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HANDICAPPING INSIGHTS FEBRUARY 13, 2009 by Dick Powell The decision to reduce the minimum bet amount of the Magna 5 from $2 to $1 reminds me of a line from Animal House when Otter tells Flounder: "You screwed up -- you trusted us!" Horseplayers are convinced that if betting denominations are reduced, handle will go up since it would make the bet more accessible to more players. Sounds good in theory, but it doesn't always work in practice. Case in point is the Magna 5. Five races on a Saturday in less than an hour at multiple tracks was a great idea and the Magna 5 took off immediately with handle averaging more than $500,000 right from the start six years ago.Originally a $2 bet, the few times there was a carryover yielded pools around $1 million. It wasn't broke so it didn't need fixing! But Magna listened to the many racing media members and horseplayers that have complained about super exotic wagering with $2 bet minimums like Pick 6s and Pick 5s and how much more money would be bet if the minimum were cut in half. By doing this, it opens the bet up to smaller players that can now spread across more betting combinations and all this is supposed to result in more handle. This year, the first Magna 5 was on January 24 with handle of only $431,780. This was the second lowest in Magna 5 history, from 50 runnings. On January 31, a new low was set when the Magna 5 only handled $402,677 -- the lowest ever -- until last week when a new low was set as the Magna 5 dipped below $400K for the first time; $399,437. In 2007, the 10 runnings of the Magna 5 averaged $589,411 with one carryover week. In 2008, the nine runnings of the Magna 5 averaged $535,019 with one carryover week. So far this year, the three runnings of the Magna 5 averaged $415,608, which is a 22.32 percent decline from the 2008 averages and a 29.49 percent from 2007. Considering that total handle nationwide in the month of January was only down 2 percent and that Gulfstream, which usually hosts at least two of the races, has shown increases in business this year, it would make sense that these declines are due to the lowering of the $2 bet minimum to $1. One reason that I have always been opposed to lowering the Pick 6 minimum bet from $2 to $1 is how the bet can be carryover-driven and that the lower minimum would drastically reduce the amount of carryovers. At major circuits like NYRA and Southern California, where the Pick 6 is huge, business on it might average about 1 percent of all sources handle until there is a carryover. Southern California usually averages between $150,000 and $200,000 daily until there is a one-day carryover when they average close to $700,000 depending on the day of the week. Two-day carryovers result in multi-million Pick 6 pool totals. If you have the discipline to only play Pick 6s with carryovers, you have the opportunity to play into a large pool whose effective takeout rate has been lowered or even negated by the size of the carryover. At a 25 percent takeout rate, if there is a $100,000 carryover and the next day's pool is $400,000, the carryover cancels out the takeout that day as long as your money is not in the carryover. Without carryovers, the Pick 6 is just another high takeout super exotic wager. Based on the Magna 5 handle figures for the first three weeks this year, the chances of having a carryover look to be much less than the one in nine in 2008 and the one in 10 in 2007. Even though total handle is down, more combinations can be covered with the $1 bet minimum. If Magna wants to fix their bet, I would leave the $1 minimum but add a $500,000 guaranteed pool total. This can be somewhat risky for management if business stays at the current level, but it should easily attract enough added attention to meet the guarantee unless there is horrible weather at the Magna tracks. Thanks to reader and friend Steve Zacks, we now have some hard data regarding horses that win in their first start following a claim that move up in class. Steve sent me a report that included 300 horses that fit the bill and the results are quite interesting. Out of the 300 horses that won in their first start following a claim that moved up in class, the average time between the actual claim and the winning race off the claim is 39 days. The old stereotype of a trainer claiming a horse and running it right back and winning while moving up in class is long over. Even I was surprised at the average amount of time that elapsed until the horse made its first start off the claim. That said, Steve's report did show 29 horses that won in their first start off the claim while moving up in class off two weeks or less of rest, which was far more than I suspected.
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