Foreward

When Doug Reed asked me to speak at the RTIP symposium, while flattered for the invite, it presented a challenge. The title of the talk was frontiers in wagering; a talk on the new forms of gaming that could be introduced into the US market in order to stimulate the betting industry.

The problem occurred to me that its probably the case that the industry has failed to innovate for at least the last 10 years, so why would we expect that any big change was on the horizon, and more importantly why would big change result in anything more than continued issues and decline?

With this in mind, my talk focused on whether or not it was possible to institute significant change with the tools at hand. As the old saying goes, a bad workman blames his tools. Is it possible that instead of blaming our tools, we could look to improve the service we offer without ripping out everything that exists now? I recall a conversation with the CEO of one of the industry's ADW platforms, talking about the possibility (as it was back then) of the Jockey Club buying United Tote. I raised a number of questions for him to ponder, which I think are still relevant.

Supposing the 'industry' did buy a tote system for itself:

1. Would it be able to operate at lower than current fees? Probably not, so there is no inherent cost saving.
2. Would it engender greater innovation? More specifically, do you believe that the reason there is no innovation is down to the tote companies themselves? Again, probably not in my opinion. Its not in the interest of the tote companies for the continued downward spiral of handle, so you have to believe that if they were capable of change, it would happen.
3. Would it increase player interest? Again, I cannot see how this would have effected that scenario. Those companies strong enough to effect such change could pay for it to happen if there was an ability to define the needs and service them, which would ultimately benefit the whole industry.

So why is there no change? I personally feel that the industry at large suffers from a lack of momentum. An infinite loop of continued decline perpetuated by a reluctance to push the boundaries of what we can do right now, which is further increased in velocity by a lack of understanding from the regulators with regards to the impact which simple changes to relax certain rules could have on the viability of the tote product.

My talk reflected this. A fairly brutal assessment of the state of affairs, but presenting a set of viable changes that can create an environment which is suitable for innovation. That's really the key. If you take nothing else from my presentation away, I hope it will assist in understanding that there are things we can do right now, without enormous structural change, which will create an environment in which innovation is possible. The market for pari-mutuel betting will continue to decline unless new ideas can be implemented quickly and effectively. If we do not move from the current position of stasis to one where investment in new features and systems can be quickly and effectively rewarded we'll never get anywhere.

What we really need is an environment where healthy competition can be allowed to exist. We need more vendors offering the core services that the industry needs. 

This includes:

1. Teller and self service terminals supplied from outside of the industry
2. ADW and other online services supplied by a number of vendors, not just the incumbent tote suppliers.
3. A flexible framework for the development of derivative betting products, which will create new gaming opportunities without the need for significant legislative change.
4. Mechanisms to improve the service a pool betting facility can offer our customers, in order that they are well informed, offered reasonable guide prices, and given options that reflect what someone would expect from any online business, gaming or otherwise.

In each point on my talk, I consider one option that would meet some or all of these needs. I will detail the reasoning behind each of these points in this blog.