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Tuesday, December 28, 2010

Numbers Game

On its website, HANA plays a little footloose and fancy free with the numbers to make the California takeout increase seem more odious to horseplayers than it actually is.

On Jan 01, 2011 California Exacta Takeout will Increase by 9.7% to 22.68% - giving California one of the highest exacta takeout rates in North America.

On Jan 01, 2011 California Trifecta Takeout will Increase by 14.51% to 23.68%.
In fact, the rates are going up from 20.68%, an increase of 2% and 3% respectively. If we were talking about dollar amounts, you would correctly say that the price is going up 9.7% from $20.68 to $22.68, and 14.51% from $20.68 to $23.68. But percentage points are percentage points, and we generally express such changes in absolute terms, not by percentages of percentages. If the mortgage rates go up from 4% to 5%, we say that the rate has gone up by one percentage point, not by 25%.

That's despite the fact that a change in percentage can have different implications for the dollar amounts involved. Cangamble correctly points out that an increase from 3% to 4% on a line of credit means a 33% increase in payments. But that's a random example; the percentage dollar increase varies with the rate. If it increases from 9% to 10%, the payments would increase 11%. If you're borrowing from Cash Call and the rate goes from 99% to 100%, then the payments increase by only 1%.

Similarly, and in the pari-mutuel world, an increase in takeout percentage can mean different things for different people. On Monday, approximately $967,000 was bet at Santa Anita on exactas. Under the present takeout of 20.68%, the house takes out just around $200,000, and returns $767,000 to the players. When the new rate of 22.68% takes effect, the house would take some $219,315, and return the remaining $747,685. The increase to the state of $19,315 is HANA's 9.7% "takeout increase." But the decrease in the payout to players is only around 2.5%. So I think that HANA is using deceptive numbers to make their case. (And some in the racing press has bought right into it.) Whatsmore....and I'm sure I'll get flamed for saying this....I think that a reasonable person could make the case that increasing its take by 10 to 15 percent with the goal of increasing purses while costing players "only" a small percentage of winnings is not an unreasonable nor harshly unfair way to address the crisis faced by the industry in the state.

What exactly is my point here? Well, reader Indulto proposes that the boycott rubs me the wrong way, and I'd concede that point. HANA annoys me with, among other things, their silly track ratings, as is apparent if you've been following my posts on the group, and I'll admit that my perception of this matter is shaded by that. On the other hand though, it seems to me that there's a high level of animosity on the part of the boycott proponents towards the CHRB and TOC; I've read posts and comments in which the criticism of those groups has become highly personal. Maybe that's why, as some commenters on this site have noted, they don't project nearly the same animosity towards other racing jurisdictions with even higher takeouts on some bets than will be the case in California.

Having said that, I'll reiterate that I'm not in favor of higher takeouts, and I think that the increase in California is short-sighted and likely to fail in its quest to attract large high-quality fields through higher purses. But, as I've said (perhaps inelegantly and in a regrettable pique of anger), horseplayers have it pretty good these days. Sitting at their computers and with their HANA takeout charts as their guide if takeout is of primary importance to their goals, they can pick and choose from virtually any track in North America. So, boycott away if you wish. But, in my opinion, this is a local issue of relatively minor magnitude that is not worthy of investing a national movement. That should be saved, as steve in nc points out, for more profound causes. It's not like increasing takeout is a current fad spreading throughout the country that needs to be snuffed out. On the contrary, HANA has done an excellent job in pushing the issue of lower rates to the forefront of the industry's consciousness. California has a problem, and, like many businesses, they've decided to raise their prices. Don't play their tracks if you don't like it. But let the rest of us decide for ourselves.


jk said...

SA had a 21% decrease in handle on opening day vs the comparable day a year ago. They will need another takeout increase to offset the drop in handle. Looks like HANA struck the first blow in this battle.

Steve Zorn said...

By scientific standards -- even by the low standards of economics and other pseudo-social-sciences -- there's very little empirical data on the effects of takeout changes. Way too many variables, and, generally, takeout experiments have been too short-lived to provide useful data.

That said, I don't see the relatively small purse boost that was projected by California as likely to make the slightest difference in field size and quality. To achieve that goal, you need to do something extreme, like Monmouth's "million a day" season. And even that didn't pay for itself in increased handle.

