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Sunday, January 2, 2011

Tampa Bay Downs' Handle is on Fire

Early this season a trend developed, and it is a positive trend in a sport with many negative ones.

Tampa Bay Downs, once considered a second tier track, has entered the big leagues.

Even with snow rocking the east coast, the NYC OTB problem and all our various issues, Tampa's handle, year over year, is better than it has been in its history. New Year's Eve, they were up almost 20% to $5M. On Wednesday, they outhandled Santa Anita. Last Sunday, with the major weather problems out east, they were up double digits over last year's same day. And the big mover, Saturday New Years Weekend: They did $5.4M on 10 races compared to last year when they ran 11 races and did $4.3M. They gained 26% with one less race this year.

What's happening with this "little track"? Why are players clearly moving to them?

Although there are myriad factors that go into a track's handles or the popularity of a track with horseplayers, there are a few big components. Takeout rate, field size (e.g good racing for fans), customer appreciation and player friendly bet sizes are a few of the larger ones. What has Tampa done along those lines?

First, they have dramatically and systematically lowered their takeout rate. In a walk through Tampa's past we see this article on their business plans last decade:

"Tampa Bay passed the cost on to its fans [raised takeout], now taking 20 percent from all straight bets and 28 percent on exotics. "

Handle was off 20%, and even their manager knew this was long-term suicide.

"Our regular fans are very upset about this and they're starting to go elsewhere. This could be a disaster for us."

They were taking in about $500,000 handle per day.

In the late 1990's things began to change. They began to open, not protect their signal - and they began the assault on their high takeout. In 2001, Tampa (by our data) had the 65th worse takeout score in all of horse racing. Today, they have the third best. It did not help overnight (in fact, early handle bumps or stagnations were not enough to 'pay for the takeout drop') but they stuck with it. In 2001, Tampa handled about $1.8M per day. In 2010, they set a handle per day record of $4.2 - over a double. For 2011, they have lowered takeout yet again, just like they did last year.

Second, they have good large fields, and good competitive racing. Their field size was 9.26, ranking them 10th in North America last year. So far this meet, the field size has skied: to 9.63.

Third: They treat their on-track patrons right. Snip from their press release:

Once again this year, Tampa Bay Downs offers free Grandstand admission and parking. Additionally, this year the Oldsmar oval will offer $2 pint domestic draft beer specials from 11 AM—3 PM every weekday during live racing. New additions to the concessions lineup include a rotisserie chicken stand located on the first floor of the Grandstand, new Grandstand seating and new carpeting around the facility Other old favorites include the Sweet Shop, which features fresh, home-made pies, cakes, cream pies and Danishes as well as specialty coffees and ice cream treats; and Brady’s Backyard BBQ continues to tempt taste buds in the Backyard Picnic Area. Mouse the Mascot, a three-year-old Miniature Horse, will once again make appearances on weekends in the Backyard and Grandstand apron to visit with fans young and young at heart.

HANA Treasurer Theresia, who travels to dozens of tracks every year made her first trip last year: "It's a great track to visit and you guys know who picky I am. My first visit to Tampa Bay Downs last year was a delightful surprise. I am really looking forward to my visit there next month."

Last year on New Years Eve there were 2,400 on track. This season there were 3,000. The handle bump was double digits. They are clearly doing something right.

Lastly, bet size. Fractional wagers increase churn and give customers a more positive experience. That's why they are a part of the HANA racetrack ratings. As Mike Maloney, HANA VP, said in Horseplayers Magazine two months ago in an interview:

"As a big player I prefer $1 and larger minimums because I can make more money, but they [fractional wagers] are good for the sport and the smaller player, so I am all for them."

Two years ago, Tampa started adding more and more fractional wagers, and again this year they have added more. From a post a couple meets ago on the HANA Blog, Mr. Berube said:

"I know that is something you [customers] have asked for. I measure this and have for years, so we should be able to see if those bets help us".

They appear to be helping.

