Playing the Future - By John Fradkin

(Originally published in the July 3, 2010 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)  

It’s no secret that these are not the best of times in the Thoroughbred business. However, unlike most other participants in this business, I think the future holds a great deal of promise. We could be just around the corner from an explosion in betting handle if we embrace the future instead of clinging to the past.

The Internet and advance deposit wagering are the future of our industry, and they are powerful forces. The Internet fits our data-rich sport of horse racing better than any other sport, and we’ve barely scratched the surface of the positive impact it will ultimately have. Playing the horses from home just might be the ultimate video game, and its appeal could be huge to an Internet-savvy segment of the population we haven’t reached yet.

I don’t think it’s an impossible dream to think of tripling or even quadrupling our national betting handle if we can get these new players to try our game. However, we need to treat our existing players better as they have the potential to grow handle pretty dramatically and we need them to attract and educate the new players. 

This is how I see the future. I’m not sure how or when we are going to get there, but our ship has momentum and it’s moving in this direction already. If racetracks, horsemen, and the account wagering companies can cooperate to see the light at the end of the tunnel, then my vision—or something similar—is possible and the ride will be smoother, shorter, and less painful for all of us already in the business.

  • New contracts are put in place so that the horsemen and racetracks putting on the show receive a fair share of the takeout dollar no matter where the wager is placed. This is by far the most important issue facing our industry today. It should not matter to the racetrack or the horsemen where a bet is placed. Racetracks start to view the account wagering companies as allies instead of competitors.

  • Account wagering becomes the norm, both on track and off track. Racetracks install robust Wi-Fi routers on track to handle ontrack account wagering. Racetracks and account wagering companies give wagering devices such as the Apple iPad free to their best customers. Customers use these devices to wager both on track and off track but especially when on track and away from their computers. Wealthy horseowners at Del Mar and Saratoga who don’t feel comfortable carrying a lot of cash start to make the occasional $10,000 bet from the privacy of their own box.

  • Rebates become legal in all states that allow account wagering. Accounts wagering over $10,000 per month, receive a 10% rebate at the end of every month deposited automatically into their account. More players actually win consistently. Some casual players become semi-professional, and their handle goes up exponentially.

  • The game of betting on horses starts to shed the “it can’t be beaten” stigma that it currently has as more and more stories get out about people actually making money playing the horses.

  • New players start opening accounts. “Gamers” start to realize that playing the horses online is a pretty fun game and could be profitable too. Online poker players give it a try. Daytraders give it a try. College kids start opening accounts. Grandpa gives his math-whiz grandson, who is already online five hours a day, the password to his Xpressbet account. He mentors Junior on how to read the Racing Form and encourages him to play the late Pick 4 at Santa Anita every day.

  • These new players actually start coming to the track a few times a year. They bring their laptops and their iPads. They also bring friends. Ontrack attendance numbers start to improve. Horse racing starts to re-enter the mainstream of American pastimes. Prognosticators project that horse racing might soon become as popular as poker.

There are millions of people already sitting in front of their computers for many hours a day playing games for fun and profit, and if we can just get them to try our game, it could be a beautiful thing.

I’m a huge proponent of ADW because I’ve tried it and I love it. If you haven’t tried it yet, you need to. It is so much superior to the cash system in so many ways that I miss my account wagering system when I’m at the racetrack! 

John Fradkin is a breeder, owner, and horseplayer based in California.


Leave a Comment:


Kudos to Mr. Fradkin for his innovative proposals. It's too bad he's not one of California's elite. As an outsider his ideas will be summarily dismissed by it's entrenched "leaders." After all, they are the only ones who could possibly be smart enough to offer solutions.

29 Jun 2010 1:29 PM

You have declared yourself the front running candidate for "racing czar" in my book!!!  

29 Jun 2010 2:22 PM

I envy and admire your passion.  Despite the implication of #1, most involved in racing weren’t born cynics.  In fact many once shared your enthusiasm to aggregate talent and resources behind a consensus plan.  Unfortunately, many capable individuals have tired of the fight and left the game.  Here is hoping that you and those less infected can succeed where others have failed.  Honestly, good luck to you sir.  

29 Jun 2010 2:59 PM

Great comments, I have a friend who loves to play and I was amazed he was able to watch and play the races on his I phone. We certainly need to do a better job taking care of our players and marketing to the new ones out there.

