A great realization is starting to occur in horse racing today. Tracks are starting to compete with each other for a larger piece of the pie.
More and more tracks are starting to reduce takeouts on at least one type of wager, some are reducing takeout on more than one. This is an attempt to get the existing Horseplayer to divert funds to that track, that would have been wagered at another track.
The tactic seems to be working. Tracks bucking the industry trend of lower handle have been experimenting with takeout gimmicks. Meanwhile, tracks that have had stagnant takeout rates continue to see handle declines for the most part.
Unlike what happens when Horsemen compete for a larger piece of the pie (which usually comes at the expense of the Horseplayer ie California), when tracks attempt to compete for a larger piece of the pie, there is a chance for actual industry growth to result.
Today's Horseplayer is more sophisticated than ever before. Partly because the dummy money has left the building, but mostly because those who are left playing have been exposed to mounds and mounds of statistics. Statistics lead to the most important stat of all: The ROI. And of course, ROI is very much tied into track takeout. Tracks are starting to understand that a good percentage of their existing customer are cognizant of track takeout.
Just in the last few weeks, harness track Northfield Park has announced a takeout reduction on Pick 3's, Pick 4's, and Pick 5's to 14% beginning April 1, Hastings Racecourse has dropped WPS and Pick 4 takeout to 15%, and introduced a Pick 5 with the same 15% rate, Lone Star Park has joined in too as they have introduced a Fortune 6 with a 12% takeout (this one is strictly a gimmick, and a lower takeout isn't important as it won't appeal to most hardcore players, Lone Star would have been better off introducing this as a 22% takeout bet, while reducing other wager types instead, but that is another story).
Part of the realization tracks are dealing with is that the easiest player to cater to, is the existing player, one who might be hundreds or thousands of miles away from them.
The end result is that Horseplayers will last longer as the overall blended takeout rate starts to drop. The longer they last, the more likely they are to expose others to the game.
Hastings, of all the tracks that have reduced rates recently (add Tioga Downs to the list), actually is tackling the track patron growth problem by reducing WPS bets. They are appealing to both the simulcast/online player and the live player with the recent reductions they made.
"We are trying to reengage the horseplayer that we might have lost, not only locally but throughout the marketplace," says 29-year-old Hastings Regional General Manager Raj Mutti.
They are hoping for a 10% increase in handle. I think their handle numbers will go up more than that. Personally, I'm going to begin doing my own track variants for that track this year, instead of relying solely on TrackMaster numbers (they are good, but in order to make money betting, you pretty much need to have something the rest of the public doesn't have).
If bucking the trend continues to work for those tracks lowering takeout, it is expected that A tracks join in and start reducing takeout rates. We could be witnessing the beginning of a paradigm shift that could eventually cause tremendous growth, as significant drops in takeout will lead to horse racing competing with other forms of gambling (something the industry has all but given up on).
Don't think the industry isn't watching the California Handle Massacre that is happening right now (down another $2 million in handle yesterday alone). Racetrack execs are beginning to think about this approach very seriously: