What has been the impact on handle of slots?

[CBedo]

It's been pretty clear what has happened to purses at tracks that have gotten slots, but what has been the actual impact on handle? I would guess there have been some studies done somewhere, but I'm fairly ignorant when it comes to knowing much about this subject.

Any help would be appreciated. Thanks.

[Saratoga_Mike]

It's been pretty clear what has happened to purses at tracks that have gotten slots, but what has been the actual impact on handle? I would guess there have been some studies done somewhere, but I'm fairly ignorant when it comes to knowing much about this subject.

Any help would be appreciated. Thanks.

Stats from Pennsylvania (source: DRF 10/24/09):

Total t'bred handle*
2006 $777.6 mm
2007 741.9 mm
2008 657.9 mm

*includes betting by PA residents on in-state and out-of-state t'bred racing and betting by out-of-state residents on PA t'bred races

Total purse subsidies (from slots)/total purses:
2006 $2.6 mm / $55.0 mm
2007 124.7mm / 144.3 mm
2008 193.9 mm / 201.1 mm

So as purses went from $55 mm in 2006 to over $200 mm in 2008, total handle actually declined by over 15% from $778 mm to $658 mm. Now most horsemen would say "who cares," but the state will eventually claw back more and more of the subsidy and the declining handle will actually matter.

[CBedo]

I was hoping my cynicism would be unfounded. This is just more support showing that slots will not "save" racing unless the the monies they generate are used to grow the sport. In fact, it's quite possible that slots could be accelerating the decline as track owners and and horsemen get a false sense of security from the added purses, which we should assume (as we've seen already in some spots) states will start to dip their fingers in the slots till more and more.

Thanks Mike for the data. I added one more year to it (the year before slots), and then added the North American handle to get a sense of how Pennsylvania handle is growing relative to the overall economic climate in horse racing. As you can see in the following table, not only has Pennsylvania handle fallen, but it has fallen faster than national handle, and actually the decline in overall market share has accelerated to the downside. Not much to be encouraged by.

Year Penn Total Share
2005 775.8 14,561 5.33%
2006 777.6 14,780 5.26%
2007 741.9 14,724 5.04%
2008 657.9 13,670 4.81%

[cj]

I have stated many times I believe the proliferation of slots is terrible for racing long term. It takes away any incentive to make the product better. It also cannibalizes races at all the tracks by diluting competition. People want to bet on big fields with at least fairly reliable horses.

The old bread and butter of racing cards 20 years ago were the hard knocking claiming races. They are spread so thin now the races are not attractive any longer. Those horses have spread to the racinos, tracks that used to be where most of them went when they couldn't compete at the bottom level of the bigger tracks any longer.

[proximity]

. In fact, it's quite possible that slots could be accelerating the decline as track owners and and horsemen get a false sense of security from the added purses, which we should assume (as we've seen already in some spots) states will start to dip their fingers in the slots till more and more.....

you get the sense that many of these "track" owners don't want racing to "succeed" period. they just want to be in the gaming business.

now pen racing is certainly better than it was pre-slots, and i'm not just talking about purses. the fields are bigger which reduces effective takeout and there seems to be greater availability of rebates through adws. i certainly think the product can be improved even more and fault pen gaming for not aggressively promoting racing and taking strides to do this, but still slots have improved pen racing for the bettors.... but if players won't gravitate towards bigger fields and bigger rebates, then???????

[CBedo]

you get the sense that many of these "track" owners don't want racing to "succeed" period. they just want to be in the gaming business. This sure seems to be the gist of it.

[proximity]

the thing that slots actually saved that they shouldn't have wasn't the game itself, but rather the racetrack companies (many who operated in near monopoly conditions for years) whose complacency and ineptitude are mostly responsible for the present state of racing. these operations were rewarded for their failures!!

[johnhannibalsmith]

I love this thread and appreciate the posts... :ThmbUp: :ThmbUp:

[illinoisbred]

What happens when the novelty wears off,or most regular slot players loose all their discretionary/disposable income, or as more and more tracks get slots taking players away from nearby markets[Illinois getting them -taking players from Indiana/Iowa] ? Will purses fall faster than they rose? This is just a temporary band-aid and when it comes off the wound to racetracks will be deeper and sorer.

[levinmpa]

I don't understand why the Racinos with an influx of slots revenue have not lowered the takeout on racing. Philadelphia Park is one of the worst culprits of high takeout. The horsemen, owners, jockeys, and track ownership all benefit from the slots revenue, but the horseplayer gains nothing. Why not lower the takeout significantly and give the horseplayers a reason to put money in your pools. There would likely be an increase in handle due to the lower takeout and higher churn, resulting in additional revenue. I just don't get it.

