Monday, October 15, 2012
Calder 50-Cent Pick 5 Latest Example Why Low Takeout Wagers Make Sense
ELMONT, NY, October 15, 2012—If any of racing’s leaders who might wield some influence in their state houses can’t influence their legislatures to accept a lower parimutuel tax in the interests of raising revenue, then they are just not doing their jobs.
For those of you who may counter with “well, what’s new about that?” don’t be disappointed if I don’t retort with some snappy comebacker. Much of what racing’s leaders do, or fail to do, is simply indefensible.
Nothing can be more instructive about the benefits of lower takeout than what’s been happening in the sunshine states, Florida and California, with respect to their low takeout, 50-Cent minimum, Pick 5.
Last year in SoCal, Santa Anita was coming off one a horrendous meeting, the result of a horseplayers’ boycott of the wagering pools in protest of a bill that raised the parimutuel rake.
But then Hollywood Park instituted a 50-Cent Pick 5 with 14% takeout--the same rate that would also be instituted in Arcadia—and voila, a reversal of fortune. California was on course for a handle decrease of $400 million for the year.
Because of the Hollywood Pick 5, bleeding slowed to $250 million for the year, the lion’s share of the losses suffered at Santa Anita.
With the day’s first race attracting Eastern and Midwest simulcast dollars which Hollywood never had seen pre-Pick 5, 2012 handle at Hollypark was up 3% for despite increases in takeout and declining handle figures in other pools, especially higher-priced exotics.
Del Mar instituted the low-cost, first-race Pick 5 this year and overall exotics handled doubled, not only because of the Pick 5 but because of increases in the five races that comprise the sequence.
There’s no sense in letting all that good research go to waste, right?
One Wednesday at Del Mar this summer, with the Pick 5 pool offering a sizable carryover, $3 million was bet in that pool despite the 50-Cent minimum; that’s right, $3 million in the first race on a Wednesday.
That was the largest exotic pool ever to start a racing card in California, including extremely high volume Kentucky Derby day and Breeders’ Cup. Opening and closing days notwithstanding, it was the highest Wednesday handle in Del Mar history.
Indeed, the stars were aligned, but still: Total handle that day was up nearly 58 percent year over year while on-track handle increased an astounding 62 percent.
That figure represented per capita betting that escalated from $114 to $178. In simo-land, the per cap rose from $271 to $308. The momentum lasted right through to the end of the meet.
When the 2012 Del Mar meet ended, on-track wagering rose by 13.3 percent despite an attendance decrease of 1.2 percent. Receipts at Advanced Deposit Wagering companies rose over 34 percent, from $1.3 million in 2011 to $1.8 million this year.
And once bettors recognize a bargain wager, they support it to the end. On closing day, a non-carryover Pick 5 handled more than $567,000, up 30% over closing day last year.
This Saturday at Calder--where the 50-Cent Pick 5 is offered at an industry low 12 percent [Lone Star and Sam Houston offer the same low rate]--the Festival of the Sun program’s Pick 5 was conducted on a wet track with the Tropical Park Derby rescheduled to the main track.
After scratches, 40 runners remained for an average field size of 8 horses per race. The payoffs were: $3.60, 2.80, 23.40, 4.40 and 5.60.
Four favorites at $5.60 or lower, and a 10-1 chance making its first start with first-Lasix for a barn that’s a profitable 42% with 46-90 day returnees and 60% efficient with non-graded stakes types, combined to pay $948.10.
That’s for 50 Cents--not the phony $2 payoffs posted by most tracks who believe that horseplayers are too stupid to know the difference and want to trumpet artificially inflated prices.
And, by the way, there was only $16,000 bet into the pool, meaning there were no “square bettors” to boost the return on investment. Further, if no one picks five, a Pick 4 consolation is paid with a carryover to the next program.
Yes, Virginia, and New York, and Pennsylvania, et.al, there is a way to attract handle in inter- and intra-race pools buy offering popular wagers with a low takeout at an affordable buy-in cost.
I’d call it a no-brainer, but why confuse the issue?