Racing has a serious problem here

[jelly]

If you work in track management, if you are a horseman, or if you are a politically appointed state regulator – this article was written for your benefit.


As members of track management, elected leadership of horsemen’s groups, and politically appointed state regulators – you have played an active role in setting takeout levels.


And in so doing you have created a comically poor wagering experience for the new would be racing fan compared to what that same new would be racing fan experiences when he or she walks into a casino.
In a recent article, The Paulick Report covered an appellate court ruling in Kentucky that vacated a decision made by a lower court to allow gaming in the form of Instant Racing to operate at race tracks in the state of Kentucky.


Buried in that article is the following quote:
“According to statistics provided by the Kentucky Horse Racing Commission, $15.7 million was wagered on Instant Racing at Kentucky Downs in May, with $14.4 million returned to the public in winning bets. Total commissions were $1,285,991, with Kentucky Downs receiving $1,050,348 in net commissions. Fourteen percent of the net track commission, or $147,048 go into the purse fund, and $10,503 (1% of net) to a breeders incentive fund. “


Those numbers indicate that Instant Racing takeout is approximately 8.28%.


Bullet Point: This is a case where tracks and horsemen are clamoring for approval to offer an electronic version of racing that has a takeout of 8.28%.


Yet the real thing (live thoroughbred racing) has a blended takeout rate more than double that amount.


Q. Why such a disparity between the two rates?


A. It’s really quite simple. Takeout rates for the live racing product aren’t set by the market.

Instead, takeout rates for the live racing product are dictated by track management, leadership of horsemen’s groups, and politically appointed state regulators – people who to date have done everything in their power to deny even the suggestion that market forces apply to the live racing product.


The 8.28% takeout rate for Instant Racing came about because it was suggested by the market. There is a growing body of real world evidence to suggest that Instant Racing’s 8.28% takeout rate is not too far away from the optimal pricing point for most forms of gaming.


Q. Where does that body of evidence come from?


A. It comes from the casino industry.







Read the rest here....

http://blog.horseplayersassociation....long-term.html

[Tom]

Q. Why such a disparity between the two rates?

Two totally different games.
Different frequency of play, more plays in one of them......

[forced89]

The purse supplements from Instant Racing helped keep Oaklawn relevant for a number of years. But it wasn't just the purse supplements from the machines.

Because most who attend the races at Oaklawn don't live in Hot Springs, Instant Racing gave those in our group who weren't interested in the live races something to do while the rest of us did out handicapping. Because this stimulated weekend trips to Hot Springs I think Instant Racing also added to the attendance at the track and to the handle.

[Quesmark]

After the initial investment,the costs involved keeping an instant racing machine operating is negligible compared to the expenses involved in running live races.
The 8.28% takeout is low in comparison to part-mutuel pool rakes,but relatively high for a gambling device[slot machine].

[Robert Goren]

Originally Posted by Quesmark

After the initial investment,the costs involved keeping an instant racing machine operating is negligible compared to the expenses involved in running live races.
The 8.28% takeout is low in comparison to part-mutuel pool rakes,but relatively high for a gambling device[slot machine].

An instant racing machine is a slot machine. There is no skill involved with them.

[OTM Al]

It's time to stop making this foolish comparison. So what if the take on one pull of the slot machine is 3%. The argument constantly ignores the fact that an average person can do 6-10 pulls a minute. That is an effective take PER MINUTE of between 17-24%. I generally play 4 races on a day's card give or take. Show me one person who has sat down at the slots and made 4 pulls and called it a day.

[takeout]

Dayum. Tough room, Jelly. No danger of preaching to the choir here.

[racingfan378]

I agree with the takeout being too high, and as a bettor it sucks. But anyone with half a brain knows 98% of people lose playing the slots. Vegas wasnt built on winners.

With that being said, I wish someone could sit down and do the math for one track if the takeout was 10% across the board for easy math. When you crunch the numbers to see who gets what of that takeout % etc. I think we would see a huge cut in purses, funding for this that etc.

We all agree takeout sucks esp. at the rate Parx charges BUT at 10% instead of 30% does that mean they would be getting triple the handle on an already low Sunday total handle? I think not.

No easy answer when it comes to the takeout rates in this game. Sometimes we have to think of both sides of the coin.

Even if Hollywood Park had a low takeout rate, people still dont bet CA racing anymore due to bad field sizes and the nickle and diming those tracks do to get you into the door.

