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Thursday, June 2, 2011

California Meetings Update from Jeff Platt - New Takeout Increase Planned at NorCal State Fairs, Boycott Continues

I attended a meeting yesterday at Hollywood Park. This was a follow up to meetings held earlier this year well in advance of the Hollywood meet.

The premise for the original meeting was this:

1. All Sources California Thoroughbred Handle in 2010 (total customer spend) has shrunk to approximately ONE HALF of what it was just nine years earlier in 2001.

2. Handle (total customer spend) at California's two thoroughbred tracks for the first two months of 2011 are showing accelerated declines despite the takeout increase (where additional money was earmarked for purses.)

3. Let's identify the reasons behind the decline and air suggestions for reversing the trend.

(Kudos to Hollywood Park for providing the impetus to meet and look for solutions.)

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During the original meeting the following problems (in no particular order of importance) were identified:

1. The horse population is shrinking.

2. Costs to maintain a horse in California are higher than elsewhere in the country.

3. Field Size continues to decline.

4. The price (takeout) is too high for the product offered.

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There were about 40 people at the original meeting. Attending were management/leadership from all facets of the industry: track management, owners, trainers, breeders, the CHRB, and yes horseplayers.

It was decided that the issues involved were complex and that it would be best to break the attendees up into committees - with each committee assigned an individual area - and each committee to hold follow up meetings to discuss their assigned area of responsibility.

I was assigned to the committee charged with discussing pricing the game properly. (So I'll write the rest of this progress report from that perspective.)

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At a follow up meeting (about two months ago) I mentioned that all sources handle numbers for California's two thoroughbred tracks were off more than $100 million vs. the same period the prior year and made the suggestion that an immediate rescinding of the takeout increase might be a wise thing to do.

I also suggested that CA State Law mandating the ADW Retention Cap be rescinded so that California residents could obtain rebates like the residents of other states.

Track management and horsemen (the TOC) weren't willing to rescind the takeout increase. Some of them mentioned being pressured by the CHRB to keep the takeout increase intact at all costs (a position the CHRB commissioners have apparently done a 180 on if you read the transcripts from the last public CHRB meeting.)

We suggested other ways they might reduce the trend, including the reduced takeout pick5 that Hollywood later adopted.

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With five full months of handle numbers now in the books, the evidence is overwhelming:

The takeout increase has been a colossal failure. The strategy of increasing purses by removing money from customer wallets did not bring increased field sizes as promised. It only accelerated the decline in total customer spend.

On the bright side, the handle numbers clearly indicate the reduced takeout pick5 at Hollywood has been a success. Beyond whatever money the pick5 is generating on its own, having a reduced takeout pick5 in the early part of the card is generating overflow handle for their earlier races. (They admitted as much yesterday.)

Despite the evidence, which is crystal clear at this point, California's racing decision makers do not appear to be in any hurry to act.

At yesterday's meeting, when we suggested they rescind the takeout increase, looking around the room - I saw a lot of them rolling their eyes. (Many of them are still clinging to the idea that takeout doesn’t matter.)

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I have some bad news to report. The senate bill authorizing the thoroughbred takeout increase also applies to the upcoming NorCal Fair meets.

Incredibly, at present, they plan on increasing exotics takeout at the NorCal Fairs as follows:

EXA/DD
From 22.02% to 24.02%

TRI, P3, P4, SUPER, Place Pick All, Pick6, etc.
From 22.02% to 25.02%

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Summary
I wish I had better news to report. Based on what I saw yesterday, they still have a long way to go when it comes to implementing the changes needed to reverse the trend and start earning player business.

Until or unless further changes are adopted (There ARE future meetings planned where further player friendly changes WILL be talked about.) I will continue my support of the Players Boycott – and recommend all players everywhere do the same.

Jeff Platt
President, HANA

HANA Sign Up Link:
http://www.jcapper.com/HANA/SignUp/...rm.asp?source=0
PlayersBoycott.org site:

6 comments:

Anonymous said...

Lord help us all.

.... incredible.

Pacingguy said...

I'll say one thing. They are consistently stupid.

Anonymous said...

Dear Jeff,

You clearly do not have a clue!

The people who matter most to the future of racing do not give a sh*t about take-out. They certainly do not give a sh*t about the difference between 2% higher or lower.

You want to talk about "colossal failures" - HIALEAH and its 12% take-out was a colossal failure.

The Portland Meadows 14% pick-4 was a colossal failure.

Why??? Because you pinheads at HANA have been all talk and zero action. Had you people been adult enough to put your money where your mouth is, those venues would have seen untold riches flowing through their mutuel pools.

Why TVG offered to reduce the effect of the PM take-out on that pick-4 to ZERO percent, and you nitwits wouldn't even support THAT!!!

Get it through your collective heads: You CAN NOT BE part of the solution when you continue to be a giant chunk of the PROBLEM!!!

You and the rest of these dolts here continue to talk... and dream... and hypothesize in your own idiocy. Yet when the rest of us boil it down, it is still IDIOCY!!

Take-out fluctuations mean so damn little on pick-4's, pick-5',s and pick-6's that to take even partial credit for a handle increase makes you look absurd.

Any added numbers caused by the pick-5 at Hollywood result from its mere existence and NOT from whatever random take-out number is attached.

Why don't you all set an example and actually support the tracks and pools who are seeming to make your poorly-conceived take-out adjustments?

Anonymous said...

Sharp post. A collection of customers are (supposedly) the reason why handle is off by $10 billion over the last ten years.

The odds line that the above poster works in the racing industry ...... one to twenty. If not he should submit a resume; he'd be hired, and possibly given a car allowance.

Phil

Anonymous said...

Well, at least the CHRB acknowledges that the handle decline has actually happened. You'd think it was a freaking national security issue by the way that other interested parties in California have reacted. Uh, Anon #3 and others who think they are masterminds: check every piece of serious quantitative evidence on takeout increases for the past 40 years. They hurt racing. Period.

Get off your pitiful hobby horse (mm, a bunch of other variables at tracks do affect handle and will prevent some takeout declines from having a large enough effect to improve revenue) and assess the evidence from California rather than your own fears of exec firings by equally ignorant corporations. If your job and income don't depend on you making an objective assessment, I can assure you - it's remedial at best.

Get a brain. In that event, California racing needs you.

Anonymous said...

I'm sure none of you fools will ever get back here for some helpful hindsight, but just in case:

Per the recent Mckinsey report:

""".....fewer than 2% of most fans know about takeout. Thus, the report makes no recommendations on an issue that has boiled over this year, particularly in California."""

Now when you do some challenging-for-yourselves math and figure out what tiny percentage of the 2% of fans who "know" about takeout would even go on to "care" about takeout, surely you'll begin to gain some sort of helpful understanding. I'm sure you guys are the first ones targeted by supermarkets when they put the milk and the beer in the back, for their knowing how gullible, impulsive, and obviously disorganized you all are.

Now I say get off your collective asses and go out there and pound those 12% pick-4's and 14% pick-4's until you're blue in the faces.

I hear Hialeah is soon to open up, so call up your buddy CanGrumble and caravan down there with him to reap the unfathomable wealth he promises.

Gamble up, you fools!!!