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.

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