From the Kentucky Task Force Report released today. Among the recommendations:
The following funding mechanisms are proposed:
-Increase takeout on exotic bets and win-place-show bets
From the Cummings Report, written in 2004 and paid for by racing to recommend what to do to get racing up to speed in the 21st century:
"Racing has lived with rising rates of takeout for so long that they have become a way of life. They are the line of least resistance whenever the industry needs money. It is all too easy for the industry to see that if we have a constant $100 in handle, and we raise the takeout by one percent, we’ll make a dollar more. It is much less easy to see that handle is not constant and, over the longer term if not the short, we won’t have that $100 any more."
It's been four years since that report. Its findings have come true again and again. Yet still racing does the opposite of what he recommended.
Thanks to Inside the Pylons at Paceadvantage, for pointing this out.
If the industry wants to solve its problems the answer lies in finding ways to grow handle instead of finding ways to shrink it!
Raising takeout now will have the wrong effect. It'll just drive handle even lower.
The advantage that racing is currently enjoying is that 99% (give or take) of all horseplayers are losers. When you lose, the only difference takeout means is that you lose sooner. To an adrenaline junkie, that sooner loss or later loss doesn't compute, so even with a takeout rise, players still go back. Somehow we have to convince unsophisticated players that every percentage point is really important. Its not bad enough they take our breakage and have been doing so for YEARS. With the advent of dime supers, people can cash tickets rounded off to the penny yet the very reason breakage was instituted was so pari-tellers wouldn't have to pay out odd change. Now, we have to pay out odd change and the breakage rules remain in place, as strong as ever with zero opposition.
Anon 12:37, I think that unsophisticated bettors don't need to be told how good or bad takeout rates are. I think as you've pointed out that they do (at least innately) realize how fast they lose though they may not know the real reason.
But just look at slots with their 10% takeout. I think operators know if they up it to 11 or 12% the players will collectively lose faster, but I think they are worried that too fast will mean the customer may not come back so quickly next time.
If that wasn't the case, why not take 20% from slots?
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