Keynesian Cross

A few days ago I may have implied that I had some insight or a counterargument to the recent post at Thatsamore. Since I am in no way qualified to expatiate on this matter, I feel it is my moral obligation to do just that.

I will approach this matter employing several assumptions:

• A common desire to improve the sport as a whole, disregarding individual interests or agendas.
• An understanding that the aforementioned assumption will be anathema to many and not a little, financially detrimental.
• I have no particular affinity for Plonk's proposal nor anything against it.
• I hope to establish a self-sustaining horse racing empire.
  
• Horse racing will never regain the preeminent status it held in the 1950's.
• Perpetuating the status quo, will, by definition, change nothing.
• I am a rabid subscriber to the free market theory.
  
• This is a rhetorical exercise, designed to engender honest debate and merely a starting point.
• I think that racing should limit itself to Arlington and Hawthorne with maybe that early May race down in Louisville.
  

Choice is a good thing and we are fortunate to have it; it is why nobody is braving the mine field in the DMZ while following Polaris from the 38_th parallel.

The problem lies not with our embarrassment of riches but with the misconception that if 1 of something is good, then 10 must be better. The marginal costs associated with all those choices accelerate the law of diminishing returns.

Imagine an aged single malt, a nice wine, a good beer, or for our teetotalling contingent, a bowl of ice cream. That first glass/bowl is divine, the second and maybe the third are almost as good but eventually, if you continue to ingest them, you wake up wondering why a herd of sheep decided to bed down in your mouth.

Betting, I imagine, works the same way. You play the early Pick 3 at Aqueduct and the rolling daily doubles at Calder, then you notice an overlay at Yavapai Downs and decide to take a stab at the Pick 6 carryover at Hollywood and so on. You might cash a bet here and there but I would suggest that over the long haul, which gambling gaming is all about, you would find yourself with a negative ROI. If we agree that racing is fueled by the betting dollar and the bettor is fueled by positive ROI, would it not follow, that all else being equal, increasing ROI would lead to more bettors?

Casual bettors don't face this problem, they are at the track to enjoy the racing and the day; they are not inside at the simulcast screens, cursing Castellano for getting shut off at the rail.

Ah, but why do we bet so much. For the same reason Mallory climbed Everest and the airlines block off 3 hours for a flight from Newark to O'Hare when the flight time is 1h50. Because people, given choices, will take them, whether they are good or bad.

People travel from NY to Chicago and so the airlines arrange to have flights between those cities. Well people want to travel when they want to travel and look for flights during those times. Airlines see that those times are popular and can therefore charge a premium, so they take those bookings and offer more. People see more flights and book them and then complain when they are sitting in (on, for my NY readers)line on the taxiway for 1h30, waiting to take-off. If a competitor cuts their fares, you have to match them; in aviation you are only as good as your dumbest competitor. There is choice but the service and experience are lousy.

This is, admittedly, a simplistic argument and I don't know that three tracks is the answer but it is also not close to the 20 or 30 we have now. Does New Mexico really need 6 tracks? If all this choice is such a good thing, why do races, often, fail to fill; even with the reported over breeding? What lucrative odds can be found in a six horse field? Cangamble is fighting a tireless war and has some excellent arguments to explain the recent decline in handle.

I don't pretend to argue that consolidation is the final answer but I think it is a starting point.

Why do TVG and HRTV show Philadelphia Park and Yavapai on tape delay while covering the live post parade at Aqueduct? Because that is where the money is. The market is already signalling its preference for survival but the squabbling and gluttonous insiders just can't pull themselves away from the crumbs scattered along the floor.

I would suggest that racing needs to shrink its footprint and improve the remaining product. Only when they can deliver a quality product, with consistency, should they think of expansion. If the demand is there, it will not fail to capture the hearts of the public.

As Charles Emerson Winchester III said "I do one thing. I do it very well and then I move on."