[rrbauer]

you get the sense that many of these "track" owners don't want racing to "succeed" period. they just want to be in the gaming business.
Thereby proving that they're not as dumb as we've given them credit for....BUT when the pols start giving them smaller and smaller slices of the slots' pie what comes after that?



now pen racing is certainly better than it was pre-slots, and i'm not just talking about purses. the fields are bigger which reduces effective takeout and there seems to be greater availability of rebates through adws. i certainly think the product can be improved even more and fault pen gaming for not aggressively promoting racing and taking strides to do this, but still slots have improved pen racing for the bettors.... but if players won't gravitate towards bigger fields and bigger rebates, then???????
At their takeout levels the rebate cups should be overflowing. Because horseplayers have no lobby and have no concentrated voice in the matter racing associations will continue to keep takeout levels high while getting big purse supplements that will make the horse owners' happy. Some day those chickens will come home to roost but we'll either be broke or in the ground by then!

[tzipi]

Racinos WANT NOTHING TO DO with the horses. They just said they did,so they could get their foot in the door on the casinos. The casinos make money,horse racing is drag on them and is a failing money part of the racinos.
As insiders have said, racinos will start lobbying soon to get rid of the failing horses and expand the casinos. Lazy horse racing people screwed over the sport bad with this move because they were too lazy to fix it's own sport.

What's Phillys daily handle avg? $60,000

[Doc]

Racinos WANT NOTHING TO DO with the horses. They just said they did,so they could get their foot in the door on the casinos. The casinos make money,horse racing is drag on them and is a failing money part of the racinos.
As insiders have said, racinos will start lobbying soon to get rid of the failing horses and expand the casinos. Lazy horse racing people screwed over the sport bad with this move because they were too lazy to fix it's own sport.

What's Phillys daily handle avg? $60,000

Philly Park's ownership never wanted anything to do with racing. They purchased the track in the early 1990's because Phonebet, OTBs and expanded gaming were on the horizon. Expanded gaming was really the prize they sought, and they got it. They greased the politician's palms plenty to ensure the slots bill passed, believe me. Sen. Tomlinson in Bucks County was the recipient of mucho political donations, as was Ed Rendell. Horses are seen as a necessary evil to Philly Park. If they could pave over the backstretch and put up another building for slots, they'd do so in a minute.

[tzipi]

Philly Park's ownership never wanted anything to do with racing. They purchased the track in the early 1990's because Phonebet, OTBs and expanded gaming were on the horizon. Expanded gaming was really the prize they sought, and they got it. They greased the politician's palms plenty to ensure the slots bill passed, believe me. Sen. Tomlinson in Bucks County was the recipient of mucho political donations, as was Ed Rendell. Horses are seen as a necessary evil to Philly Park. If they could pave over the backstretch and put up another building for slots, they'd do so in a minute.

NO racino wants the racing part. It's not just Philly. Racing was failing before they got there and racing people ALREADY GAVE UP on it! Why would they want it? They just said it so they could get their foot in the door for their casinos. As insiders have said racinos will soon lobby to get rid of the failing sport and expand the money making casinos on the new land. This was the plan all along. Yeah,these casinos want to fix something that even people who ran the sport gave up on :D .

Casino people play slots and games. They always knew this. They don't go there and all of a spend all there money on horses. Racinos will kill off alot of racing. Too bad the lazy racing people did not try to fix their own sport. They just took a quick way out.

[FantasticDan]

Does anyone know what Finger Lakes' handle/trend has been since their slots opened? Their first year for slots was 2004..

[tzipi]

Does anyone know what Finger Lakes' handle/trend has been since their slots opened? Their first year for slots was 2004..

I know they do about 900,000 to 1,000,000 a day there according to equibase. But they do not list attendance anymore.
But see it's really tough now,as of about 2-3 years yrs ago most tracks stopped posting their attendance and some just list handle. Is it just the track handle or is it handle brought in from other places too? About 5%-10% of tracks still list their attendance and handles from on track and off track.

[therussmeister]

I know they do about 900,000 to 1,000,000 a day there according to equibase. But they do not list attendance anymore.
But see it's really tough now,as of about 2-3 years yrs ago most tracks stopped posting their attendance and some just list handle. Is it just the track handle or is it handle brought in from other places too? About 5%-10% of tracks still list their attendance and handles from on track and off track.
Most "slots tracks" don't list attendance because they don't charge admission, so they don't get a count.

[tzipi]

Most "slots tracks" don't list attendance because they don't charge admission, so they don't get a count.

Some smaller tracks I looked up don't have casinos and they didn't post their attendance. I could be wrong,been a while since I was checking. I know Aqueduct does not charge admission and they list attendance. Well anyway, not a big deal.