29 Jun 2010 3:17 PM
Ken Woodall

What racing presents is a secret, closed, hard to figure out batting sport that draws relatives of old players. Barbaro breakdown with Stronach saying "That's the way it goes in racing"; Eight Bells, Santos with a non "battery in hand" photo, no national PR clearing house and spokeperson. Nothing easy about betting. When EPTA is afraid of the potential popularity of Z vs RA or when there is a local track good idea, TRA, NTRA, HANA, TOBA, DRF, PN, MEC, MID, CDI, are all bust with their own agenda. Less than competent programs to pretend they are doing something. Case in point- the new breakdown survey is not even broken down by sex of horse.

    As a newbie, I was glazed over by a few things- Tote odds 9-1, 9-2, 9-5, even. and the other fractions. Then exactas written as will pays, charts in $1 decimals. No lengths PLUS finish time; speed ratings from Beyer, Brisnet, track. Racing needs consistent formats for will pays in toteboards, charts, as well as exotics.

    no newbie window where you do not get yelled at;

No Miss (and MS) ____Track, title won by 'capping contest to answer handicapping questions;

No horseplayers with a Handicapping Certificate to teach with discounts as rewards;

No speed rating on program, 40 arrows in DRF PP sample with no factor expected win %.

No simplified workbook instructional handicapping booklet. No general public contests requiring code to match a code on every racing TV show or website, winner to show up at the OTB or track.

No recent survey of what public needs to get interested, no recent doping survey to allay paranoia. Nothing to get slots players interested in racing (see my new bet idea below).

No trade/playing cards to get public interrested in horses,

No PR of Solis' clliffhanging, lifesaving heroics.

Not much rewards for those who want to be pure non- batting real "fans".

No Yum Foods, Deere, or other sponors, players or owners willing to publicize outside racing and network.

No super carryover to draw the public and other type gamblers:

    The public also needs my "Lucky Longshot" betting pool instead of picking 16 horses in the correct order over 4 races.    

    My betting idea: If the longest lonsgshot in the regular feature win pool wins, a special $1.00 feature pool pays off for those with that horse bet into that special pool. Mostly longshots would be bet in the special pool; carryovers until the last day of the meet, when the mandatory payoff is for whoever wins the feature. That means multimillion dollar carryovers at every racetrack that everyone including slots bettors can play, general public media attention, and the last day rewards regular bettors with a guarateed profit. What longest longshots win features? Ever heard of Giacomo and Mine That Bird?!

    Later there can be another similar (set up the same) pool for the last race on the racecard.

29 Jun 2010 3:19 PM

Agree with everything you say except the 10% rebate.  You haven't done the math.  Wont work at $10,000 a month. Maybe $100,000 but that still might be a stetch...

29 Jun 2010 4:21 PM

Free PP's.

Lower Takeout.

Less racetracks(bigger pools for other tracks).

Remember,you need to make racing a attractive gamble.It is a Bad gamble as of now.

Good luck

29 Jun 2010 6:59 PM
Brian Russell

Agree with the overall concept but waiting for 50 states to legalize rebates may be a wait until eternity.  The only way to jump start it is getting one to two big racing states to do it and promote it heavily.  Also, the other poster was correct, a 10% rebate for only $10,000/month won't work for the industry.  Many decent bettors that bet all and night day can churn that much in A DAY on a $500 bankroll without making a significant profit.  A graduated rebate would be necessary with the 10% level at probably $200,000 - 250,000/month.

29 Jun 2010 7:48 PM

Did not see exchange wagering or takeout reductions mentioned. I guess the same magic hocum racing has used for decades will create this "modernized" "updated" NON-tote based system, huh?

You are sure as hell dreaming if you think any of what you say is going to happen using the current stone-aged system with the 20% to 30% takeouts.

You are pissing into the wind & it is only going to land you-know-where. Let me be the first to tell you that it is not raining.

Current model is DOA!!!

29 Jun 2010 8:21 PM

Close 50 percent of tracks and ma bee we could get a little better than 3/5 on a good horse

29 Jun 2010 9:43 PM

Great Article

29 Jun 2010 9:50 PM

Mr Fradkin:

You are on the right track. ADW is the way to go. It is even better when the track-feed is carried online and I do not have to deal with the TV shows. It allows me to see the horses parading rather than the windbags talking.

