The slots bonanza has forever changed the economics of horse racing, where betting handle is no longer the engine that drives the train at tracks blessed to have these infernal machines. That's been good news for horse owners, track owners and governments, a lot of whom are making obscene amounts of money from their slots. The hitch is that the slots have done nothing to promote the sport, create new fans or level the playing field for horseplayers who are playing an unbeatable game. Fix the latter problem and horse racing could enjoy a remarkable revitalization.
It has become apparent that management at racinos, by and large, doesn't have any interest in horse racing or promoting the sport. The game is pushed off to the side, a nuisance to those whose only concern is how much money they can make by emptying the pockets of those foolish enough to wile away the hours in front of a mindless machine. But maybe the few among them that genuinely care about horse racing might consider a bold proposal that could make horse racing the kind of gambling game where people might actually be able to win money. Do that and horse racing will thrive.
There are myriad reasons why horse racing's popularity has declined dramatically over the last few decades, but none more relevant than the fact that it is a gambling enterprise that is so difficult to beat that virtually everyone who tries it loses money. The situation has only grown much worse over the years as tracks have raised takeout rates (the amount that is taken out of the betting pools before money is paid out on winning wagers) -- in some cases more than doubling them.
But what if racing were transformed into a gambling game that no longer caused customers to go broke but actually made the most savvy players wealthy? Because of slot machines, that's no longer a preposterous scenario.
Before anyone had ever heard of a racino, tracks made their profits and paid their purses from their cut of the betting handle. Now, at the slots tracks, the betting handle is such a small part of the overall business that the amount of money that trickles in from what people are betting on horses is virtually meaningless.
Yonkers Raceway is a prime example. The New York harness track handles about $500,000 a night, with about $60,000 of it being bet on track. Those are minuscule numbers, yet Yonkers offers some of the best purses in harness racing and may soon be at a point where the total amount of purse money paid out in a year is less than the total amount bet on the product.
The small amount of money made by a track like Yonkers from the betting becomes insignificant when compared to the millions being made from the slots. So why not give it back to the horseplayers and let them share in the slots largesse?
Imagine a game where there was no takeout or a very small one. The same exacta that is now paying $40 would pay $50. The winner that now returns $8 would pay $10. The result would be a true game of skill in which the best handicappers would defeat the weaker handicappers and make money. And even the poorer handicappers wouldn't get buried, which is what is happening to them now.
The best analogy is poker, where the house only takes a very small cut and the rest is returned to the players. The good poker players win and the bad ones don't. The fact that poker is a game where a smart player can make money is obviously a major reason why it is so popular.
In racing, you can take a brutal game and instantly turn it into the best gambling product there is. With a realistic chance of making money, and maybe even a lot of money, people would flock to the racetrack. By taking little, if any, money out of the pools, the tracks would make next to nothing from the betting on the horses, but that's exactly what they're making now. The serious money would still come from the slots.
Unfortunately, with the way the game is set up, this could only work with on-track customers. Tracks already receive such a small cut when a bet is made off-track that there's no way they could afford to give something significant back to simulcast bettors.
The easiest way to make this work would be to establish a bonus system for on-track players. Every time they cash a bet, which would be paid out at the normal price, they should receive a bonus payoff in the neighborhood of 15 to 20 percent of their winning bet. The money would go directly into an account where it can be used for future wagers. That way you wouldn't have to worry about two sets of payoffs, one for on-track customers and another for off-track customers.
This might not be the perfect win-win situation, but it's at least a win-lose nothing situation. Horseplayers would be far better off and tracks would lose next to nothing. The real winner, though, would be horse racing, a sport that needs something more than big purses and rich track owners.
Bill Finley is an award-winning racing writer whose work has appeared in the New York Times, USA Today and Sports Illustrated. Contact Bill at wnfinley@aol.com.