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Thread: Del Mar Gets it
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Old 07-13-2015, 03:29 PM   #10
Jeff P
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I'm far from convinced that Del Mar track management "gets it."

Last year, after the conclusion of the Del Mar and Saratoga meets, I ran the following handle analysis comparing Del Mar 2014 vs. Saratoga 2014 and submitted it to the CHRB.

The analysis shows a side by side handle comparison by wager type along with takeout rate for each wager.

Overall, Del Mar handled about 78% as much as Saratoga did.

On WPS wagers, where both tracks have approximate level takeout rates, Del Mar handled 82.76% as much as Saratoga did.

But on Exacta wagers, where Del Mar has a takeout rate of 22.86% and Saratoga has a takeout rate of 18.50%, Del Mar handled just 54.79% as much as Saratoga did.

I found that number stunning and upon learning that an open to the public CHRB Parimutuel Wagering Committee meeting was scheduled to be held at Los Al where the topic of discussion was whether or not the CHRB should consider undertaking a formal economic study of takeout rates and their effect on handle and revenue, made the drive up to Los Al and presented my analysis.

Code:
HANDLE PER RACE ANALYSIS  DMR 2014 vs. SAR 2014

 COL-A          COL-B         COL-C    COL-D         COL- E
-----------------------------------------------------------
	      		             % RATIO    TAKEOUT PCT	
 WAGER	     DMR 2014	   SAR 2014  DMR/SAR     DMR    SAR
------   ------------  ------------  -------   -----  -----
   WPS	   357,191.42	 431,591.93   0.8276   15.43  16.00
------   ------------  ------------  -------   -----  -----
   EXA	   191,623.58	 349,769.78   0.5479   22.68  18.50
------   ------------  ------------  -------   -----  -----
  QUIN	     9,616.63  	  17,509.86   0.5492   22.68  18.50
------   ------------  ------------  -------   -----  -----
    DD	    51,382.56  	 109,866.97   0.4677   20.00  18.50
------   ------------  ------------  -------   -----  -----
   TRI	   128,401.10	 200,302.83   0.6410   23.68  24.00	
------   ------------  ------------  -------   -----  -----
    P3	    90,587.11	  96,380.09   0.9399   23.68  24.00
------   ------------  ------------  -------   -----  -----
 SUPER 	    90,214.33	 104,983.19   0.8593   23.68  24.00
------   ------------  ------------  -------   -----  -----
    P4	   309,936.53	 428,709.63   0.7230   23.68  24.00
------   ------------  ------------  -------   -----  -----
 High5	    54,307.78	       -NA- 	-NA-   23.68  24.00
------   ------------  ------------  -------   -----  -----
    P5	   542,446.00	 334,177.73   1.6232   14.00  15.00
------   ------------  ------------  -------   -----  -----
    P6	   363,049.75	 165,065.08   2.1994   23.68  24.00
------   ------------  ------------  -------   -----  -----
 OTHER 	    24,337.28	  35,594.83   0.6837   23.68  24.00
------   ------------  ------------  -------   -----  -----
FLDSIZE	         8.78	       7.97   1.1020
-----------------------------------------------------------

Notes:

1. The above handle summary compares DMR 2014 against SAR 2014 and handle numbers are expressed as handle per race.

2. Column B lists average handle and field size per race for DMR 2014.

3. Column C lists average handle and field size per race for SAR 2014.

4. Column D lists DMR numbers expressed as a percentage of SAR numbers.

5. Column E lists a side by side comparison of takeout rates for DMR and SAR.

6. For WPS, Del Mar and Saratoga have approximate level takeout rates, Del Mar at 15.43% with Saratoga at 16.00 % with Saratoga using Nickel Breakage, DMR handled approx 83% as much as SAR did. (Use this as your baseline.)

7. For EXA, Del Mar handled just 55% as much as Saratoga did. This number is stunning when you consider the differential in takeout rates.

8. For DD, Del Mar handled just 47% as much as Saratoga did. This number is stunning when you consider the "logic" used to justify abandoning Santa Anita's 18% rolling double experiment where DD handle per race was up 24%.

9. I submitted the argument that had EXA takeout at DMR been 18.50% like SAR, EXA handle at DMR would have likely been in line with the WPS baseline of 82.76%.

I also submitted the argument that if this were true EXA handle for the DMR 2014 meet could be estimated as follows:

(EST DMR EXA HANDLE PER RACE) = (SAR EXA HANDLE) x (Baseline)

or (EST DMR EXA HANDLE PER RACE) = (349,769.78) x (0.8276)

or (EST DMR EXA HANDLE PER RACE) = 289,469.47


10. Based on handle projections assuming an 18.5% takeout rate, I submitted the further argument that revenue on Exacta wagers for the DMR 2014 meet could be estimated as follows:

(Revenue Per Race on EST DMR EXA HANDLE PER RACE) = (289,469.47) x (0.185)

or (Revenue Per Race on EST DMR EXA HANDLE PER RACE) = 53,551.85


11. (Revenue Per Race on ACTUAL DMR EXA HANDLE PER RACE) = (191,623.58) x (0.2268)

or (Revenue Per Race on ACTUAL DMR EXA HANDLE PER RACE) = 43,460.23


12. I also submitted the argument that as a result of their 22.68% exacta takeout rate, Del Mar experienced a REVENUE SHORTFALL for Exactas of just over $10k per race calculated as follows:

EXACTA REVENUE SHORTFALL PER RACE = 10,091.62

(or 53,551.62 - 43,460.23)


13. I also submitted the argument that as a result of their 22.68% exacta takeout rate, Del Mar experienced an Exacta REVENUE SHORTFALL for their 2014 MEET of approximately $3.279 MILLION calculated as follows:

Exacta REVENUE SHORTFALL for DMR 2014 MEET= $3.279 MILLION

(or 10,091.62 x 325 exacta races)


14. The numbers suggest 22.68% takeout on 2 horse bets is costing California Racing millions of dollars per year in lost purse money and track revenue.


15. The numbers suggest 22.68% takeout on 2 horse bets has negatively impacted funding for alpha-bet groups such as the CHRB, TOC, CTT, CARMA, Disabled Jockeys Fund, etc.




The CHRB Commissioners treated me politely - as did track management and representatives of the TOC - But I found it interesting that I was the only one attending who took the podium and spoke in favor of the meeting agenda item: Whether or not the CHRB should consider undertaking an economic study on takeout rates and their effect on handle and revenue.

I also found it interesting that many members of track management in Cali racing, management at brick and mortar OTBs, representatives from the TOC, and Labor Unions also took the podium - and all who spoke publicly bemoaned declines in revenue, layoffs, and cutbacks in hours for parimutuel clerks over the past few years (following the takeout increase they insisted on implementing Jan 01, 2011) but NONE of them spoke up in favor of the agenda item: Whether or not the CHRB should consider undertaking an economic study on takeout rates and their effect on handle and revenue. And many from track management and the President of the TOC voiced opposition to even the idea of an economic study of takeout and revenue.

Speaking honestly, I'm far from convinced track management at any California track "gets it" at all.



-jp

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