There are plenty of things wrong with horse racing in Pennsylvania, but at the top of the list has to be the state’s onerous takeout rates on exotic wagers, which discourages betting and has been a contributing factor to overall pari-mutuel handle decline for the last 15 years.
Despite benefiting from expanded gaming revenues, Pennsylvania’s thoroughbred racetracks have experienced a precipitous slide in handle, as the 2015 Annual Report issued by the Pennsylvania Racing Commission in July (http://www.agriculture.pa.gov/Protect/RacingCommission/Documents/2015%20Racing%20Annual%20Report.pdf), shows. In 2001, more than $1.46 billion was wagered on races in the state. In 2014, that number had declined to $427.5 million – a whopping 71 percent decrease. Similarly, the state’s share of tax revenues from those wagers decreased 65 percent over the same period, from $31.8 million in 2001 to a little more than $11 million in 2014. No doubt high takeout has played a big part in this negative trend.
Other tracks have recognized that high takeout negatively impacts their bottom line. Over the last several years, Tampa Bay Downs reduced takeout and handle ticked upward, while the Monmouth-at-Meadowlands all-turf meet, which starts September 28, will offer an across-the-board takeout rate of just 15 percent, the lowest takeout in the nation.
“You hear over and over again that fans want big fields, low takeout, and competitive racing, and that’s what we’re set to offer,” said Dennis Drazin, advisor to Darby Development LLC, operators of the Monmouth-at-Meadowlands meet.
According to Jeff Platt, president of the Horseplayers Association of North America (HANA), a grassroots organization committed to giving horseplayers a voice and which hopes to effect change in the industry: “Lower takeout translates into more situations worthy of our betting dollar. Higher takeout translates into fewer situations worthy of our betting dollar. The more situations where we find value, the more situations we bet. It’s as simple as that.”
Each year, HANA publishes ratings of 62 thoroughbred racetracks, and it’s no surprise that the three Pennsylvania rank near the bottom. Two of them have the highest takeout rates in the country for certain exotic wagers. Here’s the link: http://www.horseplayersassociation.org/2016Sortable.html
Of the tracks listed in HANA’s 2016 ratings, Presque Isle Downs in Erie ranked 38th, Parx Racing in Bensalem ranked 46th, and Penn National in Grantville ranked 48th.
The top five spots were filled by (in order) Kentucky Downs, Keeneland, Saratoga, Suffolk Downs and Tampa Bay Downs.
Tracks are ranked according to takeout rates for simple wagers like win, place and show, as well as exotic wagers like the Pick 3, Pick 4 and Pick 6.
Also included for each track is average field size, a simulcast signal distribution grade (from A to F), the average pari-mutuel pool per race, exotic pool per race, and handle trend (up or down).
Using Kentucky Downs, HANA’s top-ranked track, as an example, we find that its WPS takeout is 16.00; exacta takeout 18.25; trifecta, superfecta, Daily Double, Pick 3, Pick 4 and Pick 6 19.00, and Pick 5 14.00.
Average field size in 2015 (the 2016 meet was not yet complete as of this writing) at Kentucky Downs was 10.60 horses per race, while mutuel pool per race was $118,626, exotic pool per race was $232,143, and handle trend was positive, at +6.46%. Year after year, the Franklin, Ky. course has shown healthy handle increases, thanks to its product and takeout rates proving extremely attractive to handicappers.
The only negative for Kentucky Downs was its signal distribution grade, which was given an “F.” According to HANA, that means a very high signal fee and/or multiple restrictions.
Let’s take a peek at how the three Pennsylvania tracks measured up against Kentucky Downs:
PRESQUE ISLE: WPS takeout: 17.00; exacta 20.00; trifecta and superfecta 25.00; Daily Double 20.00, and Pick 3 Pick 4 and Pick 6 25.00. Presque Isle’s average field size in 2015 was 7.49, while mutuel pool per race was an anemic $28,117, exotic pool per race was $53,558, and handle trend was down at -0.73%. Signal distribution grade was a “B,” meaning a moderate signal fee and/or restrictions.
PARX RACING: WPS takeout: 17.00; exacta 20.00; trifecta and superfecta 30.00; Daily Double 20.00, and Pick 3 Pick 4 and Pick 6 26.00. Parx’s average field size in 2015 was 7.94, while mutuel pool per race was $51,429, exotic pool per race was $102,980, and handle trend was down at -0.70%. Signal distribution grade was a “B.”
It should be noted that Parx’s takeout rates for the superfecta and Pick 6 were the highest on the 62-track list.
PENN NATIONAL: WPS takeout: 17.00; exacta 20.00; trifecta 31.00, superfecta 30.00; Daily Double 20.00, and Pick 3 Pick 4 and Pick 5 25.00. Presque Isle’s average field size in 2015 was 7.50, while mutuel pool per race was $41,719, exotic pool per race was $77,530, and handle trend was up at +2.15%. Signal distribution grade was a “B.”
Penn National’s takeout rate for trifectas was the highest on the 62-track list.
“To those who think takeout doesn’t matter – think again,” wrote Platt on the HANA website. “Takeout matters – on both sides of the window. To the player, takeout determines odds and payoffs. In every wagering situation, lower takeout means higher payoffs. Conversely, higher takeout means lower payoffs.”
Pennsylvania regulators would do well to heed those words.