[Rutgers]

I know they do about 900,000 to 1,000,000 a day there according to equibase. But they do not list attendance anymore.
But see it's really tough now,as of about 2-3 years yrs ago most tracks stopped posting their attendance and some just list handle. Is it just the track handle or is it handle brought in from other places too? About 5%-10% of tracks still list their attendance and handles from on track and off track.

The 900,000 - 1,000,000 would be the total handle bet on-track and off-track on the Fingers Lake card. Some tracks will break the numbers down by whats bet on-track and off-track.

Across all US tracks on average, only about 10-11% of a tracks handle is bet on track. I do not know if this is the case at Finger Lakes. I know at Monmouth Park the on-track percentage can be as high as 20%.

[badcompany]

Stats from Pennsylvania (source: DRF 10/24/09):

Total t'bred handle*
2006 $777.6 mm
2007 741.9 mm
2008 657.9 mm

*includes betting by PA residents on in-state and out-of-state t'bred racing and betting by out-of-state residents on PA t'bred races

Total purse subsidies (from slots)/total purses:
2006 $2.6 mm / $55.0 mm
2007 124.7mm / 144.3 mm
2008 193.9 mm / 201.1 mm

So as purses went from $55 mm in 2006 to over $200 mm in 2008, total handle actually declined by over 15% from $778 mm to $658 mm. Now most horsemen would say "who cares," but the state will eventually claw back more and more of the subsidy and the declining handle will actually matter.

These numbers have to be taken with a grain of salt. During that time period, the country was entering a severe recession.

[Saratoga_Mike]

These numbers have to be taken with a grain of salt. During that time period, the country was entering a severe recession.

They sure found money to play the slots!

[tzipi]

These numbers have to be taken with a grain of salt. During that time period, the country was entering a severe recession.

We didn't get hit till the very end of 2008 and then into 2009 for the recession.

[CBedo]

These numbers have to be taken with a grain of salt. During that time period, the country was entering a severe recession.That's why I compared their numbers to total North American handle. Looking at their share of total handle should give us an idea of how they are doing relative to other tracks that are facing the same economic and structural challenges (I realize that there could be some differences regionally, but overall, this should be close enough for my purposes).

[proximity]

or in the ground by then!

i hope to be playing the game until we get to this point...... but beyond that (despite pretty much being your typical coldhearted railbird who gets his kicks standing around yelling expletives at tv screens) i hope that the game continues to prosper long after i'm gone. and one of the main things that really concerns me is that i don't see similar altruistic feelings coming from horsemen and their little groups (hbpa...). they rush to the defense of kids with needles training at percentages that would make hall of famers blush but as long as they get their cut of the slots there is no horsemen pressure on the tracks to fix and promote the game. future generations be damned.

[appistappis]

the slots were the beginning of the end of ft. erie which is barely clinging to life......last time I went to finger lakes there couldn't have been more than 100 of us in the stands.

[FantasticDan]

I get to Finger Lakes about a dozen times per season. If you go on a nice summer weekend or a holiday, the racing floor and grandstand are very busy and positively buzzing. Go on a Tuesday in October, that's a different story.. ;)

I never knew FL before the slots. Am I right in saying the racing product has seen a modest improvement since they were installed? And modest purse increases?

I know the facility itself has seen some improvements over the last five years.

[fmolf]

as soon as the first wave of deals expires for these racinos and new contracts need to be negotiated the horseman will suffer, because racing is not self sufficient.I believe many tracks will close as governments reach out to take the horsemans share to balance ever increasing state and local budgets.

[JBmadera]

as soon as the first wave of deals expires for these racinos and new contracts need to be negotiated the horseman will suffer, because racing is not self sufficient.I believe many tracks will close as governments reach out to take the horsemans share to balance ever increasing state and local budgets.

I believe this is exactly right. Just look at how poorly many of the Indian Casinos are doing - the racino's will want better deals to stay afloat and I'm sure racing will suffer.

Plus the economics in general make no sense: perhaps I have this wrong but I sure thought I saw a 3yr and up 4k claimer at Penn last night with a 12k or 16k purse???? WHAT? I'd still own horses if horses if there were sustainable purses at that level!

[onefast99]

I believe this is exactly right. Just look at how poorly many of the Indian Casinos are doing - the racino's will want better deals to stay afloat and I'm sure racing will suffer.

Plus the economics in general make no sense: perhaps I have this wrong but I sure thought I saw a 3yr and up 4k claimer at Penn last night with a 12k or 16k purse???? WHAT? I'd still own horses if horses if there were sustainable purses at that level!
The purses are consistent with other tracks for the lower level 4k and 5k claimers the purse monies range from 12k to 14k. The allowance races still give out 36k to 41k and there are several 2yo races where the purse is 36k. Not bad as the cost to keep a horse there is about 35% less then NJ or 45% less then NY.