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Originally Posted by Murph
I can't debate the fine points with you folks on this subject but may I pose a question?
Could the issues begin to be addressed with an overhaul or restructuring of a 'national simulcasting' contract? Something with terms to address the expansion of opportunities in all gambling which have long included pari-mutuel laws pro or con in every state? Terms that might address each states concerns with access to the tote and signal fees ect? Start with this as some kind of equalizer?
You are all working hard to present a common ground. Thank you.
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Almost no one actually understands the economics of racing, from running a racetrack to setting up a simulcasting system. In a Darwinian sense, tracks that use economic muscle (big purses) cause other tracks to adapt by cutting costs or simply dying - and the cutting of costs often drives more horsemen away - and that is what the trend seems to be. It's kind of the reverse Was-Mart model. Keep prices so low that you drive the competition out of business. In the case of racing, it provides higher purses to drive competition out of business. Those tracks with casino subsidized purses may wind up surviving and driving tracks with better reasons to stay open out of business. Look at the thread about Monmouth Park.
The current structure of simulcasting allows for rebates, and my question is, would reducing the take instead of distributing rebates increase handle? Obviously the danger is that the handle from the whales goes down because they lose the rebate, and that has to be weighed against increasing handle because of lower take.
The signal is clearly underpriced. Let's be realistic. The cost of running an electronic ADW is minuscule compared to running a track, and giving an ADW a relatively cheap signal cost undervalues the product.
Someone needs to undertake a study of racetrack economics, including simulcasting. Job one is still getting the take reduced.