The solution for California: in the short run, slot machines, if they can get them, and card rooms. In the long run, lots less racing and lots fewer Cal-breds. Structural adjustment time.

Alan Mann said...

jk - Maybe so. Or maybe it was because of no turf racing, continued economic woes, and/or the fact that they were dirt races with horses with little or no dirt form.

markinsac said...

DECEMBER 27, 2010

REPORTER 818: Sir, can you tell me how Santa Anita's handle numbers are down over 20% so far?

BOSS: You buffoon, we competed with the NFL, and there was a huge blizzard on the east coast.

REPORTER 818: But handle numbers are actually up at Turf Paradise and Golden Gate. Did snow bound players on the east coast play those tracks and forget to play yours?

BOSS: There was record snow in the east. Mother Nature killed us.

REPORTER 818: But even your in-state numbers were down.

BOSS: Um, I'm needed elsewhere. I'm going to let Doug O'Neil finish up the newsconference for me.

REPORTER 818: Doug, can you explain how the in-state betting numbers were down?

DOUG O'NEIL: I don't know how that got there.

REPORTER 818: Doug, could the widely reported "PLAYERS BOYCOTT" be having an effect?

DOUG O'NEIL: I don't know how that got there.

REPORTER 818: Doug, you sound like you have your head up your ass.

DOUG O'NEIL: I don't know how that got there!

Anonymous said...


Correlation does not equal causation.

Compare handle yesterday at SA with the first Monday card of 2009. You'll see the difference is negligible.

When comparing two sets of data you need to make sure you're comparing numbers that are resulting from similar circumstances. Additionally, are you really going to draw a conclusion on a HANA boycott based on one day of data? I think people are overestimating HANA's reach; many players (both hardcore and casual) have either never heard of HANA and/or pay little to no attention to them.

Cangamble said...

Anon, 9 races yesterday versus 8 the corresponding Monday last year.
HANA is sure getting a lot of press these days. It won't take long before a lot more people know about HANA.

As for the numbers game. I explain it again here.

Anonymous said...

There are numerous problems in racing and we have a blog post worried about how numbers are reported - either by real percentage or percentage-percentage?

Where was the blog post when HANA brought the 30% handle decline to the CHRB after the Los al takeout increase and the board explained it with "too many people watching the Olympics"

We get it - you dont like HANA. But concentrating on something as ridiculous as a percentage listing says more about you than it does them. It looks petty and small.

El Angelo said...

I agree with most of what Alan says and I don't dislike HANA. I disagree with the idea that HANA represents all horseplayers, because it's simply not true. And using hysterics and deception to try to prove a point damages the basis of the argument in the process, much the same way that PETA takes away credibility from rational people in favor of animal rights or the Tea Party diminishes the credibility of all libertarians.

Alan Mann said...

Anon 1:59 - I disagree...I think that the issue of distorting the facts in order to spin your message to the masses, as I feel that HANA is clearly doing with their inflated percentages (even after reading Cangamble's post), is hardly petty. In fact, just briefly and without getting too profound, it's the main problem with our national political debate these days.

Alan Mann said...

....which is basically what El Angelo beat me to saying (and did so better).

Anonymous said...

Let me be the third to agree about the percentage distortions by HANA. HANA is a legend in their own minds and absolutely, and thankfully, do NOT represent even a small slice of horseplayers. As has already been pointed out, few horseplayers have even heard of them. Plus, as Alan pointed out, their ratings of racetracks are woefully stilted and another example of their own personal biases. Hey, biases are the way of life, and we all have them, but at least ( right or wrong ) we get to choose our own. HANA has no right or authority to choose them for us.

Anonymous said...

Do something else if you don't like it. Bet win and horizontal like most winning bettors.

Anonymous said...

I think another reason for the opening day decrease compared to last year, is opening on a Sunday versus opening on the highest volume day of the week.

Anonymous said...

Can't wait to bet Gulfstream and the 50c pick5 with a 15% takeout.

I agree with others that this takeout increase will not help them get bigger fields.
One things for sure handle will go down,It's just a matter of how much.

HANA said...

