We’re Mad As Hell…

by Ed Meyer

posted on November 17, 2008 in General Discussion | No Comments >>

“Could you please add some knowledge to this ongoing ADW nonsense? How can Internet players present a problem? We add no expenses of any kind to their plants or operations.”

“Besides not needing seats, parking, washrooms, service reps or housekeeping, we do not even smoke near or swear within earshot of any of their patrons.”

“Isn’t anything from us obtained with the least possible amount of overhead? If anything, should we not be allowed to wager with a reduced takeout? Isn’t anything from us, in effect, found money?”

A dispute between Thoroughbred horsemen and ADW companies essentially began anew with the recent opening of the Hollywood Park meet. Bettors are used to being shut out from online wagering at many of the sport’s best venues, including Hollywood and Churchill Downs most recently.

The reason? Horsemen, more appropriately an alliance of horsemen known as the Thoroughbred Horsemen’s Group, want a bigger share of racing’s shrinking pie. What they don’t fully grasp is that if they remain on this hardball course they will only hasten racing’s demise.

In these difficult times, it’s not like they’re being reasonable. The THG is looking to increase its share of their split with the tracks and ADW’s from 20 percent to 33 1/3. And they believed they’re entitled. After all, they put on the show.

Never mind that this money wouldn’t exist without the creation of privately financed ADWs that exist beyond the wagering arms of the tracks themselves. Never mind that beyond the seed money, ADWs must finance, staff, program and develop software, promote, market and provide customer service.

Never mind that tracks must maintain huge facilities, provide housing for equines and their handlers, perform track maintenance, maintain the property, insure, light, climate control, park, staff, maintain barns and dorms, market, promote etc., etc.

Horsemen put on the show. True. But the tracks and ADWs give horseman the opportunity to earn. They facilitate the entire process by handling the wagering dollars that make purses possible.

The ADW issue has been ongoing for years and something must give before it’s too late. None of the sides seem able to hammer out an agreement. So the tracks will continue to lose along with the horsemen. Per usual, no one has considered the horseplayer in all this. Without them, the rest is conversation.

Throughout the country, most simulcast players have had to maintain several accounts to bet the tracks they follow. And that was pre-impasse. Not only is it poor customer service and public relations, it’s a horrendous model.

Once people learn they can live without their present avocation, they’ll find another pursuit. The fan base is dying off as it is, on track and off. Given the prohibitive cost of creating a new customer, racing can ill afford to lose any of its shrinking base. There’s no wiggle room.

And we’re not even considering over-saturation of the product and the high cost of wagering via excessive takeout rates. ADWs are the only growing segment of the horse racing economy, and situations like this threaten that growth.

A look at the recently released Equibase wagering handle chart is instructive. Note that despite fairly precipitous declines in wagering, both from month-to-month and year-to-date, October ’08 purses declined by less than half compared to ’07, while purses YTD are relatively flat despite almost 6 percent handle decline.

None of this is good, of course. But to not accept some revenue declines while the industry suffers significant losses, seems unreasonable and selfish. Things are bad all over. Failing to negotiate in good faith is like today’s unpopular ballplayer, who signs a contract, then decides he made a bad deal.

Horsemen need to live with the deal they made, then get over it. Of course, they’re entitled to a little more. But everyone’s rowing the same boat and a 65 percent increase is outrageous in this environment.

Keep on losing players one by one with such an arrogant posturing, and you’ll learn to reap what you sow. Like the electorate, players are mad as hell and will decide one day not to take it anymore. They’ll just find other games to wager on. Willing to roll the dice on change?