However, the cost structure must change or horse-racing will be just a hobby for the wealthy.

30 Jun 2010 6:58 AM

You can already bet against your account in the boxes at Saratoga for five or more years now.

30 Jun 2010 8:20 AM

Preaching to the choir almost.  I agree that the game needs to be beatable by some, and the only way to do that is to either embrace rebates, or lower takeout (same thing).  

The only thing I really disagree with here are a couple of points:

1.  I believe rebates should be consistent percentage wise for all, right from dollar one bet.  Nobody becomes a $10,000 a month bettor overnight, and in order for that to happen, you need to give them the best chance to painlessly learn the game through betting and sharpening one's handicapping skills.

2.  We are seeing more going back to the tracks and horsemen now as distribution fees have begun to rise.  Meanwhile handle is dropping as ADWs who give rebates wind up with less to rebate the players.  Lets not put the cart before the horse.  In other words, more to the tracks and horsemen means less winners have a chance to be created.

If in fact dollar one rebates will create winners and then eventually increase handle 3 or 4 fold, live with this, and reap the benefits when the growth occurs.

30 Jun 2010 9:05 AM

Since the majority of bettors is over 50yo, are they expected to convert to laptop or PDA debit wagering?  I don't see that happening.  So then what, do we discard these folks who have been loyally supporting racing for all of their adult lives because they are $2. bettors?  That seemingly would not encourage them to bring new blood to the track, ie, by spreading the word.  Then, too, what would happen to all the "stoopers" in this electronic world :-)  I am not adverse to ADW, just don't forget them that brought you to the dance.

30 Jun 2010 9:13 AM

Well, sounds good, you will attract smart young people.  However, what are you going to tell them when they figure out that they were suppose to get $2.39 back from their bet but they got paid only $2.20.

Also, how are you going to explain to them that they have to pay 20% to play this game when poker only charges 5%?

30 Jun 2010 11:41 AM
The_Knight_Sky racing blog

Mr Fradkin wrote:

Rebates become legal in all states that allow account wagering.


Rebates reward the established high volume bettors.  But that does not address the need to lower the takeout rates across the board.

If the bar remains high, how are "new fans" going to cross over to profitability and become life long participants ?

Current marketing efforts are doomed simply because new and intermediate fans, their lack of knowledge are tapping out their bankrolls every season.  

Only a select few newbies persevere with their weekly paychecks while the aging fan base quietly passes on.  

Maximum growth will only be realized if horse racing lowers the takeout rates to what it was in it's heyday, circa 1960's

in the 10 to 15% range.

If a larger segment of the public became winners at horse racing wouldn't that serve as the best public relations move for the game?

I sincerely believe so.

30 Jun 2010 12:06 PM

I think your enthusiasm is great.  And I strongly agree that, for horse racing to survive and thrive, it needs many more fans.  

However, the economic model that horse racing is currently built upon is simply unsustainable.  And many of the comments by the posters to your article seem to think that if we just reduce the takeout or close 1/2 the tracks or provide free everything, all will be well.  In my opinion, that's a very selfish viewpoint.  It may be better short-term for some gamblers.  But, it won't be well for all the horsemen who have spent their lives working long hours with the horses.  It won't be well for all the owners who currently lose about 40% for every horse they own.  It won't be well for the tracks who could sell their properties for real estate (instead of racing) and actually make money.  It won't be well for all the track employees such as the tellers, security, cleanup crews, restaurant staff, track maintenance and others.  It won't be well for all the horse transport companies, the horse breeding farms, the feed companies, the jockeys and exercise riders, the bloodstock agents, the veterinarians.

Someone has to pay to put on the show.  And the show is very expensive (much more than setting up a poker game or even a casino).  If the takeout is reduced to nothing, free PPs are given, free parking are given, etc., then who pays to put on the show?

I've been a fan for 50 years and a small-time horse owner for 10.  I've seen several sides of the picture.  The reality is, no business or industry can survive if everyone (including the customers) end up with more money than they start with.  Where does that money come from?  Trees?  Businesses and industries make money by providing a product that they can sell for more money (not less money) than it takes them to produce it. If horse racing survives, it must be viewed as entertainment combined with the chance to win money if you're smart enough.  But only a chance.  The average fan will lose money. Increasing the number fans would spread the costs across more people.  And the tracks have been woefully poor in attracting new fans, providing clean/pleasant surroundings and making the entertainment portion a great experience.  But, at the end of the day, the customers still need to pay for the show or the show stops.

