Thursday, December 4, 2008


I have a lot of catching up to do with news and racing but the one issue that I was most interested in before my sabbatical was the continuing ADW saga, particularly the situation that was being played out in California. Obviously they have come up with an agreement of which the terms have not been released - at least not to my knowledge. I would venture that not everyone got everything they wanted, otherwise the percentages would most likely have been revealed along with news of the year pact.

I still believe that the ADW situation is now racing's biggest problem. In an industry where the takeout was established to assure the health of the industry it is now relied upon by several (greedy) industries to exist. I can't say with complete certainty that I understand where all these problems began but I think the seed was planted with the first OTB's in New York City, circa 1970. Apparently NYRA didn't see OTB's as a real threat to their business (handle) that in those days was (for all intents and purposes) completely generated on track. Perhaps it could not be fathomed that people would prefer to watch and wager on the races from a remote location when they could go to the track and see the races / horses in person. From what I understand NYRA agreed to take just 3% of what OTB took in -presumably because NYRA didn't believe that it would amount to a hill of beans - and the mold was cast. But preceding that historical event I presume the takeout was split between the track and the horsemen - though to what breakdown of percentages I have yet to discover. I also have yet to hit on the proper google terms or to send an inquiry to the right person to find out historical rates of track takeout for days gone by. But if I go with the 14% I saw mentioned somewhere what could have been the worst case scenario? An 8% - 6% split? more likely 7% and 7% between track and horsemen? Perhaps it wasn't even thought of in those terms back then, maybe there was just an allocation of funds. (To all my fellow bloggers I would appreciate any accurate information that you can add here).

But what occurred in California, before the new pact, is this [from my Ellis Farce entry July 5].

The distribution of takeout on ADW wagers differs in state and out.
For this purpose, let’s assume we’re focused on out-of-state ADW wagers on a race;otherwise, they can be quite different.

Assuming a 20% takeout:
2 to 3.5% to purses – Host Fee split·
2 to 3.5% to track commissions – Host Fee split·
13 to 16% to ADW company

In states where an ADW has to pay a source market fee (payment to local track/horsemen) – few – it looks like this (on average):
· 2 to 3.5% to purses
· 2 to 3.5% to track commissions
· 3 to 7% to local track/horsemen
· 9 to 13% to ADW company

When source market fees are paid, the 1/3 revenue model horsemen are talking about is met; by adding the source market and host fees together.

My point is that we (as fans of the sport) should all be behind the THG & TOC and all horsemen/owner groups (that aren't ADW's like CDI and Magna) because they are fighting for money that would go back into the game and therefore benefit the product. I also believe that the track operators should be fairly compensated. Horseman's groups should see them as partners, and likewise those owners should see the horsemen as partners. But this will never be true or practical when the tracks are also ADW's. Like so many things today the industry is dealing with antiquated laws that no longer have legitimacy. I see anti-trust implications here though I never see anyone raise those questions. This is not so far removed from what has happened on Wall Street. Those with the power (money, [ADW's] ) have managed to keep their advantage. I leave it to all of you to surmise how.

I'm for the ADW's being fairly compensated. However, my view of what is fair is obviously a lot different than theirs. Personally I would like to see 7 % to horsemen, 7% for ADW's and 6% for the tracks. Assuming a 20% takeout.

Yes there's a lot more money in the game now then back in the sixties but there are a lot more people trying to make a living off that money these days and things are much more expensive. But as fans we should be concerned with the health of the game first and foremost.

Here at the Thoroughbred Bloggers Alliance we have standings and other advertising that comes from CDI, TVG etc... While almost all of it goes directly to charity [Old Friends] those of us that don't carry the standings have to personally donate our share to that cause each year. I don't carry them because I will not lend support to those [ADW's] entities [I did for two days but thought better of it and opted out again] . When all is finally settled and everyone is getting a fair share I will put the standings back up. Until then I will keep them off my site in solidarity to the sport I love. I don't for one moment question those on TBA that do post them; it is an individual decision. And for most one thing may have nothing to do with the other. We all have our own thoughts and I support everyone's individual decision. And, after all, whatever TBA receives goes to a good cause. Taking from Peter to pay Paul? But for those fans that have been and are irate over loss of signals etc... please try to see the bigger picture.

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