Thursday, June 4, 2015

Handicapping Contests Drive Business

Monmouth Park has yet to publish its usual press release with official results of Saturday's National Handicapping Championship (NHC) qualifier, but according to the NHC Tour leaderboard page, I finished 21st out of 219 to pick up 578 more Tour Points to land around 200th in the standings.

There's a lot of tournament season to go, but finishing in the Top 150 come season's end would advance my goal to reach a second-straight NHC at Treasure Island come January 2016.

That quest continues this Saturday, with my hard-earned entry in the NHC qualifier; a win would be nice, but building up more Tour Points is becoming a realistic option to advancing to the NHC in Las Vegas, even as a part-time player.

Last week I discussed the NHC Tour points topic and got some interesting feedback.

To recap, I argued that the 2015 NHC Players' Committee needs for next season to reassess its valuation of multi-round on-track handicapping tournaments, specifically Simulcast Series Challenge (SSC) at Monmouth Park.

Data from this past Saturday's contest at Monmouth only underscores my thesis and at the same time validates the parimutuel value to U.S. racetracks of hosting on-track handicapping contests.

The SSC is a $200 buy-in ($100 bankroll and $100 takeout-free prize pool) with 4 rounds of "pre-qualifiers" where the Top 20 finishers in each advance to an "invitational" for two spots to Vegas.

In a break from past years, however, the Players Committee ruled this year that NHC Tour Points would only be awarded to contestants based on the number of SSC Invitational qualifiers (80), rather than a total of entries through the four pre-qualifier rounds (more than 800).

This is a significant difference that could deter NHC Tour members from playing the SSC series.

I, for one, would forgo the SSC again under today's Tour Points structure and budget my money toward online contests with more-favorable NHC Tour points allocations.

I maintain, as written last week, that a) competitors in the 2015 SSC Invitational got stiffed, b) Monmouth needs to leverage its on-track contest circuit lead (30 NHC seats of 600 awarded; most in the country) to endorse change to the benefit of its contest customers, and c) the NTRA should be on board with this logic, since the NHC Tour points allocation devalues the SSC and could hurt Monmouth Park's winter simulcast business through reduced parimutuel pools.

At this past Saturday's NHC qualifier, which awarded NHC spots to the Top 5 finishers, contestants funded an initial $100 bankroll and another $200 each into the prize pool.

As the contest bankroll is "live," contest players bet real money into the pools at Monmouth, Belmont and Pimlico.

A quick look at the data proves interesting.

According to Daily Racing Form, there were 8,055 in attendance at Monmouth Park on Saturday, with $553,095 bet into the mutuel pool on track of a $3.97 million total, or about 14% of the total (on par with a 14.7% average the last 7 live racing days inflated, specifically, by Sunday's Food Truck Festival -- 22%; Saturday's and Monday's got little bump.

The average of wagers per person, however, this past Saturday was $68.66 -- 30% above the 7-day average and a whopping 66% better than the 3-day Food Truck Festival average, and indicative of the value of core customers betting on the actual races/core track product.

Delving deeper, my initial $100 bankroll -- after "churning" back some winning bets into other races -- produced $261 of total bets across the three contests tracks, including $170 into races at Monmouth Park (and a brutal loss at the wire by Loverbil in the Reilly Stakes for my $40 win wager that compromised my hopes of winning the contest). 

That's nearly 150% above the average customer.

Let's assume that every contest player on track loses his/her initial $100 bankroll without a single winner.  That's nearly $22,000 of wagers (including $11,000 specifically into Monmouth Park's races; contest rules require that players make at least five wagers of at least $10 each on races at Monmouth, or $50 per player); that's nearly 2% of the on-track mutuel pool alone. 

Each $50 increase per contest player on bets into Monmouth's on-track product yields another percentage-point gain in terms of total mutuel pool contribution; so, if 219 players, on average, win a few wagers and "churn" $200-$300 back into Monmouth, they'd comprise nearly 4%-6% of the day's on-track mutuel pool, or nearly 4x the average customer before any cash wagers they may also make outside the contest competition on races at Monmouth.

Keep in mind, too, that contest players are not the casual customer, who might "cash out" after hitting, say, a $200 wager on a race and head home.  They're also inflating the win, place and show pools (the only races available for Monmouth Park's contests)

By virtue of the NHC contest player's goal to secure a seat in Vegas, he or she needs to continue betting until the contest's conclusion in order to build top bankroll, so the proposition to the host track is very appealing (i.e., likelihood that the majority of each contestant's money will be kept by the host through losing wagers) when factoring the "churn" element.

Fortunately, not sold on going "all in" on a particular horse in the contest finale with my entire $137.90 bankroll at that time, I wagered $60 and held onto $77.90 to backdoor into 578 NHC Tour points, and so Saturday's game effort (including 28-1 winner Padre Graz in Race 9 from Monmouth, which kept me alive in the contest) was not a complete loss.

What would be a complete loss is if, approaching next season, the NHC Players Committee and NTRA continue to devalue a unique multi-round on-track contest such as the SSC, which funnels real money into the coffers of tracks but gets short shrift by today's NHC Tour Points system.

A far richer analysis of this angle would only validate this point, in my opinion, and one the relevant parties might want to investigate more deeply.

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