Keeneland caves and lowers takeout. Does the right thing.
 

And a tip of the cap to EVERYONE who participated in the boycott and made enough noise to make this happen.

And a tip of the cap to Jeff Platt and HANA. Without them putting out the press release (that news outlets must cover) this takeout reduction may not have happened.

Sometimes a big kick in the balls works. We ought to do more of that IMO.

Boom!

I see that on social media some people aren't too thrilled with the takeout reduction because they didn't rescind all of the takeout hikes.

It's pretty simple

We didn't knock handle down enough to force all of the changes we wanted. If handle were down 20% or more then they may have rescinded all of the takeout hikes.

Bottom line is that way too many people didn't care about the take hike in the first place or handle would have been down a lot more.

A track responded within a reasonable time to a customer driven movement.

This is a historic moment.........

Still irks me a bit they didn't totally cave on exactas.

Imo, doubles should be the same as exacta.


-jp

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Hmmmmm, maybe players do have some power after all. Glad to have done my part, in various outlets.

Think of what could be done if pressure were brought to bear on takeout in general.

It should, but they consider that you are potentially (if alive) getting two races of action and they are losing churn.

I was on the phone with them yesterday (ahead of this morning's announcement.)

One of the things they mentioned was Bill Nader's presentation at the AZ Symposium where Nader had suggested the industry had lost its way a bit by forgetting about churn. (And that multi-race bets have a tendency to keep money tied up which reduces churn.)

-jp

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I will be betting Kee Win and Exacta's this spring.

Welcome back Keeneland!

I boycotted the whole fall meet.

Looking forward to betting Keeneland again.

That is grossly incorrect regarding what Nader "thinks"


Simulcasting is what killed live on track handles and in turn created greed to raise takeout!

No one NEEDS to go to the track anymore to place a bet, unless you are in Texas or AZ, so all ADW operations make a mint due to the current scale of what they get and their low overhead vs the track and all their operating expenses.

A great example is the poorly ran Penn Gaming tracks:

Charles Town Races: they handled "live"

$96.7 million in 2002
$23.8 million in 2016

Total C. Town handle is down $55 million from 2002 to 2016

The state of WV is down $330 million in bets (including greyhounds) from 2002 to 2016

On page three you can see the "state's share" tank from 1978 to 2016 according to the WV racing commission reports.

The industry did it to themselves

some good news, but I'm still a trifecta player first! I will be betting KEE again:headbanger: Thanks to the other boycotters out there and HANA. Those that didn't help-you are welcome!

Rightly or wrongly the presentation by Bill Nader at the Symposium in AZ this past December (mentioned in the article below) is one of the many things we were talking about on the phone yesterday...

By Matt Hegarty
12/05/2017 3:25PM
Symposium panel urges lower takeouts:
http://www.drf.com/news/symposium-pa...lower-takeouts

--this:
--and this:
Imo, racing faces many different issues/challenges.

Imo, empty grandstands are certainly one of those challenges.

But so is ever higher takeout.

And promotion of new jackpot wagers at insanely high net effective takeout rates that result in ever smaller churn.

And odds that change after the bell.

And drugs.

And regulators who are afraid to hand out penalties with teeth.

And horses that barely make six starts per year (when they used to make ten to twelve.)

Imo - all of the above (and more) lead to empty grandstands. And ever shrinking handle numbers.

We have to start somewhere. :)


-jp

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Caving?
 

I wouldn't exactly call it that.

The only good rate they offer is the 15% P5.

I agree. The first HANA-led boycott worked. :ThmbUp:

Maybe other tracks out there thinking about raising takeout will reconsider.

You guys do realize all the other pools that were raised are still up, right? Talk about a pyrrhic victory. If this is considered a win I'd hate to see what losses look like.

