Archive for Gulfstream Park

Is Gulfstream’s $.10 Pick 6 A Good Model For The Future of Wagering????

This week’s LET IT RIDE.COM HOT TOPIC comes from Andrew Beyer of The Washington Post…take a read and VOICE AN OPINION!

Microbets: Overall, the benefits trump any drawbacks

HALLANDALE BEACH, FLA.

A bettor playing Gulfstream Park’s races last month cashed a ticket that was almost unprecedented in U. S. parimutuel wagering. He collected $221,677 for a winning combination that cost 10 cents.

The wager, dubbed the Rainbow Six, represents an innovation sweeping the sport: the microbet. Whereas the $2 bet once was the industry’s standard, and most exotic wagers have been sold in $1 units, many tracks have begun to offer smaller bets. Customers at Gulfstream can play 10-cent superfectas, 50-cent Pick Fours and a 50-cent Pick Five as well as the 10-cent Rainbow Six.

This wagering concept was developed in Australia under the name Flexi-betting. An industry executive, Paul Cross, discussed the innovation at a U. S. horse-racing conference in 2006 and inspired a greyhound track to introduce wagers costing less than a dollar. Now most thoroughbred tracks offer microbets in some form.

The main rationale for microbets is to help smaller bettors play exotic wagers that typically require a multitude of combinations. Picking the first four finishers in a race is a formidable task; if a bettor wants to play a superfecta using all possible combinations of five contenders, a five-horse box with a $1 wagering unit would cost $120 and would exceed the budget of many players. The advent of the dime super means that a bettor can make the play for $12 and get in the game with the big boys.

Some people would say that this is not necessarily a good thing for less sophisticated bettors. Maury Wolff, gambler and economist, observed, “We’re pushing people into more complicated bets that are much more difficult to put together intelligently. It’s hard to screw up an exacta, but it’s easy to screw up a superfecta play.”
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Though the microbets surely have some drawbacks, they offer one benefit that trumps any negative features. They shelter players from tax withholding by Internal Revenue Service. When a bettor wins $5,000 or more on an exotic wager paying odds of 300 to 1 or higher, the government extracts 25 percent of his payoff. (If a superfecta returns $5000, the player walks away from the window with $3750 and a tax form.)

For many players – those who don’t itemize their tax returns and thus can’t claim losses to offset their reported wins – this is money they will never see again. Taking so much cash out of circulation reduces players’ betting capital and thus hurts the economy of the entire parimutuel industry. Because the payoffs on 10-cent supers, 50-cent trifectas, etc. are much less likely to exceed the $5,000 threshold, players keep more money and continue betting with it.

Some forms of microbets are more attractive than others, and I believe the worst of them is Gulfstream’s Rainbow Six. Though it has proved popular since it was introduced here this winter, it is, in my view, a sucker bet.

In the Rainbow Six, bettors try to hit six winners as in a conventional $2 Pick Six, but the entire pool is paid out only when a single ticket has all six winners. If more than one perfect ticket is sold, the winners collect 60 percent of the money bet that day (less the track’s takeout) and the remaining 40 percent goes into a jackpot that carries over to the next day.

“We know it’s a gimmick,” said Tim Ritvo, Gulfstream’s general manager, but he saw the Rainbow Six as a way of appealing to a new audience. “It’s giving the average lottery player a way to play for a huge jackpot without alienating our regular customers.”

The comparison with the lottery is appropriate. In a conventional Pick Six, a player putting in a small ticket has less chance of winning than a big bettor or syndicate; but if he picks six winners, he gets the same payoff as the big boys and he can be grateful to them for fattening the pool. The dynamics of the Rainbow Six are very different. A player buying a small ticket has a minimal chance of holding a winning combination that all of the big players miss. His best hope is to select six winners and collect a consolation payoff. After money is taken out of the pool and goes into the jackpot, and after Gulfstream gets its cut, only 48 percent of the day’s wagers are paid out.

