Letter to the Editor: CAW ‘Activity Stinks to High Heaven’

by Walter Toner

Rainy afternoon on Cape Cod and I had a few minutes to kill, so flipped the channel to TVG for a quick flutter. I selected the filly Just Like Magic, approaching the gate at 7-5 as the recipient of a $10 win wager in the 3rd race Oaklawn (3/28).

She charged up the rail and won. Final odds were 3-5. WTF. Sorry for the crudeness.

Racing will never engage the next generation of punters with 15-27% takeout and NO fixed odds, when they can bet on sports with a 4% vig and wagers that are fixed.

In the UK, an extremely sophisticated betting market, exchange wagering in its 20-year history now handles 85% of wagers, plus or minus.

Further exacerbating the industry's vulnerability is the contents of this article. My takeaway from this article is that Stronach and his friends:

  • Own racetracks
  • Own offshore betting hubs for friends
  • From these hubs, friends receive substantial discounts to wager into onshore pools
  • And we can assume the friends are getting late, direct access to track pools… and perhaps entering the pool after the start

Now the late betting is speculation on my part. It feels like it happens. And from the first four bullets, it seems suspiciously like that might be happening.

This insider activity stinks to high heaven, not just regular heaven.

This beautiful sport is bucking these horrific headwinds of scandal and a less-than-competitive product. Yet racing will always have tremendous potential.

But what is the point of one laboring all night on PPs to arrive at a horse that one feels should be 6-5 or 7-5, only to see that selection drop to 3-5 at the quarter pole?

My introduction to racing was with Win Elliot, the Schaefer Circle of Sports, and Fred Capossella. Old timers can place an era on those names. My first Racing Form cost me 50 cents; what are they now, $10? I can make an informed wager on the Red Sox without that surcharge.

Sadly I am not sure that I'm going to ever see the industry make any real progress making horse racing as competitive and accessible as other wagering products.

Thanks for reading.

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The Week in Review: In 2024, the Sport Needs to Do Better

The remaining days in 2023 dwindled to a few last week, a welcome development considering the year that it was. Yes, there was some good news. Arcangelo (Arrogate) winning the GI Belmont S. for trainer Jena Antonucci was as good a story as we've seen in some time. The saga of Cody's Wish (Curlin) continued to tug at our heartstrings. The sales continue to post huge numbers. Purses have soared in Kentucky and at Oaklawn, with maidens running for pots in excess of $100,000.

But for every good story there seemed to be 10 bad ones.

With the animal rights community and some portions of the media putting unrelenting pressure on the sport, there's never a good time to go through a rash of breakdowns, but for it to happen surrounding the running of the GI Kentucky Derby was bad timing at its worst. There were 12 deaths at Churchill Downs crammed into just a few weeks and it got so bad that racetrack management decided to pull the plug on the remainder of the meet and move everything to Ellis Park.

Then Saratoga happened. When New York Thunder (Nyquist) broke down strides before the wire in the GI H. Allen Jerkens Memorial S. the number of horse fatalities at the meet had soared to 12. It was a horrible sight to behold for a national television audience and the 48,292 in attendance. And it was a ghastly reminder of what happened three weeks earlier to Maple Leaf Mel (Cross Traffic) in the GI Test S. She, too, broke down right before the wire in a spill that was as ugly as it gets.

The Breeders' Cup was not immune to tragedy. Though no one was seriously injured on the day of the races, Geaux Rocket Ride (Candy Ride {Arg}) and broke down and had to be euthanized and Practical Move (Practical Joke) suffered an apparent heart attack and died, both while training for the GI Breeders' Cup Classic.

The fatalities obviously caught the attention of 60 Minutes, which, in November, aired a story that focused on the breakdowns and the sport's doping problems while casting a brutally negative light on the sport. Then we learned that we will get more of the same sometime in 2024. In December, FX, a subsidiary of Disney Entertainment, announced that there would be an upcoming documentary, “The New York Times Presents: Broken Horses,” which it said would examine “systemic issues, questionable practices and urgent calls for change that have shaken horse racing to its core.”

When it comes to the economics of the sport, there was more troubling news. Through November, handle was down nearly $500 million on the year or 4.39%. That means we are on our way to seeing the steepest declines in handle, outside of the COVID year of 2020, since 2011. Does that have anything to do with the computer-assisted wagering (CAW) players? Probably. They have tilted the pari-mutuel pools to a point where the regular horseplayer is getting killed and getting out.

In July, 1/ST Racing announced that Golden Gate Fields would be shutting down for good at the end of the year, throwing the Northern California circuit into chaos. The track got a reprieve, but a brief one. It is now scheduled to cease operations on June 11. That's when it will join Arlington Park, Calder, Hollywood Park, Bay Meadows and others that couldn't make it to the finish line. Some wonder whether Santa Anita, which sits on property that is estimated to be worth $1 billion, will someday join them.

Racing can't afford to have another year like this. Things need to change. While there are no magic bullets, here are what I believe are some practical and common sense solutions to some of the problems.