If tracks want to draw larger crowds they need more races per day at shorter intervals. A track could have an undercard of, say, seven low level handicap claiming races with larger fields with short intervals between races. The reason to have handicap races is to level the field and make the race competitive. A competitive race should draw larger fields because more entrants will feel they have a chance to win. Then later in the day the last five to seven races could be for high level claiming, allowance, and stakes horses where the fields tend to be smaller. Maybe race three or four days per week rather than six.

Whatever model tracks are using now they need to throw out the window and start over because what they're doing is not working.

It makes sense on the one hand that a bet like the Daily Double has less churn, but on the other hand, if you take time to handicap two races in a row chances are you are betting multiple bets in both races. In effect, the Daily Double can be seen as a loss leader that draws more bets into the pool of the second race.

It would be easy to find out how much effect the Daily Double has on handle. Just eliminate it for about 30 racecards and then measure the difference in handle on the second race compared to days when the Daily Double was offered.

If handle on the second race declines on days when the Daily Double is not offered then it makes sense to lower the takeout on the Daily Double to attract even more wagering.

This looks a sneaky strategy on the part of Keeneland. You raise takeouts, knowing they will antagonize price conscious bettors. Then later you partially rescind the takeout hikes. Players, having been repeatedly beaten down with oppressive takeouts, believe they have secured a significant victory. However, the end result is Keeneland simultaneously raises takeouts while recreating interest in their product.

Total victory looks like 20% down or more. We weren't even close to that. I'm surprised they lowered it at all but glad they did on the higher churn wagers. I heard that a certain radio show host implied that Keeneland did us a favor and if true I take strong exception to that. They were hurt financially (revenue would have been up significantly) because those of use who worked everyday to push the boycott did so.

If we want total victory a lot more people have to do a lot more work to make it happen. Pretty hard to make the case to boycott them again while California still has 22% take exactas.

for 50 years that i know of, you lay $110 to win $100 on football games. they have never gone up. some places actually give you a deal if you bet on a Friday night and give you the juice at $105 to win the $100. why should racing ever go up in their takeout? they are competing with sports gambling for their handle.

i admit that tracks do need more revenue. but to me you get more revenue by building up the product not charging more or giving away more to purses. you build it right back up by doing something stupid, offering up integrity. its pretty simple.

I almost used the “p” word yesterday in a question about why they didn’t lower the other pools....but I had not looked at the details....didn’t want to comment until I heard more.......but I have to tell you I’m shocked they did anything at all.

I am only betting the pools that have the lower takeout.

I am cheap, what can I say

I agree, but they lowered some take out rates, which is borderline shocking

They didn't expect the backlash and the bad publicity. I'm surprised they lowered some of it back as well. They'll lower all of it back if someone is smart enough to figure out a way to get them down 20% or 25%. And that goes for any track. We can change the game in a month if people came together.

its too bad people can't work together for the common good, too selfish I guess. It was very difficult for me to boycott this track. I love playing MSW races and they usually have the best along w/Saratoga. Also, no state bred races is a huge plus to me

People were fired up during the Ca. boycott in 2011 and that was great. But, after they didn't lower takeout further than the 14% take P5 and the DD's back down to 20% a lot of people gave up and I can't say that I blame them.

I don't play CA, but isnt their handle still going down?

Santa Anita is up.

I went to Vegas a couple of weeks ago and they definitely are no longer consistently setting football lines at 110-100, and some of the lines are not 105-100 either. I saw some 115-100 and 120-100 on point spreads on playoff games.

I have a bit of inside knowledge of this, and that is that they are no longer necessarily setting lines to generate exactly even betting action (the traditional way a sports book operates, so that the house can never lose) and are now pursuing exploitative strategies that allow the book to make more money, including by modifying the vigorish to take in additional money.

So yes, they are screwing with takeout.

Now, even betting NFL games, "value" will become a component in the decision making on whether to bet or not.

Way too many places to shop for a price to believe that vig will go up in sports betting. The only thing that could screw up the free market for vig is heavy government intervention.

Tell that to all the players in Las Vegas who are now playing 6 to 5 blackjack.

