On October 12, 2017, HorseRacingBusiness.com ran a post titled “Keeneland’s Takeout-Rate Increase” that analyzed the potential profit/loss effects of the track’s takeout boost on win, place, and show betting by 9.375% and on most exotic wagers by 15.79%. These increments began with Keeneland’s fall 2017 meet and became the target of a boycott endorsed by the Horseplayers Association of North America, or HANA.
The October 12th post stated:
“Keeneland would breakeven on its takeout-rate increase decision on win, place, and show bets if handle declines by exactly -8.57%. A smaller decline than -8.57% will yield a profit and a larger decline than -8.57% will yield a loss.
On exotics, Keeneland would breakeven on its rate increase if handle falls by precisely -13.64%. A drop in handle of less than -13.64% will result in a profit and a drop of more than -13.64% will record a loss.”
The Keeneland meet is now concluded and all-sources wagering (on-track plus off-track) declined by $11.32 million or 8.52%. It looks as though Keeneland gained a small dollar amount on its price increases because anything better than a -13.64% drop in exotic wagers was profitable.
A Keeneland spokesman blamed the weather for the decline in handle. That perspective, however, does not comport with the fact that the track had near-record attendance yet on-track wagering was essentially flat compared to 2016. Moreover, as HANA points out on its website, Keeneland’s all-sources handle was poor when benchmarked against two top-of-the-line racetracks that also had live racing in October. Belmont’s all-sources handle was up over 12% and Santa Anita’s increased by 8%.
As noted in the October 12th post on this subject, whether Keeneland’s decision to substantially raise takeout rates proves to be a significantly profitable one, or a blunder, won’t be determined until the end of the spring 2018 meet. Keeneland’s top management must wait six months to see how many of the boycotters come back or persist in avoiding the track.
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