Hialeah's 12% Takeout: Is There A Conspiracy To Make It Fail?

Hialeah opens their short quarter horse meet today.  They are doing something phenomenal for Horseplayers:  A 12% track takeout on all wagers.  Many studies suggest that the optimal takeout for horse racing is somewhere between 10-12%, the optimal takeout being the price where tracks and horsemen make the most money.

Last year, Hialeah only did around $100,000 a day in handle.  Wouldn't it be great to see that number double or triple this year thanks to increased churn and meeting many a Horseplayer's desire for lower takeouts?  This is a great opportunity to give the industry some hard core evidence that lowering takeout will work.

The problem with this takeout reduction is that many internet betting sites are not offering Hialeah to their customers.

It makes me question whether there is a conspiracy going on.  It is no skin off an ADW's nose to add a track.  Why then are Twinspires, TVG, XPressBet, HPI, and NYRA Rewards not offering Hialeah? When I looked at their menus this morning Hialeah was nowhere to be found.

The fee that Hialeah charges for its signal is most likely minimal, and there will be a lot more churn thanks to the takeout reduction, so the argument that they are not making enough money is bogus. Besides, the overwhelming majority of smaller ADWs have Hialeah on the menu.

To my knowledge most, if not all of the major ADWs offered Hialeah last year, so the excuse that there is not demand for the product doesn't wash either, because if anything, there will be more demand this year thanks to the lower takeout. 

Does the fact that California will have a takeout increase in place come December 26th have something to do with it?  Or that a few of these ADWs own racetracks that have much higher takeouts have something to do with it?  Do they want this venture to fail so that pressure is not placed on them to lower takeout?

One thing is certain, ADWs not offering Hialeah do not have their customer's best interest at heart.  In fact, the customer is being completely disregarded.

There is a lot of buzz on the internet already.  Check out this thread on Pace Advantage.

I urge all Horseplayers to make as much of an effort as possible to support Hialeah and their takeout decrease by playing it.

TrackMaster has recently revamped their speed figures for Quarter Horse Racing, if you are looking for decent past performance help.

UPDATE: Hialeah is on TVG's menu.

Inspired By HANA, Pinnacle Race Course Lowers Takeout On Exotics

It isn't a shocker that racetracks are now starting to pay attention to the customer. Handle is dwindling, in May handle was down 8.3% from the previous year.

Simple Business 101 demands that when demand decreases, prices should come down. In horse racing, the price to the consumer is the track takeout. If a track is in trouble and they don't lower takeout, they aren't trying.

Pinnacle Race Course is trying. From Director of Pari-Mutuels/Simulcasting, Laura Bennett: "In response to the Horse Players Association of North America (HANA), we have lowered our take-out rates to the "lowest in Michigan".

More Money To The Players: "Win, Place, and Show are set by the State at 17%. All other pools are by track choice. We have lowered all our other offerings to 20% except Trifectas and Superfectas which have lowered to 25%.

Before this takeout drop, Pinnacle Race Course ranked 64th out of 69 tracks in North America for takeout score. Takeout rates were 17% WPS (unchanged), 20% on doubles (unchanged), and 27% on all other bets (they dropped the takeout by 7% on exactors, and 2% on all other bets).

With Tracknet dissolving, Pinnacle will be able to broaden their distribution to all ADWs.

I hope tracks like Fort Erie are taking note. Horseplayers who get more money back on each bet will last longer, and they are more apt to come back and play quicker. Lower takeouts also attract price sensitive players who may have avoided the track in the past.

Fort Erie takeouts are the second worst in North America. 16.95% on WPS, 26.2% on all other bets except for triactors which have a takeout of 28.2%. Their handle sucks this year. And it is a big year for them as they attempt to turn the joint around. If they don't address the track takeout issue soon, they simply aren't trying. 26.2% on exactors and doubles is simply obscene.

Lowering track takeout isn't an overnight fix, but the sooner they drop it, the quicker the process to build up their customer base begins.

To join HANA click here, it is free, and only takes a minute or two.


There Is Actually A Chance That Woodbine and All Ontario Racetracks Will Lower Takeout Soon

As mentioned here previously, Nick Eaves, the new top banana at Woodbine Entertainment is making it a quest to get the Ontario Horse Improvement Plan funded by slots and not by bets on horse races:

"He wants an immediate reduction in the takeout – 2 per cent on straight bets and 4 per cent on trifectas he calls “a start’’ – by removal of the current tax that goes to fund the Ontario Horse improvement Program, suggesting that worthy plan be funded by general slots revenues."

This would be great for Woodbine, which has some momentum going lately thanks to exposure at TVG and having their past performances being part of the Daily Racing Form Eastern edition in the USA. Woodbine also for the first time in at least recent history, can now be wagered on in Las Vegas. 83 Casinos can now put Woodbine on their betting menu.

If this does come to fruition, and Woodbine didn't come up with some excuse to not cut the takeout by the full amount of the HIP tax, Woodbine's takeout on WPS would be 14.95%, which would be the lowest in North America. 18.5% on Exactors and Doubles would tie them for the lowest in exactors (on the thoroughbred side), and tied for third for daily doubles.

I would hope that all harness tracks in Ontario, Ajax Downs and Fort Erie would also drop takeouts by the same amount as the HIP tax as well. But they could do what Woodbine did a few years when the government opted to lower taxation on wagers from over 8% to 1.3%, and foolishly keep takeout the same.


As for being able to allow bettors to play single sports games, I don't see the idea of Woodbine being a bookie flying. Unless it is set up in a parimutuel way, there is risk. And if they charge anything more than 10% juice, they won't attract enough action to make it worthwhile.


Bennett Liebman, has written a very good article in The Post (The New York Times Blog): Reasons For The Decline of Horse Racing.

All his reasons are significant. Although I will argue that his first reason cited, "Other Forms Of Gambling" is very much related to his ninth reason "Track Takeout" which could be combined to be the major reason for decline: Horse Racing's failure to compete with other forms of gambling.

As he points out, horse racing is a game of skill with an onerous collective takeout. There is no real reason for a newbie to get started, and little reason to stay:

"When you hear from the major rebate shops, that without the rebate, even their most skilled players almost never beat the takeout, you wonder why you play the game."

The bright side is that even smaller bettors can now can decent cash bonuses on their bets if they shop around.

There are additional reasons for the decline in horse racing. One that a commenter brought up is very valid, and it has to do with the short racing span of today's superstar horses. Frying 2 and 3 year olds, while taking the best out of competition and putting them in the breeding shed, has made it so that fan favorites come and go way too quickly.


Churchill Downs Inc. Has Completed The Merger of Youbet with Twinspires
It will be interesting to see what platform and features the keep, and which they get rid of in the near future.