4 February 2010

Horse Racing Handle Is Swirling Down The Toilet

Handle, Purses Down Double Digits
"According to the Thoroughbred Racing Economic Indicators provided by Equibase, wagering on United States races in January 2010 was $917,083,595, down 12.03% from $1,042,532,063 a year ago.

U.S. purses, up 3.46% to $70,667,466 in January 2009, were down 10.04% in January 2010 to $63,574,094.

Part of the decline in handle and purses can be attributed to a 7.98% decrease in race days—individual programs at each track—from 376 last January to 346 in January 2010. But clearly the national economy, declines in many gaming sectors, and overall malaise in Thoroughbred racing are factors."

The horse racing industry has done everything it can to avoid the inevitable fact that they are not a competitive form of gambling. Collectively, when takeout is brought up horsemen and racetrack execs remind me of little children who plug their ears and stomp their feet while humming "mummummummummumummummummu" out loud.

Yet, as we've seen with Los Alamitos recent action to raise takeout, the industry is still under the delusion that they will make more money if they raise the cost to the consumer to bet. Economics 101 is the complete opposite. When you want to increase sales (handle), you are supposed to have a sale (lower the takeout).

Now Kentucky is talking a bet tax as well to be imposed on their internet bettors.

Rumblings are that the horsemen in California are now looking to raise takeout at some or all of the major California racetracks.

Many racetracks, led by Tracknet, are trying to push up host track fees (according to DRF's Matt Hegarty), which inevitably causes rebated horse players to get squeezed. They wind up betting less, and it becomes more and more rare to find winning horseplayer, which are crucial to the game right now if it intends to grow.

When will the insanity stop?

The horse racing industry desperately needs lower prices for the players. The Horseplayer needs last longer. The longer they play horses, the less they will play other games of chance (the more money they will collectively lose playing the ponies), and the more likely they are to draw in friends to their hobby as well. This means growth.

Create visible winners, and younger people will automatically become interested in the aspects of handicapping. This too means growth.

Everything else is futile. When will the racing industry wake up? When museums put in a horse racing exhibit next to the dinosaur section?

Michael Gill got barred from racing at Penn. Some (or many) Gill horses are now getting offers on them. The irony is of course, that jockeys will now ride the same horses they deemed "unsafe."
For a real ugly take on the Gill situation check this out:

HT Equidaily
Gill still runs horses at Philadelphia.


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