The meeting transcript is now up on HANA Reports, regarding the meetings attended by HANA's Jeff Platt and Barry Meadow.
Messers Platt and Meadow tried to stress the numbers, and that they felt lowering overall handle is not good for California racing. Members of the CHRB and Mr. English, disagreed and presented other numbers.
We found a few areas curious, and wonder if the CHRB and other boards that make takeout decisions should have experts on hand to advise them, instead of doing what they have been doing.
One part, where they all agreed (and we quote) that takeout was less important than quality, is strange to us, as it flies into the face of expert opinion.
VICE CHAIRPERSON ISRAEL: So what you’ve been able to determine so far, the most important factor in determining handle and interest is the quality of the product, not the price of the product?
MR. ENGLISH: Absolutely.
The University of Louisville did a study on quality versus takeout issues and concluded that: "A reduction of takeout results in the highest increase of handle (e=-2.3), followed by field size and number of races (e=~ 0.60) and coming in last was purse size (e=0.06)."
As well this report, which studied all wagering, and not simple anecdotal evidence of a short period at one track: "".... wagering would increase by only 6% if purse were doubled. This is a surprising finding considering the importance that is attached to the purse variable in all major policy decisions to increase the wagering in this industry.""
So, the experts tell us that "quality" (read purse increases/more horses) do not do the job when we compare it with the effects of takeout.
This also flies into the face of empirical evidence from the California lottery. They lowered takeout in April, and lottery sales rose by $55M. They did not change the "quality of the lottery tickets" they simply lowered the price.
As well, they seemed to think that we will pay a higher takeout like people pay to watch a movie.
MR. ENGLISH: Yes. That’s correct. Perhaps more interesting, because it’s just like people pay extra money to see something in 3D --
CHAIRPERSON BRACKPOOL: Right.
We are disappointed and somewhat surprised that people who make wagering decisions not only do not consult experts, but compare the decisions we as gamblers make to how people decide to go to the movies.
For more of the exchanges, including Jeff and Barry's points, please visit HANA Reports.