Archives for December 2011

TURF SPORTS

Media reports about the global business of golf are full of references to its diminishing fortunes. The gloomy tone should be familiar in horse racing circles. Golf, Inc. magazine lamented: “The dark economic clouds that have long threatened the golf industry are now fully upon us. The unemployment and financial wakes of their storm are splashing over every golf course and golf-related company in the world…reduced rounds, vanishing members, layoffs, or product closures.”

The near-term anxiety in both golf and horse racing is that the core customer base of older patrons is shrinking and people in their 20s and 30s are not taking up the sport like they once did. Retiring baby boomers are unquestionably curtailing their golfing, likely due to living on reduced incomes and incurring physical ailments. The longer-term looks even more worrisome—a study by the National Golf Foundation found that the number of golfers between the ages of six and seventeen decreased from 3.8 million in 2005 to 2.9 million in 2008.

Beginning with the mid-1980s until the turn of the century, the number of golfers in the United States grew at a compound rate of three percent annually. However, since 2000, the trend is negative. The number of rounds played has declined by almost six percent resulting in over 800 golf course closures. From 2005 to 2009, the golfer population decreased by over 13 percent to 26 million players.

Most of the proposed solutions to golf’s problems have already been recommended for horse racing. For instance, the Golf Inc. feature “How to Fix the Golf Industry” suggested four common-sense initiatives that are apropos for racing, such as providing a welcoming experience to novices, encouraging veteran golfers to play with family and friends, improving golf courses as hospitality centers, and using celebrities as goodwill ambassadors to reach out to mass audiences.

Like racing, golf is also trying to innovate. For instance, Jack Nicklaus is experimenting with rules adaptations in an effort to speed up the game and make it less difficult. Recently, Nicklaus’ Muirfield Village Golf Club held truncated 12-hole tournaments that players had to finish in 2 1/2 hours lest they be penalized one stroke for every five minutes over the time limit. Another modification was that the holes on the putting greens were 8 inches in diameter rather than the regulation 4 ¼ inches.

Golf and horse racing are tradition-steeped pastimes struggling to attract patrons. Purists undoubtedly look with disdain at dramatic departures from convention such as clocked 12-hole tournaments, exchange wagering, and a nighttime Kentucky Derby. Yet if an eroding fan base is to be replenished, these classic turf sports must continue to acclimate to the times while retaining the essential qualities that made them so popular in the first place.

Copyright © 2011 Horse Racing Business

Originally published in the Blood-Horse. Used with permission.

A NEW BET PROPOSAL, BY JOHN G. VEITCH

Thoroughbred horse racing is facing many challenges. For example, as of October 2011, wagering on U.S. races declined by 7.4% year-to-date, and U.S. race days were down 4.68%. Some of this is the result of weak economic conditions, but generally, competition from other activities, gambling and non-gambling, has been siphoning off both existing and potential fans.

Hypotheses and research have been published to help explain the reasons for the decline. In addition, various efforts and innovations have been undertaken to stem the downturn, like the creation of TVG and HRTV, new betting options such as the Pick 6 and the 10-cent Superfecta, and Churchill Downs’ creation “Downs after Dark.”

Competition from alternative gambling–primarily the rapid proliferation of casinos–is most likely the biggest factor in the erosion of racing’s share of the gambling dollar. (As reported by the McKinsey & Company report to the 2011 Jockey Club Roundtable, commercial casinos grew 34% between 2001 and 2011.) When compared to betting on horse races, games at casinos offer little down time, and for the most part, less complicated betting. For example, one can just push a button on a VLT.

The racing industry needs to offer more alternative betting options (as well as less time between races) to spur fan interest. A play that, to my knowledge, has never been used, is an adaptation of the over/under (O/U) from sports betting, and centers around the time of the race.

This bet would allow a participant to place a wager based on the estimated or “par” time of the race as set by the track. It could be structured in two ways. First, a straightforward O/U based on the fractional times and final time of the race. Second, a more sophisticated O/U based on the fractional times and final time of the race, wherein the bettor wagers on the exact time to a tenth of a second, with corresponding odds.

These wagers offer racetracks and advance-deposit-wagering outlets a solution to a major problem; providing the betting public with multiple options in short fields. Even a three-horse field yields numerous betting options, and in larger races, betting options proliferate.

Here is how this suggestion could work. The simplest wager allows an O/U bet on the par time set for the race by the track. The odds would depend on how much is bet on the under, par, or over. The sophisticated O/U offers wagers for multiple times, in 0.1 second intervals for the under or over as well as the par time.

As an example of the sophisticated O/U, suppose the track sets the par time at 1:22.0 for a 7-furlong race, as well as establishes the odds for the par time. In addition, it offers odds and times for 0.1 second times faster or slower than the par time. The par time might have odds of 2-1, while 1:22.1 could be 5-2; 1:22.2, 3-1; and so on. Or, for a faster time, 1:21.5 might have odds of 10-1. Also allow betting on split times and this race has a plethora of betting options.

Downsides to this wager are minimal. Trying to fix a race to collect on an O/U bet would be unlikely, as getting a horse to run a specific distance in an exact time is nearly impossible. Tracks that implement such a bet would need some modification to their tote boards, and software, but it should be easy to adapt to an ADW platform. It also provides a hedge bet against a long shot. Who cares if the 50-1 shot won? You cashed on the Over-Under!

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John G. Veitch of Saratoga Springs, NY has been a horse-racing fan for nearly 40 years. He is a TOBA member, owner in several partnerships–including Bourbon Lane, Big Horse, and Pennywise Stable–and his family’s racing history dates to the 19th century.

Copyright © 2011 Horse Racing Business