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Originally Posted by thespaah
Ok...I'll bite...Why is Cnl losing money on live racing?
And as a follow up, why on earth would anyone make such a large investment on a business that was destined to lose money?
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I don't know that they are. But I can totally believe it. Costs to run a race meet are really high and I've heard a number of tracks utter the phrase "lose as little as you can during the meet and make as much as you can during simulcast/dark days."
I just looked up a day of handle from Colonial last year, Sunday July 7th. They paid out a little more than $130k in purses.
They had $80k in on track handle, which at 20% blended take is 16k in income.
14k in instate wagering, let's say they get 20% from that, another 3k
372k in out of state wagers, which they probably get 3% from...so 11k.
So they're showing 30k in profit off the racing card. That's before taxes, % to horsemen, state racing commissions etc.
Now you gotta pay all your seasonal employees for the day. Gate crew $120 a day per guy, so that's $1500 right there. Now pay announcer, placing judges, in house stews, jocks room personnel, clerk of scales, track crew, photo finish, equibase, television crew, ambulances and EMT's to follow the horses (imagine what that costs!) your track handicapper/tv personality, paddock judge, entire racing office and about 20 or 30 other people.
Oh plus you gotta pay out purses
Whereas simulcast days, you employ a teller or two, someone at guest services and someone at the coffee shop, who are all getting 10 to 15 an hour and make 15 or 20k on simo wagering.
As far as why someone would make investment, because they can probably make money in the off-season or on concessions. Or as is the case at some tracks, the owners just love horse racing.
