HANDLE NUMBERS MAY NOT BE WHAT THEY SEEM
By Ray Paulick
I hate to rain on Equibase and the National Thoroughbred Racing Association’s bad news parade, but there was some good news in horse racing’s monthly economic indicators released on Thursday.
Average daily handle for the month of February increased by 4.80% in comparison to 2009 figures. Average daily purses were up by 4.29% in February. Year-to-date figures for average daily handle are virtually dead-even (down 0.14%), as is the number for average daily purses (plus 0.81%).
Those are signs, like the few glimmers of hope in the general economy, that our worst days may be behind us.
Why, then, did Equibase and NTRA only report the bad news, that gross wagering and purses were down double digits? The business figures compiled by Equibase make things look terribly bleak: gross handle down 13% in February and purses down 13.43% from 2010, and year-to-date figures down 12.51% and 11.67% in those respective categories.
They include the total number of racing days for February and for the year to date, which show drastic declines of 16.99% and 12.38%. We are not going to increase gross handle with we run nearly 17% fewer race days. Those gross numbers do not tell the complete picture, and an organization like the NTRA should be doing a better job of interpreting its own economic indicators.
The good news about February and handle comes on the heels of Fasig-Tipton’s successful sale of 2-year-olds in training at Calder race course in South Florida.
There has been severe weather this year in many parts of the country, reducing the number of race days because of cancellations. But some tracks are simply running fewer live dates, a trend that we’ll see more and more of going forward.
The days being dropped intentionally by racetracks are going to be weekdays when handle and purses are lower, so it’s logical to expect average daily numbers to increase when weekend cards represent 50% of the week’s action on a four-day racing week instead of 40% on a five-day week. Del Mar saw its average daily numbers increase last year when the Southern California track dropped its Monday programs.
So, part of this increase in average betting and purses for February is likely due to the loss of more weekday programs than weekends. The message here is that less can be more.
Call me a contrarian, since other publications focused on the negatives—the drop in gross purses and handle. However, I’m willing to take any scrap of good news I can find these days.
Copyright © 2010, The Paulick Report
Savvy businesses recognize value. Advertise in the Paulick Report.
Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick
Tags: Calder Race Course, daily handle, equibase, fasig-tipton, February, NTRA, Paulick Report, Ray Paulick, south florida
March 5th, 2010 at 10:07 am
What this sort of proves is that less is not going to result in more. And that has been an argument by many who state there is too much horse racing.
I’ll say it again. The price of betting needs to come down. Horse racing needs to compete with other forms of gambling if it ever wants to grow again.
March 5th, 2010 at 10:28 am
The comparison one makes when arguing about the price of betting is that the casino industry takeout is so much lower.
When one is in a casino (or racino) one can make bets every few seconds, therefore can make several hundred bets in a 30 minute period, the traditional time between races. We dont have this luxury and when you compare the cumulative takeout at the casino against a typical horsebet, the horse bet gives better odds. I would also argue the horsebet experience is so much more fun too.
March 5th, 2010 at 10:29 am
As always, thanks. I learn something every time I come here.
Linda
March 5th, 2010 at 10:29 am
I agree w/Ray………look for the positives and be optimistic. As much as I love Thoroughbred racing, there is too much of it, all year long. I believe if we had less racing days, but quality races, large fields, etc., racing would do fine. Way back when racing was in its glory days, there wasn’t racing year round…………our 4-legged atheletes had time to rest and come back strong. Fewer race days may prove to be a good thing all around………less is often more. Fewer days of racing is the least of this industry’s worries. The industry needs to get its act together on so many more important issues…….including respect for the fans and those who enthusiastically support racing.
March 5th, 2010 at 10:57 am
It is nice to hear some good news for a change. Maybe other publications go for the negative because of the “if it bleeds it leads” syndrome.
On a somewhat related note, our local news this morning reported our region is economically recovering now and it’s not just slight gains. Despite the national unemployment rate, three of our factories are calling back employees that have been laid off since the economic crisis started.
That’s likely good news for the rest of the country, too. In previous recessions we’re always among the first to suffer but also among the first to recover. So keep your chin up, I think better days are just around the corner.
March 5th, 2010 at 11:20 am
It is only good news if you make the assumption that people would have bet the ‘daily average’ on the days when racing was not being conducted vs last year. If all people did was move around the money they intended to bet to days/cards that were available, then there is no good news.
March 5th, 2010 at 11:30 am
Ralph, in today’s world of internet and simulcast betting, one can play 5-15 races every hour without a problem. And when you make a bet on a race, it may include tris, supers, pick3’s, dd’s, wps, etc. Usually if one plays are race, they aren’t betting a deuce.
Bottom line, an average horseplayer could and would play as much if not more during a 5 hour sitting, if takeout were reduced to what they are in slots.
March 5th, 2010 at 11:53 am
I agree that things aren’t as bad as the gross numbers would suggest,but they’re probably not as good as Ray suggests, either, for the reasons already mentioned by others.
I would substantially disagree with your categorization of the F-T Calder sale as “successful,” even though average and median were up. Over 60% of the catalog either was scratched or failed to attain the reserve price (and that’s even with the new statistical trick of reporting post-sale private deals as “sold.” Nice sale for the 90-something owners whose horses sold, not so nice for the majority of intending sellers. And Keeneland’s move to a boutique evening sale for Book 1 of its September yearling sale also suggests that the ultra-high top-end market is getting thinner. Still high prices, but not so many horses goingt for those prices.
