As requested by the folks at the northfield handicappers message board, http://thebeliever2.proboards83.com/index.cgi?, here is my most recent Harness Eye column:

Confessions of A Public Handicapper May 2008 by Keith GisserReprinted from Harness Eye 5/16/2008 by permission of DRF

I made a stand based on principle a couple weeks back and it cost me $1,700. I had to do it. As a horseplayer, I am sick and tired of racetracks, horsemen and advanced deposit wagering sites treating me like a second-class citizen. I had to put my foot down and say enough is enough. Here is what happened:

I know little about thoroughbred racing. Those of you who have seen me on the air at Northfield might say the same about my harness racing knowledge. But despite my lack of expertise on the runners, I always bet around $100 on the Kentucky Derby and the Derby undercard. This year, horsemen negotiated a contract with Churchill Downs that allowed ADW’s (account wagering platforms) to simulcast the Kentucky Derby and the Woodford Reserve at a higher simulcast percentage than Churchill’s regular races. That’s no big deal. Tracks have been doing that for years on the big races. But then, the horsemen got greedy. Relatively late in the process, they decided to withhold their approval for Churchill to simulcast the other races on the Derby card to account wagering platforms unless Churchill paid them more. They decided to hold me hostage.

I am not going to argue that the horsemen shouldn’t get a better percentage of these account wagering profits. But you don’t pi## off you customers by withholding approval at the last minute. What the horsemen should have done is said, we are not happy, but in order to be fair to horseplayers, who pay our salaries, we will agree to simulcast this year’s Derby undercard, but we need to reach an agreement for 2009 and beyond. Instead, the just said, nope. Sorry. See ya.

Now the irony here is two-fold. First of all Churchill Downs operates the largest account consortium in North America. It includes the old WinTicket and BrisBet sites, as well as a number of affiliated sites, including BetHarness.com and BetRunners.com (full disclosure: I am the BetHarness co-ordinator at Northfield Park and we owned the sites in partnership with AmericaTab until Churchill purchased them. We continue to operate them). Churchill’s own TwinSpires is part of this huge network, as is Magna’s XpressBet. So Churchill was in a position of not being able to offer its own races on an account website it oeprates.

The second irony is that Churchill and the other “establishment racetracks,” are responsible for this mess in the first place. You see, when they created the simulcast business model twenty or so years ago, , they figured any extra wagering would be a bonus, so they priced their product very low, generally charging other tracks 3-4% of wagers. They figured they had the best product, so they would be the only ones simulcasting and they would reap the benefit. But a funny thing happened. Other tracks started simulcasting, too. And the gambler was savvy enough to realize that now he had twenty tracks available and he could certainly find better value and viable plays by spreading out than by sticking with playing his home track exclusively. So the money started getting spread around.

I suppose it is important for everyone to understand how this whole thing works. If I sit at Northfield and bet on Northfield, about 21% of every dollar wagered is taken out before the payoffs and split, nearly evenly, among the state, the track and the horsemen. This percentage varies by track and jurisdiction, but is generally 18-24%. If I sit at Northfield and bet The Meadows, as an example, The Meadows get 3-4% of every dollar I wager, while Northfield keeps about 17.5% (each of these contracts are negotiated by the individual tracks, so the numbers may vary). So it takes about $7 bet off-track to equal $1 bet on-track on live racing, and about $7 bet on-track on incoming simulcasts to equal $6 bet on-track on live racing. In other words, instead of increasing profits, the tracks now had to work that much harder (and handle that much more) to make the same amount of money. Northfield Park is a perfect example. Casual fans cannot understand why we handle so much, but our purses are so low. They are sure management is ripping off the horsemen. Nope, just a lot of handle from remote locations, with a low profit margin.

So, much as Amazon.com realized that they could sell books cheaper than a bookstore, websites like WinTicket.com realized they could sell racing cheaper than a track. They had no expenses of a physical plant or to actually put on any races. WinTicket was operated by Charlie Ruma, who owns Beulah Park in Columbus, and unfortunately, he was the only operator who truly understood the nature of his business. His goal was to provide more signals than any other service. You see, many track sign exclusive deals with TVG or other sites in order to get their races televised or a higher profile. Ruma agreed to pay a premium for those signals, making his sites the closest thing to a one-stop shop in the account wagering biz. Even if he had to pay 8 or 10% for a signal, he could turn a profit, albeit a smaller one, and most importantly, keep his customers happy. When he sold AmericaTab, most experts agree it was the fastest growing entity of its type. Unfortunately, the other sites and their operators seem more concerned with protecting turf than actually providing customer service.

