3 December 2010

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.


Brian Zipse said...

Hear, hear! I only wish I followed Quarter Horse Racing more to really dive in.

Good luck Hialeah! Thoroughbreds in their future???

The_Knight_Sky said...

CanGamble wrote: Why then are Twinspires, TVG, XPressBet, HPI, and NYRA Rewards not offering Hialeah?

These companies through greed, are standing in the way of horse racing's revival. I will continue to wager at the track / OTW instead.

As much as I like to support 12% takeout rates and give Hialeah new life, I must wait until a thoroughbred meet is conducted on the premises.

A pricing reduction such as this should be part of a long term business strategy such as the one that Tampa Bay Downs now enjoys.
Otherwise I tend to view it as a gimmick.

I would also caution that a 2 month experiment on a quarterhorse meet shouldn't serve as the crystal ball for what ails thoroughbred racing.

Steve Munday said...

TKS hit the nail on the head.

It's no skin off the noses of most ADWs, except of course the ones that are in other racing-related businesses that will be impacted by Hialeah's success. Both Gulfstream Park (owned by F. Stronach who also owns Xpressbet) and Calder (owned by CDI who also own Twinspires) are trying to keep Hialeah from getting slots and offering thoroughbred racing. It's not about what's good for horse racing or what's good for the horseplayer; it's what's good for their bottom-line.

And I agree w/ Brian too; I'd like to support Hialeah, but I know zero in QH racing so the 12% isn't going to help me very much. Now if they had Thoroughbreds I'd be all over it!

Anonymous said...

As is so often the case, you continue to talk one game while your actions (or lack of them, in this case) demonstrate both a lack of fundamental understanding and no intimate, actual knowledge of the subject.

Were a switch to 12% takeout the awe-inspiring move that you have always tried to assure everyone it would be, then you'd be there, on-track, and on-site, ready to make a relative killing.

You continue to ignore the harsh reality that "12% of nothing is 'nothing'...".

Hialeah is so insignificant in every way, shape, and form that Portland Meadows continues to advertise "the lowest pick-4 takeout in the industry". (which, as the rest of us understand {yourself never yet included} is all smoke and mirrors where it concerns a pick-4).

So just stay up there in Little League country and let the rest of us play in the big leagues.

Cangamble said...

Anon, since this is my blog I'm going to take liberties and call you what you are, a condescending know it all who has absolutely no clue.
Little leagues? Anyone who knows how much I bet will laugh themselves to the ground.
Oh, and since the California bill was signed, not one dollar has been bet there. And that will be the case until things are reversed....if ever.
12% takeout will grow the game. Nothing else will work. How are the big tracks doing in the last 7 years? Can I call you a numbskull...sure I can, it is my blog.

Cangamble said...

I guess I should add something. A 12% takeout will not get people going to the tracks again. It will create enough winners though, that more and more people will want to bet, but since this is 2010, almost 2011, most will do so from home or the office.
Racing is a great game, but it has not tried to compete with other forms of gambling.
At least Hialeah is trying. As for Portland Meadows, I agree that it is just a gimmick, and growth won't happen because of it.

Jim Davis said...

I don't know what 'anons' problem is , but 'he' misses the point entirely.

No one thinks Hialeah is going to attract any whales just because of a low takeout. But if they do exhibit some degree of success , it might inspire others.

Might even attract a few pro's back into game if a major did the right thing.

That Blog Guy said...

Some of the problem may be people not interested in Quarterhores. If your ADW doesn't offer it, tell them you want Hialeah; you may be the Xth customer to ask for it may tip the scale. Sure there may be greed involved, but give them the benefit of doubt and ask for it; let them prove you wrong.

Under FL law, they can race some t-bred races under the quarterhorse license. However, they still are working with temporary barns, so the plan is to re-introduce t-breds in the 2011-12 meet. However, it will not be a pure t-bred meet.

Moose said...

Just an FYI, TVG DOES offer wagering on Hialeah, it may not be shown on-air, but you can bet on it via the website.

Cangamble said...

Moose, I already updated that at the end of this post.

Unknown said...

Cangamble, your blog is just not correct.

I know for a FACT that XpressBet has been offering Hialeah with video and wagering since it started running this season. There are other possible delay's that aren't due to 'Corporate Greed'.

I know that many mornings, especially early in their season, (early December) Hialeah had technical difficulties with the Tote hubs. This is usually indicative of the track needing to get their ducks in a row.

As you state: "It is no skin off an ADW's nose to add a track." You're absolutely right!!! Technologically its EASY to add more tracks, but Contractually, there are a lot more hoops that ALL parties, (the Track,the Tote hub,the Video provider, and the ADW,) have to jump through.

Cangamble said...

Jon, I don't believe Xpressbet had it the first day but I might be wrong.
I know very well how ADWs work. There is no reason for Twinspires not to have Hialeah this year. That is a fact.
And I don't think there have been any major problems with the Hialeah signal either.