Monday, August 31, 2015

Mainstream Phun

I have purposefully not used 'ph' on this blog, unless I am talking about Philly Park - er I guess it's Parx now so I can drop it - or for American Pharoah himself. But I could not think of a better blog title.

Today on the Fox Sports website:

We see why athletes and politicos worry about things being taken out of context.

It reminds me of the Brett Coffey tweet:

For those reading the blog who are new to horse racing, Jose Lezcano was not trying to "hurt" American Pharoah by poking him in the eye, inflicting pain, or even giving him one of those delicious snow cones at the 3/4's so he had a brainfreeze headache. It was just race riding, or sour grapes, from whatever your perspective.

As for the ride by Jose Lazcano, well, Kiaran said enough for you to know:


I am not one for slamming jocks and drivers for rides or drives, unless it's obvious. We never know what happened in the race, or if the horse was no good, etc. But (excuse my language), no chit Sherlock. How the game plan could be "let's go after a horse who is much faster than us, at 10f, with decent closers who can probably pick us up," was a plan is beyond me. Maybe Jose saw AP was not right, or something, and decided to take a chance, but a game plan like that? I can't see it. That's Sham-like in the Secretariat Belmont.

Another "Phun" thing I saw (there I go again) Saturday, was the look of defeat. I know there are a lot of great photographers out there, and sometimes it feels Eclipse Awards are pre-determined. However, if you've seen a better shot than this this year, let me know, because I haven't.

Enjoy your Monday everyone.

Saturday, August 29, 2015

Digging Deep, Being Great

It was almost seven years ago. I was at Mohawk and the great Somebeachsomewhere was racing in the Simcoe Stakes. He didn't seem to be quite himself on the racetrack, but as per usual, he fired to the lead and then grinded to the 3/4's like a 1-9 shot should. But a funny thing happened. He was starting to wilt. As the finish line drew closer his margin grew smaller, but he reached it in time.

After the race the horse was immediately scoped. Something was likely amiss, and it was; his lungs were full of mucous. Some horses are so good, so tough, and so great, they win when they should not. They hang around when others would be long beaten. The Beach was one of those horses.

Photo Courtesy someone who loves horse racing
Today in the Travers Stakes, American Pharoah was beaten. It was his fifth trip across the country. He fought through a Triple Crown series, and in at least one of those races he certainly was not at his best. He had a relatively short break after his win in the Haskell. He was racing at the graveyard of favorites. Maybe this was expected. But how it happened showed us a lot about this colt.

At the half, Pharoah looked nothing really like Pharoah. Rider Victor Espinoza was starting to ask, with 6 furlongs to go. At that point I mentioned to my playing partner, "if Betfair offered this in-running I would bet the house against him". Four furlongs later this looked to be prescient. Frosted, the horse he was battling, the horse who he swatted like a fly when he ran at him in the Belmont, the horse who is nowhere near as talented, actually headed him. Game set and match.

Not so fast. American Pharoah rebroke.

My lock of the century fade in running, the horse who had to be asked at the half, suddenly looked like he was still going to win. Unfortunately for him, and his connections, he had to beat one more contender, and didn't have enough in the already empty tank. His ears pinned, his nostrils flared, he tried his guts out, but he was caught in the last couple of jumps.

People like to watch this game for many reasons. Some people like to wear hats, dress up, be seen. Some like to watch stakes races, claimers; some just like to be at the track. Me, I like to watch great horses. Today I saw one in American Pharoah, and the fact he did not win had absolutely nothing to do with it.



Friday, August 28, 2015

Horse Racing Needs Reinvestment, Cultivation For Growth. It's More Than About a Pen

The national advertising numbers for the last seven days just came in. Sitting at number 4 is a gambling daily fantasy sports site.

The $12 million spent is about 12% of this company's 2014 revenues. They are investing a lot of money to gain and keep critical mass, as they fight with competitors like FanDuel, and other gambling pursuits, like racing and poker.

