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"Too Much Product, Not Enough Demand"

Nick-Eaves-01.jpg

Published: February 5, 2010 9:54 am ET

Last Comment: February 10, 2010 5:55 pm ET | 17 Comment(s) | Jump to Comments

In an article today by the Edmonton Journal, Woodbine Entertainment Group President and COO Nick Eaves has been quoted as saying that there is too much product and not enough demand for harness racing in the province of Ontario.

"There's too much product and not enough demand for harness racing," Eaves said. "We (WEG) race 240 standardbred cards, compared with 160 thoroughbred dates. The balance is wrong, especially when you have 13 or 14 other tracks racing harness horses close by -- like Flamboro Downs, which has something like 250 harness cards a year."

Eaves also noted in the Edmonton Journal story that as WEG saw wagering on its thoroughbred product rise seven per cent in 2009 from 2008, wagering on its standardbred product was down seven per cent.

Eaves also said that the biggest growth area in the racing business has been internet wagering through Horse Player Interactive.

Eaves went on to state, "…with the products available today and the reality that people's lives are busier and different, we have to make telephone, internet and other wireless device wagering easier."

Click here to the read the Edmonton Journal article in its entirety.

(With files from the Edmonton Journal)

February 10, 2010 - 5:55 pmCheck the handle at any one

Bubs McGee SAID...

Check the handle at any one of these harness tracks in Ontario.

People are avoiding them, numbers do not lie.

February 9, 2010 - 12:34 pmI suggest they leave the

Norm Brunet SAID...

I suggest they leave the take out the same however give cash back to the HPI customers on an elevated scale BUT ONLY ON WAGERS ON CANADIAN TRACKS. In regards to B tracks they should not be aloud to go head to head against an A track which I find is self defeating and makes no business sense. Twenty some years ago it did not matter but I find it absurd in this day of the internet to have 2 Ontario tracks race at the identical same time, I believe the business word is "cannobilism". The Meadows race at 12.55 p.m. during the week and 3.55 on Fridays and enjoy a 500K handle.
Not one of our B tracks can boast that. When you go to the casino they give frequent player prizes....why not for racing ? I know they give you points in Toronto but why not all over Ontario ?
There is a way to revive the betting industry here but the operators need to be given incentives to succeed on the track side.

February 9, 2010 - 9:27 amSo many great ideas, it is

Shawn Murphy SAID...

So many great ideas, it is good to see. You are right, Woodbine is not fan griendly at all, i was there last night and you could shoot a cannon through the place and not hit a person. Mohawk is a great venue, the horsemen love it, make it a 12 month operation. Reduce the takeout, like we all say, there is so much competition for the betting dollar these days we need to stay with the times. Open up the dining room, have $10 buffet nights, remember the old "sports" at Mohawk, imagine having a big Superbowl party there? What WEG needs to do is gather gamblers together in a forum and get their ideas and not the guy who spends $20 a night either. I have said this before, reward your players, send out free buffet coupons once a month to some HPI members, they will bring friends, it creates a domino effect. Create a weekly National Lottery that sells tickets through the OLG. So many ideas, now we need someone to run with them.

February 8, 2010 - 11:36 amI am not so sure Mr. Eaves

Norm Brunet SAID...

I am not so sure Mr. Eaves that the problem is supply and demand. It would be interesting to see the HPI numbers and where the canadian betting dollars are going. How much of them are going south ? Yonkers is averaging a million a night handle with there biggest handle night beeing Monday and Tuesday. That number is up significantly over the past few years. The Meadowlands have 2500 to 4800 in attendance and they still charge an admission fee.
The flaws with Woodbine harness racing have been well documented over the last years and yet WEG have chosen to ignore them. Whom would want to go to an arena to see a hockey game if they had to watch it on a t.v. and the outcome would be decided after the first 5 minutes. Harness racing is a spectator sport yet you have taken that away at Woodbine. If I attended the standardbred's for the first time at Woodbine I seriously doubt that I would be interested in returning again,thus you are showing a product 7 months out of a year that have very little chance of attracting new patrons due to product presentation. If you were serious about improving the harness side of racing at WEG then you might want to crunch the numbers Mohawk harness vs Woodbine harness and don't forget to consider that the thoroubreds at Woodbine are competing against the standardbreds at Mohawk so the supply is more. In brief it has nothing to do with supply and demand but more about whom builds the better mousetrap.

