Sometimes it seems like Uncle Sam is running the racetracks. Just like the government is opposed to cutting taxes across the board so too are racetrack operators when it comes to lowering takeout rates.
Takeout, takeout, takeout. It is one of, if not the, most talked about issues in horse racing. The only problem is with all the talk there is very little action. While the boycott of the California takeout rate increase was reported to be successful it was a far cry from what one would have expected. Of bigger concern however is the fact that it took an increase in takeout rates for any action to be taken.
While there may be some disagreement from owners, trainers, and racetrack operators it is fair to say that all horseplayers agree takeout rates are too high. Lowering takeout rates will put more money in the horseplayers pockets and as I documented (here and here) will also put more money in owners, trainers and racetrack operators pockets.
So what can we (horseplayers) do to make change happen? Rather than wait for the next takeout increase, which is inevitable, we can take action today and let our wallets do the talking. It does not matter if you are a $2 a race bettor or a $2,000 a race bettor together we can make a difference.
The Two Phase Approach to Lower Takeout Rates
Boycotting the California tracks made a statement but my plan is much bigger than that. Rather than targeting all of the wagering pools at a single track or a group of tracks I want to focus on individual wagering pools at all tracks.
Phase 1
Determining the ideal takeout rate that will generate the maximum returns for all parties involved can only be determined through trial and error. The problem is no tracks are willing to lower takeout rates across the board and keep the rates at those levels for a long enough period of time to determine the true effects on overall wagering handle. The first phase of this approach will prove to the doubters that lower takeout rates result in increased wagering handle.
Action Plan: Shift Wagering Handle to Specific Pools at Specific Tracks
To get the ball rolling the first step is to shift all of your wagering handle away from Win, Place and Show pools that have a takeout rates of 17% or higher and away from all other pools that have takeout rates of 20% or higher. To make the transition as smooth and easy as possible I have compiled a list of wagering options by track that satisfy those guidelines:
* Update: Gulfstream Park WPS has been added to the list as the correct takeout rate is 15%, not the 17% that is listed on the HANA 2011 Track Ratings chart. I also changed the file from Excel to Google Docs so that any changes in the future will be automatically updated.
In a short time racetrack operators will have two options: increase the takeout rates on those pools or decrease the takeout rate on the pools that are being boycotted. I am confident common sense will prevail and the latter will occur. After a few months at the lower takeout levels wagering handle across the country will increase. At that point it will be quite obvious to the doubters that lower takeout rates result in increased wagering handle putting more money in the pockets of horseplayers and themselves.
Phase 2
At this point I expect some, if not most, of the racetracks to begin to lower takeout rates further in order to stimulate more growth in wagering handle.
Action Plan: Rinse and Repeat Phase 1
As soon as racetracks lower takeout rates on all or some of their pools your wagering handle must follow. Investing only in the pools that have the lowest takeout rates will again force racetrack operators to make a decision: raise takeout rates or lower takeout rates. Again common sense should prevail and takeout rates will be lowered across the board and as we know wagering handle will increase even further.
This process should be repeated until wagering handle levels off at which point the optimum takeout rates will have been determined.
Is It Really That Simple?
The answer is yes. Even though we (horseplayers) are at the bottom of the list when it comes to how decisions will effect us we control the horse racing industry. Without our money there would be no sport. If everyone decided tomorrow to stop betting until the takeout rates were lowered the sport would cease to exist in a very short time. My plan on the other hand systematically chips away at the takeout rates over time thus ensuring the continuation of the sport while also achieving the end goal of maximizing revenue to all parties involved.
Owners, trainers and racetrack operators will no doubt be stubborn to change but they will have no choice if we put our money where our mouth is. This will take a concerted effort by all horseplayers but I am confident that the end result will be a win-win situation for everyone. It may not happen next week or next month or next year for that matter but eventually the optimum takeout rates will be determined and wagering handle will reach its fullest potential.
Each year fewer and fewer races are worth betting and fewer dollars are going back into our pockets. In order to reverse this trend we (horseplayers) need to take action. I know it is easy to talk the talk but I vow to walk the walk. Starting today I will only bet into the pools listed above. My meager bankroll will not have a huge impact by itself but together with all of you we can make a difference. So stop complaining about excessive takeout rates and take action. You have no excuse not to do so. Print the list I provided above and focus your wagering handle on those pools.
A few years from now you will be able to look back and be proud that you were part of a grass roots effort to fix the sport you love. Together we can make a difference, will you join me?
Creative Commons photo courtesy of Infrogmation
