MORE ON RACETRACK PARI-MUTUEL WAGERING

One of the principal findings of the McKinsey & Company study presented last Sunday at the Jockey Club Roundtable is that handicapping and betting on horse racing can be intimidating to people who are not familiar with the processes. The McKinsey consultants showed a video clip of a man in his early-to-mid 20s trying to figure out how to place a bet on an ADW site (you can see it at the Jockey Club presentation that is available at their website). It took him about 45 minutes and he was still flummoxed. This is why the Jockey Club is funding a free-to-play practice site.

I have observed countless people who frequently buy lottery tickets and have rarely or never been to a racetrack. They might buy a pari-mutuel ticket on horse racing  if it did not entail them going to a racetrack or opening an ADW account and if the potential payout was large enough. Never mind that their chances of winning were exceedingly slim. The slots areas of racinos would be naturals for selling big-payoff pari-mutuel tickets based mostly on chance rather than handicapping skill.

I have never suggested or recommended that racetracks change the present wagering format for experienced bettors. What I did suggest is that wagering options should be expanded to make them attractive to people who can’t or don’t want to handicap for various reasons. Any consumer product company is always looking to expand its product line to attract new segments of customers. Racing must not exclude the millions of people who will not wager on the sport if they have to handicap and cope with confusing betting requirements. What is routine to seasoned racehorse bettors is complex to the neophyte.

Copyright © 2011 Horse Racing Business

Comments

  1. Bill,
    In order to have mega-payouts you have to have mega-handle. What exactly are you suggesting? Stronach’s quadruple quadfecta?

  2. And furthermore, how do you devise a wager that isn’t dependent on handicapping? Do you disconnect the wager from race results? And if not, how is what you are proposing any different from any current wager? Nothing stops people from betting numbers at random on any super-exotic wager.

  3. Bill Shanklin says

    Kyle,

    Sweden’s v75 bet is an example of what I am suggesting. Here is a link explaining it: http://news.tabonline.co.za/ToteRules/V75/tabid/616/Default.aspx

    Some people say it would not work in the USA because of small field sizes. But if the tracks got together with horsemen and decided to make it work in the name of saving the sport, it just might work. You could even combine Thoroughbred races with harness races, if need be.

    The whole idea is to create a novel bet or bets that would attract lottery and slots players, who would not otherwise bet on horse racing.

    Market research among horse players would be likely to produce some creative ideas about how to craft a bet with a huge handle that would involve a high degree of luck. Let the handicappers do their WPS and exotics but add some bets where skill does not matter all that much.

  4. Am I missing something or is that just a Pick 7 with a $2 minimum?

  5. Bill Shanklin says

    Kyle,

    Yes. But the bet is made difficult and the pot rich by the fact that each race has 15-16 starters. The racetracks and horsemen in Sweden make sure the races fill with this many starters. You can see that there are strict rules for how scratches are handled. I suggested in a magazine article some time ago that racetracks could pay owners to enter horses, rather than the other way around, so that there is plenty of incentive. Even a last place finish would be profitable for the owner. This bet would need wide distribution and promotion on ADWs, at the racetracks, casino sports books, and especially in the slots and card areas of racinos. Some state lotteries might cooperate as well. It would take time to get the word out about the bet. A player could buy a ticket just like one can buy a lottery ticket–by specifying numbers or having a computer generate the picks. When I have asked some racetrack executives about this bet, I only get objections to why it can’t be done. Sweden does it. This is the type of innovation needed for outreach to non-horseplayers. I don’t know what would work and what would not, but experimentation is needed and there will be more failures than successes. The new product failure rate in corporate America is 80% or higher.

