Eric Cherry talks about cartel wagering
March 26, 2013
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Eric Cherry, who races horses as Let It Ride Stables and owns the South Florida Trotting Center in Florida, has written the following in response to recent articles regarding cartel wagering at the Meadowlands Racetrack:
The recent article about cartel wagering and how The Meadowlands is secretly fostering this practice to the detriment of horsemen in order to artificially raise the handle is missing the boat on many levels.
The goal should be to create as many dollars as possible to distribute between the horsemen through purses and the tracks. The actual handle is secondary. If the amount that is allowed to be wagered were capped then the margin earned per dollar bet would be material in this discussion,but that is not the case. A large handle is required to allow all bettors to bet the maximum they desire without destroying the odds. That is worth repeating. A large handle is required to allow all bettors to bet the maximum they desire without destroying the odds.
The current fee, otherwise known as takeout, is extremely high. After 12 races with a 20 percent takeout (many tracks aggregate rate is higher), the bettors are left with just 7 cents while the track and horsemen split 93 cents. It is no wonder that revenue is dropping. This model worked when there was considerably less competition,but is struggling today with the expansion of many forms of wagering. Our sport faces many challenges, but it is in all of our best interest to evolve with the times.
I am certain that most people remember that before the days of the Internet that the cost of buying and selling stocks made the cost of day trading prohibitive, except for professionals. Today for a transaction fee of about $10 you can buy or sell virtually any quantity of a given stock. I proposed in a past article moving to a transaction fee for the larger bettors. We don't want to discourage or stop the smaller bettors from participating so, for them we can leave the current system in play. The cost structure of accepting wagers has been reduced dramatically. Many of the bets today are paperless and a significant number of bettors bet online without the cost of human interaction as well. We need to encourage more players to "invest" in our betting pools. To accomplish this, we need to offer an enticing product. Large pools with a small takeout, whatever the method, does just that.
Let's not forget that takeout is a FEE! We don't pay our bills in percentages, we pay them in dollars. It costs the same to put on our show, the races, no matter how much is bet. Our main concern should be how much money is available to convert into purses and not the percentage of takeout!
If The Meadowlands rise in handle is the result of them giving a "break " to the cartels, then I commend them for proving that basic economic principles work in our industry and we should embrace that idea instead of criticizing it. Our other choice is to depend on politicians to help us. How is that working out?