family own a stock being endorsed.  If the analyst does not own a position, the obvious question is why not?  If he or she does have an ownership stake, this signals confidence in the pick or, alternatively, that the analyst may be hyping the stock to run up its price.  If an analyst’s ownership position is not revealed at all, his or her recommendation is manifestly not as credible.

Before purchasing a company’s stock, a skilled investor knows to access publicly available information pertaining to how many shares of the company’s stock insiders hold.  A large ownership stake by executives and board members is a favorable finding whereas token ownership or selling signals caution.  Recent purchasing activity by insiders is another indicator of the confidence they have in the company’s future.

Over time, a horse bettor following the picks of a TV analyst can judge the analyst’s skill.  But it would be informative if the analyst were to let viewers know whether he or she personally has backed a horse and even for how much money.

Copyright © 2021 Horse Racing Business

WORLD-CLASS HORSE RACES TO LOOK FORWARD TO IN WINTER 2021

Throughout 2020, horse racing around the globe was, for the most part, able to operate without fans in attendance.  The same is true so far in 2021.  For example, although British Prime Minister Boris Johnson has locked down the nation until at least mid-February due to a spike in coronavirus cases, horse racing is allowed to proceed.  Likewise, In Ireland, government authorities have restricted or temporarily banned most sporting events, with horse racing being one of the few exceptions. 

Technology that allows fans to conveniently watch and bet remotely with top horse racing sites has enabled horse racing to avoid the shutdowns and severe financial difficulties of sporting events that depend heavily on ticket and concession revenues from in-person fans.  Prior to the pandemic of 2020, the majority of pari-mutuel handle came from off-track betting and this turned out to be a huge advantage in weathering the pandemic storm. 

It will take time for the world to vaccinate enough people to return to a semblance of pre-pandemic conditions, so most sporting events for winter 2021 are likely to ban or limit the number of fans in attendance, or cancel.  Fortunately, horse racing aficionados can look forward to a winter of premier cards from the United States, Great Britain, and the Mideast.

The calendar kicks off with the Pegasus World Cup Invitational and the Pegasus World Cup Invitational Turf from Gulfstream Park in Florida on January 23.  The former is contested on dirt with a $3 million purse and the latter is a $1 million race on grass.

Then, the spotlight turns to King Abdulaziz Racecourse in Riyadh, Saudi Arabia, for races held on February 19 and 20.  The second renewal of the Saudi Cup, the world’s richest race with a purse of $20 million, is the feature on February 20.  Over the two-days of racing, purses are worth an astonishing $30.5 million.  In 2020, 64 foreign entries from ten countries competed in seven international races and culminated with the Saudi Cup.

On March 27, the Dubai World Cup is set to return after being cancelled in 2020.  Nine races with $35 million in purses are run on a single day at Meyden Racecourse.  The showcase is the $12 million Dubai World Cup.

Steeplechase or “jump” fans always look forward to the four-day, 28-race Cheltenham Festival in England, which is scheduled for March 16-19.  The Cheltenham Gold Cup is the most prestigious race.  It is highly problematic whether fans will be able to attend, but, if not, they can watch and bet remotely.

Copyright © 2021 Horse Racing Business

OVERLOOKED ATHLETES TURN INTO STARS

When quarterbacks Josh Allen of the Buffalo Bills and Baker Mayfield of the Cleveland Browns led their teams to places in the 2020/2021 National Football League playoffs, it reminded me again about how exceptional athletes, human or equine, are often overlooked early-on by talent evaluators with a reputation for expertise.

Josh Allen in high school sent approximately 1,000 emails to college coaches inquiring about playing for them.  Only the University of Wyoming showed interest. After a year in junior college, Allen transferred to Wyoming and took the Cowboys to a conference championship and two bowl games.  Drafted by the Bills at number seven in the first round of the 2018 NFL draft, Allen developed into a franchise-caliber quarterback.  Similarly, Browns quarterback Baker Mayfield was a walk-on at Texas Tech University before transferring to the University of Oklahoma, where he won many honors including the coveted Heisman Trophy.  He was drafted first overall by the Browns in 2018. 

Many such cases can be readily cited in any sport.  How in the world did Michael Jordan get rejected by his junior high’s basketball coach? Johnny Unitas was one of the greatest NFL quarterbacks of all time, yet he was virtually unwanted by the pros out of college.  Tom Brady, arguably the greatest NFL signal caller ever, was a sixth-round pick of the New England Patriots. The list goes on.

In horse racing, John Henry and Seattle Slew were low-priced yearlings and Sunday Silence and Northern Dancer did not meet modest reserve prices at auction and were returned to their consigners.  The recently retired Maximum Security, who won over $12 million on the track, as a 3-year-old ran in a $16,000 claiming race.  Tiz the Law, also recently retired with earnings of over $2.7 million, was deemed insufficiently qualified for the 2017 Saratoga Fasig-Tipton select sale of yearlings and instead brought $110,000 in the Fasig-Tipton sale of New York breds.

No matter the sport, the potential is always there to find a diamond in the rough.  In horse racing, a seven-figure yearling at auction may temporarily get the publicity.  But two or three years later, a lesser purchase, or a reserved not attained, may get star billing.  This is the hope and challenge of buying a future racehorse.

Copyright © 2021 Horse Racing Business