That’s a 52 percent takeout – worse than the lottery. I hope other tracks don’t emulate Gulfstream and introduce their own version of the Rainbow Six: There are plenty of other possible betting innovations that are more fan-friendly bets.

Gulfstream introduced both the Rainbow Six and the 50-cent Pick Five this season to replace the $2 Pick Six, which had generated disappointing results. The traditional Pick Six can be the most exciting wager in the sport, but outside of California and New York it usually doesn’t attract large betting pools that motivate players to dive in. However, the Pick Five got an enthusiastic reception at Gulfstream. “It’s hittable, but the payoffs are good,” Ritvo said.

With hundreds of thousands fewer possible outcomes than a Pick Six, the Pick Five is a more manageable wager. The 50-cent unit lets average players spread their bets to give them a reasonable shot dealing with the big, wide-open fields at Gulfstream. Yet the bet has produced payoffs of $69,853 and $47,959 this winter, and the median return has been more than $5,000, making it well worth the handicapping efforts of any horseplayer. Moreover, Gulfstream promoted the Pick Five by offering it with a takeout of 15 percent (compared to the extortionate 26 percent it takes from trifectas and superfectas) so by almost any standard it is an attractive wager. Other tracks are taking notice. Keeneland announced a few days ago that it will replace its Pick Six with a 50-cent Pick Five.

Over the years, the racing industry has had a poor record of developing attractive parimutuel products. The last truly revolutionary idea in the game was the guaranteed $1 million Pick Six pool. But thanks to microbets, the sport may be able to offer a new generation of wagering products.

WHAT’S YOUR TAKE?

Does The Renovated Gulfstream Park ‘Get it Right’???

This week’s LET IT RIDE.COM HOT TOPIC comes from Eric Mitchell of The Blood-Horse…take a read and VOICE AN OPINION!

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Eclipse Award winners seemed to be reading from the same playbook this year. Several, at some point during their acceptance speeches Jan. 17, touched on the need for Thoroughbred racing to get fans more involved and engaged.

Mike Repole got the ball rolling while accepting the Eclipse Award for his 2-year-old champion colt Uncle Mo.

“Without you guys, there is no sport,” he said. “We have to do more to be more accommodating.”

A big step toward making racing more inviting would be to upgrade our racetracks. This issue of The Blood-Horse contains a top-notch feature on the state of year-round racing. A key point made in the main article by Jacqueline Duke is that we have a saturation of live racing; more product than demand. The days when tens of thousands of people regularly spun the turnstiles to watch live racing don’t exist anymore. The big crowds are reserved for boutique meets and main events, such as the Triple Crown, Breeders’ Cup, and select grade I races. Otherwise, our large, rambling grandstands are sparsely populated and not very inviting.

One racetrack did reinvent itself and got it right—Gulfstream Park.

I recently visited the Hallandale Beach, Fla., track fully prepared to hate it. My memories of Gulfstream Park have roots in the 1989 and 1992 Breeders’ Cups and several Florida Derbys in between. Standing on the wide concourse above the grandstand seating offered a sweeping view of the track enhanced by mild South Florida breezes coming off the Atlantic. A wide apron stretched along the rail where fans soaked up the sun and got close to the action.

Former owner Magna Entertainment (which has since gone bankrupt and transferred the track to current owner MI Development) tore down the old grandstand and replaced it with a much smaller facility that opened in 2006. Company founder Frank Stronach’s vision was to create an entertainment destination by building a more modern facility with an adjacent retail development filled with restaurants, bars, and fashion shops. Stronach has taken a lot of criticism over the years for his visions, but at Gulfstream Park his vision works.

Granted, grandstand seating and the large apron are gone, and the track is no longer suited to host an event like the Breeders’ Cup without a lot of temporary seating. Another knock against the new track is a majority of the seating is indoors where a seat in the simulcast parlor or clubhouse will cost at least $10. But no one pays anything to park, and there is no admission fee.

