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Friday, February 23, 2007

Empire's Takeout Plan a Ruse

- Steven Crist, writing in the Daily Racing Form, rips Empire Racing for proposing an increase in the takeout, and exposes the lie behind their stated logic for doing so. Noting that Excelsior and NYRA both intend to keep the rate as low as is feasible, Crist writes that Empire struck a radically different note:

"Empire stated they would request an increase of take-out on regular and multiple wagers to place New York on par with the national averages for such wagers. This, they stated, would be a short-term test of two years."

Empire's position is not merely wrongheaded. It is based on a familiar and deceptive characterization of New York's takeout rates that is trotted out every time someone wants to put more of the public's money into his own pockets.
He goes on to explain that, though New York's takeout on straight and multiple bets are a bit lower than that of Kentucky and California, its rate on exotics is significantly higher - 25% as opposed to 19% and 20.68% respectively. If you blend the rates and give proportional weight to multiples, the rates are actually comparable.
So Empire's claim that a takeout increase on straight and multiple bets is needed to "place New York on par with national averages" is simply false. Even more disturbing, though, is the very idea that a takeout increase is necessary or even appropriate when New York racing is on the verge of swimming in money from slot machines at Aqueduct and perhaps Belmont. Excelsior and NYRA seem to understand that this is an opportunity to experiment with lower takeout rather than soaking the overtaxed betting public even further.

Horseplayers will not find any comfort in contemplating where Empire's higher grab of their payoffs would ultimately be going - to the prominent racing companies and individuals who bought ground-floor shares in the enterprise at a nominal fee and stand to make windfall profits if awarded the franchise.

2 Comments:

Lenny said...

When will tracks realize that higher takeouts reduce wagering? If anything takeouts should be cut in half, across the board, at every track in the country. This would allow more people to be profitable and would put more money back into the bettors hand.

Common sense says that no matter how low the takeout the track will inevitably get the money back over time. The more money put back into the bettors hands the more they have to play with. Of course some people will walk away ahead, but alot of people will put it all back into the windows (or at least some of it).

Lower takeout creates more winners, better odds and happier customers. No other form of gambling has such a high takeout. Slot machines may seem boring (I rarely touch them) but most of them have a very low takeout. I have seen some that have as low as a 1 to 2% takeout. Try getting a slot jockey who sees that a machine returns 98% of the money bet to leave the slot area and go to the horse wagering area where at best they can bet a wager that returns 86% and requires some thinking to win and also takes anywhere from 20 minutes to 2 hours to collect the winnings. This is the reason why so few slot jockeys become racing fans.

Lenny

Anonymous said...

Interesting listen on equineforum.net last week. Joe Riddell (Spelling?) who is running
Premier Turf Club out of Fargo North Dakota. (onshore acct wagering) said...

Paraphrasing...
" We’re broke as an industry:
3.2 Billion spent in NA by Owners to purchase, train, vet, transport, blacksmith
Running for 1.2 Billion in Purses
2 Billion dollars being lost by owners each year."

With 10-15 Billion bet each year and the takeout equations, etc. the math above seems to make some sense to me. So the slots splash is just bumping purses "artificially".

My point? When horseplayers bemoan that the bettor is the customer, and why isn't there better customer service etc., my mind always drifts and I say.... Just a damn minute; Owners are putting more into the racing equation than bettors are. And now I say, the slots players are more key to racing than the horseplayers, especially since horseplayers are drifting to rebate shops with even smaller takeouts and no feedback money into the industry.

The more I read about things the more complex the industry is to me... The more I sometimes feel like owners should pick up theoir toys and go home. Just race each other for the fun of it. Wouldn't that actually be the best thing for racing??? Imagine that world. Racing with no purses. No commercial pressures, no sponsorship, contraction to 4-5 tracks NA-wide. Less doping. The best horses would face each other. No pressure to run ASAP at 2. Let everyone bet where ever they want.

.... Sorry I was dreaming there again.

KH