Churchill Downs raising takeout

[hracingplyr]

Just read so far the meet is down 23% in handle. YESSSSSSSSSSSSS. Guess the boycott is working a bit.

[DeanT]

Here is an update as of this morning from a couple of the guys working at PB.org, including some numbers in comparison for Arlington (another CDI property) and Belmont.

It's pretty detailed. Since last update, handle has fallen another $7M at CD, for a total of $19M down. Arlington also down.

http://www.playersboycott.org/handleupdate05182014.html

[OTM Al]

Originally Posted by cj

You think Churchill's one big day can make up for the carnage the rest of the meet has been? We'll see, but I doubt it.

The main point is they don't care though. They want to look bad. People keep forgetting that. They want gaming.

They certainly do forget that. All the boycott is doing is allowing CDI to have justification to cut more days which will allow them to make more money as they will be able to cut wages and other costs needed to keep the place open.

I see some are claiming the boycott is working already. It is, just in the way CDI wants it to. This was an added bonus to them. Can see Churchill having a very short spring meet in the future and the length of the fall meet will depend if they want to do the BC or not.

[Jeff P]

So be it Al.

Let's say for the sake of argument Churchill was counting on pushback from players when they decided on a takeout increase, that their goal all along was to paint the bleakest picture possible.

But what if Churchill still can't get slots from the Legislature and decides to cut dates? I mean really cut dates.

What if Churchill decided that for 2015 they were only going to run a one week meet culminating on Derby Day?

Consider all the possibilities that go with that scenario (Churchill essentially getting out of the everyday racing business.)

Is the game of horse racing better off - are players better off with Churchill essentially out of the eveyday racing business?


-jp

.

[OTM Al]

Originally Posted by Jeff P

So be it Al.

Let's say for the sake of argument Churchill was counting on pushback from players when they decided on a takeout increase, that their goal all along was to paint the bleakest picture possible.

But what if Churchill still can't get slots from the Legislature and decides to cut dates? I mean really cut dates.

What if Churchill decided that for 2015 they were only going to run a one week meet culminating on Derby Day?

Consider all the possibilities that go with that scenario (Churchill essentially getting out of the everyday racing business.)

Is the game of horse racing better off - are players better off with Churchill essentially out of the eveyday racing business?


-jp

.

Seemingly every day I hear we need to reduce dates. If that is true, then this certainly would be for the betterment of the players. It's basically what I expect to happen there anyway. You want them to act like businessmen. Well, they are.

[DeanT]

If that's what CDI wants, it's probably not smart. As Louisiana showed, politicos have pushback of their own.

Fairgrounds off 20% last two years: Commission and legislature steps in, threatening the pulling of a license.

Arlington off 27%? Churchill Downs off 23%? Calder brutal? I would not think for a minute that, like in LA, horsemen groups and legislatures would stand idly by while their racetracks are mothballed.

Coming from Ontario I saw what happens when racing is ignored and handle losses continue. The government steps in and takes away slots. If slots are taken away from CD tracks the same way, their stock would probably be cut in half.

[Saratoga_Mike]

Originally Posted by DeanT

Coming from Ontario I saw what happens when racing is ignored and handle losses continue. The government steps in and takes away slots. If slots are taken away from CD tracks the same way, their stock would probably be cut in half.

Works differently here - the purse subsidy goes away, not the slots/casino licensure. It's easier to make money in the casino biz than the horse racing biz. CHDN's mgt realizes this, not exactly a state secret.

[Exotic1]

Originally Posted by OTM Al

They certainly do forget that. All the boycott is doing is allowing CDI to have justification to cut more days which will allow them to make more money as they will be able to cut wages and other costs needed to keep the place open.

I see some are claiming the boycott is working already. It is, just in the way CDI wants it to. This was an added bonus to them. Can see Churchill having a very short spring meet in the future and the length of the fall meet will depend if they want to do the BC or not.