If racetracks want to succeed they need to take on the casino image of not charging for general admission and parking along with providing free drinks stations to the guest and even giving away the live racing program along with tip sheets and staff members at the track who could actually teach a new person to bet properly for that day's live racing instead of the $2+ program fees tracks charge nowadays. I've seen people want a program, the staff memer says it cost X amount and they say no thanks and walk away to the casino floor or stay and NOT bet at all. Then and ONLY then would you see a better increase of live attendance.

The goal is to get people at the track and not the OTB. This is where the tracks make the most money is when someone comes to them! When someone plays Keeneland from CA then Keeneland isnt making anything compared to the same guest ontrack.

[cj]

Originally Posted by OTM Al

It's time to stop making this foolish comparison. So what if the take on one pull of the slot machine is 3%. The argument constantly ignores the fact that an average person can do 6-10 pulls a minute. That is an effective take PER MINUTE of between 17-24%. I generally play 4 races on a day's card give or take. Show me one person who has sat down at the slots and made 4 pulls and called it a day.

You may play four races a day, but you can bet a race somewhere every few minutes if you are so inclined. You also aren't limited to betting the live card, and the host track benefits when you bet others too. The comparison isn't great, but it isn't near as bad as you make it out to be.

[cj]

Originally Posted by racingfan378

When someone plays Keeneland from CA then Keeneland isnt making anything compared to the same guest ontrack.

Let me ask you a simple question. Whose fault is that?

[OTM Al]

Originally Posted by cj

You may play four races a day, but you can bet a race somewhere every few minutes if you are so inclined. You also aren't limited to betting the live card, and the host track benefits when you bet others too. The comparison isn't great, but it isn't near as bad as you make it out to be.

Every few minutes, yes, but the point is still made that the slot machine is working at a rate of takeout per minute equal to or higher than takeout at almost every track. 5 minutes of play at the rate above is an expected takeout of between 60 and 78%. How does that equate to playing one race every five minutes, which is doable if you really want to. It sure doesn't look so much better to me.

[castaway01]

Originally Posted by cj

You may play four races a day, but you can bet a race somewhere every few minutes if you are so inclined. You also aren't limited to betting the live card, and the host track benefits when you bet others too. The comparison isn't great, but it isn't near as bad as you make it out to be.

Still, there is something to be said for the idea that while takeout is a huge factor for us because we know about it, the vast majority of slots players don't avoid horse racing because of the takeout. The vast majority of those slot players also lose money at a similar rate to horse racing gamblers (for reasons Al said), but slots are easy, quick, exciting and "fun," a simple diversion, while trying to understand racing is difficult, time-consuming, and while "fun" for us requires you to use your brain, which most don't want to do.


While I would love for takeout to be cut in half, you'd still largely be preaching to the converted at the track. Sure, please, cut it tomorrow, but casinos and slot machines would still be taking people's money in buckets, as they are now throughout the nation.

[OTM Al]

Originally Posted by castaway01

Still, there is something to be said for the idea that while takeout is a huge factor for us because we know about it, the vast majority of slots players don't avoid horse racing because of the takeout. The vast majority of those slot players also lose money at a similar rate to horse racing gamblers (for reasons Al said), but slots are easy, quick, exciting and "fun," a simple diversion, while trying to understand racing is difficult, time-consuming, and while "fun" for us requires you to use your brain, which most don't want to do.


While I would love for takeout to be cut in half, you'd still largely be preaching to the converted at the track. Sure, please, cut it tomorrow, but casinos and slot machines would still be taking people's money in buckets, as they are now throughout the nation.

That pretty much nails it.

[jelly]

Originally Posted by castaway01

Still, there is something to be said for the idea that while takeout is a huge factor for us because we know about it, the vast majority of slots players don't avoid horse racing because of the takeout. The vast majority of those slot players also lose money at a similar rate to horse racing gamblers (for reasons Al said), but slots are easy, quick, exciting and "fun," a simple diversion, while trying to understand racing is difficult, time-consuming, and while "fun" for us requires you to use your brain, which most don't want to do.

While I would love for takeout to be cut in half, you'd still largely be preaching to the converted at the track. Sure, please, cut it tomorrow, but casinos and slot machines would still be taking people's money in buckets, as they are now throughout the nation.

And expensive.$8 for a DRF form.A major problem is how to use the information to attract new players.

[OTM Al]

Originally Posted by jelly

And expensive.$8 for a DRF form.A major problem is how to use the information to attract new players.

New players don't buy the form. If anything, they buy the track program as that is something they can relate to from other sporting events. It is much cheaper. And compare that $8 for several tracks to what people pay for TG or Sheets for one track. There are choices.