Turf Wars have kept BetHarness customers from getting certain signals, while XpressBet clients can’t get others and TwinSpires is locked out of still more, even though we operate under the same umbrella. Whether due to greed, lack of understanding or outright stupidity, these safe, legally licensed are getting outmaneuvered by offshore sites who have no concern for the laws of the United States. Many pay horsemen NOTHING, since many of their wagers never shows up in the pools -- they are really nothing more than high-tech versions of Murray, the sandwich shop guy, who took a few bets on the side.

So, the Churchill horsemen decided to speak up in an amazing display of bad timing. It was on the heels of Calder’s horsemen totally withholding their signal for simulcasting, meaning they would get NO revenue from simulcasting. Now again, I am not debating that horsemen should get a higher percentage of income. But that is something to be negotiated before a meet starts. Not during. My dad used to call this cutting your nose off to spite your face. Robert Townsend, who made Avis a key player in the car rental biz in the sixties, called it “pissing in the soup.” And, it’s no surprise that earlier this week Churchill announced a 20% purse cut. Whatever you call it, all factions suffer and the client is the only one with no leverage. Unless he stops betting.

So, in the week or two leading up to the Kentucky Derby, I made it clear to anyone who would listen and some who wouldn’t that they should not bet the Derby or the undercard, regardless of where or how. But, I continued to post to a number of websites and to my blog (there is going to be a new url soon, so I will give it to you next month, although it is linked to http://www.northfieldpark.com/). As a public ‘capper, I had to at least pick the race. Here is what I posted in a few spots:

“I am not sure Big Brown is unbeatable, especially from post 20, but I have to pick him to win and he may be 5-2, even as the favorite. If I were playing the race, I would bet $20 on him to win and then would key him in the tri. I like three horses—Denis of Cork, Colonel John and Pyro, and I would throw the filly Eight Bells on, as well. She wouldn’t be there if she couldn’t compete with the boys and she has some upside.”

As we now know the trifecta, which paid $3,400+ for a deuce (or would have yielded $1,700+ on my $12, 4-horse key) was Big Brown with Eight Bells second and Denis of Cork third. If I want to make take a stand in the future, remind me to say “Principals? I don’t need no stinkin’ principals.”

Whether you are a T-bred fan or a harness bettor, the Eight Belles incident hurts. I lost my first race horse, Jef’s Rusty Ricky, when he choked down and died in the stretch of a Northfield Park maiden trot in 1978, so I have been there. I kind of walked around in a daze for a day or two on the backstretch. But, as sad as the breakdown was, NBC and Churchill needed to have better measures in place to screen the public from what was happening. I am not saying hide it, but deal with it matter of factly, and without any sensationalism. The photos of the filly on the ground, with her leg at a grotesque angle, do not serve our sport well. Fortunately, many calmer heads than the PETA folks who spoke up initially have come forward. Had this been a $2500 claimer at Fonner Park, I doubt PETA would have cared much. They would have been busy saving spotted owls that nested in K-Mart signs.

It has been interesting how much has been written about how t-breds are being bred to be faster and less sturdy animals. There is no doubt that the same is true of the standardbred, although our breed remains far stouter and sturdier than the runners, with far fewer fatal breakdowns. Hopefully, breeders of all horses will think carefully about where they are headed in the future.

That’s my time this month. Cash like crazy and I will see you in June.

>>>JIM e-mailed me and said HI,

Enjoyed your column and share your feelings about the Eight Bells tragedy to a point. I detest the sensationalism of such accidents as happens in other human sports like football where injuries are cheered and replayed endlessly. However, I also detest any form of censorship because it is "hiding" the truth. That only gives ammo to such silly groups as PETA.

It is important that all who care about racing know the truth and address these issues.