The Buzz

This goodwill has transferred into solid, positive buzz. Mark Hughes in the book "Buzzmarketing" said there are many ways ideas are spread in the internet world and positive ones are not seen very often, as compared to negative ones. In fact, negative criticism is 28 times more likely than positive. Not in Tampa's case.

We caught this exchange from Twitter last week:

- 0_crunk We've entered the twilight zone when TAM out handles SA.

- Fuller fields, lower exotic takeout, lots of good buzz. RT @o_crunk We've entered the twilight zone when TAM out handles SA.

- @o_crunk I consciously chose Tampa over Santa Anita yesterday so I can relate.

On chat boards, everyday players are noticing: "For those of you that like exciting racing, I suggest you take a look at Tampa Bay Downs" was one. Another from TVG's website: "I remember the old TBD. It was hideous. Bad racing. High takeout rates. Owned by the "boss". Never even gave racing there a second look. Now Tampa has transformed into a good, exciting small track with good racing and handle has increased tremendously."

The Future

With success occurring, it sometimes breeds some bad decisions.

When people are moving to your track and handle is growing, as gambling expert Wil Cummings has said, there is pressure to 'sneak takeout increases into the mix'. In his report to racing back in 2003: "The industry fails to realize that when we raise takeouts $100 that is bet will not be $100 anymore." We doubt Tampa will do that, but it is something that can kill the good vibes.

Tampa Bay's signal fee is probably too high right now in terms of ADW handle maximization, and any move to increase it can absolutely clobber them, so that should be resisted.

We also hear from players (and this is a growing sentiment): "I will give them more time, but please ask them to lower WPS and Tri takes, as they are still too high." We agree. We respectfully urge Mr. Berube to consider that for next seasons takeout move. In a business that has lost half its handles in ten years, we all know now that slow groans can turn into loud roars over time, so we think it is time to nip that in the bud.

With success comes pressure to grow, and there is nothing wrong with that. If Tampa keeps improving like they have and avoid "old time thinking" pitfalls, $5M handle days can be $8M ones. There is no need to settle, and there is certainly no need to move in reverse.

When your critics show praise you are doing something right....

Rich Bauer, a long-time player who cared deeply about racing, who ran the website "Trackthieves.com" and also staged a boycott of racing in 2004, passed away this year. He found little to crow about regarding the "business of racing" (not racing in general, he loved it of course), but he made a trip to Tampa each winter, and loved the little track. He wrote on this very website a couple of years ago:

"I first played Tampa in '03 when looking for a track to play on Tuesdays. Subsequently I went in Dec '04 after relocating in the eastern US and have been a regular visitor there each winter since then. I just returned from 3 weeks there on the 18th and already have reservations for the whole month of January in 2010. Tampa has reduced takeout on a variety of bets since '04. They have exceptionally friendly employees and staff; and, management is accessible to discuss player issues. Valet parking is still only $5. What's not to like?"

Players in 2010 and 2011 seem to be in agreement with Rich - handle can go up and down, but it never lies. If you are looking for a track to try, or are not sending money to California and are looking for a place to bet, give Tampa a shot.

You certainly won't be alone.

3 comments:

The_Knight_Sky said...

At the same time Calder race course has chosen to increase the pricing on their wagering product.

CALDER'S TAKEOUT RATES:
wps 0.1800
ex 0.2100
tri 0.2700
super 0.2700
doubles 0.2100
Pick 3 0.2700
Pick 4 0.2700

Why would anyone want to participate at Calder when there is a much better alternative in Florida?

Anonymous said...

it's all about the take-out.
gulfstream will benefit from cal's
greed and stupidity.
what racing needs is a nationwide , uniform take-out and drug testing policy.
dutrow again? no one is surprised.

Anonymous said...

Please...the take out on trifectas alone on saturday was 305 thousand and only 193 thousands in purses ..forget the 3-4 5 picks and be serious when it comes to value 25.9 nis not value...MARTY