12/09/2015 1:52PM

Fornatale: Ludt has seen contests from both sides now

Email

Tom Ludt really understands horseplayers because he is one. With nearly 25 years in the racing business, Ludt, 50, is currently a consultant for The Stronach Group working on some special projects. He has made it a point during his time in the game to try to see things through the eyes of the players.

Ludt, from Youngstown, Ohio, fell in love racing when he got a job working with Jonabell Farm back in 1991. From there he moved on to Vinery, and eventually became the president of Santa Anita. “When I got to Santa Anita that’s when I really got to know the handicapping side of the game and contests,” Ludt said. “I got pretty involved with players at the high end, many of whom became my good friends.”

Ludt thinks it’s important for track executives to not only understand where handle comes from but also to appreciate the people who are spending their money at the windows. “That group includes everyone from the two-dollar bettor to the players who contribute significantly to the handle week-in and week-out,” he said. “When I identified people like [professional players] Duke Matties and Jonathon Kinchen coming to our track, I wanted to do everything I could to help them come back.”

Ludt would like to see racing emulate the Las Vegas model as much as possible. “The two-dollar bettor is going to have pay for some things to help cover the overhead, no different than Vegas,” he said, “but the big bettors need to be comped or at least have their overhead significantly reduced in whatever ways the tracks can.”

One of Ludt’s best ideas along these lines was the creation of the famed Eddie Logan Suite – the command center of Santa Anita’s live-bankroll tournaments – which serves as a VIP room for high-level players. “When I got to Santa Anita I wanted to have a place I called The Vegas Room. At first I didn’t like it because it was too far back from the finish line. But sometimes when you’re wrong, you’re right. Players really love it and as a result it’s thrived.”

By attracting players to a place like the Eddie Logan Suite, Santa Anita has created a true destination for horseplayers, and Santa Anita is rewarded by getting its “golden dollars”: When a dollar is bet on track the hosts receive a much higher percentage than they do from dollars bet off track.

“We need handle in any way, shape, or form, but the truth is that racetracks need ontrack handle,” explained Ludt. “It’s not ever going to be like it was and I get that. At the same time, you’ve got to have an environment at the facility that people are going to want to go out of their way to experience or it just becomes too stagnant.”

This is an idea that some racetrack executives – who seem content with the idea of the tracks as large television studios – should pay attention to. “As much as racetrack executives appreciate handle, I’m not sure all of them understand the necessity of catering to the big players," Ludt said. "It’s more complicated than gamblers think to run a racetrack, but at the same time it would be nice if the tracks could appreciate their customers more.”

This is not without its challenges. “Rebating has made it very, very difficult, which is a real sore spot for me,” said Ludt. “To think that a racetrack is spending a lot of money to put on a show and can’t compete with these places that have minimal overhead and are offering rebates is upsetting. The rebates can be higher than the track’s cut and that’s discouraging when you consider the overhead and the physical cost of maintaining a facility.”

This dynamic comes into play in The Stronach Group’s recent lawsuit aimed at the contest site Derby Wars. “My interpretation is that The Stronach Group feel like they’re putting on a show and they need to be compensated,” Ludt said. “It’s a reasonable argument to me. This is just my opinion, but I don’t think they’re anti-contests, they’re anti the idea of not being compensated for putting on the show. “

Ludt, doesn’t see contests as hurting handle. “I don’t agree with the idea that people are leaving tote betting behind and just playing in contests,” he said. “The contest players I’m friends with bet plenty.”

In fact, horse racing contests actually help racing’s bottom line by providing an additional benefit: marketing. They’re bringing in new fans and revitalizing old ones. “That’s where we need fantasy racing,” Ludt said. “You can convert people from playing fantasy sports into horse racing and they become part of the handle. In my opinion, we don’t want to chase away fantasy racing, because it’s getting new people interested.”

Nowhere is this dynamic more evident than in online qualifiers for live-bankroll contests. A player might win a feeder for $21, then a Breeders’ Cup Betting Challenge seat where he or she turns over more than $15,000 or more on-track over the two days of the Breeders’ Cup. Remember that the players at the 2015 BCBC bet $3,063,495 (over 15 percent of the “golden dollar” ontrack handle) just within the contest itself. These same players were also playing multirace wagers that surely would raise that number significantly.

Live-bank contests work well on a smaller level as well. Consider Ludt’s success in winning the Los Alamitos contest last weekend. “I went up to Los Al and put money through the windows,” he said, “so Los Al won, the horsemen won, and I was rewarded for going to the contest.”

The benefits of live-bankroll qualifiers to the tracks are clear, but what about mythical-money online contests? Even if you accept the notion they should have to compensate tracks, it’s fair to assume that because of the additional marketing benefits they provide, contest sites shouldn’t have to give as much to tracks as ADWs do. If they did, they’d all be gone tomorrow and this tremendous growth opportunity for the sport would be out the window.

“I can’t speak for The Stronach Group, but I would think they understand that difference,” said Ludt. “Too often in this industry, we don’t get together and talk, we just fight, and that can be frustrating. I think we need a compromise that allows fantasy sites to thrive where the tracks can directly share in the benefits.”