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Prized Customers
Monday, September 17, 2012 - by Bob Carson

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Editor's Note: The USTA website is pleased to present freelance writer Bob Carson and his popular "Outside the Box" features. This monthly series is a menu of outlandish proposals presented with a wink -- but the purpose behind them is serious. The views contained in this column are that of the author alone, and do not necessarily represent the opinions or views of the United States Trotting Association.

“I put a dollar in one of those change machines. Nothing changed.” -- George Carlin

Bob Carson

Wagering two dollars on a horse race, watching the horse trot across the finish line first, and then bounding back to the pari-mutuel window to collect six dollars was a thrill for our parents and grandparents. Today, winning six dollars just does not provide the same buzz that it did in 1948 or 1964. Fewer and fewer people carry a significant amount of cash.

Using a credit card for wagering creates a disassociation between a winning horse wager and a losing horse wager. Credit makes the transaction seems like an abstraction -- until the statement arrives or additional funds need to be deposited. Quite simply, we just don’t get the same psychological bang for our buck in non-personal transactions. Inflation, debit cards, credit cards, advanced depositing and checks have changed the gambling landscape.

Still, for the most part, and hopefully for a long time, money will make the horses go around. But money may not be the only way to make the turnstiles go around. An additional method of enticing new players may reside in non-monetary rewards such as automobiles, vacations, electronics, concert tickets, cruises or jewelry. For a portion of the population yet to discover our game, valuable prizes are more rewarding to the winner than cash.

Autumn Ryan graphic

Some readers will huff at the concept of prizes in lieu of cash at the racetrack. Take a breath; these thoughts do not step on traditionalist toes. This idea is another one of those separate tracks; an initiative that can run alongside traditional pari-mutuel wagers.

Let’s not spend much of this column on the ways that racetrack patrons could win prizes. We can think of countless cost effective types of wagers. We could also easily make a list of potential prizes. Here is one quick example; if you pick the exact order of finish in a race with eight horses you win a large flat-screen television like the model displayed in the concourse. To take a chance at winning the TV players can handicap the field in the race or choose random numbers for their play; they simply walk up to the row of what looks like traditional pari-mutuel tellers waiting beneath the large sign that reads GIFT PLAYERS.

They say, “Flat screen, race five, 2, 3, 1, 6, 8, 7, 4, 5.” They hand the teller five dollars (or the teller swipes their credit card) and the teller hands them a ticket. With dreams of taking home a 72 inch television in their head, they stroll out to watch the race.

Let’s take a look at why in the world a racetrack would set up a system where customers try to pick winning horses for prizes instead of money. There are quite a few reasons; reasons grounded in solid research. Here are 20 to consider.

  • Trophy value has power. People will brag about their new set of golf clubs or LCD TV they won much more than money. The audience will listen and remember that their acquaintance won something significant at the racetrack.
  • As the operator of a racetrack, if you don’t need to pay out real money, you can increase profit margins. More of the prize money stays in-house. A prize structure is a low risk additional revenue stream.
  • High-end prizes that are tactfully displayed will visually enhance the facility. Posters of Paris on the walls, shiny cars, and electronic prizes flashing throughout the racetrack will help the ambiance.
  • The money that gift players plop down to play for prizes will be very real. After allocating funds for purchasing the prizes and paying the tellers, it will be up to the businesses to maximize the prizes and profits.
  • A non-monetary reward model will avoid some state restrictions. It is possible that a prize model could open up harness racing to states or cities that have no harness racing footprint.
  • High-end prizes will help change the image of racing from a scruffy guy in a fedora. The personality emanating from these new players will be lighter, less grim.
  • To a percentage of players, money is irrelevant; playing for a prize (a prize that they could easily afford) is a stronger enticement.
  • Playing for prizes will take the intimidation factor out of gambling and will appeal to wider demographics. These new people will be playing more than gambling; this makes a difference because there is a huge difference between passive and active gamblers.
  • There are an infinite number of themes that a horse racing facility can create that will make prize-based programs promotable. A prize structure can be constantly changed, offering new avenues for advertising.
  • Psychologically, tangible goals in the form of items, more than money, can create greater competitive spirit; people will work harder for spectacular prizes like a trip to France or a new luxury car.
  • Non-monetary prizes are visual motivators and are easier to promote than cash. Imagine the motivational value from a news clip or commercial where a conga line of winners are shown walking out of the racetrack with valuable merchandise. Compare that picture to a handicapper who is quietly walking out after winning a $5,000 monetary wager.
  • Non-monetary prizes have a long shelf life. A cruise or flat screen TV has more enduring value than money or a check.
  • Luxury (and the non-monetary prizes should always be high-end, with true value) promotes success. It will associate the sport with high quality branding.
  • People remember winning merchandise and travel. Cash winnings are quickly forgotten or merged into the winner’s checkbook.
  • People are smart. New people trying to pick horses for prizes will soon recognize that they can improve their chances if they begin to learn the rudiments of handicapping. They will evolve from mere “number pickers” to real fans of the sport.
  • Non-monetary rewards will cost the racetrack much less than advertised because the value of these rewards can be inflated and the true cost mitigated via imbedded advertising.
  • Winners of very nice prizes offer promotional hooks. The couple that wins that trip to Paris for a five dollar wager and tweets the occasion via social network is a no cost advertisement for the sport. Stories of individuals winning great prizes are newspaper, radio and television features waiting to happen.
  • Local vendors and retailers will find opportunities to promote products; these products can be offered as prizes. For example, a local company manufactures recreational vehicles; they offer a $50,000 model as a prize in exchange for a certain amount of time that the RV will be displayed at the track and on the webcast.
  • True handicappers may find cost effective “wagers” in playing for a high end prize. Let’s say a substantial prize, a car valued at $30,000 is on the table. The true handicapper knows the odds; the real handicapper may feel the odds of winning the car (where many of his competitors are amateurs) create a better bet than trying to win an equal amount of cash.
  • A pilot program, where players attending a racing program try to win prizes instead of cash, could be outsourced. The outsourcer could merely pay the racetrack either a flat fee or a percentage. This would make such a program risk-free to racetracks and racinos.

The last bullet point may be the most important.

In the rather insulated and risk-averse world of harness racing, asking people to tackle new programs is uncomfortable and unwelcome. Many racetracks are absorbed with trying to keep the ship afloat, keep the horsemen content, and keep the casinos in their sights. A prize structure would seem to be an excellent business opportunity waiting to happen; a new business model that could be outsourced that does not even require an enterprising entrepreneur to know a trotter from a pacer.

The real prize could be full grandstands, more excitement, new faces and additional revenue.

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