Jeff Gural, the New York real estate magnate and racetrack owner has this to say in the Bloodhorse from the HTA conference. This is hot on the heels of the Tioga Downs takeout reduction announced yesterday. Takeout was brought down to the minimum as guided by New York state law.
At a panel discussing on suggestions for improvements to racing, Jeff Gural, the owner of harness tracks at Tioga Downs and Vernon Downs, New York, suggested that the light attendance was because “the race tracks that don’t have slots aren’t here because they can’t afford it. Those that do have slots aren’t here because they don’t care about racing any more.”
Gural said, “even though I’ve lost a lot of money, I still enjoy running Tioga Park.” And despite his losses, he remains an advocate of reducing the takeout. “If you’ve got slots,” he said, “the pari-mutuel revenues are a drop in the bucket. Why offer slots with an 8% takeout and then charge people 20% to bet on racing?”
He clearly has a lot of guts to say this to his fellow track owners. And we, as a Horseplayer Association, will ask racing with him: Why are states prohibiting track owners from lowering their prices? Why can't slots tracks (where the bulk of the money comes from slots for purses, not pari-mutuel revenue) charge as low a price as they want?
Tioga VP Settlemoir: "“We would even consider going lower on the takeout rates to between eight and nine per cent like the typical hold in the casino world if the state would allow us."
When will our business, in as bad a need for change as any business on earth, stop standing in people like Jeff Gural's way?
Jeff Gural and Tioga are to be applauded for lowering their takeout. I know I will be looking at their race card first before I wager elsewhere.
That being said, if a track like Tioga can lower their takeout to whatever they want, what happens to the non-racino tracks? Certainly a track like the Meadowlands could not survive on a 8 or 9% takeout rate. That being said, there is no reason why all tracks can't go to a 15% across the board takeout rate.
To answer your question they will get out of his way when every track has slots like he has and make it a level playing field!
You can't really expect tracks that already losing money hand over fist to lower take out and wait 10 or 20 years for their handle to double to get back to even. They will close and put hundreds if not thousands of people out of business as well as numerous supportive businesses and people out of work.
When you have slots you have that flexibility. Otherwise you simply can't risk you business waiting for your business to grow to make up for the lowering of takeout.
The reason they can't go to 15 % is because the host track fees are still 5-6-7 percent or more if you are buying tracknet, California, NY, KY signals. Tioga was able to get everyone on board for this one year trial to agree to less money includinig their horsemen's group because they are now going to sell their signal for 2 % instead of teh 3-4-5 percent they were selling it for before. Not all horsemen groups are going to be so generous!
From anon: 'Otherwise you simply can't risk you business waiting for your business to grow to make up for the lowering of takeout. '
Risk business? Horse racing is off over 40% the last decade in terms of handle. Doing nothing risks the business, and jobs. Doing something at least gives us a chance.
"Something" is better customer service. "Something" is treating the players, horsemen and your employees as human beings and letting them know they matter. "Something" should not be making the margins smaller and smaller while your costs continue to rise.
I was just emailing a friend of mine about the new bill in Kentucky which is going to squeeze yet another 1.5 % out of the ADW's. I was making the point that is really isn’t about the 1.5 %. It is about the trend. KY charging 1.5 %, VA charging 10 %, Idaho charging 10 %, Illinois saying you need to be partnered with a local race track, California wanting a $ 500,000 bond to operate in the state and then restricting you to 5.5 % profit, NY making you be SAS70 approved and to have an Independent monitoring system (combined costing you over 50 K a year), Oregon charging you 7 %, Maryland charging you 10 %, NH charging you 11 %, the list goes on. On top of that you have entities outside the State entities such as RCN, Trackmaster, Equibase, Your tote, the host tracks’ tote, your state tax, your ADW daily fee of $ 200 a day, your unions, Hana wanting to lower the takeout which squeezes these numbers even more (had to say it), large players and even small players wanting higher rewards, free PP’s, Free programs, Free this and Free that, and the list goes on and on and on….Everyone looks at it from their own little world and forgets that everyone else has their hand in your pocket!
Yeah you have to do "something" but squeezing the margins even more will put many of these race tracks and ADW's out of business which will leave monopolies. AND if you think you are being treated bad now and charged a high rate wait until the remaining groups have their monopolies to see what happens!
Handle is dropping off the map because horse racing isn't price competitive with other forms of gambling. Customer service only goes so far, I'm not paying $10 for a Big Mac no matter how much the cashier smiles at me and tells me how good looking I am.
The customer/gambler pays for everything, but bottom line they are there to GAMBLE, not to support a charity.
What goes on within the different states, the inequality of competition from one state to another, and the takeout and signal fees do not matter to the average customer. What matters is what happens to their bankroll and how the customer feels about it. If they feel they can last, they stick around, if the feel they can win, they really stick around and tell others. If they feel they get no bang for their buck, they withdraw.
Either the product is priced well or it isn't.....and right now it isn't.
People are leaving, and no newbies are coming in to take their place.
Tracks are shutting down, dates are being lost, and it isn't HANA's fault because the industry isn't doing what HANA wants it to do, they are continuing on their self destructive path.
It is up to the industry to get their act together and stop this nonsense of high takeouts and the new practice of squeezing the shrinking pie. Things need to change in order to get the customers it lost back, keep their current customers, and most importantly, attract new customers.
Gamblers don't owe the tracks, ADWs, tote companies, states, and horsemen squat. Horse racing has been run by a culture of entitlement far too long.
If horse racing continues to go the way it is going, sure, there might be a monopoly left standing, but it will be like a monopoly on having the rights to sell fridges in the North Pole.
"Gamblers don't owe the tracks, ADWs, tote companies, states, and horsemen squat. Horse racing has been run by a culture of entitlement far too long."
It is that mindset, attitude and greed of not only the players but everyone else that I mentioned to include the unions, horsemen, tote companies, states, etc that have forced these race tracks into the position of having to raise takeouts which of course is and will be their downfall.
The tracks have to pay the bills. Investors don't put their money up for the fun of it, not even the Gural's of the world. If he didn't have slots he would not even be in the game!
Customers can not be put into the greed category.
Greed implies someone who makes a profit, trying to make more of a profit.
Gamblers who profit from betting horses are few and far between, and that is not what this discussion is about.
You are right it is not about greed it is about the attitude of the groups I mentioned that has been the downfall of this great sport.
However in that you missed my point and grabbed onto the word "greed", don't you think customers wanting less takeout BUT more free stuff, including yourself who now want Tioga to provide free PP and/or programs is a bit greedy? At the very least never satisfied!
Regarding Tioga, I explained that I'm a thoroughbred player. This takeout drop will appeal to many players like me, but if others are like me, if I see a fee pp I'm more likely to make a selection, if I make a selection, I'm more likely to continue to play, especially since I'm not familiar with the track or even harness racing very much these days.
It really isn't about greed, it is about Tioga taking full advantage.
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