Changing Racing’s Core Principles to What They Were Is The Way Forward

This past week we’ve seen (insert grade-school gelding joke here) the sport of pro football deal with something called “InflateGate”. As everyone knows, the New England Patriots are accused of deflating footballs to gain an edge on their competition. This is nothing new for the Patriots. In previous years there have been proven and not proven accusations of cheating. On ESPN Radio Charlotte this week, former Carolina Panthers GM Marty Hurney said, “there is a culture of cheating at the organization,” and most seem to agree. 

I have read many this week, both inside and outside the sport of horse racing, who think this is really no big deal. After all, the Pats beat the Colts by 38 points, and a couple deflated footballs surely were not the difference. I believe those people are missing the point, however. Making sure there is not a “culture of cheating” is something that’s vital to the NFL’s existence. 

In the 1940’s and most of the 50’s, the NFL was a poor cousin to an American apple pie game that had a long and storied history: baseball. While World Series champs were on cereal boxes, football was playing to half empty stadiums. In the late 1950’s, that began to change. Led by Commissioner Pete Rozelle, the sport of football began to be guided by core principles. By creating partnerships that helped put smaller market teams on the same playing field as large ones, scheduling that allowed all to thrive if they were good enough, and numerous other transparent and forward-thinking measures, there was a sense of fairness in football that was not seen in baseball. This plank fit in perfectly with the country they were serving. 

As written in “America’s Game: A History of the NFL”, “The NFL, with its egalitarian framework, was much more consistent with American aspirations of equal opportunity and pure meritocracy than any other major team sport.” 
Former tight end Jamie Williams (years later) added to that sentiment perfectly: “Baseball is what America aspires to be, football is what the country is.” 

Fans who had long left baseball lived in cities where football was a part of their lives. It supplied social glue, long before Twitter or Facebook ever did, and was a big part of a city’s self image. Fans were married to teams, because what they stood for resonated with what they believed was fair, right and honorable. Rozelle, and those who followed him, knew that the league’s fortunes would be tethered to this fan link, and must be protected at all costs. 

This is why, when a coach like Mike Tomlin of the Steelers stepped on the sidelines during a play a year or so ago, knocking a player off line, he was fined a whopping $100,000 and gave an almost tearful mea culpa. This is why the New England Patriots and deflated balls are such a story. A league built on branding that has eclipsed baseball and every other sports league in the U.S. has to unequivocally stick to their core principles: If you cheat–no matter how small–it’s an attack on what our fans stand for. 

When we switch to horse racing, the closest parallel to the NFL we probably have is in Hong Kong. There, the core principle is very simple: If something is done that affects the integrity of the game, it will cause fewer people to bet the product and is an attack on the future of the product. 

We hear this time and time again, in press releases, annual reviews, or in every day occurrences. 

Several years ago there was a curious case of a drug positive. Hong Kong barns equipped with cameras, caught a horse who had been entered in a race sticking his head across into his neighbor’s feed bucket, who was not in to go. He obviously ingested something untoward. The horse’s trainer received a positive test and was suspended. 
When vets do work on a Hong Kong horse, it’s logged and placed on their website for punters. 

When a horse is reported lame, all treatments and works are open, and the horse must be approved to race again. Bettors know what’s happening. 

When a jock doesn’t ride out a mount, or a horse loses by double digits, investigations occur, and sometimes the jock is fined and suspended for months. 

Although some of those examples might be considered cumbersome, or unfair to some, each and every one of them (and we could use dozens more) comes down to what they want to convey: The customer has an ethical and sound product to wager on. 

In North America, a core principle was once held dear by this great sport. More than a century ago, Pittsburgh Phil (along with other railbirds) was frequenting racetracks for the betting action, and that betting action (with 5% or less takeouts) was something they, along with a generation of bettors, could beat. When you scan some of the headlines in the turf press throughout the 10’s and 20’s, this is readily apparent. There are stories about racetrack characters, bookies, professional punters, top businessmen of the day, all there, earning a living betting or booking the greatest gambling game ever invented. Racing was considered mainstream, fair, and beatable to any gambler. This meshed perfectly into a country leaving the Gilded Age. 

What happened over the next several decades changed racing forever. The building block of the sport–why these people were coming out to the racetrack: to bet–was not fostered, it was challenged. Beginning in about 1940, when a government needed money, they came to horse racing, and horse racing happily turned over some margin, if they got theirs, too. Three-percent increases in the juice became 6% in a three-for-me, three-for-you back-scratcher, with the betting customer holding the bag. The greatest gambling game ever invented was under attack from the very people who were supposed to protect it. There was no Rozelle, or anyone else to say “whoa.” 

Other negative measures to increase revenues at the expense of the core customer prevailed. Past performances costs, admission and breakage (they’d break to the penny in the 1920’s) were all nickel and dimed from customers. To see how upside down this was from the turn of the century (courtesy the Kevin Martin at the Colin’s Ghost blog) a relative of Pittsburgh Phil was interviewed for the Turf and Sports Digest in 1948 and he was asked what Phil would be doing if he were alive today. 

“Uncle Phil would sooner match coins on the street than try to buck the trend of the pari-mutuel machines,” he said. Takeout in 1948 was 10%. 

That’s negative branding. That’s selling out a core principle that is vital for your business. 

That negative branding exists today. Just last year when Churchill Downs hiked their takeout rates, how many times was the customer mentioned? How many times was the lost handle at the top of the funnel that was sure to come evaluated beforehand? It was about increasing a purse, which the horsemen happily went along with (that so far they, by my numbers, have never seen). No one stood up for the core principle. 

Just this year we see infighting for slices of the simulcast pie, where fans in certain locales are shut out from betting a racetrack. There is no mention of bettor decay that has occurred and will continue to occur. The people who put the cash in the top of the funnel are barely even an afterthought. 

If the people who put the money in are an afterthought in regard to the way horse racing does business, how can the pie possibly ever grow? 

Back in 2002, former Buffalo Bills GM Bill Polian attended the Hall of Fame induction ceremony for his quarterback Jim Kelly. Kelly threw a party in a hotel ballroom and after a few hours all that were left were a handful of Bills–Talley, Tasker, Bruce Smith and several others. They noticed flashes going off from the window of the ballroom and it was coming from a couple of dozen Bills fans who had made the trip down from Buffalo, who were standing outside. Bruce Smith swung open the doors and invited them in. They snapped pictures for a half hour, chatting with the players. 

At one point, Polian turned to a woman and asked her, “why is there so much excitement over this?” 

She replied, “these were some of the happiest times in our lives. We had to be here.” 

That’s a deep link with your customer that is not created through fancy TV commercials, giveaways or seat sales; it’s fostered through generations of being exactly who you say you are and delivering on your promise. 

Racing can change in the eyes of the gambling world, but first it has to make a major philosophical shift, by turning back to its once core principle. The sports’ fortunes are directly tied to the people who are betting the money, have always been tied to them, and they will be the ones who decide its future. 

Dean Towers is a Director of a Toronto-based marketing firm and a Board Member of the Horseplayers Association of North America. He has been a frequent speaker at industry and gambling conferences in both the US and Canada. He wrote his university thesis on off-track betting and has authored a white paper on exchange wagering. 

Feedback for publication? Email suefinley@thetdn.com