  6. A few thoughts: I am for less racing and bigger fields. I am for “participation purses”, for want of a better phrase. Saratoga does a little bit of that. And so did Monmouth last year.
    The Swedish use of the morning line favorite as the substitute for a scratched horse in a horizontal wager like the Pick 6 or V75 is an interesting concept I think I’d be in favor of.
    The V75 seems like Sweden’s lottery. I assume they have a wide distribution network. Racing in the States is tacitly “forbotten” from competing directly against the state lotteries. Don’t see that changing anytime soon.
    If we are going to get a lottery with crossover appeal I’d like to see it be a Kentucky Derby lottery. I’d run it through Powerball. It would involve the top six to eight finishers. Before the Derby draw players could pick their own numbers. After the draw only quick picks would be allowed.

  7. Bill Shanklin says

    Kyle,

    Excellent points you make about field sizes, distribution and the Ky. Derby lottery. Interestingly, in Ohio, racetrack slots will be administered by the Lottery Commission, so in a case like this there is the opportunity at least to coordinate some plays involving both racing and the lottery and leverage the lottery’s distribution network.

  8. NYS Division of the Lottery is technically in charge of the VLT’s in New York, too. There has been some minimal cross-promotion between NYRA and the Lottery over the years, nothing more. Actually, that relationship makes direct competition even less likely. It has always been the case that in an unfettered environment the obvious market for racing to have sought would have been lottery players. It would have been easy and straightforward to show that a trifecta or superfecta was a better bet than the Pick 3 or Pick 4 daily lottery drawing. The tagline, “We keep 25 cents of your dollar. They keep 50.” That campaign never saw the light of day and never will.

  9. Bill Shanklin says

    Kyle,

    Seems like you have thought a lot about the issues facing racing and have some promising ideas. Racing needs strategic thinkers.

  10. It will never happen until a Novice/Gambler maybe NOT a novice can go into 7/11 and bet a Race

    That’s what horse racing needs,
    and they need to make a betting menu that will atrack people at 7-11

    Nobody goes to the track anymore,

    Racing has to wake up and make a betting menu so people at 7-11 can play,

    The GOVT did this, it’s called KENO.

    and the GOVT is taking your betting dollars

    Wake up Race Tracks,

    you got to compete for the betting dollar

  11. Ride The Rails says

    Racing needs to change the way it’s presented or this younger generation will never get invloved. Youngsters cannot & will not sit around to play 2 races per hour. Tracks should run 3 days per week Friday night, Sat & Sun. 15 race cards 15 minutes apart. Smaller venues can find thier niche mon, tues wed etc.

    Offer Win wagers only, no one cares anymore about place & show with a 3.20 payoff. In addition to the win wager offer just one exotic bet. Like a DD in race one, one exacta in race two, one tri in race three, one super in the fourth etc. One or two pick 3s on the entire card. A twin trifecta in race 9 & 10. One late DD. Imagine the pool size of each of these bets!

    If you want to draw people to the live venue offer a 10% take out for on-track wagers. While you’re at it build a Imax theater into the grandstand & starting using Jockey Cam with it’s front and rear lens. A bettor could watch the race in the Imax theater from the back of the horse he bet on! Eliminate the 300-1 to one Tax and charge a dime tax on every ticket wagered. There are far more losing tickets than winners. The money is collected up front & a big score is truely a big score. BTW paper money is no longer needed, just use a track debit card.

    I could go on & on. The folks who are in charge of the racing industry will see to it that some day horse racing will be an exhibit at the Smithsonian Museum. It’s too bad, this is the greatest sport on the planet and an awsome place to take a first date!

  12. In California they used to have a pick six quick pick where the computer picks your horses for you, they since stopped in when there was a computer glitch, why not on big pick six pools have the lottery terminals in the state sell pick six tickets with computer generated picks, just like a quick pick on the lottery, this would get non horse players involved and would cause the pick six pool to become very large.

  13. Hairy Reason says

    Although I can tell that you (and some of your noters) mean well, your approach is EXACTLY OPPOSITE of common sense.

    It has been so many years since COMMON SENSE was the backbone of things going on in racing that nobody is used to striving to rely on common sense anymore.

    Instead of the lottery, pick-7, or pick-256, which would further exacerbate the PROBLEM, while stepping AWAY from the solution, racing needs to bring the novice fans NEARER to the ‘insiders’/’sharpies’.