30 Jun 2010 1:27 PM

Increasing handle is so simple that it continues to elude every racing executive in this game.

1) Lower takeout

2) Create a Betting Exchange

See where handle is in a year.  

30 Jun 2010 2:17 PM


Isn't it obvious that the customer doesn't want to pay 20% anymore and that's why we are having this discussion.  You can keep charging 20% and they will continue to stay away.  Penn National, Mountaineer, Charles Town, Fair Ground, Philly Park, Praire Meadows have given the owners over $1billion dollars in slot money in the last 10 yrs and racing is in the worse shape it's ever been in.  Try to lower the price, lower takeout or bust.  I got a feeling we will have to go bust first since your thinking is similar to the establishment.

30 Jun 2010 6:40 PM

Did the article say "cooperate"???

Dead On Arrival!!!

30 Jun 2010 7:07 PM

Rebates accomplish the same thing as a reduction in takeout, yet are probably easier to embrace by the industry, and they encourage more handle.  Some of the previous posters don't seem to get that.  Rebates are already here on some platforms and in some states.  If we only had a Racing Czar who had the power to . . .

30 Jun 2010 8:25 PM
Joseph Heller

Ever heard of Catch 22?  You lower take out and/or issue 10% rebates and every track but CD goes out of business.  Why?  Cause they simply can’t stay long enough for the tact to bottom out, much less show a positive trend in betting volume.  And you think Horsemen are going to sit back and drive Fords and cut day rates while this master plan is given a chance to work?  Good news is the 2% betting factor that accounts for 20% of the handle will react positively; bad news is the other 98% is non-pulsed as if nothing is different.  Good luck, you’re all dreaming.

30 Jun 2010 9:10 PM
Thomas J.

This is a GREAT plan to make the ADW's wealthy as they would handle all the action but what about the brick and mortar facilities (tracks) that offer import simulcasting?  If handle is going through ADW then they see nothing.

30 Jun 2010 9:27 PM
C Bea

Exchange wagering is exciting but it will further drive a stake in our heart if Betfair is allowed to pay what they want. I understand that they've offered 25-50 basis points (.25%-.50%) of the total handle. Or the equivalent since they don't calculate handle as handle. It's a funny number "net win".

Betting exchanges can increase the total business potentially by 50-100% but they'll pay less than 1/10th of what ADWs currently pay or less. You do the math and tell me that we'll all get rich and prosper feeding at the trough of Betfair!?

There are other betting exchange technologies out there. I hope the NJSEA is smart enough to look at all of the options!!

30 Jun 2010 10:26 PM
Joe F.

Dude, you don't have a clue!!!!

You illustrate your cluelessness by practically pontificating with the following:

""...horsemen and racetracks putting on the show receive a fair share of the takeout dollar no matter where the wager is placed. This is by far the most important issue facing our industry today.""

In reality, horsemen are more likely to be the biggest PROBLEM faced by the racing industry today.

Horse owners and breeders created ALL of the present mess with their entirely separate, speculative run-up which has created huge and needless expenses that raise the overhead at all racing establishments needlessly.

This is parallel to the way the cost of gasoline was roughly $2.00 higher 2 years ago than it is today, that even though millions of gallons of oil continue to spew into the Gulf of Mexico on a daily basis.

Those costs of two years ago were caused in largest part by mere speculators, which is what all horse owners are.

Who in the **** are you to determine for everyone else involved just what is "the most important issue facing (horse racing) today"??

Racing has caused all of its own problems and at this point nobody outside of racing cares about them.

01 Jul 2010 2:12 AM

Great article and hats off to you for your insight!!!

To me the bet to entice new comers is the NYRA grand slam. Allows for action over multiple races and you do not need the winner.

The appeal of million dollar payoffs attracts alot of novices. A quick pick type bet that can be offered at lottery retail locations would certainly increase handle 10 fold.

Bill Finley and Davey Johnson have a Saturday radio show on Sirius and one of there sponsers is from Hong Kong. I forget the name of the play but it continually offers multimillion dollar pools and offers fractional wagering.

Inovated bet types like this will be the key to our future.