Seriously, A LOT OF GAMBLERS DO NOT CARE ABOUT TAKEOUT. Some do. Gambling businesses make more money by separating the two groups and charging them different rates. This is why we have rebate shops.

If you are a whale sports bettor, you can probably find a sports book to take your action at 115 rather than the 120 they were posting. But all the casual players don't care.

http://horseracingbusiness.com/

Excerpt:

A more likely explanation is that management was alarmed by the intensity of the bettor backlash–and the resultant decrease in handle–and decided it could not take the chance of the ill will spilling over into the April 2018 meet.

If you had looked at the board a little closer...you would have seen that, when the takeout is raised on one team...it's reduced on the OTHER team. If one team is listed at -3 (-115)...then the other team is listed at +3 (-105). And if one team is listed at -3 (-120)...then the other team is offered at +3 (-100). The oddsmakers are simply shifting the takeout, in order to attract money on a given team without having to raise the actual spread on the game.

This doesn't mean that the takeout has been raised higher than its normal 110-100 level. The totality of the wager is still offered at 110-100.

EVERY GAMBLER CARES ABOUT TAKEOUT, even if they don't know what it is.

Because they absolutely know how fast they go broke.

Take your average Joe who sits down at a slot machine. He puts his $100 in a machine and plays for an hour and loses the $100. Then he moves to another machine (or another casino) and plays for two hours before he loses his $100.

Which machine do you think he plays next time? He may not know that machine #1 had a 25% takeout and machine #2 was at 10%, but he knows he got 2x the play out of machine #2, and is going to gravitate there the next time he sits down to play.

Same thing if Joe goes to the track with $100. He plays the races and maybe loses the last of his $100 in the 8th race of the card each day. Then the track raises the takeout, and he finds himself done after the 6th. How do you think he feels about the value he is getting for his $100? He might not have a clue what the takeout is, or if the track raised it, but his wallet knows.

It's actually worse on the parimutuel side because of churn. Joe's $100 might have led to $700 in wagering before, but now it's down to $500.

Smart gambling businesses tweak their takeouts (or house advantage on the casino side) to maximize player experience and revenue. As an example, Tampa Bay Downs was always good at this. For several years they moved their takeouts around to see what worked and what didn't, before settling into a pretty good program. To their credit, I expect Keeneland is now doing the same. There was probably a realization somewhere that they might have gone a bit too far, and now they are making a few changes to see if they work better. Wouldn't surprise me if they made another set of adjustments after they see how the Spring Meet goes.

You are ignoring that variance is huge in gambling. You have to bet a LOT of money to hit the convergence point.

Slots have so much churn that they are a special case, although reducing takeout isn't the only way to increase Time On Device. They also use bonus rounds.

But for most forms of gambling, the casual player takes a LONG time to bet enough where the main causal factor isn't short term luck. Hence, the need to discriminate and charge them higher takeout while charging less to players who care.

Not ignoring it at all. By virtue of you stating slots having a lot of churn and are a special case, you've just proved my point. They are the closest casino game to compare parimutuel wagering with because a slot machine operates off a straight takeout model also.

My point was all customers care, even if they don't consciously know it. But if we are to assume your premise that not all customers care and therefore should be treated differently, then ponder this.

If it's necessary to lower the effective takeout rate for "customers who care" why is it not the right thing to do for everyone? If the "customers who care" will bet more because of their lower effective takeout, wouldn't everyone bet more if the takeout were lower? After all, if the "customers who care" aren't going to bet more, then why bother charging them less?

The data I presented on our panel in Tucson showed that our customers churn rate was over 42% (a factor of 3x) higher when factoring rebates (which is how the industry currently lowers effective takeout).

Many people seem to forget we are in the churn business. Putting more money in the customer's hands will always increase churn rates. Optimizing that number to maximize revenue is the challenge, and it's not an easy solve, especially when everyone isn't doing it at the same time. That's why Bill was suggesting that tracks band together to do it.