Power Cap

Power cap- existential handicapping

04 September 2009

Right Sizing The Racing Product

The key issue affecting the racing product is the sheer amount of the product. On any given Saturday in North America there are upwards of two dozens tracks operating with a race commencing every minute. With this much product racing ceases to be an event and resembles an infomercial for a kitchen appliance on a never ending loop in a deserted big box store that nobody goes to in some anonymous blanched suburb. Go to any simulcast center or OTB and every race looks the same. In silence it is anonymous claimers running around in a circle, while older working class men yell and slap their behinds with the racing form. Instead of a complex blood and guts puzzle to contemplate the game is reduced to keno with domesticated animals.

Racing does not need to reinvent the wheel to bring back the big-event nature of the game. The white hot and trendy UFC only holds fights every few weeks. Thus every fight is hotly anticipated as a lack of supply stokes demand. Anticipation is marginalized when in a three minute span the 5th race from Finger Lakes is shortly followed by the 5th from Delaware which is followed by the 4th from Ellis.

This is where government intervention has damaged the collective racing product. The permission to subsidize purses with slot machine revenue has created entirely too much product. Racing has ceased to be a hobby of the wealthy and has become welfare for horsemen. While everyone deserves to be paid for their hard work they should not be subsidized when their work no longer has a market. Should neighborhood shoe repair stores be brought back from the service industry graveyard and be subsidized by slots too? Most of these racino subsidized tracks have an unappealing product and a purse structure that could never exist if not for the slot machine subsidy. Their presence is hurting the existence of neighboring tracks that operate on parimutuel waging alone pressuring them to acquire a slot machine subsidy as well.

The sheer amount of racing not only reduces the appeal of the racino product but it also dilutes the appeal of tracks in neighboring jurisdictions siphoning stables and decimating competition thus neutralizing the appeal of the product. The expansion of gambling from parimutuel wagering and Las Vegas to slots machines in every region is another example of the enlightenment establishment not considering the unintended consequences of their meddling. The horse racing industry has not benefited from the increased gambling even when it enriches the purse structure temporarily it sets in motion the process that will eventually ruin the collective industry by market saturation and the loss of the fickle public as racing fans.

In the past I have advocated a laissez faire approach to the current challenges of the horse racing industry. Call it an intellectual breakthrough but I now believe that the laissez faire approach is the road to ruin for racing. There are too many jurisdictions with too many local interests that have the game "drifting like a rudderless ship". At this point centralized influence and power would greatly help in providing "friendly persuasion" to the market forces affecting racing. The ship can not continue to drift and take on more product while the bulkhead of the ship takes on more water.


Theodore L. Grevelis said...

This would require the subjugation of a state's own interest for the good of all. With the dollars involved, it won't happen. Bankrupt states are not going to give up millions in slot revenue that they currently receive from racinos. However the reduction in the 2010 foal crop to perhaps under 30,000 for the first time in years, will exacerbate the current dearth of horses and those tracks that jumped on the slots bandwagon early will survive, those who have not won't because that's where the horses will go.

The industry may right size, but it's going to be painful...

Anonymous said...

"Older working class men." This puts you and Stronach on the same page. His annual reports were always filled with pictures of attractive 20-30 year olds cheering on their horses. Only problem was when the photo-shoot was over they would leave the track never to return.
We older working class men who happen to like horseracing need something to bet on(what ever happened to Pioneerof The Nile?). Are we supposed wait for Zenyatta or Rachel to make an appearance before we bet? We old folks need action(time is running out). We can stand losing. Hell, Stymie lost 96 times which makes Curlin look pretty good. Seabiscuit a ghost from the past who made into the hearts and minds of some of the present day fans lost 56 times.
I admit that the claimers leave a lot to be desired but trying to get to the breeding shed undefeated doesn't offer much in the line of action either.