The sport needs to fully embrace StrideSAFE. StrideSAFE is a biometric sensor mechanism that slips into the saddle cloth to detect minute changes in a horses' gait at high speed. Those changes can, and often do, signal that a horse is in the early stages of having a problem that could lead to a fatal injury. The technology has been around since 2011 and, while it has been experimented with here and there, it remains largely absent from the backstretch of America's racetracks. Why? There's no doubt that widespread employment of StrideSAFE will cut down on the number of horses that break down and there's no excuse for the sport to continue to drag its feet when it comes to embracing the concept.

The CAW factor is a major issue that's not going to go away, no matter what harm it might be doing to the overall health of the sport. It has become an unmanageable runaway train, with these players betting so much money that no track is going to turn away their business. But some guardrails would help. More tracks need to do what NYRA has done. They have effectively closed the CAW players out of the win pool by no longer allowing them to place bets at the very last second. They have also been excluded from NYRA's Late Pick 5 and the Cross Country Pick 5.

The betting product also needs to be better and more geared toward the booming market that is made up of sports bettors. The sport has not been nearly aggressive enough when it comes to getting the on-line sports betting websites to start accepting bets on racing. To date, the only one that has been signed up is FanDuel. That also means adopting fixed-odds wagers, which are what the sports bettors know. Only Monmouth Park has gone down this road and two years after it was implemented in New Jersey the concept is limping along. No other tracks or states have tried fixed-odds betting and, in New Jersey, only the second-level tracks are available to the fixed odds bettors.

The takeout remains too high. With betting on a horse race often involving a rake of around 20%, the game is always going to have a tough time competing with other forms of gambling, where the effective takeout rate is lower. We're seeing some progress in this area, with a number of tracks lowering the takeout on horizontal wagers like the Pick Four and Pick Five. In 2023, Hawthorne took a major step in the right direction by lowering its takeout on win, place and show wagers to 12%. But we need a lot more of the same. With so much of purse money now coming from alternative sources like slot machines, there's no reason why tracks in places like New York and Kentucky can't at least experiment with reduced takeout rates.

Fix the Triple Crown. It needs it. The GI Preakness S. is no longer coveted by the sport's major trainers and has become a weak link in the Triple Crown. Everyone wants to run in the Derby and then they scramble, some pointing for the GI Belmont S., some ready to put their horses on the shelf until the big summer races. The 2022 Derby winner, Rich Strike (Keen Ice) passed on the Preakness and, this year, Derby winner Mage (Good Magic) was the only horse to go in the first two legs of the Triple Crown. The result is that the Preakness is less important than it has ever been and that only weakens the Triple Crown as a whole. When 1/ST floated the idea of running the Preakness four weeks after the Derby, NYRA reacted by announcing that it had no intention of moving the date of the Belmont. Yes, a Belmont run five weeks after the Derby works well for NYRA, but it needs to put its self interests aside and do what's best for the sport and shift the Belmont to late June or early July.

While we're at it, the purses for the Triple Crown races are too small. In this day and age, the $1.5-million purse for the Preakness is not going to motivate anyone to run. These are supposed to be the most important races in the sport and their purses should reflect as much. For all three races, the purses should be raised immediately to $3 million with the goal of eventually making them $5-million races.

These are things that can be done. Let's not let another year go by in which the sport embraces the status quo while the outlook for its future continues to get worse. The year 2024 is upon us, let it be the year where the sport takes much needed steps in the right direction.

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60 Speakers Announced For Global Symposium on Racing

Over 60 speakers will present at the University of Arizona's Race Track Industry Program's 49th annual Global Symposium on Racing, scheduled for Dec. 4-6 at Lowes Ventana Canyon in Tuscon. The event brings together racing industry executives from around the world to explore critical issues and trends across the three racing breeds.

Panels at the 2023 Symposium will include:

 

  • Computer Assisted Wagering–The Good, The Bad, and The Future
  • Out of the Shadows–Shining a Spotlight on Mental Health and Emotional Wellness
  • The Path Forward–Race Track Safety and the Anti-Doping & Medication Control Program
  • Strengthening Your Simulcast Content–Maximizing Handle in Diverse International Betting Markets
  • From Data to Dollars–Understanding Horse Racing's Economic Impact as Racing's Future is Questioned
  • Land for Sale. How Will Race Track Closures Impact the Industry's Long-Term Sustainability?

 

One of the highlights of the Symposium will be the “Legends of the Game–Racing's Iconic Turf Writers” featuring esteemed journalists Steve Crist, Andy Beyer and Jay Privman.

Pre-conference sessions will set the stage for the Syposium's opening evening reception on Dec. 4 and will include:

 

  • HISA Workshop for State Regulators and Stewards
  • 3rd Annual Racing Secretaries Summit
  • Track Surface Regulatory Requirements
  • NTRA Handicapping Contest Workshop

 

Prospective attendees are encouraged to register by Nov. 17 to take advantage of a $100 discount and Ventana Canyon is offering reduced room rates of $189 for attendees. Registration for the Symposium and hotel reservations can be completed at RacingSymposium.com, where a list of the speakers may also be found.

