Wednesday, March 10, 2010

Pennsylvania tracks' committment to racing

Tom Lamarra wrote an interesting article at Blood Horse detailing the Pennsylvania Horse Racing Commission's push to hold racetracks in the Keystone State accountable for promoting live racing and breeding as part of legislation authorizing table games.

Lamarra's article comes just 15 days after this blog published Thoroughbred Times correspondent Tom DeMartini's scathing review of the live racing experience at Philadelphia Park.

Philadelphia Park has a current average purse distribution of $262,887, so you probably won't find many local horsemen who are disappointed with the expanded gaming model, but I sure am.

The rule in states with expanded gaming should be that takeout on horse racing wagers cannot exceed the takeout on slot machines, which is typically in the 10% range. I've excluded table games because I wouldn't expect racing to do a 1% takeout like you could find with craps or blackjack with liberal rules.

Regulators and racing could even get creative with the rule, that is the average takeout needs to be 10%. This could allow tracks to try a "no takeout" or "low takeout" (e.g. 5%) promotion on certain bets at certain times while offering a higher takeout on certain other wagers.

Being creative with carryover pools, as NYRA is with its Pick 6 pool could also work. Philly or Penn National could offer a 5% takeout on P6. When there's a carryover of four figures (the pools are small), it jumps to 10%. When the carryover is five figures, it's 15%, six figures 20% and seven figures 25%.

Horsemen should be the ones championing this cause because of states realize that all that money going to purses and breeder incentives isn't increasing interest in the game, then they're going to cut those funds. So in the case of Philly Park, Greenwood would likely still maintain a decent chunk of operating revenue from slots while money to horsemen in the form of purses get slashed.

All that is to say that horsemen have a bigger interest in seeing the sport grow than Greenwood does since the operator is entrenched enough in the gaming business now that it wouldn't miss the racing (see Harrah's wanting to shutdown greyhound racing in Iowa as an example--the people associated with dog racing lose everything while Harrah's keeps the gaming).

It's nice to see Pennsylvania regulators hold the tracks accountable, but remodeling the grandstand to make room for a poker room shouldn't pass muster as "growing live racing."

2 soothsayers:

  1. Eddie D wrote:

    Regulators and racing could even get creative with the rule, that is the average takeout needs to be 10%.

    This could allow tracks to try a "no takeout" or "low takeout" (e.g. 5%) promotion on certain bets at certain times while offering a higher takeout on certain other wagers.

    _________________

    Ed thank you for addressing the need for a revamped pricing model for horse racing.

    The business model is broken as we are tied into the current simulcasting contracts.
    These contracts must be revamped before allowing individual racetracks (and their states) to approve takeouts of 10%.

    There is no doubt that a long-term approach(in all the pools) would work. The new fans that walk into the racetrack not only battle a lack of wagering experience and the basic knowledge of the game, they battle takeout rates that test even the best of handicappers.

    Can you blame the very best bettors for fleeing to the rebate shops? The overpricing of the product must be corrected if the horse racing industry is to move forward.

    I champion a five year plan of incremental reduction of 2 percentage points in all the wagering pools until that 10/12% objective is met.

    It must be done.
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  2. The biggest problem here is that hardly anyone would take their signal. If this was implemented everywhere, then there would be a network of tracks that would force tracks and ADWs to take the signals of slot tracks.
    I think in light of this, the rule could change to not exceed 200% of slots (which I believe is close to 8%), in today's current environment.
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