Inovated bet types like this will be the key to our future.

01 Jul 2010 6:31 AM

Some previous commenters just don't get it.  Lowering takeout will allow players to last longer, they may not care on the surface, but they will play more, and they will have a much higher probability of introducing others to the game.

Keeping takeout at 20% is causing a death spiral.  

I suggest some of the obvious horsemen who are commenting here, read up on the concept of optimum pricing.

01 Jul 2010 9:15 AM

Cangamble I'd suggest you're probably wrong on few if ANY horsemen commenting on here.

01 Jul 2010 9:41 PM

Let's talk about a novice at the track...who happens to love the horses and is unfamiliar with the racing forms and analysis.  I'd want to visually assess the horses before I bet, but I don't want to be running back and forth to a window to place my bets...and possibly miss the race.  At the track, there should be windows like banks.  You deposit a specific amount at  the start of the day.  You pay a deposit on an electronic gadget that can transmit your picks to your bank window while you never have to leave your spot on the rail.  At the end of the day, you collect your bank...and return the gadget, allowing that you can add to your "bank" account anytime during the day.  Is this done anywhere?  Can it be done?  If you want to attract novices...I would find this more appealing and intriguing than any race form...and much simpler...especially to those at the track with disabilities....who would rather not bet than try to maneuver a wheel chair back and forth through a crowd.  Just asking.

02 Jul 2010 9:33 AM

Joe F, you need anger management.

The facilities? What a laugh, they're getting rich off of the horsemen yet don't want to share anything. No owner, trainer, barn staff or jocks? NO HORSES therefore NO facility.

I'd say you need to walk away from racing, if you have ever even been to a track. You sound incredibly bitter and misinformed.

No one who isn't a horseman or track owner has any reason to be so vehement about this subject.

Not even a gambler, because you could just find something else to gamble on.

Hey maybe you should take a look at the house odds and win % at a casino if you want to get really mad.

Who do you think is driving the takeout from the handle anyway?

Do you know what % of that takeout actually even goes to the horsemen?

02 Jul 2010 11:17 AM

In your column you mention that players would bring laptops or IPads.  We don't need those large items, that's why we have cell phones with internet access.  

SoRthe racetracks just need to advertise heavily on their OWN online wagering (eg. NYRA rewards has a mobile site for it's online wagering).  We can just take our cellphones or smart phones that have already unlimited internet access and wager through it.  

The track web designer needs to create a correctly formatted mobile site, so there is no need to download an application.  At the same time, all tracks should have a customer service stand on the to help us open a new account, approve the bank transfer on the spot, answer questions about the mobile site, and get us quickly rolling for the day.  

This would benefit the track.  First, we bet on their system, so they keep the share.  Second, by not waiting on line at the teller, I would place more bets since nobody would be rushing me.  Thus also avoiding a lost bet, because plenty of times we ran out of time waiting on line, and walk out without making a wager.  It would be beautiful to watch the horses in the paddock while placing my bets.  No need to run to the machines or tellers, then rush to the stands to find a spot, just to barely see the race, since I'll be at the back of the pack.

03 Jul 2010 11:10 PM
Fran Loszynski

It has always amazed me that a sport like tennis that takes "forever" to end a set gets so much coverage when a horserace holds so much excitement, speed, beauty, and skill- and only lasts for two minutes at best. Except for the Triple Crown series you have to search (other than a horseracing channel or ESPN) for a simple horserace held from the stakes races. There is nothing boring about horseracing compared to watching a little ball go back and forth 40-to- a thousand times in two directions.  The coverage of Wimbledon lasts three to four hours when a horserace keeps you on the edge of your chair for two-go figure! For some of us that don't have all the techinical hoopla-HELP!!!We love to watch horseracing.

06 Jul 2010 3:06 PM
Melanie Williams

You are so right on.  Even a grandmother as myself, spends more time on the computer, cell phone , laptop, ipad, and alot more I can't even comprehend.  We race standardbreds, but my dad raised thorobreds.  I love them both.  We need to get our heads out of our behinds and get into the next generation of gaming.  We have a gold mine in racing entertainment and we continue to stick our heads in the sands of 1980.  The racing industry is begging  because we are already 30 yrs behind todays entertainment industry and that is a damn shame.

18 Jul 2010 8:07 PM

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