For the record (and this methodology is one the website for those who choose to research, including links to economic journals), the HANA racetrack ratings were done as follows:
A phrase like “What makes players play a racetrack” searched in google scholar, yields economic papers and published material as far back as 1973. These journals were looked at and discussed with people who have written them. The factors that contribute to that list, through econometric models were then weighted, based on wagering elasticity. For example, if takeout has an elasticity of -4.0, field size -3.0 and stakes races -2.0 the weightings would reflect that. Those are then placed in a sheet and a HANA board member (an electrical engineer that can actually run macros, as I cant very well) crunches them and the numbers are spit out.
The reason this was done was twofold
1) Bias elimination. Horseplayers have their own reasons for playing and for many they are different based on personal bias (one likes stakes, one likes short fields because he cashes more often, one likes claimers because she plays trainer moves, another likes the hot dogs at Gulfstream and wont go to the Big A because she dislikes them there, etc), so instead of looking at the anecdotal, we went aggregate.
2) To educate the industry on what makes up betting handle according to all the academic research, that HANA feels they do not look at enough.
Over time the ratings have evolved and will continue to, but one thing HANA will not do is compromise published economic literature in this matter. If a vetted, universally accepted journal paper is published which shows the price of hot dogs is elastic in terms of horseplayer behavior, it will be added to the ratings as a weighted factor.
Thanks for reading. We take positive criticism seriously , and any criticism is welcome, however because we have done every thing we can possibly do mathematically to make the ratings unbiased, we like to address it when it comes up.
We also take great pride when a track tries to change to move up the ratings because by doing so, they are not listening to only horseplayers, but decades of published, sound, vetted literature. That is good for the future of our sport.

Thanks for reading.

gib. said...

The first time that I visited the HANA web site, several years ago, I sent them a contribution and expected to receive the advertised pin.

Call me small, cynical, and jaded (because I am), but since that experience I have not had much respect for the organization.

HANA said...

You did not get a pin? That is rare, because Theresia keeps an eagle-eye on the books and all contributions and mailouts.

I apologize.

If you wish: Please send us an email (, or and we will send one out if you still want one. We'll send two, plus a highlghter for not doing it right the first time.

Sorry again that we did not get that out to you properly.


Anonymous said...


Anonymous said...

Thanks Hana,thanks for trying to make this a bigger and better sport.

Alan seems to like the way things are run now.

ITP said... question....If all jockeys organized and wouldn't ride unless their winning % was raised from 10%-15%, would the industry say that the jockeys are demanding a 5% increase or a 50% increase.

Case closed!

Anonymous said...

And..............NYRA Rewards FINALLY has videostreaming on its site! It debuts on Wednesday! Let's see how this matches up with ADWs such as Twinspires, TVG and Xpressbet.

Anonymous said...

About a month ago I figured there would be a 10% bounce in handle from the release of the movie Secretariat. If that hasn't happened then maybe the boycott is having a major affect...unless maybe the horseplayers are staying at home trying to work through Lord of Misrule.

alan said...

RG - I got the book as a Xmas present, and will be reading it on an upcoming trip down to FLA.

HANA - Can I please have a pin? :-)

HANA said...

"HANA - Can I please have a pin? :-)"

You have to join and maybe send $20. Then we will.

Hey, we need the $20 to pay our huge staff :)

We'll be waiting to see your name!:)

PS: You don't have to support a boycott effort though. Although 70% of members polled said they support this, we have told everyone on the blog and through mailings that that we respect it is a personal decision for each and every member. No harm, no foul. Horseplayers disagree all the time, and that is not a bad thing.

markinsac said...


Let me mix racing and politics. I'd be willing to place a large wager that most people in racing management are Republicans. Republicans are the party of big business and their mantra is lower taxes equal economic growth. So what do these bigwigs in California do? They RAISE taxes. and not only do they RAISE taxes. AND AT A TIME WHEN CONSUMERS ARE PRICE SHOPPING. THIS IS A RECIPE FOR DISASTER! Here are some tracks that have actually LOWERED TAKEOUT, ONLY LOS ALAMITOS AND CALIFORNIA THOROUGHBREDS HAVE RAISED THE TAKEOUT.

What is the most troubling thing is Los Alamitos raised the takeout over a year ago and has seen a 20-25% drop in handle. Now the guys running the thorougbreds figured that they would do the same there and raise the purses figuring the handles would be the same. Los Alamitos was an abberation.

