KEENELAND’S TAKEOUT-RATE INCREASE

The Horseplayers Association of North America (HANA) ranks U. S. and Canadian Thoroughbred racetracks on the basis of bettor-friendliness.  The criteria employed in HANA’s algorithm include such factors as the level of takeout on various kinds of bets, field size, handle, and signal distribution.

Keeneland in Lexington, Kentucky ranked first among all racetracks on HANA’s 2014 list and second in 2015 and 2016 (Kentucky Downs was first in 2015 and 2016).  Prior to its fall meet in 2017, Keeneland raised takeout on win, place, and show bets from 16% to 17.5%.  The track increased exotic wagers (except for the Pick5) from 19% to 22%.  As a result, Keeneland dropped to 13th place in HANA rankings and HANA members overwhelmingly voted to boycott the Keeneland October 2017 meet.  At a minimum, Keeneland’s image is tarnished, at least in the short term.

HANA president Jeff Platt wrote in part on the organization’s website:

“As a horseplayer I’ve decided to join the boycott at the Players Boycott website because I believe higher takeout is harmful to the long-term health of thoroughbred racing.  As a horseplayer I believe sitting on the sidelines is not an option for me because everybody in the industry is waiting to see how players react to this.  I believe that if a clear message isn’t sent: Not just Keeneland–but other tracks–will have takeout increases too.

When we boycotted Churchill [Downs] in 2014 because of their takeout increase: They were down a solid 25% outside of the Derby.  How much of that was the market speaking and how much came from us drawing attention to the takeout increase is hard to say. But we sent a pretty clear message.  I expect Keeneland Fall 2017 numbers to mirror Churchill 2014 numbers–and be down a similar 25% to 30%.  But that may not be a strong enough message.  I believe that by getting the message out to as many horseplayers as possible–we can knock Keeneland numbers down significantly.”

Keeneland would breakeven on its takeout-rate increase decision on win, place, and show bets if handle declines by exactly -8.57%.  A smaller decline than -8.57% will yield a profit and a larger decline than -8.57% will yield a loss.

On exotics, Keeneland would breakeven on its rate increase if handle falls by precisely -13.64%.  A drop in handle of less than -13.64% will result in a profit and a drop of more than -13.64% will record a loss.

Through the first three days of the Keeneland 2017 fall meet (October 7, 8, and 9), handle was down by 14.61% compared to 2016.  The next raceday, on October 11th, handle plunged 20% from 2016.  Thus the track so far is less profitable on wagering than it was a year ago in spite of the significant boosts in takeout rates on straight wagers and exotics.

Whether Keeneland’s decision to raise takeout rates on its customers proves to be profitable or a mistake won’t be determined at its October 2017 meet.  A clearer picture will emerge toward the end of Keeneland’s spring 2018 meet, after time has passed since the takeout-rate increases and boycotters have either stayed away or come back.

Copyright © 2017 Horse Racing Business

WORKING QUIETLY TO SAVE HORSES FROM BAD ENDINGS

Racing horses can be an exciting sporting venture, particularly at the highest echelon.  In the past several years, the industry has endeavored mightily to address the unglamorous issue of aftercare for off-the-track horses, with multiple initiatives, such as The Jockey Club’s Thoroughbred Incentive Program and establishment of the Thoroughbred Aftercare Alliance.

Countless people with big hearts and dedication work behind the scenes to save and retrain former racehorses that might otherwise end up badly neglected or in a slaughterhouse.  Following are four exemplars.

Edward (Ned) and Cornelia (Nina) Bonnie own 540-acre Stonelea Farm in Prospect, Kentucky and have been active participants in equine sports like steeplechase racing, hunting/jumping competition, and foxhunting for more than 60 years.  An article titled “In High Regard” in the September 2017 Off-Track Thoroughbred Magazine said about Stonelea: “Nestled against Harrods Creek, the rolling property is an off-track Thoroughbred haven…”

The Bonnies have given numerous retired racehorses a home for life and have also demonstrated the suitability of former racehorses to sport-horse second careers or just as riding horses.  The Off-Track Thoroughbred article reports that over 20 Thoroughbreds are domiciled at Stonelea Farm, consisting of a mix of retirees, young horses bred by the Bonnies, and riding horses.  Even in their golden years, the Bonnies are still providing racehorses with a safe harbor to live out their days.

