Wednesday, April 28, 2010

2010 NFL Draft Breaks Viewing Record

The Associated Press reports that more than 45 million viewers watched a portion of last month's NFL Draft. The draft changed to a prime time format for this year, with round 1 on Thursday night and rounds 2 and 3 on Friday night, with rounds 4 through 7 on Saturday. This experiment of the NFL to leverage its popularity year round was successful. Last year, there were a record 39 million viewers, easily eclipsed by this year's mark. The NFL Draft has increased in popularity along with the rest of the league. In 2001, the draft attracted 23.5 million viewers. Viewership has just about doubled in a decade.

With this large viewership, the next step would be to craft a skill contest that could extract revenue from these rabid NFL fans. The game concept would allow viewers to win prizes by correctly predicting draft picks. There is a particular contest scheme that would work extremely well for the NFL draft, which will be discussed in a future post.

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Monday, April 19, 2010

Horse Racing Still In Trouble

Horse racing in the US has been in trouble for some time. In the old days, racing was the only legal gambling activity in the US outside of Nevada. With the advent of expanded casino gambling, Indian casinos and lotteries - not to mention online gambling - racing is just one of many gambling outlets competing for market share.

In addition, the racing fan is older. A previous post discussed the age of racing enthusiasts. They're not getting any younger, which will be the end of racing if not reversed as generally dead people don't bet on the ponies, but have been known to still vote.

Not to brag too much, but I wrote a "critically acclaimed" post analyzing the racetrack industry according to Porter's Five Forces model. Who were the critics? Well they were a friendly audience to be sure, but I did receive positive feedback from a noted industry expert, who is quoted in the Casino Journal article which will be subsequently discussed.

Casino Journal magazine had a great article in its February 2010 issue regarding racing. The article does a good job of highlighting the indicators of racing's decline and does a fair job of analyzing why racing is in decline. Adding this blog's post regarding Porter's model will add additional color to the reader's inquiry.

What surprised me in a negative way was that my incorrect impression that racing handle was at least keeping static, albeit not growing. Not the case. The article states that total racing handle (i.e. bets) fell from $15.2 billion in 2003 to $13.6 billion in 2008. Even the off-track handle, which was supposed to be the strongest element (on-track handle was known to be an issue) fell from $13.3 billion in 2003 to $12.2 billion in 2008.

The article touts the promise of off-track betting, betting exchanges and racinos to help racing's future. Not including betting exchanges, the other concepts have been in place for several years and racing is still in decline. Betting exchanges have a flaw in that they are peer-to-peer bets with a low commission (takeout). They are not going to be able to generate sufficient revenue to save the industry and quite possibly will cannibalize the existing higher takeout pari-mutuel wagering base.

What is important to note is that none of these concepts do a thing to address the core issue facing horse racing - the increasing age of the racing enthusiast demographic. The sport needs younger horse players. No one has come forward yet with a concept that holds the promise to do that. There is a new concept that is in early stages of development that might "crack the code" to solve the need for new horse players while also generating increased pari-mutuel revenue for the industry.


Doocey, P. (2010, February), Post Time for Change: Racinos won't save racing - Some fresh ideas might, Casino Journal.

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Monday, April 12, 2010

NCAA Tournament Betting Values Results

Well the 2010 March Madness is over and let's find out the results of my previous post which identified some potential betting values. To recap, I bet a hypothetical $100 for Duke to win the tournament at 8-1 and bet $50 on the lower seeded choices to win their first game. I arbitrarily chose Richmond over St. Marys in their game (they played each other), but really I should have stuck with the underdog theme and chose St. Marys (which actually made it to the Sweet 16).

I didn't take a look at point spreads and just looked to see who won their game outright. So from that perspective, only Murray St in the lower seeds won their game. If you took spreads into account, I am thinking I would have picked up another game. So for the lower seeds, betting a hypothetical $50 on each of those 5 teams, I won two of those games, so overall lost $50.

But Duke actually won the tournament! With a hypothetical $100 on Duke at 8-1, that's a nice win. Overall, I bet a hypothetical $350, $100 on the tournament winner and $250 on the first round lesser seed game winners. On the lesser seeds, down $50, but on the tournament winner up $800 for an overall tournament betting profit of $750. Not shabby at all.

Next year, I'll perform this exercise again, but get firmer numbers on the point spread on the first round games. To see the March Madness bracket results, click here.

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