Yesterday we looked similarly at Hong Kong horse racing, and specifically its handle and revenues since 2005-2006:


What this table shows is the Hong Kong Jockey Club's reinvestment in the customer base, not unlike what Draft Kings is doing. Handle, in 05/06 was about $59B in Hong Kong dollars, and that yielded $3.2B in revenue. Four years later handle increased to $67.6B, but if you check revenues, they went down, to $3.12B. There were no protests, nor were there groups upset about this, it was all part of a larger plan - to grow revenues long term through this reinvestment.

Five years later, handle was up to over $100B (a 76% growth) and all-important revenues were $4.42B, well above the amount just five years earlier.

Meanwhile, this is not happening in horse racing in North America, to any large degree. In terms of "marketing", in Canada at least, horse racing was estimated to spend 1.7% of revenues on "marketing", which is "in comparison to the huge dollars -- occasionally as high as 20% of revenue -- spent by casinos."

How about for bettors? With historical average cost pricing being attacked with the disruption of the internet, here is how "HPIBets.com", an ADW monopoly handles reinvestment in its customer base. 

Further, via the 440 blog, regarding the microscopic player rewards:

"That's one of the biggest head scratchers in racing, to me. How can a customer worth about $110,000 in handle/year get barely any more respect than a customer worth $5,000 (or less.)? I'm not sure what a customer in racing has to do to be treated well by a track/ADW, but it seems to be quite a bit."

Ask a hundred people what horse racing's biggest customer problem is and you'll get a hundred answers, depending on the mix of letters in the fiefdom du jour. But, like survey's say from customers, it all hinges on disrespect. They are treated like lemons to squeeze, to serve the whims of a horsemen group or track; they are not invested in, to increase their churn, to better their lifetime value, to ensure they are betting this sport for years.

Draft Kings, the Hong Kong Jockey Club and others like them are trying, and in some cases succeeding. They are spending millions of dollars to increase the bet; to encourage and fuel their customer base.  Meanwhile, horse racing monopolies are giving out six figure players a pen. It's a big issue, and it will not go away until it's addressed.

Have a nice weekend everyone.

Thursday, August 27, 2015

Dysfunction is Infectious

Yesterday, the Baconater penned a piece on his site, "California Gets It Wrong On Lasix".

"I can’t in good conscience place any more bets on races in California – not after what happened at the California Horse Racing Board meeting last week. The CHRB voted 5-2 against the recommendations of its own Medication Committee that a trainer’s private veterinarian not be allowed to give race-day injections of furosemide, or Lasix, the diuretic used to treat exercise-induced pulmonary hemorrhage."

We have a policy that works in almost every other racing jurisdiction and has for years, a policy that is absolutely, 100% common sense, that was passed after due diligence, and it's voted 5-2 against?

Although some might say California has been the state or fiefdom with more dysfunction than anyone else, it appears to be clear there are others that orbit around the California sun.

We've seen cobalt in the news lately, with hard and fast rules set, in other countries and states. Despite that, Ohio decided it needed a cobalt "study" in April. Not to be outdone, the USTA just this week decided - you guessed it - it needs a cobalt study. It's great that there's so much money in racing for these things. Hopefully one day, every state, commission, horsemen group and alphabet can all do their own cobalt studies.

We see the same exact thing with whipping rules. State 1 studies it to death, and passes a rule. Two years later another state starts from scratch, studies it, passes a rule. And on and on. Just watch, there will be another state soon who does the exact same thing. What a colossal waste of time and money.

Further to this merry go round, we have states like Arkansas. Reading this story makes one's head spin in Linda Blairian fashion.

This dysfunction is not dissimilar to the broken window crime pattern. If someone gets away with it, we can, because there are never any consequences. Dysfunction is infectious.

This is why there is so much grassroots support for the USADA bill. People wonder how in racing there is this support. The sport is filled with rugged individualists who want little to do with federal regulation, want nothing to do with rules; it's a "hands off my horse" culture. However, with all this dysfunction, all this sometimes bizarre behavior, this clinging to the status-quo while Rome burns, these individualists have no place left to turn. Who can blame them?