February 8, 2010 - 9:02 amRobert, the government is

Maury Ezra SAID...

Robert, the government is not a barrier to takeout reduction. On bets in Ontario, the government only gets 1.3%. Any track can give a request to takeout reduction any time. At a conference, a rep from the CPMA said that he didn't care what a track take's out.

I want to make something clear here: If money received from bettors is peaked out when the takeout is at a 20% average, there is no point in reducing takeout. However every study done suggest the average takeout should be maximum 13 or 14% tops in order for tracks and horsemen to get the maximum amount out of horseplayers. And I don't think those studies include the many players who would shift their action back to the parimutuel pools from offshore if takeout were reduced to 12% or so.

I use this example all the time. The takeout on slots in North America is around 8% on average. Slot operators know that if takeout were higher than that, lets say 16%, they would wind up getting less than half the handle bet at 8%.

Why does this happen? Not because slot players are aware of takeout. They are aware of how long they last. If they lose $100 in two hours, they get more discouraged than if they lose it over 4 hours. They are more likely to come back when they last 4 hours because they are under a greater illusion that they are closer to beating the game and/or they feel they at least got four hours of entertainment. The growth comes in because the more they go, the more likely they are to drag someone with them the odd time.

To me, less racing is a band aid solution. It won't grow the game, but it is an attempt to stop the bleeding. Lowering takeout is an attempt to grow the game.

February 8, 2010 - 4:16 amNancy,the sad reality is

Nancy,the sad reality is this house cleaning should have happened 10 years ago.

The sweet heart deal the tracks got from the slots was to good to be true. It's like Eric Poteck said "to give racetrack operators slot revenue with no criteria or benchmarks based on their ability to grow their handle is even more absurd". What incentive is there for a track operator(s) to overhaul a failing business model when it's guaranteed money regardless of performance!Western,Flamboro,KD,Sudbury etc.

There isn't enough(product)"A" horses to maintain racing at the Wood/Moh for 12 months. Never has been. For Eaves to blame Flamboro(ninety percent of purses are for 5-7thou) or any other "b" track for the "imbalance" is like the Toronto Maples leafs blaming the OHL and minor hockey leagues!

Not only is Eaves going to have to reduce racing to 8 months,he is going to have to say "GOODBYE" to Woodbine slots and move racing to Mohawk full time.

February 8, 2010 - 1:38 amMaury,i agree with you but

Maury,i agree with you but how does the racing industry reduce the "takeout"?Ask the government to not only keep pouring in hundreds of million of dollars from the slots,but to also reduce the "take"!

The racing industry had a chance when they negotiated with the government when the slots first came to race tracks in Ontario.They elected to take the money instead of working out a deal,that in lieu of money,the "take" at the tracks would be lowered.

Because of this decision,they have no choice but to reduce race dates dramatically now.

February 7, 2010 - 9:08 am@robert and how do you

@robert and how do you explain to owners that they will have to pay the training bill on a horse that is fit to race but has no place to race ? How do trainers survive without their percentage ? After paying bills for 4 months ( roughly 10,000 dollars ) only to be told you didn"t get in...too many horses ! So then what ? you have 14 races a night which the public hates !

February 6, 2010 - 11:47 pmEconomics 101: When demand

Maury Ezra SAID...

Economics 101: When demand drops, the price of the product (takeout) should drop. The main reason betting is down is that racing fails to compete with other forms of gambling plain and simple.
I think someone at WEG should investigate player's habits when it comes to online betting.
I'm pretty sure they will find that when players go broke, they tend to take breaks, and lately, if I'm not mistaken, the breaks are further apart.
When players take breaks, they either start forgetting about racing, and may find other things to gamble on, or gamble on things that they know gives them a bigger bang for the buck.
The key to growth in horse racing is to keep the player in the game. And when the player is in the game, the more likely they are to expose friends, family and coworkers to the game as well.
And this can ONLY be achieved through lower takeouts.

Cutting dates is giving up way too early. Cut takeout first, see what happens, and then go from there.

February 7, 2010 - 12:24 pmJack Darling,when Eaves

Jack Darling,when Eaves mentions race reductions,i don't think he is contemplating "slight alterations" to race dates.I think he realizes he will have to take a blow torch to the existing race date schedule.Nothing less then 3-4 month reduction at Woodbine/Mohawk.

