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Friday, November 30, 2007

By The Numbers - Following Up..

- As the legislature apparently moves towards a compromise on the MOU that will grant NYRA its 30-year extension (thanks to Teresa for the link), I hope you had a chance to check out the comments here, particularly the extended version by an extremely knowledgeable, though still anonymous poster. Of the figures provided by NYRA's Disclosure Statement on the percentages of bets it receives from bets made on-track, and those made on NYRA tracks (said in the Statement to be 9.3%) and at NY OTB's (2.5%), he/she wrote:

If NYRA includes the out-of-state handle in the calculation of their wager retention - they're being misleading because NYRA's out-of-state signal sale is the product of negotiation between NYRA and the receiving racetrack. Did they utilize the whole off-track handle in an effort to inflame opinion against the inequity? Can't tell. They didn't address how they arrived at their figures. Given that we are not informed what method NYRA used to calculate their off-track wager retention rate, any discussion of how much money would be left relies on facts not yet in evidence, i.e., the trustworthiness of the 6.8 percentage spread. It could be much, much less. I'd love to read Bennett Liebman's take on this.
Well, Bennett Liebman emails:
Looking at the direct (defined as bets placed on NYRA) numbers from the Racing and Wagering Board's annual report, NYCOTB pays 9.3% to NYRA on handle

Nassau 7.73%
Suffolk 7.68%
Capital 5.1%

At least a half of these payments should go to horsemen, but the exact payments depend on the applicable statutes and the contracts between NYRA and the OTB's. It's fair to say that NYRA gets substantially more than 2.5% on bets placed on NYRA races from the metropolitan OTB's.
Mr. Liebman also refers us back to his Racing By The Numbers report. It contains a lot of facts and figures, but one obviously would have to inspect the statutes and contracts in order to get an exact idea of exactly what the spread between on- and off-track bets are. In any event, it would appear that our commenter had the right idea, and the second commenter correctly points out that I was ignoring the expenses that NYRA would take on should it take over OTB.

Even if the effective spread is just half of the 6.8% as stated in NYRA's document, using the actual figure of $625 million wagered on NYRA bets off-track, that would still be an extra $21.25 million to NYRA, which, in a non-bankruptcy year, would in theory put it within shouting distance of breaking even. But, whatever the exact numbers really are, it's just mind-boggling to me that an industry which generates over $2.5 billion in wagers in this state alone can't stand on its own without subsidies from slots. Something ain't right to be sure. For one thing, the rate at which NYRA, and every other track in the country for that matter, sells its simulcast signals out-of-state is something which needs to be examined right away.

- Michael responded to my post about Jose Bracetty and Patrick Biancone:
Regarding Biancone: had he ever been charged with anything I think race track officials in other jurisdictions could have taken action against him, but since he wasn't charged (and everything we knew about Cobra Venom was technically from leaked sourced reported in the DRF) it makes sense that nothing was done.
That's fair, but not the point in my opinion, which I know is in the minority. The State revoked Bracetty's license on the grounds that his "experience, character and general fitness were inconsistent with the public interest and best interests of racing." I think that, after the substance was found - and no matter what the source of the report, the fact is that the substance was present in his barn - Biancone's presence on the grounds was similarly inconsistent with the best interests of racing. Racetracks are free to ban persons on that basis and to protect the betting public. Several did so with the TRPB/Great Lakes Downs jockeys, who were never charged with anything either. Nobody has yet to explain to me the inconsistencies between those two situations.

12 Comments:

Teresa said...

Thanks for the link and the credit, which I duly pass on to Equidaily, whose site I perused earlier and where I saw the headline.

Anonymous said...

Bracetty vs Biancone:

According the the NY Daily News: "The 29-year-old jockey applied for an apprentice jockey's license on Sept. 26 and was allowed to ride after being issued a 'Valid Receipt,' which allows an applicant to continue to participate in racing while his or her application is pending."

In other words, it sounds like he hadn't yet been issued a license -- which might have made the process of banning him much different -- and easier -- than banning a licensed person.

Anonymous said...

Agree Anon, but in general does it not seem they are a lot tougher with the jocks than with the trainers?

A jock makes an unintentional mistake in a stretch drive and gets 15 days, a trainer gets the same time for his/her third positive, and his barn continues to operate.

Anonymous said...

This might be fitting for this post.

Gary Contessa claimed "Elixir" today on behalf of Winning Move Stable.

Contessa, Elixir, my, oh my, what a perfect tandem.

The pig is a thief.

steve in nc said...

The only way I can think of to make the game more profitable is to get more people playing, but as much as I love it, most people think I'm nuts (except when I win).

To save a little money, I would cut purses in all Graded races a little. Or better yet, cut back the number of top races so the top horses had to face each other if they wanted graded status. When big purses ballooned years ago, it didn't produce any greater public attention for the sport or motivation for horsemen to run their nags more often -- it is just a hugely inflated jackpot for the most successful. Since most of the value to be gained in racing is to boost sire value, a cut in top stakes purses could save tracks $$ without hurting the sport.

The franchise issue looks from here like a lot of races on a typical NYRA card: Many question marks and not much value on any of the logical contenders. It is the kind of race I only bet, well, because I'm a horseplayer.

From the horseplayer perspective, NYRA has gone from being an outright outrage to providing acceptable customer service in most cases. This has taken a long time. I think the process began around when Crist took the job there, but has accellerated in recent years, probably from scrutiny over scandals and fear of losing the franchise.

