Session Two: No Holds Barred

Erik Potek of Canadian Horseplayers Advocacy launched Tuesday's second session of the Standardbred Wagering Conference with an introduction to his interest in playing the ponies, and shared some of his foreign wagering experiences, the results of which led him to ask some reflective questions about an erroneously recorded result.

"Where were the checks and balances?" he asked. "Why were no media asking questions?" These questions and others led Potek to the launch the concept of CHAG. He stressed that at the moment CHAG is still a concept.

"Research and positive feedback I received inspired me to put together the concept of the Canadian Horseplayers Advocacy Group."

Potek's vision statement: To grow the Canadian horse-wagering industry to the benefit of all stakeholders by acknowledging and accepting the horseplayer as a key industry stakeholder.

The goals, according to Potek, would be to protect and educate the horseplayers, and to promote the virtues of Canadian horse-race wagering.

Potek explained that horse race wagering is a demand-base industry and there is a strong argument to make that the industry has failed the horseplayer. Not surprising, he said, considering the industry was developed with little input from the horseplayer.

"It's one thing for operators to promote the virtues of the game," Potek explained, "the message has much greater credibility when the horseplayer is given the voice to promote the virtues of the game."

Potek went on to make a whole list of suggestions, which included comments on potential horseplayer stewardship, regulations, pools, post times, consolation payouts, choosing substitutions in a multi-race ticket in the event of a scratch, encouraging communications about scratches, equipment changes, etc. He wrapped up with a request for comments and support for CHAG.

"We (the horseplayers) care about the industry and the game more than any consumer group I've ever seen. All the industry has to do is truly recognize and embrace us."

It took just a few moments for panel moderator Peter Gross to start a debate of sort by asking the audience if anyone thought horseplayers with the correct ticket should not have been paid after the pylon incident at Western Fair Raceway. When one man in the audience suggested that, no, they shouldn't have been reimbursed, Potek jumped in to defend the horseplayer.

"Why isn't there a process for the horseplayer?" asked Potek. "If you, as a horseman, were paid out in the order that the horses crossed the line, as opposed to the official finish, you would be raising an issue as well, and it would be a legitimate claim."

Potek said that the issue with such instances is with the judging, yet he acknowledged that the number of cases in which similar instances have occurred are not that great.

"Look, people bet on account now," Potek said. "One way to encourage them to bet on account is to say: if there is ever an issue where there is an inquiry and an appeal, and that result is changed, we'll have locked in that ticket and you will be paid for that ticket."

Horse owner/horseplayer Kevin Koury then jumped in to play devil's advocate, suggesting that the main goal is correct. "It's almost impossible," said Koury, "to ask horseplayers to save tickets and ask the tracks to pony up." The better thing to do, according to Koury, is to just address the underlying issue: when the judges are assessing situations they need to get the decision right on the spot.

"I do clearly believe the customer is someone we have to pay more attention to," interjected Dennis Dowd, NJSEA senior vice president of Legal and Government Relations. "But I don't think the line is black and white -- it's not solid."

Dowd suggested that many horsemen are also horseplayers, stating there is a lot of crossover. "Lowe and behold, when I got into management, it seemed there were a lot of people in management who were also horsemen. Erik [Potek] is unique in that he is strictly a horseplayer, but we are a lot more homogenized industry than a lot of people think. Very, very often a lot of us wear more than one hat."

"How difficult is it to initiate a new bet the way that you are regulated by the CPMA?" said Gross, switching gears.

"Right now it takes about a year," said Jamie Martin, WEG senior vice president, Racing. "The other part of it is that it (a new wager) has be something that tote systems in North America can handle and it needs to be something that other jurisdictions can wager on." Martin said, in short, that instituting a new bet is primarily a regulation issue, but also a technical issue. Dowd insisted that coming up with creative new bet types is something that track operators can't ignore.

"In the last 10-20 years or so," Koury interjected, "we have seen the brunt of competition come in, and we have, with all these changes around, us, failed to change. And what that has done -- the only way we can attract more money -- will be to attract the professional gambler. What if we polled everyone in this room, if we asked them: what is the one thing we can do to help this industry? To me, the answer is that we need to get the pools bigger. That is going to increase purses, which will bring better horses and horsemen. But that's the million-dollar question. How can you do that? How can you increase the pools? The only way to do that is to attract the professional gambler. Right now harness racing is leaning toward the two-dollar bettor and that is killing our industry."

"Like put them up in executive hotels and that?" Gross asked with a grin. "Not even," Koury replied, "just give them a reason to play. There are plenty of people who will spend $5,000 or $10,000 on one ticket. You've got to give the professional player a reason to play."

"You make a gambler think that he's getting some kind of a break, and you've got him," commented Gross, stating his personal opinion.

Then the real debate began over the oft-asked takeout question.

"Can you lower takeout?" asked Gross, who referred to the recently-discussed idea of running single races or cards with little or no takeout as a promotional tool. "Do you agree that lowering takeout will increase churn?" Martin responded by saying that it's difficult in the current regulatory environment, and that the move likely wouldn't increase churn anyway.

"But based on the changes that Rande (Rande Sawchuk, director of Policy and Planning, Canadian Pari-Mutuel Agency) is making, can't you do that?" Potek asked. Martin suggested it would be difficult to do it for a single race and get regulatory approval for it, but admitted it's something he hadn't looked at. "We could," said Martin, "but obviously the first step is to see what the regulatory changes are (in reference to the upcoming CPMA policy changes)"

Potek kept on pushing the issue, stating that he was curious about it. He said he was curious because if there is a belief that lower takeout will increase churn, then wouldn't racetracks do it?

"A general takeout reduction?" Martin responded. "I don't think we'll see the benefit." "But it's statistical!" Potek responded.

Koury jumped back into the conversation by saying that he completely disagreed with Martin. "Currently, as a professional gambler, it's impossible to make money in harness racing the way it is," he said. "The only way that you could fundamentally do that and attract the bigger gambler in order to make money is to lower takeout. Have any of the tracks looked at those numbers? Why haven't they looked at that? Why don't you think it will work?"

"One of the problems we have when you look at takeout," Dowd responded, "is 'where does that 20 cents or 19 cents go?' As a racetrack operator, you have to give 10 cents of that to purses. Then you're left with 8 or 9 per cent to operate your track. At the Meadowlands, which I think of as one of the premier racetracks in North America, we might make $1 million dollars this year."

"So the way things are set up right now, you barely make money," agreed Koury. "The track owners could be the biggest beneficiaries to reduced take out."

"Why are we not playing with the takeout?" Potek added. "If the horseplayer is screaming for reduced takeout to increase the churn, why not give it a try?"

"There are some misunderstandings here I would like to clear up," Sawchuk interjected from the audience. He stated that on the issue of takeout, there are regulations that tracks must abide by. Sawchuk did state, though, that historically operators have shown little interest in changing those rates. The betting public, he suggested, has benefited from consistent expectations about the rates. "If you want to give more money away, you're welcome to," Sawchuk said to the panel. "But what we do tell you is that if you do accept wagers, you have to divide your money a certain way."