Tuesday, August 25, 2015

Hong Kong Betting Growth

There was quite a conversation on the twitter about Hong Kong Jockey Club betting growth this early evening. Hong Kong, since 2006, has rapidly grown handles, and has been reaping the benefits of such growth.

"The record turnover this year is the result of a lot of hard work. Since the 2005-2006 season, turnover has increased 79.7%, which is testament to the successful strategies the club has undertaken in that time to revitalize Hong Kong horseracing," Engelbrecht-Bresges continued."

Via BH. 

Hong Kong's betting growth was spurred in large part, due to a change in policy in 2006, "Betting Duty Reforms". This change allowed the Club to pay revenues to the state from gross profits, instead of from a set amount of takeout. The club began trying to get back lost punters who were frequenting Macau (with lower takeout), investing more in the customer, through various reforms, and, in general, using good old fashioned business school metrics to increase wagering.

In effect the opposite of what is done in North America, where slices of the takeout are still looked at as a piece of the pie (that shrinks).

This is illustrated here.

Notice that during the increase in turnover (handle) from 06 to 09, margins to the club (profit) did not increase. This is 'taking a smaller piece of the pie, to hopefully increase the long term growth of the pie'. Then, handle grew enough where margins increased to a record $4.42B in 2013-14.

The HKJC was freed up to increase turnover, and that, in part, helped it achieve their goals, for their horsemen, their charities, their club and the government.

Will this happen in North America? No. Horsemen groups (see California and Kentucky at Churchill) along with racetracks are trying to take more margin, rather than take less. That, in this environment, decreases handles, and we are where we are.

Have a nice Tuesday folks.

Sunday, August 23, 2015

A Different View of Horsemanship, Lasix and a Beholding Opportunity

EL Titan with his trainer
I was chatting on the twitter box with Brad Thomas last week about the secrecy shrouded in horse racing. To find out if a horse has a cough is hard enough, let alone a physical issue; "none of your business" is a  mantra.  I noted to Brad that harness racing is a little different and we see yet another example of it.

In today's HRU, George Teague, trainer of three year old star Wiggle it Jiggle It, who banged off an impressive 48 score in the Battle of Bandywine last evening:

 "He's got a muscle issue on the back. You can't do much with him. He's raced, not trained."

We've often noted his little hitch, so maybe that was an ongoing issue. Regardless, you know what you're getting with Teague.

EL Titan, trained by Riina Rekila won the big invite, defeating JL Cruze last evening, also at Pocono. She had something interesting to say, about her star horse's early season schedule:

"He's had allergies too so he's not at his best in the summer."

Notice what's missing from EL Titan's program page last night?


Yes, there is no "L". Rekila, with a different kind of horsemanship decided to get the horse right, even though he was having lung issues. In a world where horses are given lasix whether they need it or not, this is pretty refreshing, and shows you can have a superstar that will make millions if you take care of the ailments.

This openness helps fans understand horses and that's not a bad thing. That horse who just raced flat in July? It probably wasn't the jockey's or driver's fault. The horse didn't get dirt kicked in his face nor did it "bounce". He or she is not a "rat". It probably had allergies, or a hundred other things. 

Further in HRU, "Things I'd like to See in Harness Racing" a column you might like.

Beholder won the Pacific Classic, beating a decent field last night and did so coming home in under 25, impressively. Hyperbole was at a fever pitch, however, and this could present an opportunity. The figure is sure to come back big, and will be an outlier, suggesting that it is not performance-level accurate. Bayern and Midnight Storm stopped like they were shot (a bad last and second last), adding to the visually impressive steam from the move on the far turn. We've probably got a perfect storm where if Beholder does race in the Classic, and we like a horse (especially if the race is Pharoah-less), we can take a shot for a score. Now I just have to find a horse.

Last night's Gold Cup and Saucer was cancelled, and it will be raced today, at 3PM. A quick storm went through the venue, causing a mudbath on the racetrack.

Have a nice Sunday everyone.