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Fed Up With the CAWs, Brent Sumja is Now an Ex-Horseplayer

It was back in 2004 that Brent Sumja made a career decision. He was among the leading trainers in Northern California, but wasn't following his true passion. That was playing the horses. So he disbanded his stable and set out to be a professional handicapper. It went well. He played the races regularly and also focused on the handicapping tournaments. In 2014, Sumja won five tournaments in a four-month span from May to September to clinch the title of 2013 Daily Racing Form NHC Tour Champion and the first prize of $75,000 that goes with it. For years, he was confident that he had made the right decision.

But the game he was playing in 2013 is nothing like the game being played today. That, he says, is because of the proliferation of the Computer Assisted Wagering (CAW) players. He's found that he can't compete against them, their algorithms, their ability to bet huge amounts at the very last second and their huge rebates.

In a Tweet posted Sunday, Sumja announced that he was walking away. “They (CAW players) have infiltrated every last pool and after 40+ years I am done feeling and being duped by sketchy practices,” he wrote. “Going to concentrate on other sports I am excited about. They ruined horse racing.”

Ironically, the decision came after he made a winning bet on the 20-cent jackpot Pick Six at Del Mar. The winners paid $5.40, $14, $5.20, $56.80, $6.60 and $4.40 and the bet paid $3,216. Sumja is convinced it should have paid more and that the reason it didn't is because the CAW players swooped in and took home most of the pool.

“It's been a culmination of years of just feeling like something is going on that makes me feel that I am not playing on a level field because of the computer players,” he said. “I don't understand technology, so I don't know how they are doing it. But I do know that when you see late odds changes and they are correct way too often in terms of them winning it seems not possible. It gives me a feeling that I am playing in a game that is stacked against me. You know the old adage, when you feel like you are the sucker at the table it's time to get up. I have read what Jerry Brown wrote in the Thoroughbred Daily News and have followed all the numbers Pat Cummings has been coming up with. It's made me realize I have no edge anymore. If I can't beat the computer players why should I play?”

Sumja said he had been wagering about $500,000 a year and worked with two other horseplayers, one betting $2 million a year, the other $1 million. Both partners have also quit wagering on racing. Sumja's wagering dollars are now devoted to sports betting.

“We're all out, but I don't think the tracks care,” he said.

As is the case with many horseplayers, Sumja got tired of watching the horse he wagered on at 4-1 30 seconds before the race break on top and go down to 8-5. Even when those horses won, it left a bad taste in his mouth and he can't understand why the horses whose odds take a late plunge seem to win far more than their fair share. He is not willing to concede that maybe that's because the CAW players' algorithms are so good that they usually come up with the winner.

“I'm not going with the company line that they are just great handicappers. I don't buy it,” he said.

Sumja wants the tracks to close the pools well before the race starts.

“They have to close the pools off significantly ahead of the first horses going into the gate,” he said. “That would take away the feeling that something isn't quite right. You bet on sports and you take a team at +$350, the game ends and you win you get paid +$350. If you take a team getting four points and if they cover the spread you win. What horse racing is doing would be like them telling you with a football bet we'll let you know what the spread is after the game has started. You might have plus three or plus six. We'll let you know during or after the game. Why would you play that? You wouldn't. Shut the pools down three minutes to post. Shut everything down. Let every player see what odds they are really getting.”

Sumja understands why the tracks willingly accept wagers from CAW players. By some estimates they now account for one-third of all the dollars wagered on U.S. racing or about $4 billion annually. The tracks have made a business decision that it's in their best interests to take their bets. Sumja counters, saying that a lot of players are now doing the same, making a business decision that because of the CAW players it is not in their best interests to continue betting on the sport.

“If that's what racetracks want, to cater to CAW players, that's fine,” he said. “But you have a choice not to play nowadays. There are so many other types of wagering available. I've been making my own football line since I was 15. I love betting on sports. And when I make a sports bet that is paying 7-2 I get 7-2 if it wins and not 6-5. It's a refreshing feeling.

“In his article, Jerry Brown wrote about the myth that horse racing won't make it without the money being bet by CAWS. Horse racing made it for 100 years before anyone ever heard of CAW. I understand games change. If racetracks feel this is what they need to do to maintain their business that's what they're going to do. It also comes to a point where you make your own decisions and when you realize you're in a bad spot you've got to stop playing. That's my position. I'm not playing anymore. Neither are my friends.”

Sumja said that after he posted his tweet he heard from dozens of people who said they also have quit betting on racing and that they were happy that he spoke out. The horse racing industry used to get $500,000 a year in handle from Brent Sumja. Now it gets none. How much longer can this keep happening and how many more Brent Sumjas can it afford to lose before real and lasting harm is done to the sport? These are real problems and so far the sport hasn't been able to offer any serious solutions.

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