Higher takeout not helping Hollywood Park

[jelly]

A decline in all-sources handle could lead to a purse cut at the current spring-summer meeting at Betfair Hollywood Park, according to the track’s president, Jack Liebau.


“We’re concerned,” Liebau said. “We may have to cut purses. We are not getting the field sizes that we’re expecting.

“Everything starts with the product. We’re not getting the participation that we thought. We can’t do anything if people don’t enter. I find it depressing. We’re in a critical stage as far as entries are concerned.”


http://www.drf.com/news/hollywood-park-slumping-handle-could-cause-purse-cut

[Indulto]

A decline in all-sources handle could lead to a purse cut at the current spring-summer meeting at Betfair Hollywood Park, according to the track’s president, Jack Liebau.


“We’re concerned,” Liebau said. “We may have to cut purses. We are not getting the field sizes that we’re expecting.

“Everything starts with the product. We’re not getting the participation that we thought. We can’t do anything if people don’t enter. I find it depressing. We’re in a critical stage as far as entries are concerned.”


http://www.drf.com/news/hollywood-park-slumping-handle-could-cause-purse-cutIs it possible the sponsorship renaming has been a negative factor?

In addition to allocating stalls differently, they could also allocate races and wager pools differently. Instead of 8 races each on Thu and Fri, why not 6 each on Wed, Thu, and Fri for one additional P6 & P5 per week. Put the P5 on the last 5, the P4 on the last 4, and eliminate quinellas and perhaps doubles. Experiment with lower exacta takeout to match NY. They could take 2 races from Sat and have the same total. The additional day with BEL open should help also.

[wisconsin]

Is it possible the sponsorship renaming has been a negative factor?

In addition to allocating stalls differently, they could also allocate races and wager pools differently. Instead of 8 races each on Thu and Fri, why not 6 each on Wed, Thu, and Fri for one additional P6 & P5 per week. Put the P5 on the last 5, the P4 on the last 4, and eliminate quinellas and perhaps doubles. Experiment with lower exacta takeout to match NY. They could take 2 races from Sat and have the same total. The additional day with BEL open should help also.


This makes too much sense.

[fmolf]

This makes too much sense.
Maybe just maybe the customers message may get thru?........NAW I DOUBT IT!!

[anotherCAfan]

I'm not a bettor, but why have 11 races on Saturday if the fields may not be good Saturday or Sunday? Why not have 10 races Saturday with marginally fuller fields? (assuming that some of the races Saturday could be combined... obviously not going to combine Maiden Claiming with a nice Allowance race)

Is the handle from that extra race better than the handle from ten good races?

[DJofSD]

Frank Leverone 4 hours ago

Maybe raising the takeout on doubles and exactas by 2% and putting that money into the purses will help.

Brilliant!

[Indulto]

http://blog.horseplayersassociation.org/2012/06/hollywood-park-slumping-handle-could.html

[Meunuco]

Why not aim low and try to solve some fixable issues: like 2012 level bandwidth for Calracing? No sense having cable and getting dialup speed on that site. No wonder I don't miss not playing CALI tracks anymore. Why are these bozos still open for business? Their product sucks.

[Some_One]

6 races? How about just go to a 3 day week.

[Indulto]

6 races? How about just go to a 3 day week.That was my first reaction, but it's the P6 carryovers that will make or break CA tracks. Not being open on Wednesdays when BEL is, just leaves money on the table.

I'm suggesting this approach as an experiment to jump start handle under emergency circumstances. In the long run, a schedule like MTH's probably makes more sense, but only if the races are higher quality as a result of the shortened schedule.

[Tom]

6 races? How about just go to a 3 day week.

How about a 3 day season?
How anyone play that crap at Hollywood?

BHP you say?

BFD I say.

[fmolf]

How about a 3 day season?
How anyone play that crap at Hollywood?

BHP you say?

BFD I say.
their ruining hollywood like they do everything else!

[Some_One]

Sometimes less is more, HK runs only twice a week. Or why only have 2 beers a night, go have 8-10 and see how that turns out for you? The current strategy is only good in the short term with tracks getting the churn and the breakage, however if that is -EV in the long run, they have to do something different.

[therussmeister]

I think if you go to a three day week more horses, and horsemen will leave. It works for Monmouth because there are nearby options to run the other four days.

[Indulto]

I think if you go to a three day week more horses, and horsemen will leave. It works for Monmouth because there are nearby options to run the other four days.Good point!

[LottaKash]

Me persoanlly, I could care less about what happens to racing in CA....

A few years back, they thumbed their noses at me for the last time, I quit them....

They made their bed's....RIP

best,

[Jeff P]

It's time that the TOC and the CHRB faced reality. SB1072, the bill that they lobbied for and called the "single best thing we can do to save California racing" - the bill that wrote the takeout increase into state law is backfiring on them.

Bigger purses didn't increase field size like they promised.

But higher takeout is causing handle to drop like players predicted.

The trouble is, higher takeout is causing handle to drop where it hurts them the most: On track and at satellite OTB brick and mortar venues.


-jp

.

[cnollfan]

:ThmbUp: It's time that the TOC and the CHRB faced reality. SB1072, the bill that they lobbied for and called the "single best thing we can do to save California racing" - the bill that wrote the takeout increase into state law is backfiring on them.

Bigger purses didn't increase field size like they promised.

But higher takeout is causing handle to drop like players predicted.

The trouble is, higher takeout is causing handle to drop where it hurts them the most: On track and at satellite OTB brick and mortar venues.


-jp

.

[classhandicapper]

It would all be so much easier if it was easy to isolate the impact of changes to the "take" on the bottom line (not handle) of the track from general industry trends, the local and national economy, weather, number of races carded, field sizes etc...

