ABOUT THE KEENELAND TAKEOUT DECISION

Effective with the October 2017 meet, Keeneland Racecourse increased the takeout percentages on most bets to the maximum allowed by Kentucky law.  Led by the Horseplayers Association of North America (HANA), a boycott ensued…and aggregate handle declined 8.7 percent compared to the same meet in 2016.

Keeneland recently announced a rollback on the takeout percentages on some bets that it previously raised.  Win, place, and show wagers will revert to the old rate of 16 percent from 17.5% and exactas will be reduced to 19.5% from 22%, which is a half percentage point increment over the former rate of 19%.  Other exotic wagers are to remain at 22% and the pick five will continue at 15%.

In October of 2017, Horse Racing Business published two articles on Keeneland’s takeout increases and wrote in part:

“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.”

Now that Keeneland has partially reversed the pricing decisions implemented at the October 2017 meet, it will be interesting to see if the compromise is enough to placate disgruntled bettors and thereby turnaround the decline in handle the track experienced.

Keeneland management may have intended from the start to raise takeout rates and then subsequently to lower some of them to give the appearance of responding to bettors’ concerns.  A more likely explanation is that management was alarmed by the intensity of the bettor backlash–and the resultant decrease in handle–and decided it could not take the chance of the ill will spilling over into the April 2018 meet.

Raising prices in a low-inflation environment is not easy for any company, but Keeneland vastly exceeded reasonable boundaries when it boosted the takeout rate on exotic wagers by nearly 16% (from 19% to 22%), given the underlying inflation rate in the economy of less than 2%.  Moreover, management has left the huge increase in place for trifecta and superfecta bets.  That may be difficult for many bettors to accept.

How much betting money comes back to Keeneland in April remains to be seen.

Copyright © 2018 Horse Racing Business

ONE MONTH TO THE CHELTENHAM FESTIVAL

A sure sign of impending Spring in the United Kingdom is building anticipation among horse racing fans of The Cheltenham Festival, held this year on March 13-17.  The Jockey Club-owned Cheltenham Racecourse is situated with the picturesque Cotswolds Hills in the background.  Cheltenham is located about 88 miles from London.

The Cheltenham Festival is, depending on one’s perspective, either a five-day meet of the world’s best jump racing or a social gathering of over a quarter million people that offers blue-ribbon corporate sponsors the opportunity to reach coveted demographic groups.

The Festival cards 28 jump races with £4.5 in purses for spectators to watch and bet on.  The feature of the entire Festival is the Cheltenham Gold Cup, contested on the final day.  The Gold Cup is one of the two most prestigious jump races in the world, along with the Grand National.  This Group 1 National Hunt race dates back to 1819; it is run over 22 jumps spread out over 3 miles and ½ furlongs, and usually has over 35 entries.

The current favorite for the Cheltenham Gold Cup, at 7/2 odds, is the Nicky Henderson-trained 9-year-old Mite Bite.  Mite Bite, winner of nine of 14 lifetime starts, won the King George at Kempton on Boxing Day, 2017.  The next best-liked horse for the Gold Cup at 6/1 odds is the 2017 winner Sizing John, who was a badly beaten seventh place in his last start in December 2017.  Many of the possible entries are horses capable of winning at double-digit odds.

Besides the Cheltenham Gold Cup, virtually every one of the other 27 races provides bettors with handicapping challenges and opportunities.  Jump races at Cheltenham attract lots of betting handle because the fields are full of highly rated horses.  Moreover, one misstep or rider error in a jump race and a chalk is out of contention.

All 28 Cheltenham races can be wagered on at one or more of the many online sites identified at the brand-new bettingsites.ltd.uk.  This website of websites provides an array of information, including the top 10 betting sites in the United Kingdom, new sites for betting on sports, and customers’ favorite betting sites.

Copyright © 2018 Horse Racing Business

RACING PROMOTED AS ENTERTAINMENT OR GAMBLING?

A South Florida lifestyle magazine in January 2018 carried an advertisement for the then-upcoming Pegasus World Cup Invitational at Gulfstream Park that read in part:

“Giddy Up

It’s a Party.  With a Racetrack.  And you’re invited.”

On the national telecast of the race, Belinda Stronach, chairwoman and president of the Stronach Group, which owns Gulfstream Park, explained to the audience that the intent with the Peagsus World Cup is to promote horse racing by “wrapping an entertainment experience around the on-track experience.”

She went on to say that although horse racing/wagering is the “core” product, the Pegasus World Cup is intended to appeal to non-racing fans by emphasizing an opportunity for having an enjoyable time.

Horse racing per se is supported by a comparatively small percentage of all bettors, who wager the vast majority of the money bet.  The future of horse racing depends on enough prolific bettors like them coming into the game in the years ahead.  To this end, the view here is that the Stronach Group is on target with its strategy to promote the Pegasus World Cup to the general public as entertainment rather than gambling.

Whereas the sport’s current large-scale bettors respond to rebates, pick 6 carryovers, takeout rates, and other such monetary incentives, the non-racing fan and the $2 player care more about horse racing as entertainment.

A large portion of the people who attend the Triple Crown events, and the annual seasons at Del Mar, Keeneland, and Saratoga, may not frequent another racetrack all year.  However, some small but unknown percentage of the people who attend–and who are new to racing–will develop an interest and turn into steady bettors.  Some will even become so enamored that they will take part in handicap contests and follow and wager on horse racing on a year-around basis.

For highly select events, like those mentioned above, “wrapping an entertainment experience around the on-track experience” is a logical strategy for cultivating racing’s potential customers of tomorrow.  However, the entertainment approach would be ludicrous for, say, promoting Aqueduct on frigid winter days with sparse crowds at the racetrack.  That takes a gambling-focused appeal.

Copyright © 2018 HorseRacingBusiness