A 30 year renewal would bring stability, but jeez, but judging from the arrogance and incompetence rampant in the NYRA I grew up with, I don't know if stability is what horseplayers should want for NYRA.

On the other hand, the non-racing groups clearly can't be trusted with our game. And the inside industry groups aren't much better -- look what Stronach has done with GP.

Horseplayers are going to be priority 27b when Spritzer & Bruno finally consummate their deal. I fear the fruit of that union will be a Frankenstein monster, with ill-fitting body parts sewed together to suit the needs of the both men's financial and political backers.

This Christmas baby -- sired by Bruno out of Spritzer (Sheldon Silver) -- will no doubt be heralded with all the fanfare of The Green Monkey, and may not be any better at the horseracing game. There is only one reliable odds on play in all this: taxpayers will lose more than Michael Tabor when all is said and done.

Why will all this be allowed to happen? Because they know that most of us will continue to play the horses regardless. The folks with the willingness and the wherewithall to have a political impact are not horseplayers.

I had a good day playing AQ today (no, not the P6, damn it) so my view of the franchise stuff may actually be a bit too rosy. All but $10 of my NYRA account money will be withdrawn by Dec. 15th just to be safe. I sure hope I'm wrong about all this. Could be. I thought the war in Iraq was a bad idea and look how that has turned out!

Anonymous said...

Steve, nice take, love the pedigree angle on the back room deal soon to be hatched.

Excellent point on the graded stakes money, only reason for it is the competition for horses.

For the most part the winners of these races are not in this for purse money, and it pales in contrast to the breeding stock values, except of course if you own a gelding.

Unfortunately, the real answer is monopolizing the industry. This is about the only government regulated industry that is not handled in a monopolistic fashion, similar to a utility.

Since it is so highly taxed, on gross reciepts like utilities, it should operate as one, setting all graded stakes purses the same, say 250000 for a G1, 200 G2, 100 G3 etc. No other purses would be allowed above 75k.

The money saved would be divided between the operators and the overnight purse account, rewarding the parties that put on the day to day operations.

Against everything I believe in, but the major league tracks simply can not survive while competing against each other. The profit margin is too small.

The operators of the MAJOR race meets need to organize, decide on a much higher signal price, and stick to it. Stop under cutting each other when negotiating deals with the parasitic off track signal takers.

Yes, some small track operators will go under, off track entities will go out of business, and overall handle will drop (but not as badly as feared, true players would sign up with the individual tracks emerging on line accounts and TVG or HRTV), and the breeding industry would suffer to some extent due to less demand (although emerging overseas demand will offset as Korea, Hong Kong, Eastern Europe, Turkey etc expand the product).

But the major league tracks will be healthy, and the "sport" is conducted at the major tracks.

The minor league tracks will need to do what minor league teams do in other sports, find a way to promote or fail.

steve in nc said...

Anon, can you serve as the first national Commissioner of the new non-violent "NRA" (National Racing Association) and still stay anonymous? Not that I get one, but you sure have my vote.

Imagine a nationally organized sport with the same (stiff) medication rules. Imagine a stakes calendar dedicated to competition between horses, not racetracks! Imagine no possessions...

Excuse me, I'm a little giddy. The two kids have sleepovers away tonight so my wife and I will reintroduce ourselves over dinner, and we'll get to see Across the Universe instead of the usual kid stuff.

Good luck in the late races -- I gotta get back to painting the little one's room.

Anonymous said...

If the racing game is so lucrative, why is NYRA the only qualified franchise bidder? Oh, of course, NYRA has been hiding the skimmed cash somewhere- probably buried in the infield at Saratoga- unbeknownst to the other bidders and potential bidders. Hasn't NYRA been audited six ways to Sunday since the political attacks began in earnest a few years ago? And this alleged "irregularity" wasn't revealed when the Spitzer-Havesi attack dogs were leaping the length of their chains? /S/Green Mtn Punter

Anonymous said...

gmp- under the current structure NY racing is clearly NOT lucrative. Note that it IS profitable in KY, Del Mar, FG and Woodbine, which do not have the parasitic OTB problem. Unfortunately, most worming medications eliminate flat, blood, round and various other types of worms, but not political worms. Until Albany gets their hands out of the till, no one can be profitable in NY, without the subsidy that is VLTs.

The industry as a whole could use improvement in the financial structure, and many smarter than me have laid it out better and in more detail than I have in summarizing above.

But even with the status quo it IS possible to run a financially sound racetrack if the operator is not forced to compete with the goverment that regulates its existance.

Has NYRA mismanaged, certainly. But they are not the root of the problem in NY. The root problem resides in Albany and its many OTB incarnations.

If the OTB situation was solved, there would be many more bidders for the franchise, but right now there is only one that is truly concerned more with racing than the VLT's and that bidder is NYRA.

Anonymous said...

steve in nc -

Thanks for your support, if drafted I will run for commissioner.

But since I was not raised in Lexington and will not bend over for the all powerful breeding lobby I have zero shot of ever serving as commish.

If the problem of NY racing resides in Albany, the national problem absolutely resides in Lexington.

On the face it seems ironic that the protectors of the breed are the most opposed to the welfare of the horse, but todays breeders are profit driven, concerned with today's bottom line over the long term health of the industry.

Ever notice that when battles are fought for change in the sport, the good guys like Jackson and Padua are non KY Breds?

Handride said...
This comment has been removed by the author.
Handride said...

wholeheartedly agree about purse structure, it's not the motivation of our sport. maybe if the monkeys in charge realized that we could get a better looking sport.
posted about this once before