If we could show hard unspun isolated numbers instead of evidence and economic theory, it would be easier to convince politicians and those in charge of what to do. Otherwise, it feels like throwing darts because there are so many moving parts impacting handle and profits.

[cj]

It would all be so much easier if it was easy to isolate the impact of changes to the "take" on the bottom line (not handle) of the track from general industry trends, the local and national economy, weather, number of races carded, field sizes etc...

If we could show hard unspun isolated numbers instead of evidence and economic theory, it would be easier to convince politicians and those in charge of what to do. Otherwise, it feels like throwing darts because there are so many moving parts impacting handle and profits.

True, but you don't need to be an economist to know short fields and higher takeout are going to cause some decline in business. The two in combination will magnify the problem.

[Jeff P]

It would all be so much easier if it was easy to isolate the impact of changes to the "take" on the bottom line (not handle) of the track from general industry trends, the local and national economy, weather, number of races carded, field sizes etc...

If we could show hard unspun isolated numbers instead of evidence and economic theory, it would be easier to convince politicians and those in charge of what to do. Otherwise, it feels like throwing darts because there are so many moving parts impacting handle and profits.

You raise a valid point.

However, the calculations aren't rocket science:
Track's Revenue = (Handle) x (Takeout Rate) x (Percentage Split, Track)

Horsemen's Revenue = (Handle) x (Takeout Rate) x (Percentage Split, Horsemen)

Of course, there are different demographics involved. For example, the "brick and mortar" demographic has a higher percentage split for both Track and Horsemen than the ADW demographic. (But the formulas used to arrive at revenue are the same for each demographic.)

Using the above formulas, and plugging in handle numbers from Equibase Charts for calendar years 2010, 2011, and 2012, we've looked at Total Revenue for Hollywood Park.

To date, for calendar year 2012 (after the takeout increase) the Tracks have a drop off in in total revenue that is running in the millions of dollars vs. total revenue for calendar year 2010 (pre takeout increase.)

The tracks are well aware of this (although they don't want to admit it in the press.)

However, the tracks HAVE approached the TOC behind closed doors multiple times and asked for a partial rollback of the takeout increase - specifically in the area where the takeout increase is most egregious: exactas and doubles - and have been turned down by the TOC multiple times.

From what I can see the CHRB has quietly backed the TOC in this (leaving the tracks "holding" the bag" so to speak.)

The TOC may have wrestled a bigger percentage slice of the pie and thus bigger purses through SB1072 - but things aren't working out so well for the tracks.


-jp

.

[Charli125]

It would all be so much easier if it was easy to isolate the impact of changes to the "take" on the bottom line (not handle) of the track from general industry trends, the local and national economy, weather, number of races carded, field sizes etc...

If we could show hard unspun isolated numbers instead of evidence and economic theory, it would be easier to convince politicians and those in charge of what to do. Otherwise, it feels like throwing darts because there are so many moving parts impacting handle and profits.
I can answer that for you using a semi-scientific method. Using year on year figures, I came up with the below. The number of days is different, so keep that in mind.

I took total takeout less purses to get the below results. Obviously it's not 100% accurate because of how takeout is different based on ADW, on-track, etc., but it gives a pretty good indication. This is what I'm referring to by the number noted as Total Takeout.

2010:

30 race days
263 races
avg field size of 7.85
Total Handle of 211.7 Million
Handle/Race of 805K
Total Purse 10.3 Million
Purse/Race 39K
Total Takeout 29.84 Million.


2011:

29 race days
253 races
avg field size of 7.65
Total Handle of 193.0 Million
Handle/Race of 763K
Total Purse 11.1 Million
Purse/Race 44K
Total Takeout 28.66 Million. A drop of 1.28 Million.


2012:

25 race days
220 races
avg field size of 7.52
Total Handle of 158.3 Million
Handle/Race of 719K
Total Purse 10.5 Million
Purse/Race 48K
Total Takeout 22.00 Million. A drop of 6.66 Million.


Decrease in Total Takeout as defined above of 7.94 Million dollars.

I agree with you, forget about handle and look at the bottom line. When you look at the bottom line it becomes obvious why they're going to cut purses. Down 8 million in revenue(about 27%), yet paying more in purses.

[Al Gobbi]

It's time that the TOC and the CHRB faced reality. SB1072, the bill that they lobbied for and called the "single best thing we can do to save California racing" - the bill that wrote the takeout increase into state law is backfiring on them.

Bigger purses didn't increase field size like they promised.

But higher takeout is causing handle to drop like players predicted.

The trouble is, higher takeout is causing handle to drop where it hurts them the most: On track and at satellite OTB brick and mortar venues.

-jp
.

also exchange wagering was included in this bill and we all know that isn't going to happen for some time.

[David-LV]

also exchange wagering was included in this bill and we all know that isn't going to happen for some time.

The words some time should be changed to all time.

__________
David-LV

[usedtolovetvg]

Won't Betfair just say that this decline would not have happened if Exchange Wagering had been started like they and HP wanted? They'll turn this into a marketing ploy for their Exchange.

[classhandicapper]

Charlie and Jeff,

I think you guys have some great data and are doing a great job of making the case, but there are still going to be debates about whether any changes in the bottom line are related to the CA economy, general trends in the industry, growing/shrinking entertainment alternatives in CA, the weather etc... or the take.

All these things play a part in addition to the take.

It's basically the same debate we see on TV over the impact of taxes on the economy and government revenues (except without as many political agendas). I think there's a pretty good consensus on the extremes, but in the middle it's hard to control for everything.