Wood/Moh has to break away from the "b" track pack and become the premiere track they bill themselves to be.Come on,most nights Wood/Moh is just a glorified "b" track.

With Wood/Moh reduced to 7-8 months the purses will be bigger and the competition will be cut throat.They will only have 7-8 months to run for the big money or they will be forced to race the "b" tracks for less money the rest of the year.

Anything less is suicide.

February 6, 2010 - 2:57 pmtakeouts on wagers seems to

takeouts on wagers seems to be the first place to start then WEG has to create a marketing department with new ideas and promotions, they rely on the same stuff year after year . There is nothing to attract newcomers, walking into the grandstand full of machines is not exactly a vibrant, exciting place to be. I cannot imagine a couple going to the track on a Thursday night being forced to hang around 2 EAST area with the hardcore regulars with no place to sit except row seating. Why not turn Woodbine into a WEGZ ? The old adage if we build it they will come just doesn"t work anymore, you have to build it , promote it, look after it and never assume the customers will always be there.

February 6, 2010 - 11:55 amNick, I believe you when you

Jack Darling SAID...

Nick, I believe you when you say that nobody is committed to growing customer demand for harness racing more than WEG. The concern here, at least in this particular piece is that your answer to the problem is to cut dates. I agree that we have too much racing but i really dont think that WEG races too much. Sure,slight alterations in dates might be helpfull but WEG tracks are the ones we really need to expand for our sport to flourish.WEG is where the people are,where the market is and where we have to make the bold moves necessary to attract more customers. Reducing the takeouts on wagers seems to be a good place to start based on the recent feedback from customers.The whole industry is motivated right now and most horsepeople are ready to help in any way they can to create more demand for our product.Harness racing at WEG is a world class product that we can promote. Before, simply cutting dates,we would much rather make moves that would increase track attendance,wagering and get those betting pools up significantly. Harness racing needs an enthusiastic, innovative WEG for it to survive and flourish. We are on the same team. If it turns out that cutting dates is the way to go,than so be it but before doing that i think now is the time to get aggressive and make the bold moves that could increase business. Good Luck, Jack

February 6, 2010 - 11:43 amIn Ontario the Harness

Eric Poteck SAID...

In Ontario the Harness racing supply is totally out of sync with wagering demand. This is very apparent by the small handle at the majority of B Tracks in Ontario. Yesterday in 12 races Flamboro handled 163,000 and Western Fair handled $95,000. The horseplayers are not showing interest in those tracks. To force operators to race when there is no customer for their product is totally absurd! But then again, to give racetrack operators Slot revenue with no criteria or benchmarks based on their ability to grow their handle is even more absurd. This reflects one of the major flaws in the Ontario racing model. Until the model is addressed, the industry will continue to shrink!

February 6, 2010 - 8:41 amDo not mistake realism for

Nick Eaves SAID...

Do not mistake realism for apathy. There is nobody more committed to growing customer demand for harness racing than WEG. Multi year wagering declines of approx. 10% are telling us loud and clear that customers are not satisfied with the product we are providing them. WEG intends to do everything we can, including find the right balance between supply and demand, to ensure that we have a harness racing business which is flourishing, not continuing to decline!

February 5, 2010 - 9:23 pmMr Eaves states that there

Mr Eaves states that there is not enough demand for harness racing...you'd think then that he would enthusiastically take up the challenge of creating more demand...instead he is totally apathetic. What a poor example he sets for those at WEG.

February 5, 2010 - 4:38 pmBefore we start thinking of

Before we start thinking of reducing harness race dates in Ontario we should analyze the total reduction in horses needed and it effects on employment in the horse racing industry. Mr Eaves before recommending a reduction in harness dates should be more aware of the employment and agricultural impact of standardbred racing in Ontario. If we used the employment statistics as the sole criteria for which breed of horses would recieve the most race dates the thoroughbred industry would be shrinking at an alarming rate. I hope that Mr Eaves who has recieved a very important platform to guide this industry stop using the popular media to promote the reduction in harness race dates if he is unwilling to put forward all of the factors and data that is used to allocate race dates!

February 5, 2010 - 2:00 pmIt sounds like WEG is

Ted Fenic SAID...

It sounds like WEG is already laying the foundation for eliminating harness racing just like Harrah's is going to do with dog racing in Iowa.

They charge larcenous takeout in a high competition gambling market and they want handle to drop so it will be a very easy argument to give harness racing the boot very soon.


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