Al,

I'm not following. If CD's game plan is to cut days, then let them cut days. Let them cut the meet, the year. If they want to raise takeout rates to 50% which will reduce revenue and justify some end game, who cares? As a bettor, we can take our business elsewhere. If they want to show lower revenue we can oblige and help. If they want out of racing, let them leave. Of course, this wouldn't be my most preferred resolution, but if that's their ultimatum, then so be it. If that's the outcome CDI is hoping for, fine. What is it that people are forgetting?

[DeanT]

Originally Posted by Saratoga_Mike

Works differently here - the purse subsidy goes away, not the slots/casino licensure. It's easier to make money in the casino biz than the horse racing biz. CHDN's mgt realizes this, not exactly a state secret.

I understand what you are saying Mike, but not really my point. The mix that goes to the operator and the track for profit are fixed in the contract, but that contract can be changed. In 2008 in Ontario, the 10% and 10% mix was recommended to be changed where 5% of the tracks' share would go to breeding and purses. This was in response to the tracks not doing enough with their profits.

Deals can be changed, and have been. The portion for breeding was cut in PA, for example.

My point is simple: Horsemen groups and legislatures, in future deals or rejigging past ones, will not be overly responsive to a track with bad headlines who shows they might not have racing's best interests at heart. Jurisdictions talk to each other and horsemen are powerful. If a state like ILL has casino gaming, they talk to LA and LA says "we've had trouble with them, so giving them less of a revenue share is not out of bounds" is not a pipe dream.

If that happens, CDI EBITDA - forecast with say 10% of revenues - has to be changed to 5 or 6% and they get killed.

This game is political, and right now CDI is politically getting skewered. If it exacerbates and continues, it could hurt their long term slots plan big time.

All my opinion.

[GMB@BP]

The sooner racing gets out of the casino game the better.

[acorn54]

Originally Posted by Saratoga_Mike

Works differently here - the purse subsidy goes away, not the slots/casino licensure. It's easier to make money in the casino biz than the horse racing biz. CHDN's mgt realizes this, not exactly a state secret.

i don't know the answer to this, but if a racetrack provides more employment opportunites (jobs), than slots, then it might be more advantageous to keep the racetrack industry going.

[duncan04]

Originally Posted by Exotic1

Al,

I'm not following. If CD's game plan is to cut days, then let them cut days. Let them cut the meet, the year. If they want to raise takeout rates to 50% which will reduce revenue and justify some end game, who cares? As a bettor, we can take our business elsewhere. If they want to show lower revenue we can oblige and help. If they want out of racing, let them leave. Of course, this wouldn't be my most preferred resolution, but if that's their ultimatum, then so be it. If that's the outcome CDI is hoping for, fine. What is it that people are forgetting?

CDI will never get out of racing for good. They have the KY Derby. Outside of that they have no interest in racing. Maybe they will give the fall dates back to Turfway

[Exotic1]

Originally Posted by duncan04

CDI will never get out of racing for good. They have the KY Derby. Outside of that they have no interest in racing. Maybe they will give the fall dates back to Turfway

I understand, of course. They can lease that brand and make gazillions.

[stringmail]

Get ready for the 1st jewel in the triple crown...The Blue Grass Derby from the fresh dirt of Keeneland.

Screw CDI.

Let's see how those $42K tables sell in Louisville when viewing the fastest two minutes in sports from Lexington.

[DeanT]

http://www.bloodhorse.com/horse-raci...handle-decline

"They made a calculated decision that handle is so great on Derby day and Oaks day that they could fleece an unsuspecting public," Platt said, before adding that perhaps takeout could be increased for just those two days. "If they want to treat Derby day and Oaks day as special event days that carry a higher takeout, maybe the demand for the product will support that. But it does not support a takeout increase on an everyday basis."

Read more on BloodHorse.com: http://www.bloodhorse.com/horse-raci...#ixzz32IN6VndS