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Simply put, the tracks' revenue model doesn't work with lower takeouts.
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I have to disagree with this.
In 2003 Stevenson & Associates, a consulting firm under contract with the National HBPA hired Will Cummings to do an economic study on racing. Cummings' report can be found on the National HBPA's website at this url:
http://www.nationalhbpa.com/resource...ort7-17-04.PDF
To anyone who hasn't read the report I suggest giving it a good read. Also worth noting is Cummings' biography found on p. 42 of the report. IMHO he is the real deal.
It's ironic that pretty much everything in the report has proven itself true in one way or another. Especially in light of the way the racing industry has seen fit to ignore virtually ALL of the recommendations in the report.
A few years later the NTRA Player's Panel came to many of the same conclusions about takeout and handle growth that Cummings did. Mainly that it is too high and that reducing takeout is something that needs to happen if the industry wants to see handle growth.
Track management will tell you that the track's revenue model won't work with reduced takeouts. What track management (and horsemen's groups like the THG) do realize - and won't publicly admit - is that racing's current 20 odd pct takeout structure has done exactly what Cummings said it would do in the report:
It has stopped handle growth dead in its tracks.
Other games such as slots and poker (and even the MA state lottery) have beaten the crap out of racing over the past several decades in the growing handle arena. And one of the primary reasons is the takeout of their games compared to ours. Hint: it's lower.
A working revenue model isn't about fleecing current customers faster.
It's about pricing the game of racing competitively and marketing it in fresh new ways to new market segments.
There are millions of customers out there involved in other games who may never - not even once in their lives - have given racing a second thought.
Racing finds itself is in its current state of affairs because other games have done a better job of reaching new customers than racing has.
Both Cummings and the NTRA Player's Panel pointed out that innovation and competitive pricing are two requirements for making handle growth a reality.
I'll make the argument that it's high time for the racing industry to wake up and grow the game by listening (for a change) to the advice of people like Will Cummings.
-jp
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