    Every single number that “X” is increased, makes “pick-X” bets less and less attainable to the novice who you are trying to ATTRACT, and gives the insider a greater and greater edge.

    The INSIDER is the root cause of racing’s struggles in the present. Does anybody wonder why a basketball league never formed around the Harlem Globetrotters? (A: because fans already knew who would finish first every single year)

    Sports world-wide thrive during times of greatest parity. In 1975 most race tracks had maybe one daily double and then some small gimmick bet, perhaps on the last race of the day, and that was it.

    In those days, when racing thrived, the insider betting $100 to win had only a marginally better chance of winning than did the new racegoer who barely found the front gate.

    Consider that there was at the time a 1-in-10 chance that the new racegoer could land randomly on the insider’s win bet. Now calculate the odds of today’s new racegoer landing on the insider’s winning pick-4 bet. (1 in 4096 with 8-horse fields)

    The pick-6 of today already foretells the fate of a so-called “lottery” tethered to racing. The pick-6 is dominated by ‘insiders’ and ‘sharpies’ with the casual fan having next to no chance.

    Sure there was the time where a guy went to the Breeders’ Cup, intending to spend $8 on the pick-6, and he got excited near the end and double-punched his numbers, earning $1.6 million dollars by accident (“Arcangues”).

    Aside from the bizzarre stories such as that timeless classic, the little guy has no realistic shot as you grow the pick-X.

    What you want to do, instead, is slowly begin to make-up for what all of these skull-buster exotics have done in terms of distancing the could-be fan (who has other options) from the hard-core fans who have inadvertently become the underlying problem.

    This is easy stuff with simulcasting, but the morons who are and have been running racing for the last two decades have ID’ed themselves as being wholly incapable of identifying or implementing common sense for the good of everyone.

  14. Harry, your rambling makes no sense what so ever, what insiders, ask every trainer in a race and he will tell you he’s going to win, take a walk on the back side of a race track and look real hard at what the insiders are driving, all a pile of crap, those are your insiders, the problem with the game is their breaking all the horse players, the take out can’t be overcome and eventually everyone goes broke including your insiders. Until the takeout is lowered to give a player half a chance there is no reason to wager on this sport when you can lay 110 to 100 on a ball game and have a 50 50 shot, it’s that simple the gambler has many better options then horses.

  15. Hairy Reason says

    Jack, you don’t seem to have a clue (still).

    This has nothing to do with touts and tipsters in the stable area, or old movie characters clocking workouts in the still of darkened mornings before anybody else awakens.

    Firstly, NOBODY CARES about takeout!!! Did you not deduce as much from the recent study that covered the subject?

    Almost nobody even “knows” about take-out, and just a sliver of those would ever ‘care’ about take-out.

    The problem is, the very people who would be those who CARE about take-out ARE the very “insiders” who are burying the game!!!!!

    When some doofus goes up to buy his first-ever lottery ticket, he does so with the one self-assurance that HIS DOLLAR has as much chance of winning as does any other dollar in the game!!

    At the track, that couldn’t be much further from reality – AND this newcomer knows it. Those who “know” (and especially those who “care”) about TAKEOUT, have become racing’s biggest PROBLEM.

    Jack here thinks the novices will leap up to bet $2 on a random pick-6 when the ‘insiders’ have all the advantages, and their random bet is less likely to produce a return than are 99% of the other dollars in the pool.

    I JUST went over that – and Jack can’t see the flaws in his thinking.

    Jack, you’re one of those guys who should take a lesson from the old poker adage:

    “if you look around the table and you can’t find the ‘sucker’, – it’s YOU”. You ARE the problem!! It is YOU who keeps the first-time novices from coming back. They go away saying “the insiders know everything and we don’t know how to do it”.

    When you are the PROBLEM, you simply CAN NOT BE part of the solution!!

    The only person “rambling” here is you… with the absurd references to backstretch crap.

    PS – the “quick pick” and it’s demise had NOTHING to do with the pick-6.

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