Sunday, June 29, 2008

How Canada Gets It Right

I'm just back from a week in Canada -- part checking up on the new two-year-old Brahms colt that we've sent up there for our Canadian partnership and part vacation. And I'm intrigued, though not particularly surprised, to find that our northern neighbors seem to know a whole lot more about how to run a race track than we do here in the US.

We visited both ends of the racing spectrum: Woodbine, with its $80,000 allowance purses and gorgeous 1 1/2-mile turf course, and little Fort Erie, opposite Buffalo, which has basically the same quality of racing as Finger Lakes, but provides an ever so much more enjoyable experience for the racing fan.

Let's start with Fort Erie. The racing, which runs from May through October, is typical of minor-league tracks. They do have a $500,000 race, the Prince of Wales Stakes for Canadian-bred three-year-olds at 1 3/16 miles (just like the Preakness) on July 13, and the $125,000 Rainbow Connection Stakes, a 5-furlong turf sprint for three year old fillies on August 17. But last Monday, when we visited, there were two $10,000 claiming races, two at $7,500, two at $5,000 and two at $4,000. Admission is free, so there are no attendance figures, but it looked like perhaps 1,200-1,500 people were at the races. The on-track handle was under $60,000, but the total, most of it from the local OTB network, which is owned by the track, was over $800,000. Finger Lakes, a hundred miles or so down the New York Thruway near Rochester, had a total handle of $1.35 million the same day, most of it through the six(!) different New York OTB corporations, but that's just about the only point on which Finger Lakes comes out ahead.

First of all, Fort Erie, in its 111th season -- opening day was June 16, 1897 -- still looks like it's a race track, even though, as at most other minor league tracks, it's the slot machines that bring in the real money. But the racing side of the facility is clean, inviting, with good sight lines for watching the racing and, a rarity at small tracks, a real turf course. Parking was easy, concessions were decently priced, and we had a picnic table on the apron down by the finish line, a perfect spot for watching the racing. To cap off the thoroughly enjoyable day, our trainer, Nick Gonzalez, won a race and, since the horse's true owners weren't there, Nick invited us into the winner's circle for the picture. Just a great day of racing.

Wednesday night, we had a party at Woodbine for our Canadian partners. A group of 30 people (partners, family members and friends) met in the Post Parade Room, one of half a dozen dining rooms at the track. Woodbine has a number of dining rooms, at varying levels of formaility, some of which (like the one we were in) set aside for groups, and judging by Wednesday's crowd, they keep them well filled. Prices were reasonable by race track standards, the buffet included prime rib, drinks service was good. Best of all, it was easy to watch the races, either from the dining room or right outside in the grandstand. All in all, a decidely fun experience. (Made even better of course, by hitting a few winning bets). And the Woodbine staff phoned the next day to make sure we'd all had a good time. When was the last time you had that happen at a US race track?

The physical plant at Woodbine, as those who traveled there for the 1996 Breeders Cup know, is stunning. The interior, which features wood paneling and marble, is well-lit, brightly painted. There are no dark corridors, no empty, rambling grandstand areas. And everywhere there are customer service folks, cheerful, helpful customer service folks, knowledgeable customer service folks. From the racing side, you'd never know that a slots facility takes up a good share of the building -- except, that is, when you think about where the money lavished on the infrastructure and the purses comes from. The outside walking ring is inviting, with grass and trees and flowers and picnic areas nearby, reminiscent of the old Gulfstream, before Frank Stronach tore that lovely plant down and substituted his cheap imitation of a Las Vegas racebook. The track itself, with the huge turf course circling the polytrack main track, and the harness track inside that, is just beautiful on a summer day. The only tracks I know that compare are the boutique meets at Saratoga and Keeneland.

So, why do the Canadian get it right, when so many US tracks seem to think that customer service is a dirty word?

Maybe, of course, Canadians are simply nicer than folks on the US side of the border. They probably are, but even that doesn't explain why the physical plants are so much more attractive and why the racing, at Woodbine at least, can offer the kinds of purses that actually let an owner or a trainer stay in business.

Both Ontario tracks have slots, and they use a good share of the slot machine profits to fund purses and to keep the race track in better than good shape. But lots of US tracks have slots as well, and not all of them offer anything like the race-going experience in Ontario. So that can't be the whole answer.

A huge organizational difference is that both Fort Erie and Woodbine own the OTB networks in their respective areas. (Woodbine also owns the nearby Mohawk harness track.) So the OTB and on-track operations are fully meshed, bettors can wager from either on- or off-track in the same account. Woodbine controls the Greenwood Teletheatre, on the site of the original Woodbine track, plus some 25 other OTB outlets in the greater Toronto area, a few of which make some serious money, especially from bettors playing the Hong Kong races late at night. Woodbine is also a major factor in the Horseplayer Interactive online/telephone betting system, which has taken the sensible step of rewarding big players (starting at $1,250 a week) with real rebates, rather that souvenirs and free food. The bigger the bettor, the more important price, i.e., rebates, becomes, and HPI recongnizes that.

Are there any lessons here for US track management? Almost certainly. First, the focus on the customer really matters. Making the place look nice matters, too. Woodbine has got it right, and the crowd -- larger, younger, more upscale and more female than at US tracks -- reflects that. It's nice that some tracks are hiring people to focus on customer service (NYRA's hiring of Gavin Landry is a recent example), but the attention to detail that Woodbine shows is way beyond what US tracks can manage. In particular, US operations need to get away from the unending, fawning attention to a few rich owners and board members, and devote all that time, money and energy instead to a focus on the average racing fan. That's where the future is. That's certainly where the money is.

And, second, tracks need more control over their own product. By owning the OTB networks, Woodbine and Fort Erie get the full takeout from whatever is bet at the OTBs, in sharp contrast to the situation in New York, where the tracks (and horsemen), get a good deal less than half the takeout on what's bet in the state's multiple OTB facilities. As a business model, the New York structure is just plain crazy, and the rich folks who were on the NYRA Board in the early 1970s, and who passed up the chance to take control of OTBs because "gentlemen aren't bookmakers," have a lot to answer for.

Are the Ontario tracks perfect? Of course not. But the experience of going there as a race fan is far superior to what it is at most US tracks. And, as an owner, I certainly can't complain about those allowance purses at Woodbine!

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