Hypothetical Question

[barn32]

I'm a philanthropic type of billionaire, and I decide I'm going to reopen an existing, but now defunct racetrack, takeover several small racetracks and combine them into one mega track, or start a brand new state of the art racing facility.

Either way I decide to go it's going to be a first class operation all the way with large purses and quality racing. Every ADW and signal outlet can have access to every race I run.

Oh, yea--the takeout will be 10% across the board. All purses will be guaranteed minimums. If the track loses money, then it comes out of my pocket. But I don't care because I'm a billionaire, and I love horseracing. But I'm also a businessman, and I want my venture to succeed.

What are my chances?

[DrunkenHorseplayer]

Zero; state governments won't approve 10% takeout and the ADW's will want exclusivity and other BS terms.

[HUSKER55]

My money says you would never get past the politics, ... unless you can buy them off. :D

husker55
:)

[classhandicapper]

Once again the government "is" the problem (or should I say enemy) and not the solution to the problem.

[ezrabrooks]

Man..that is a big shot of negativity. What happened to "build it and they will come"? I thought a 10% take out would cure every thing?

[Tom Barrister]

Actually, 10% wouldn't be a bad deal, provided that it was undersood that the (inevitable) on-site casino was subsidizing track operations, and that the latter wasn't expected to pay its own way.

[barn32]

My money says you would never get past the politics, ... unless you can buy them off. :D

husker55
:)

So the fact that I'm investing millions of dollars (tens of millions?) and employing hundreds of people means nothing?

Would the government (powers that be) really get in the way of such a boost to the local economy?

[Bruddah]

So the fact that I'm investing millions of dollars (tens of millions?) and employing hundreds of people means nothing?

Would the government (powers that be) really get in the way of such a boost to the local economy?

They WOULD, DO and WILL again. Politics has no silver lining except in the pockets of those in Power.

[Dave Schwartz]

What are my chances?


Zero.

10 percent is an unreasonably low takeout for a track to succeed.

Listen...

1.50% to the state
0.75% to the tote system
0.75% to the signal dissemenator
3.00% to the horsemen
3.00% to purses
----
9.00%

?.?? host track/ADW commisisons
?.?? track maintenance
?.?? track employee salaries

No marketing, no sales, no nothing... and most of all, no profit - figured into this!


The answer does not lie in a lower takeout. The answer lies in a reasonable rebate system. Reward people who bet more. Reward people who go to the track or OTB to wager. Find ways to reward people with reasonable rebates.


If you are a $200 player, you get a BIG rebate.
If you are a $50 player, you get a medium rebate.
If you are a $20 player, you get a small rebate.
If you are a $2 player you get no rebate.

Of course, all of this is based upon total handle, not individual bets. The rebates should be computed and paid on a daily basis. Simulcast wagers would still count, but with a lesser rebate value (because the "host" track only gets a commission on the handle).

Listen, you want people to come to the track? Reward them. It isn't difficult to figure out. You make the voucher system work.

First, you get a rebate on total daily handle, paid at the end of the day or the next day. (In other words, you don't have to be at the track to collect - it is automatically added to your account.)

Second, bet some number of dollars in the first 3 races and get a small bonus that must be collected before the 4th race. Repeat the process before the 7th race and again just before the last race. If you aren't present during the bonus collection period the "bonus" is lost.

This is the kind of reward that keeps people at the track or OTB.

Even the $2 player can be rewarded - with a coupon for free parking or a hot dog the next time he comes.

There are so many ways that the tracks could get creative. The problem is that their idea of "giving something away" is generally something meaningless. I mean, really... who cares about a John Henry drinking glass?

Although this is in the wrong thread, IMHO, the smartest thing HANA can do is learn to work with the tracks instead of against them. They have to get track management to see that there is a way to make the player happy without putting the tracks into receivership.


Regards,
Dave Schwartz

[rokitman]

Maybe our smart and insightful billionaire is a good enough businessman to make a profit from things other than take-out, just as plenty of other business do. Maybe he keeps his attendence unusually high with innovations that please his customers, and he makes a fortune off concessions and whatever other creative ways he dreams up to separate his happy customers from their money. Maybe people love to be at his track because he hit all the right notes in making being there a great experience, win or lose. Maybe he is an old-fashioned capitalist who pulls off big things that mediocre people who look to profit from being a benefactor of socialism can't. He takes his share of the cut from The Collective, thanks his lucky stars that 10,000 people will be coming to his house today, and gets to work selling.

A lot harder nuts have been cracked.

[Bill Cullen]

IMHO, there should be no take out for the local government. You're building a first-class business operation that will provide hundreds of local jobs and positive economic multipliers for the local economy. And you're doing this with all private capital. You tell this to the government right up front and you get this in writing (the legal kind), or NO DEAL.

It's a win-win situation for you: you either get your dream operation in that vincinity, OR, you get your dream operation built somewhere else and have the satisfaction of watching those local yo-yos end up building a prison to support their local economy. When the local politicos who turned down your deal are finally uncovered for what they are, they'll be inside the prison they chose to build watching the Breeder's Cup races being run at your track!

Good luck with your dreams,

Bill C