Op/Ed: Policies That Attack the Dissatisfied and Unsatisfied Will Move the Handle Needle

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As most know, this year's Global Symposium on Racing and Gaming, hosted by the University of Arizona Race Track Industry Program, is taking place this week in Tucson. On Tuesday, I watched one of the panels with interest–the use of “Big Data” in (primarily) the handicapping process.

Using data, offering new products, allowing potential customers new ways to come up with a wager, and creating different handicapping processes is always something that seems to come with a caveat in horse racing from insiders, and we saw a little of this during this panel. Sure, innovation with data and computing is kind-of-sort-of-good, but will it erode value for people who are already using these new things, in the shadows? Will it hurt our data sales? Our patrons like pen and paper handicapping, they won't embrace this type of handicapping will they? Will it somehow hurt them? Remember what the use of Beyer figures did when they entered the mainstream, do we want that again? Isn't this “robot” wagering bad?

Quite frankly, I think none of those questions matter.

Horse racing, in my view, tends to suffer from a few organizational and structural maladies, but perhaps the most prevalent (and damaging) is its steely embrace of the status quo when it comes to its satisfied customers. We see it in almost all panels about betting innovation and new products, over and over again. It's not about what an innovation can do to attract new markets, it's about what it may do to the existing one.

Racing already knows–from myriad polls and studies–what the satisfied betting customer wants: better pricing, better drug rules and tougher penalties for cheaters, to be able to bet all tracks in one ADW platform; choice; and better, more uniform judging. It's no mystery, and racing should be doing much more to address those concerns. But these customers will not lead the sport when it comes to the new growth it needs to thrive.

Business writer Seth Godin, in the very good Free Prize Inside: The Next Big Marketing Idea, has, what I think, is the right take on this:

“Your growth will come from the dissatisfied and unsatisfied. The dissatisfied know they want a solution, but are not happy with the solution they've got. The unsatisfied are the folks who do not even realize they have a problem that needs solving. The people you really need to hear from are the great unwashed, the people who are not even looking at you. That is where you will find the customers you need when your current line becomes obsolete.

“The problem is that management really likes those satisfied customers. The first question they'll ask about any innovation is 'Will our satisfied customers like it?' The question you ought to ask first is, 'Will people dissatisfied with what they are doing now embrace this, and, even better, will they tell the large number of unsatisfied people to go get it right away?'”

Panels, like the one this week at the Symposium, are important because they are laying out new policy that directly attacks the “dissatisfied.” Sure the existing customer who likes to hold a racing form in his or her hands will not, in large numbers, be downloading comma delimited files and building their robot betting software. Sure, Joe from Brooklyn that owns a flip phone will not be using “Predicteform” linked to the tote to uncover overlays at the OTB. Joe's neighbor Jill isn't tethered to Timeform US's dynamic interface getting pace projector updates either.

But there is a whole market of “dissatisfied” people who are interested in exactly that. They want a solution and racing has not yet provided enough good ones.

Moving to Godin's other group, the “unstatisfied,” the door is even more wide open.

Peter Webb, a computer and IT executive, developed a way to play the horses (in this case on an exchange in the UK), with a computer program back in 2003. He began to make a few dollars using his system, quit his job and switched to playing full time. He must know a great deal about handicapping to be that successful, right?

No, he knew absolutely nothing about horse racing.

He told the Channel Register a few years ago: “My lack of knowledge has really helped. I'm looking at the price of a horse and estimate where the price will go. My role in the market is as an arbiter of value and whatever I do I do before the race starts–I don't believe I'm better at predicting the form than anyone else.”

Peter plays upwards of $50,000 a race, on a sport he knows little about, using a system that Joe or Jill from Brooklyn would never think of using. Peter found a sport to play (racing) he barely even knew existed.

Horse racing, in my opinion, must always pay attention to their existing customers, just like any other business does. It's customer service 101. However, when non-traditional, new, vibrant ways to play the sport are suggested, the unsatisfied and dissatisfied are the markets that racing needs to pay stern attention to. Jim and Jill from Brooklyn will still play the sport if new markets do, because they are already satisfied.

In racing any new idea is far too often looked at as a problem, instead of a solution. The sport tends to look for reasons to not try something, rather than moving swiftly to experiment. In terms of the proliferation of data, the tote, and unleashing the entrepreneurs in the sport to develop new products to attract new markets, I think the sport of horse racing can, and should, do a much better job.

Dean Towers is a long time bettor, horse owner and handicapper. He is a marketer by trade, has presented at several gambling conferences across the continent, and is a Board Member of the Horseplayers Association of North America.

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