Furthermore, the internet changed everything. Suddenly gambling is at your fingertips. The Santa Anita president claimed "Only the top-point one percent of the players even know what takeout is". I think he's saying only .1% or one out of every thousans horse players know what the takeout is. OK, you are the president of Santa Anita. Have you ever done a survey of players on this? Or are you just guessing. But even if the number of players knowing takeout is low, say 5% or less, what about their subconteous? Even the degenerate gambler will go where he can last longer on his given stake. If going to the track with let's say $100 and it lasts an average 2 hours, while a
$100 playing online poker lasts an average of 12 hours, where is the degenerate going to turn to more often? I work in the gambling business and SOOOOOOOOOO many former horse players say they will NEVER go back. They say nothing about the takeout, they just say they "Never win playing the horses".

When the head of C.H.R.B. makes statements like: "We are not in competition with Indian Casinos, we're in competition with the Dodgers!" I have to question HIS credentials to even be in the position he's in. It was one of the most ludicrous statements coming out of California. I don't see a bunch of trifecta players sitting in the bleachers at Dodger Stadium. But to show more dysfunction: Hollywood Park and Santa Anita are about 28 miles apart. Hollywood charges $8 for parking and admission ($8 total). Santa Anita charges $9 total for parking and admission. Hollywood is located near the ocean, meaning not too many people live west of Hollywoood. Santa Anita is located near the mountains, meaning not too many people live north of SA. Neither Santa Anita or Hollywood is located directly on a freeway, there are freeways nearby, but the two tracks cannot be seen from a freeway. Right in between SA and Hollywood is the Commerce Casino, located right smack on interstate 5, the main freeway between downtown L.A. and Orange County. Thousands of cars pass by daily. One could say it's "Centrally located". And what did SA and Hollywood do? They let Commerce Casino have simulcast betting. Players can park for free, get free admission, and if they are having some bad luck, they can go play a hand of blackjack in between races to try to get even or poker too. Why would any player PAY for less? Who allowed this?

Indian Casinos are located as close as 45 miles from Santa Anita. They are stealing away customers left and right. The same analogy, free parking, admission, cheaper food and drinks and "more bang for the buck". So what does Santa Anita do? They accept ADVERTISING FROM SAN MANUEL INDIAN CASINO, COMPLETE WITH FREE SLOT PLAY OR MATCH COUPONS! The advertising even has a map on how to get there from Santa Anita. It might as be a one-way map, because the players need not know how to get back to Santa Anita!


markinsac said...

sorry I ran it 3 times guys, I got confused. California Racing, do you have an employment application?

steve in nc said...

I am glad to see HANA here. Thank you for reading and posting. I confess I didn't even know about HANA until this bruhaha, maybe because I play almost exclusively online now just because of geography.

I think this percentage dispute is less a matter of intentional distortion and more a matter of which end of the telescope one is looking at. Macro view - the one that impacts the industry - is the bigger percentage and the $19k deducted from the excta pool that Alan calculated. Micro view - the one that impacts me as a horseplayer - is the $2 less on $1 exacta that used to pay 100-1. they're both valid views.

HANA, since you're reading, here's my 2 cents (which many who post here think is usually worth a lot less):

The biggest bar to any growth in the player base is the perception that the game is rigged by cheaters. A serious effort to introduce and enforce a total drug clean up would enjoy broad support nationally among players and would resonate with sports fans more generally, the media, politicians and the public.

So I think you've bet a lot of chips on the wrong issue. But since you're committed at this point...

Add positive, unifying action steps to the negativity of a boycott. For example, pick a midweek day when more of the handle comes from regulars, and promote a "California Wins" day, asking people all over the country to play SA, but only in the win pool with it's low vig. See if you can show that HANA members can change the ratio of handle between the win & exotic pools.

Or pick a different track - one with really low takeout, and promote one day to see if HANA members can significantly boost the handle.

These are positive ways to show strength and unity, and only by demonstrating that will horseplayers ever get even a small voice at the decision-making table.

I respect you for speaking up and acting even if we have a tactical disagreement. And we horseplayers make a lifestyle of betting against and arguing with each other. Tough group to organize! I'm playing AQ tomorrow, and I invite all CA boycotters to do the same. With NY racing, we need to make sure the patient will live before we start removing its warts and correcting its bad habits.

DiscreetPicks said...

