By Bill Finley
At the annual University of Arizona Racetrack Industry Program symposium this week, much of the focus has been on finding racing’s next great idea. A prize of $15,000 will go to the person who comes up with the best concept as part of a competition called the “Innovator’s Circle.” There’s also a second competition in which randomly chosen participants are asked to come up with their own ideas. The winner among the group will have $1,000 donated to a charity of their choice.
It’s a terrific idea and, while it may not yield magic bullets, it is sure to produce some positive concepts that can help the sport. I’m not involved in either competition, but that doesn’t mean I can’t throw my own thoughts out there. If anyone likes them, they can have them. No charge.
The best innovation in racing over the last dozen or so years has been the concept of low-cost, jackpot-style bets that end in a mandatory payoff. Whether they’re a Super High 5 or some sort of horizontal bet like Gulfstream’s Rainbow 6, the idea is the same. The entire pool is paid out only if there is one person holding a winning ticket. If things go right, no one will take home the entire pool until the mandatory payoff day. When that day comes, and if there is a sizeable amount of money in the carryover pool, there are no limits to what people will wager or the excitement the bet will generate. Gulfstream has been way out ahead of the pack with its wildly successful 20-cent Rainbow Six wager. When everything breaks right, the Rainbow Six pool can swell to over $6 million on mandatory payout days.
But the perfect storm–no one holds a single winning ticket for weeks on end, there is a huge carryover, the mandatory payout day arrives–only happens a handful of times a year, most often at Gulfstream. Racing needs to take better advantage of the public’s thirst for such wagers–and it can.
What if a track didn’t wait for the carryover to build up all the while keeping its fingers crossed that no one holds a single winning ticket? Just pick a day and guarantee a $1 million pool.
There’s enough data available now that we know that when a pool builds to $400,000 or $500,000 people will bet heavily into it on the payout day, almost always betting at least $1 million into the bet in fresh money. The best example of this was a harness race at Woodbine. A High 5 with a mandatory payout on an otherwise ordinary harness race in April at Woodbine saw bettors inject $2.5 million in new money into the pool. It was the most heavily wagered race in the history of Canada, eclipsing that country’s closest thing to a Kentucky Derby, the Queen’s Plate. The carryover was $847,458.
If people will bet $2.5 million on an otherwise run-of-the-mill harness race with an $847,458 carryover, what will they bet if you put together a series of six (or maybe seven?) competitive thoroughbred races with big fields and tell the public the carryover going in is $1 million? The only way a track could lose is if the public bet, not less than the $1 million, but less than $1 million minus whatever the takeout is. That is not going to happen.
Tracks could get together and combine their races. A single track could pick a random Saturday, like this one when there is not much going on around the country, and roll out the $1 million guarantee. There are many ways to do it, but it should always be a Pick Six and not a High 5. (A bet I, for one, hate). If the $1 million guarantees are smashed go for $2 million.
Two caveats: These bets need to be limited. Have too many and there will be a point of over-saturation. They can’t lose their specialness. While it may seem like a good idea to roll them out on a track’s biggest day, that’s not the case. About the only time a mandatory payout day didn’t work was at the Meadowlands this year on the day of the Hambletonian, the most important trotting race on the calendar. With a $231,000 carryover in the High 5, only $343,748 in new money was invested on the bet on the day of the mandatory payout. The bet was overshadowed not only by the Hambletonian but by racing that day at Del Mar and Saratoga. The lesson: don’t pick Kentucky Derby Day, chose a day when your jackpot payout is the most exciting thing going on in racing.
Guarantee the money, heavily promote the wager, and watch the money come rolling in. It can’t miss.
CLOSERS: Some really good ideas have already been tossed around in Arizona as part of the symposium’s search for the next great innovation. The best of the bunch were the ones that involved takeout.
Racing’s single biggest problem is that the cost of making a bet (the takeout) is way too expensive especially when compared to its main competition, other forms of gambling. Racing’s product is overpriced. You cannot charge people 25% to make a superfecta bet and hope to be successful in what has become an ultra-competitive betting market. The sport has to take the takeout issue much more seriously than it does.
The best idea came from Steve Koch of the NTRA. Koch is right when he says there’s no reason that takeout should be the same on all races. Restaurants don’t charge the same for hamburger as steak. Lower the takeout on those five-horse maiden claiming races and that might spur betting on them. I would never advocate raising takeout on any race, but if a track feels they must compensate for the lost revenue from the poorer races, raise the take a bit on the “steak,” that 14-horse allowance race on the grass. Feedback? E-mail firstname.lastname@example.org