22 January 2010

Los Alamitos Handle Down 25% First Night After Takeout Hike

Last night, handle at Los Alamitos was $577,000. Compared with last Thursday night, which saw $767,000 bet, handle was off by 25%. Yesterday was the first night in which the new 2% takeout hike on all wagers was implemented.

The weather may have contributed a little, but out of state wagering on Los Alamitos was off $120,000 (26%). This has nothing to do with weather, and all to do with player protests. Price sensitive players especially saw their potential profits drop, and those receiving rebates saw the net takeout rise on Los Al, which means that other tracks that don't increase track signal fees, look more attractive.

Had we seen a takeout increase that was not publicized, we would have seen very little change last night. That being said, had it not been publicized, over a few months we would see handle drop off because players would not have as much to play with.

Prior to HANA's (Horseplayers Association of North America) inception, Calder raised takeout in April 2008 with little publicity. I did pick up the news and wrote "Calder Raises Takeout: What Imbeciles."

So what has happened to Calder since?

Calder's handle 2007 $490 Million (172 Dates)
2008 $378 Million (160 Dates)
2009 $334 Million (152 Dates)

In today's climate, the takeout increase will affect the Los Al regulars the most and contribute to bettors playing less, where some may take bigger breaks from the game and again.

I stress this, when they are not playing, there is no likelihood they will bring others out with them and that they will not expose others to the game period. This hurts short term handle and long term growth as well. This is what happens when you move away from optimum takeout rate (which according to studies is 12% or lower).

I do think that HANA has made takeout a big issue to players who may have not been cognizant of it a year or two ago, so more people are getting it.

Gamblers are always looking for excuses why they don't win. They blame themselves for making wrong decisions, they blame the ride, they blame drugs, disqualification which are all valid, but all the above would be a lot easier to overcome if takeout were reduced.

Players generally don't say they are losing because of the takeout, because that would mean that they should question why they are betting horses in the first place.

Before last night's slaughter, Los Alamitos track owner, Ed Allred, was quoted as saying "This is something that's alien to my thinking," said Allred, a noted bettor and horse owner. "This is a sad thing for me to do......If this is a disaster, I'll be the first one to change it," Allred said. "The night simulcasting is hurting."

I feel sorry for Allred, however if a track is hurting to begin with, it needs to try to lower takeout. Perhaps this experiment will teach track owners and execs a lesson in Economics 101.

It should be noted that new Chairman, Keith Brackpool, of the CHRB, was the only person who voted against the takeout hike (which passed in a 6-1 vote). Unfortunately his vote was worth as much as Bo Derek's vote.

In a recent interview he said, "It's a slippery slope, I don't like it."

I think it is important to note that yesterday's protest was not a protest against the takeout rate (Los Alamitos' rate is still lower than many other tracks out there), but a protest against the hike, and it was not intended to be a one day event. Time will tell if it was a knee jerk reaction by angry players, or if they will keep it going until the takeout change is reversed.

It would be great if it is the latter. It is about time that horseplayers got together and said WE'RE NOT GONNA TAKE IT ANYMORE:

To join HANA, sign up here, it is free to do so, and the more members HANA has the more HANA will have a seat at the table going forward.

Interesting observation regarding Tracknet and their attempts to increase rates that tracks and ADWs pay for their product.

There could be a shift going on amongst price sensitive players from Tracknet tracks to non Tracknet tracks, because non Tracknet tracks allow the player's bottom line takeout rate to be much lower in many cases. They are feeling the squeeze, and other options are readily available.

I've noticed that Tracknet tracks are not doing so well of late when it comes to handle. For example, Fairgrounds all source handle was down 31% in November and 28% in December.
Much of the blame has to do with the fact that the Mid Atlantic Cooperative's refusal to sign a deal with Tracknet mainly because Tracknet wants to increase the fees it charges for its tracks.

In the meantime, horseplayers are learning that other race tracks do exist, and their signals are available almost everywhere. Tracks like Tampa Bay Downs, which reduced takeout on a few bets this year, have been benefiting from this and the fact that it looks like the horseplayer has finally woke up.

It will be interesting to see what happens in the coming months.

UPDATE: A couple hours after I posted this, Tracknet and the Mid Atlantic Cooperative have come to an agreement. It is hush hush as to who caved.


Brian Zipse said...

Making a statement...Good for the bettors at Los Alamitos!

The_Knight_Sky said...

So who won the standoff between TrackNet and The Midatlantic Cooperative? Will we ever get the details before the current contract expires in 12 months?

Or will horseplayers suffer once again this time next year?

railbirdbrad said...

Horse players will always suffer!