Unlike the Bonnies, the husband and wife team of Dallas and Donna Keen earn their livelihood from training racehorses.  Both are accomplished trainers with some big wins.

Apart from conditioning horses at multiple racetracks, the couple in 2008 founded and continue to operate the Remember Me Rescue in Burleson, Texas.  The organization’s website states its mission:

“The Remember Me Retired Racehorse Program was formed…to assist retired and injured racehorses after their careers at the track are over.  We accept, rehabilitate, and retrain ex-racehorses with the hopes of finding them new homes with responsible owners.”

The Keens not only “accept” former racehorses, but are proactive in going to auctions and rescuing animals from slaughter destinations.   Here is a couple who engage in the full-time–and then some–business of training racehorses across several states, yet who make the time to rescue horses at auction and devote considerable effort to operating Remember Me Rescue.  That’s “giving back” at its finest.

Copyright © 2017 Horse Racing Business

WHAT THE NFL AND AMERICAN HORSE RACING HAVE IN COMMON

The National Football League and American horse racing are much different sports and businesses.  Yet they share one negative:

Some of the major financial beneficiaries of each sport/business take actions in the workplace that are bad for business and therefore counterproductive to their own livelihood.

In the case of the NFL, numerous players have alienated a significant percentage of their fan base by kneeling during the playing of the Star Spangled Banner.  One reputable poll found that 55% of Americans called the players’ disrespect for the National Anthem “inappropriate” and another established poll revealed that 34% of Americans are less likely to follow the NFL owing to the players’ conduct versus 12% who are more likely.   DirectTV is even offering $280 refunds to subscribers who cancel NFL Sunday Ticket over the players’ behavior.

Most concerning to the NFL are television ratings; the teams could play before empty stadiums and still make money from TV revenues.  In the first three weeks of the 2017 NFL season television ratings were down about 10%.  While it is not possible to determine precisely how much of this decline is due to viewers boycotting NFL games, it is certain that at least some of the downturn in ratings is attributable to fans refusing to watch.  Any percentage loss is too much.

Noted sports journalist and TV host Jason Whitlock cogently summarized the NFL’s perilous path in a Wall Street Journal editorial: “…a social-justice month, as some players have suggested…might sound awesome on Twitter, but in the real world it’s likely divisive and poisonous for NFL TV ratings.  Professional football’s core customers have more in common with our Twitter-addicted president [Donald Trump] than with sanctimonious athletes posturing for social-media approval.”

Michael Jordan was once asked why he did not publicly participate in helping politicians running as Democrats.  He famously and sagely replied “because Republicans buy shoes, too.”  This kind of obvious advice is sound for any business or industry:  Do nothing to alienate your current or potential customers.

(During either the 2008 or 2012 presidential election, a racing publication took an unscientific sampling at the Saratoga race meet of how people involved with Thoroughbreds intended to vote.  D. Wayne Lukas replied “undecided.”  Smart businessperson, indeed…keeping controversial subjects out of his workplace…knowing that people with all sorts of opinions and political persuasions own racehorses and employ trainers.)

The NFL brouhaha comes at a time when football is already under increasing scrutiny for the brain damage it does to many players.

Horse racing also has an injury byproduct that turns off fans, breakdowns, with the most publicized being Eight Belles during the telecast of the 2008 Kentucky Derby.  Yet the non-response by most racetracks to breakdowns–including all the major venues–is to continue to hold the vast majority of races on dirt, empirically shown to be the unsafest of the three types of racing surface.  The industry then scrambles to explain to the public why, for instance, there were a rash of horse fatalities this year at Saratoga and last year at Del Mar.

Other prominent examples of self-inflicted wounds are readily available and include drug-abuse incidents that were described in a 2012 New York Times expose and the pervasive corruption at Penn National Race Course in 2017.

As long as various individuals and interest groups in horse racing resist uniform regulation and enforcement of drugs by an independent federally-sanctioned organization, as well as other measures–like installing synthetic racetrack surfaces and ridding the sport of whipping imagery–they will persist in the same detrimental “do what is bad for business” pathology as some of the current crop of NFL players.  Masses of people will tune out a sport they perceive as unnecessarily dangerous to horses and jockeys and unfair to bettors.

Copyright © 2017 Horse Racing Business