Twirling Candy won the Malibu in track-record time, while Baffert's well-regarded 2yo The Factor set faster splits in his maiden win than did Malibu pacesetters Alcindor and Smiling Tiger.

And yet, no mention of either of those things in Alan's post, or in any the 20+ responses??? Come on, guys. Very interesting results on Opening Day.

hana said...


Thanks for the post.

On the HANA site the goals are listed and a proper drug policy, uniform and fair for both participants and bettors is listed as one. There are several others.

Just a note on the 'boycott'. It is not being done to hurt anyone (over 20% of HANA members own horses, we have trainers and grooms too). The history of it is long, but in general, as was posted on the Paulick Report by a wagering economist "there is not one study done that says takeout in racing is too low". All say to increase handles and money for purses (ie optimal takeout) it should be lowered.

So when the takeout increase at Los Al happened, Barry Meadow who is a HANA board member (you might know him, he wrote "Money Secrets at the Racetrack among others) and Jeff Platt went to present some numbers. They were not given the time of day.

When handle at Los Al dropped 30%, they went again. They were told the decrease was not about takeout, it was because of "weather and people watching the olympics."

They then raised it in tbred racing, amongst the protest. We hope the boycott sheds light on the practices going on there, and positive change can happen.

If you go to the HANA blog now, you can see what happened at Los Al 2010 as we have graphs up of what happened. That track is a shadow of itself - less dates, less handle, less customers.

We dont want that to happen to tbred racing, so eventho they have glossed it up as a "field size increase measure", it will hurt everyone in the long run, just like Los Al. We dont want to see that happen there.

Anyway, thanks for taking time to look into our group.


alan said...

DiscreetPicks - Yeah, I know, sorry. If I wasn't spending so much time digging out of two feet of snow, I would have gotten to the actual races.....and maybe even mentioned that you picked both The Factor and Twirling Candy! And by the way, I mentioned that the latter was worth a bet against as the favorite....not so of course at 7-2.

Figless said...

HANA- Why would you not at least try some of the positive steps Steve suggests?

A HANA race of the day(or week, perhaps their Saturday Feature Race) for instance, at a low takeout track.

I think it is a great idea and would participate.

Figless said...

DP, what I saw was a washed out, rock hard, speed/rail bias creating ridiculous track records over a completely new surface.

I dont think The Factor is the best two year old ever to run 5.5f at Santa Anita.

Twirling Candy did prove he can handle dirt, as did his half brother Sydney, but do not underestimate how much they were helped by my mush :-)

Most importantly, there were no breakdowns over the first two days after a once a decade rain storm, which bodes well for the future of this surface.

This thrills me to no end since I have been a big proponent of installing brand new modern dirt surfaces (including the base) instead of AWT.

Indulto said...

You are truly a worthy opponent. Your spin is as interesting as any out there, but you are merely annoyed, whereas we are outraged. What level of industry injustice might move you to seek reform? What was your reaction to the Braulio Baeza debacle?

This blog is a gathering place for many whose hearts and perceptive minds the boycott needs to succeed. I wish the impressive anonymous posts here were submitted with pseudonyms that would enable me to relate a body of work to an individual contributor, like steve in nc. Much of my preceding response to him was intended for you as well.

I revere Santa Anita as I do Saratoga as enablers of entertaining experiences I would like to see enjoyed by future generations. But the increasing probability of diminishing bankroll combined with the declining quality of racing at both venues (and the deteriorating facilities at Saratoga) are deterrents to that happening. Customer satisfaction must become the priority at these venues to avoid their extinction.

Effective horseplayer representation could help reverse racing’s downward spiral. Greater participation by concerned players capable of expanding HANA leadership and making it more accountable to -– and representative of – its membership, would also increase its capacity to address additional player issues.

So allow me to paraphrase you. Don’t support the boycott if you don’t want to, but let the rest of us take the first step toward what we believe will improve our lot.

BitPlayer said...

Not to get off track, but, given does anyone know how the takeout increase for handle that goes through ADW's and simulcasts is actually supposed to get into purses? Isn't the fee for the signal fixed by contract?

Indulto said...

For some reason, this post was previously accepted, but never appeared. I'll try again.

