Robert Megna, chairman of the state government’s NYRA oversight board, said in a Dec. 21 letter to NYRA president Charles Hayward that bettors had been “improperly” charged a higher-than-allowed takeout level since Sept. 15, 2010.
“Fairness to bettors demands that this action cannot be allowed to stand," Megna wrote. He said that whether the overcharge was due to “malfeasance or inadvertence,” immediate action must be taken “to repair the damage" caused by NYRA.
In a pointed jab at NYRA’s payroll, Megna criticized NYRA’s claims that pay hikes given to its management “rings hollow in light of NYRA’s failure to manage a most basic accounting task.”“Fairness to bettors demands that this action cannot be allowed to stand," but 25% take on trifectas, that's okay?
Maybe it's psychological. While not directly related to horse racing, this from a Farnam Street post titled: Why do people defend unjust, inept, and corrupt systems?
“You’d think that when people are stuck with a system, they’d want to change it more,” says Kay. But in fact, the more stuck they are, the more likely are they to explain away its shortcomings.State officials and race track management continue to act like it's the 60's, when everybody, so the story goes, loved to go to the races. Yet as soon as those race lovers got a chance to bet on something else, sayonara racetrack. Those who remain must really like horse racing to bet into such a ludicrous setup as a parimutuel pool. The fact that the take was 26% instead of 25% could hardly matter, but now that the take has been lowered to 24% (to compensate for the original gaff) bettors will undoubtedly be flocking to their local OTB! (sarcasm)
Horse racing has been dying for a long time; it's a slow death, but certain. Those involved in the business don't want to admit it. Rather than downsize or accept radical change, the industry wants life support. In New York that means the Aqueduct Casino, the revenue of which will subsidize purses. Richard Eng, in the Las Vegas Review Journal, wants more. Not only should purses be increased, but the take should be adjusted to the "optimal level" as well.
Hayward (NYRA CEO) now has a chance to be a game-changer for horseplayers, too. In past years, we have seen one racetrack after another take revenue from slot machines and raise their purses. That's fine. But I have not seen any of these tracks lower their takeout, in essence growing their business with bettors and creating new ones.
The NYRA could start the grand experiment of lowering its takeout to increase handle where maybe the horse industry can discover its optimal pricing level.But now that NYRA has casino revenue, what incentive is there to fix a broken system? And, rather than tinker with the parimutuel system, how about some competition instead? I would love to see exchange wagering and/or fixed-odds wagering come to New York. In California, Betfair is on the way, but horsemen have managed to throw cold water on that development by forcing a 10% take. From the Daily Racing Form:
Betfair, the online wagering operation, has made offers to California racetracks and horsemen to apply a 10-percent commission on bets made through its betting exchange, a far higher rate than the company applies to its customers in overseas jurisdictions, the company's U.S. president, Stephen Burn, said on Wednesday afternoon during a panel discussion at the University of Arizona Symposium on Racing and Gaming.
Although Burn said that Betfair is "still a long way away from having anything set in stone," the offer of a 10-percent commission indicates that the company is willing to significantly modify its business model to address the concerns of U.S. racing interests. Betfair currently applies a 2- to 5-percent commission on winning wagers in European countries and Australia, a rate that U.S. horsemen and racetracks contend is far too low to generate revenue that would replace the cannibalization of parimutuel handle that would be expected to occur in the advent of exchange wagering.While 10% is low compared to the typical parimutuel take, it is still high in absolute terms and threatens the revolution it is supposed to bring. Nevertheless, 10% take on an exchange is still far superior to the parimutuel system in respect to both hold percentage and the fact that straight bettors like me will know our odds when we make the bet and not have to wait for the pool to settle after the race starts. That may be the biggest plus. With exchange wagering available, there will be no reason for anyone to make straight bets into the parimutuel pool. Parimutuel wagering will remain solely to satisfy exotic bettors, who don't seem to mind paying 26% commission.