03/06/2015 12:09PM

Giwner: Seeding pools could produce higher profits

The Metro 6 shooter was a good concept but it failed.

A couple of weeks ago our Jeremey Day pondered on Twitter whether tracks could just seed pools with a small amount of money to make wagering on certain bets more enticing. I participated in the conversation mostly doubting the legitimacy because tracks would almost certainly lose money on the venture.

Being open-minded, I let the idea marinate for a bit as I pondered, which is better for the bottom line and racing as a sport, a stakes race or seeded pools?

There are many tracks currently offering as few as one or two stakes races per year. The question is whether a race like the Gerrity Memorial at Saratoga Gaming and Raceway or the Courageous Lady at Northfield Park provides the track with more publicity than a weekly campaign of pool seeding.

At Saratoga, according to my numbers, the track put up $252,000 of the $260,000 in purse money for the Gerrity. The track coupled the Gerrity with New York Sire Stakes events in 2014 and put on a nice show which garnered some national attention. Handle, as I recall, was up somewhat. But even if handle was $200,000 higher (a generous estimate) and assuming that 90% of that money came off-track, the result is still a net gain of less than $10,000 for the track and horsemen to share.

Let’s say the same $252K was used to seed the pick four on the 32 Sundays that the track raced in 2014. To clarify, seeding is basically like a carryover- extra money added to the pool that creates huge value for customers. Each Sunday the track would be able to seed the pick four (or pick five) with $7,875.

I’m going to guess that the current pools for the pick four is about $2,500 per night. How much higher will that pool get if it was well marketed in the industry with a $7,500 head-start? I’ll be conservative and say the pool reaches $15,000 each of the Sundays. Simple math: 15,000 – 2,500 = $12,500 handle increase x 32 dates = $400,000 increase in handle. Using the 90/10 rule above involving on-track versus off-track, the experiment should produce about $20,000 in added revenue.

From a sheer numbers standpoint at Saratoga it clearly makes sense to seed pools over offering one stake race. The above doesn’t even consider the increase in handle for the races which do not start the pick four. There is a reasonable chance if a handicapper looks at all four races they will find something worth betting in one of the latter legs, a race they otherwise would have ignored that day.

To give another example . . . Northfield Park’s Courageous Lady had a purse of $110,000 in 2014 with $74,000 of that money put up by the track (according to my calculations). Using the same hypothesis that handle would be up $200k because of there being a stakes race on the night, that leaves us with another $10K profit. Let’s say instead the track seeded the pick four with $25K on its other three stakes nights—Cleveland Trotting Classic, Milstein Memorial and the Battle of Lake Erie. I’m going to assume a carryover of that amount would generate at least a $100,000 pool. Math time: $100,000 - $15,000 (approx. normal pool size) = $85,000 handle increase x 3 = $255,000 increase in handle.

This entire theory is very similar to what the Meadowlands and Yonkers tried with the Metro 6 Shooter back in June of 2010. The wager was composed of six races from both tracks and started with a pool seeded at $30,000. Ultimately the Metro 6 was deemed a failure because it simply didn’t lure enough money into the pools to make a difference.

Why did the Metro 6 fail? Why would I suggest something that in essence didn’t work?

Simply put, the Metro 6 Shooter was too easy to hit. Not enough thought was put into which races were selected for the wager and thus it was hit in each of the five weeks offered, exhausting the seed money put up by the SOA of NY and Yonkers Raceway. The average money wagered each week was just over $40,000 on top of the $30,000 added. It was a great deal for bettors, but there was clear confusion in the ADW world with the bet covering two separate tracks.

The goal of the Metro 6 was to create buzz via huge carryover pools in subsequent weeks. This was unrealistic because it was too easy to hit the wager once more money was bet on it. Sure we see many carryovers in pick 4s and pick 5s, but those pools are in the $2,000 to $10,000 range, not $30,000 to $40,000. My plan only seeks to increase handle for one night of racing. Let’s get people to handicap at least four races on one night. Perhaps they’ll even bet on all four races independent of the multi-race wager. A carryover would be gravy.

The Metro 6 combined two tracks and was contested at a time when ADWs and social media were technologically far from where we are now. It is much easier to get the word out on a carryover (or seeded pool) in 2015 via Twitter, Facebook, or even the USTA’s Strategic Wagering Program. There were even fewer online media outlets back in 2010, as no Harness Racing Update or DRF Harness was around to help promote the wager.

There are of course two major obstacles to the plan above. First of all, horsemen would have to agree to reallocate the money for a stakes race to this seeding pool. Since at many of the smaller tracks horsemen don’t even like having the stakes races because they wind up giving money to horses and trainers that rarely even compete at their track, this should be a no-brainer. Plus it benefits the purse account via higher long-term handle. Secondly, we as an industry have to be careful not to eliminate too many stakes races so that the bigger picture of racing and breeding is not jeopardized.

Think about it. What brings more attention to the sport of harness racing? The $500,000 Yonkers Trot and $500,000 Messenger stakes on a card with no guaranteed wagers or the $475,000 Yonkers Trot and $475,000 Messenger with a $50,000 head start in the pick four? Would the winners of each race miss the $12,500 from their winner’s share? Maybe. Would a $50,000 carryover and $125,000 guaranteed pool at Yonkers gain publicity? Certainly.

I’m not suggesting every track in the country should drop its stakes races and repurpose the money, but it might be a worthwhile venture for a few tracks. And maybe every track with a major stakes program would benefit from taking a couple of thousand dollars from their top stakes and have a large seeded pool once a year. Let’s call it customer appreciation night.

Tracks and horsemen won’t get rich by this venture, but a few extra dollars should hit the purse account and the life-blood of the sport—bettors—may just feel valued.

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