What the renovated Gulfstream Park does offer is a bright, clean, and modern facility with some unique features, such as several rows of stadium seating surrounding the saddling paddock. The grandstand also wraps like a horseshoe around the paddock, and balconies on the upper floors provide race fans with an easy view of the horses.

The more compact grandstand with its Spanish architecture is easy to navigate and the Village at Gulfstream Park with about 40 shops, which opened a year ago, is literally across the street. The Village offers a good variety of places to eat and drink; a glitzy New York-style nightclub, a quaint Irish pub, or the Cadillac Ranch with a mechanical bull. For people who are more interested in shopping than racehorses, there is Crate & Barrel, Williams-Sonoma, A-Brand, Bobby Chan, and Claudio Milano.

An exercise rider told me the Village has done a lot to attract people in their late 20s to a racetrack they would have otherwise ignored.

“I grew up around horses my whole life, but my friends like horses just because they think they’re beautiful,” he said. “Where before they wouldn’t come here, now they do because they can enjoy a few races, bet a few dollars, and then go to the bars.”

Judging strictly by ontrack handle, the experiment seems to be working. In 2010 the ontrack handle averaged around $530,380 for the 79-day meet. For the first 11 days of this year’s meet, the ontrack handle is averaging around $595,300.

Gulfstream Park also has the draw of slot machines, which are tastefully integrated into the grandstand. No one is knocked over the head with the casino operation.

Most track owners cannot afford to tear down their facilities completely and rebuild, but Thoroughbred racing has to upgrade the experience at the racetrack if the goal is attracting new fans. For the sport to grow, we simply cannot afford not to.

WHAT’S YOUR TAKE?

One Company, Two Approaches: Cater to the horseplayer or the horseman???

This week’s LET IT RIDE.COM HOT TOPIC comes from Richard Eng of Las Vegas Review-Journal…take a read and VOICE AN OPINION!

While Gulfstream caters to bettors, Santa Anita targets racers

This is a tale of two racetracks, Gulfstream Park and Santa Anita Park, which are operated by the same owner, Magna Entertainment Corp. and Frank Stronach.

At the same time that Santa Anita has raised its takeout on multihorse and multirace wagers, its sister track, Gulfstream, has lowered bet minimums and takeout, making the product more user-friendly.

Sounds like a case of Stronach’s left and right hands not knowing what the other is doing.

Santa Anita raised the takeout by 9.6 percent (to 22.68 from 20.68) on exactas and daily doubles and by 14.5 percent (to 23.68 from 20.68) for all other exotic bets. A predictable result has been a drop in handle of nearly 20 percent.

Meanwhile, Gulfstream has been creative in offering a 10-cent pick 6, a 50-cent pick 4 and pick 5 and $1 minimums on all other wagers.

The takeout in the pick 5 is a low 15 percent, making it one of the best bets in horse racing. It mirrors the Monmouth Park pick 5 in that regard plus has a similar carry-over provision if no one correctly selects all five winners.

I think a low-priced, low-takeout pick 5 is a good way to market to everyday horseplayers for this simple reason:

Suppose I take the time to handicap the five races in the pick 5. Not only will I play a pick 5, but I will bet many of those races individually, increasing my overall handle. That’s good business.

The takeout in the Gulfstream pick 6 is only 20 percent. But the most intriguing part is the entire pool will be paid out only if there is one unique winning ticket. When there is more than one winning ticket, 60 percent of the pool will be paid out and 40 percent will go to the carry-over pool.

The idea is to create a large carry-over pool that will spark more interest, and I think that will work, too.

Santa Anita offers a better price (15.43) in win, place and show wagers than Gulfstream (17.0), and in the trifecta and superfecta, which are a ridiculously high 26 percent at Gulfstream.

However, it seems like the philosophy of the two tracks is different. Gulfstream apparently listens to its fans in making the betting product more attractive. Santa Anita is trying to appease the owners and trainers who race there at a much higher cost to its players.

We horseplayers might be dumb, but we’re not stupid. I think, as a group, we are more discriminating than track managers are giving us credit for.

WHAT’S YOUR TAKE?