Sellers can hardly wait for Ahmed Zayat to get out of bankruptcy.
March 5th, 2010 at 11:54 am
Our industry metrics are always going to be about handle even if individual entities’ performances are measured in revenue. And, in my opinion, mixing all handle figures together is like taking the performance of all stocks on the NYSE together and coming up with a single result.
We need a DJIA or S&P 500- like index to really get some value out of gross handle figures. I would suggest taking a representative sample of tracks based on some real factors of quality, quantity, weather, dates etc, and report that as an economic indicator.
I think the numbers as Ray reports them are interesting, but not really indicative of anything that anyone can take action on; such as, ‘handle is trending up, therefore i should breed my good mare to the $30K stallion instead of the $10K stallion”, or ‘I should go to the 2 yo sale now instead of waiting till the fall yearling sale’. That’s just my opinion, i could be totally wrong.
March 5th, 2010 at 1:21 pm
I don’t ever play slots but I do have a perception of them. There’s no way anyone can compare horse racing with slots in anyway including takeout. Correct me if I’m wrong when it comes to slot takeout. Yes the casino’s take is 5 to 7% depending on where your playing. Now the way I see it, your confronted with 500 to 1,000 slot machines that may payoff a jackpot, today or next Mo. No one knows what machine is about to payoff but every machine gives back a little here and there so players move around from machine to machine hoping they will get lucky, giving some money back or they spent the day and were lucky enough to be on the plus side. Conclusion in my mind, a very small % of players go home winners and maybe 1 out of 1,000 if hit a jackpot. Back in the 30’s and 40’s slot’s were called “one arm bandits’ but the takeout was much higher. To me they still are one arm bandits.
A horse race consists of just nine horses on the average, not 500 to 1,000 machines to pick from that only pays jackpots randomly. A good handicapper can cut a nine horse race down in a race to 5 or less in many cases. As said, players have many pools to chouse from to make the best wager possible to give him or her that edge to hit a “jackpot”. Horse players have the element of control over his or her wagering, that does not exist in slots.
Then think about everything else that goes with racing that’s a heck of lot more exciting than mindless slots. Plus the historical cultural thread that goes with racing.
There’s no reason in my mind why racing can’t compete with slots or poker. The biggest reason is racing over the years have done a lousy job promoting the SPORT and didn’t know enough to cater to THEIR FANS, AS SAID IN THIS THREAD.
March 5th, 2010 at 1:59 pm
When was the last time someone went to cash out 97 credits on a slot machine and it gave them 90 credits due to breakage?
March 5th, 2010 at 2:32 pm
There’s no question handle will continue to decline. The majority will just buy what they need, others will hang onto what disposable income they have or spend much less. There’s an estimated twenty million people out of work, not counting the young new to the market that want work and can’t get it.
There’s so many unsettled things going on right now with the industry we don’t have a clue as to who’s going to left standing. Meanwhile the elites of the game are sucking out what ever money they can. The proof is the Blossom, run dead last and collect a hundred grand. Also Monmouth dropping half the racing days and offering million dollar a day purses, then there’s Santa Anita giving out five million to zenyatta’s connections and they haven’t given details on that purse structure, maybe dead last will pay a hundred grand in that one as well. What a joke and SA can’t afford to fix the drainage problems they have. I see those purses like I do AIG boniness and other thieves in the financial industry. Sorry Ray, I don’t see positive things happening any time soon.
March 5th, 2010 at 3:06 pm
Vernon, in the long run, a slots player gets to play over $2000 on average before they lose $160.
In the long run, a horseplayer gets to wager $800 on average before they lose $160.
That is what takeout means to bettors.
There is a reason why horse racing can’t compete with slots and poker, and that is because the takeout is ridiculously high.
There is no reason for someone to learn to play horse racing because it takes a while just to figure things out…..might as well play slots as big scores can happen in either game, it is just you get 2 and half times more action playing slots.
March 5th, 2010 at 4:15 pm
Maury; I would love to see takeout reduced and get rid of those huge rebates the whales get on winning and losing tickets. The problem is, tracks and the states are on the brink so you won’t see any reductions for a long time to come. Heck, I used go to Rockingham Park because they had the lowest takeout in New England. That’s how important I thought it was, now there’s no thoroughbred racing there. Mass is down to one track Suffolk Downs and if they don’t get those freaking slots they will be gone also.
March 7th, 2010 at 3:28 am
#13 surely to bet the $800 on a race one has to spend at least some time looking at that race, whereas to bet the $2,000 on a slot machine that cerebral process isn’t necessary.
So this argument really comes down to whether the gambler views this as [a] spending $160 on the mental exercise of trying to pick a winner, or [b] as spending it on a set of physical repeats aimed at strengthening one arm.
Given that the end result is the same, an easier option might be to put $160 in a biscuit tin and set fire to it.
March 7th, 2010 at 11:49 am
Bill, it isn’t just one race, but a card or maybe a few cards. Yes, horse racing usually requires the cerebral process, but so does sports betting (with a 4.7% takeout on matches), and so does poker, with even a much smaller takeout.
Yes, if one has to bet into a takeout of 20%, they might as well just stick the dough in a can and set fire to it. I think many gamblers have figure this out now.