6 July 2009

If It Aint Broke D....Well Horse Racing Is Broke...Now What?

Horse racing handle was down a staggering 16.9% in June in the USA

Sure, those who have jobs as racing execs, but shouldn't, will blame the economy. Meanwhile, it hard to blame the economy when "Month to month, comparing only the Pennsylvania casinos that were open a year ago, revenues were up more than seven percent in June of this year over June of 2008."

It is also hard to ignore the fact that when the economy was peaking, handle was dropping, albeit to a much lesser degree than what we've seen the past month, but dropping nonetheless. It has been stagnant to dropping for 7 years now.

Oh wait, there were less race dates. But there was only a 2% reduction in dates, so that isn't a real good argument.

The thing that might, and I say might, make the industry notice is that purses were down 6% in June. Yes, change is needed, and when the pocket books are hurt, change actually may happen.

I wrote a piece back in November: Will The Recession Wake Up The Racing Industry?

Personally, I think racing is starting to wake up, but it is still too dysfunctional to react in a positive manner.

Read more at The Paulick Report and at Pace Advantage.

It is great to read more and more articles, blog posts and forum comments on track takeout being the number one problem that horse racing has right now. I think blogs like this, and the awareness that HANA has spread in the past year has helped educate the public immensely.

HANA has written a piece on Cary Fotias' views on takeout.

Apparently Potential Investors For Fort Erie Race Track Do Exist

“We have three interested parties at the moment, now we are just looking to find the right fit,” said Thibert.

The first option, according to (Jim) Thibert, is an Ontario-based land development company that has owned a racetrack in the past. They are exploring full ownership or partnering with the not-for-profit group.

The second potential investor is very interested and in the entertainment business. It apparently already owns a few racetracks in the United States and are experienced in that area.

The third company is also Canadian based and is part of an international consortia that has a lot of experience in the gaming business.

Regardless of which company they go with, Thibert says they’ll be pushing for a five-year deal.

The thing is that when it comes to these potential investors, price is always an issue. The $35 million Thibert and Nordic Gaming came up with was a complete joke.

It doesn't help future negotiations either.

Nordic has a history of wanting waaaaaaaaaaaay too much for the track. Until that changes, the chances the track sells are next to nothing.

Seriously, how much is a track worth that supposedly loses money even with slots? From a business standpoint? Nothing. How much is the land worth with a losing business? That is a tough one. Knowing what I know about Fort Erie and the real estate market there, I'm thinking no more than $10 million tops.

Woodbine Gets Hit Again: Turbo Charged Pick 6 Gets Scooped Up Once More
If it wasn't for Woodbine's treatment of their customers (ramping up many triactor bets from other jurisdictions to a 25-27% takeout, while making it almost impossible for Canadians to bet through American ADWs where they could get half decent rebates, or at the very least, get the actual prices that many triactors pay), I'd actually feel sorry for them.

They were able to attract just over $80,000 in new money as more players are starting to realize that there is value in the bet. But overall handle for the day wasn't all that good at $2.6 million, as horseplayers continue to avoid Woodbine's higher end takeout scheme (27% takeout on triactors, for example).

If my math is right, so far Woodbine Entertainment has put in $450,000 and they've received around $29,000 in takeout proceeds (after horsemen were paid, and assuming that 50% of the money is generated from those who pay Woodbine a signal fee). I wonder if the execs are going to have to take pay cuts if this continues:)

It appears there were five winners yesterday. I wonder if any of them got some help from Horseplayersbet.com, who missed the first leg (it was a favorite though), but mentioned the next five winners, including 3 first choice winners (including the last race winner at 8-1).

I had five of six again this week. This time spending $120. I only had it once this time and got back $176.

Short Fields: Which Tracks Are Most Guilty Of Running Races With Five Starters Or Less
Rook, a fellow Canuckian who posts on Pace Advantage, posted the percentage of races that have 5 horses or less per track:

GG17.4% MTH13.2% ARP12.5% BEL12.5% LRL11.2% HST10.9% RD10.4%HOL10.2% HAW10.0% NP9.9% DEL9.0% BEU8.8% PIM8.8% PHA7.7% AQU7.7%PRM7.4% ASD7.3% EMD7.3% PID7.0% CNL7.0% CD6.3% KEE6.3% CBY6.1% CRC6.1% SA6.1% PM5.6% TP5.2% AP5.1% FL3.8% TUP3.7% RUI3.6% FP3.5%GP3.1% FG2.9% IND2.6% FE2.5% CT2.3% WO2.3% PEN2.2% OP2.0% LS2.0%LA1.9% MNR1.5% SRP1.2% SUN0.9% SUF0.9% DED0.8% LAD0.8% TDN0.8%YAV0.8% FON0.6% EVD0.6% WRD0.6% RET0.4% TAM0.4%


Anonymous said...

Not that it makes it better... but losing a day a week at CD, Hol and GG... that's about $100m in handle... so it's more than losing "2% in race dates"... that being said, that still leaves the decline at 8%... not good...

The_Knight_Sky said...

CanGamble wrote:

Personally, I think racing is starting to wake up, but it is still too dysfunctional to react in a positive manner.

I still think horse racing has to "crash" and hit the bottom with a loud thud before it starts to pick up the pieces and starts to rebuild itself with better business models.

I was wondering how does these precipitous drops in handle and racing dates compare to those on the standardbred racing side of the coin.

Are their any figures from NAHRMA available for comparison?

Anonymous said...

WEG should start the turbo charged pick six during the week. there is definitely more longshots than on the weekends. On the weekend they tend to run like trained pigs!