Steve in nc,
Perhaps I'm misreading your posts, but it sounds as if you would support the boycott if every single one of your concerns were addressed to your satisfaction. One thing I have learned is that 100% agreement among horseplayers is unattainable. I don't know any player who isn't in favor of payoffs to the penny, but I do know that total reform in all areas is too much to ask for the first time around. That said, you've identified several important issues.

I too was concerned that recreational, smaller bankroll bettors might not benefit at the same time -- or to the same extent -- as professional, larger bankroll bettors. I'm satisfied that both groups would benefit in this case. Unrebated players will bear the brunt of the impending increase, both in and out of state. Also, since California residents cannot currently get rebates comparable to those available to some out-of-state residents, we are forced to play at a competitive disadvantage not only against heavily-rebated whales and/or professional players, but against moderately-rebated recreational bettors as well.

The target of this boycott isn't Santa Anita as much as it is the existing regulatory model for California racing that gives horsemen unjustifiable and unrestrained control over wagering as well as equine aspects of the business. I doubt you can identify another MAJOR LEAGUE racing jurisdiction where the interests of horseman and horseplayer are so out of balance

CHRB and TOC policies and practices consistently ignore the desires of the customers of California racing, and are too often implemented with a mixture of arrogance and incompetence that can't be allowed to continue. Don't take my word for it. Read the transcript of the CHRB board meeting the day the Governor signed the takeout increase bill.

Indeed, other racing jurisdictions have also raised takeout to unacceptable levels, but not in a down economy, not with such disparity of impact, and not while displaying such disrespect toward those they negatively impacted. Incredibly, this exhibit of their newly-prioritized mission of "promoting racing" over "protecting the betting public" was only the latest in a series of stunning missteps.

Steve wrote, "... And if my feeling that most horseplayers are going to shrug their shoulders at this is right, the industry will ignore us that much more completely the next time we speak up. ..."

There can't be a next time if there isn't a first time. Can the industry ignore us any more than they already are? We have to make them START listening with a successful show of strength which must be measured in number of participants and not just in percentage of handle reduced.

Where exactly should industry reform start? When will sufficient outrage again be generated to motivate unity? It's doubtful that any industry decision-making body other than the current CHRB will ever repeat their foot-in-mouth foolishness. Timing is everything. Even those who aren't directly affected by the issue should appreciate the value in striking while the iron is hot and the justification for corrective action unmistakable, if not undeniable.

Steve wrote, "... The biggest bar to any growth in the player base is the perception that the game is rigged by cheaters. ..."

You may be right and, again, I don't know anyone who doesn't consider it a problem to some extent. But it's only one reason (excuse?) why newbies feel they can't win. Also, players can't directly monitor compliance with their wishes in that area as they can with takeout.

I hope you'll bring your thoughtful concerns to the movement.

Anonymous said...

Hi Fig,

"HANA- Why would you not at least try some of the positive steps Steve suggests?

A HANA race of the day(or week, perhaps their Saturday Feature Race) for instance, at a low takeout track.

We did that for some time - from April 2009 for several months. I think we had ten of them? A couple of players ran the list and away we went.

Jerry Brown gave out free thorograph sheets for the races, BRis gave out PPs. There was a lot of help from the community.

We had a good time. And several tracks talked about "lowering the take on one pool" because of them (which now some tracks are doing). The members who ran it had real lives and the time involved was consuming, so after some success we stopped. The HANA board (about five people) were working on Euqibase scratches and changes, reporting uniform payouts and probables, a vet database for offenders - there was a lot on the table.

That's the history of that! If members wanted to start one up and run with it, we'd be game. But we have a lot (much more than the boycott only) going on and we have only a few hands on deck.



Anonymous said...

"Not to get off track, but, given does anyone know how the takeout increase for handle that goes through ADW's and simulcasts is actually supposed to get into purses? Isn't the fee for the signal fixed by contract?"

I believe that half the takeout increase will be eaten by Cali racing and half by the Adws. So, the Adws will get half the increase for their bottom line.... unless they want to rebate it back to you (I jest!)

Players on track or in CA pay the full price.


PS: That is why you see the ontrack numbers at Los Al go down more than the ADw handle. The ontrackers paid full juice.

Anonymous said...

There can't be a next time if there isn't a first time. Can the industry ignore us any more than they already are? We have to make them START listening with a successful show of strength which must be measured in number of participants and not just in percentage of handle reduced.

Well said.