LOS ANGELES, June 26, 2014—Churchill Downs will be the focus of many horseplayers this weekend as it closes out the track's spring meeting. Unlike the situation earlier this year at Gulfstream Park, however, the pursuit of a mandatory exotic payout will not be a motivating factor.

Instead, horseplayers, and the industry itself, will be looking at the final handle numbers in light of revenues gained or lost because CDI’s decision to increase takeout rates. Going into the final weekend, the home team is losing.

Compared to the previous player's boycott in 2011 of California racetracks--in response to a legislated takeout rate increase by the state--the current action against CDI tracks has garnered far greater support from bettors.

What remains to be seen is whether the results will lead to a desired rollback in rates.

Such was not the case in 2011. The only “concession” that player representatives negotiated at that time was the addition of a new, lower-takeout, lower-minimum, exotic wager, the Players Pick Five.

The bet was ridiculed initially by some who considered it a “tossed bone” to horseplayers. Instead, it proved to be a successful example of what lower takeout could accomplish and bolstered the argument for more study of optimal takeout rates.

Negotiations at that time revealed to players that the Thoroughbred Owners of California (TOC) was in control, not track managements, and that TOC was putting the squeeze on customers, aided and abetted by those TOC members who also serving on the California Horse Racing Board (CHRB).

Indeed, the failure to force a rate roll-back in California probably encouraged Churchill's own onslaught on the wallets of its customers, but this time the message from the folks at http://playersboycott.org/ was more aggressive than the approach taken in 2011.

The boycotters’ most potent weapon this time is the analysis of Churchill's daily and meet handle figures. Recall that Churchill was the first track to stop providing total attendance and handle figures in results charts. This time boycotters were armed with data collection and analysis skills honed three years ago.

The results are striking as presented by Jeff Platt, President of HANA:
“Churchill numbers through the first 34 days of their meet:
DOWN $46.8 Million (-11.69% “
“What happens if we break the Kentucky Oaks Day Friday and Kentucky Derby Day Saturday cards out as special event days - and remove both of them from ... [consideration]? “

“... handle has fallen for 30 of the 32 regular race days so far this meet:

• Total handle? DOWN $45.6 Million (-26.90%)

• Avg Handle per Race? DOWN -$111,316 (-21.68%)

• Avg Handle per Day? DOWN -$1,424,385 (-26.90%)”

“Could everyday horseplayers be saying "no" to higher takeout?”

This begs several more questions: Who are everyday horseplayers? Are they more likely to be professional bettors, or recreational ones?

Turf writer, Nick Kling, suggested in a comment here at HRI that “20 percent of the bettors wager 50 percent of the handle.” The ratio is probably even greater than that.

Rebated bettors are not affected by takeout increases to the extent their non-rebated competitors are. My surmise is that these bigger players are probably continuing at or near their same level and that the missing handle is more attributable to grassroots players who are sending their action elsewhere.

If this is true, then those of us who have been spreading the lower takeout gospel over the last three years are starting to make some headway. What mustn't happen once the Churchill meet ends is for horseplayers to give up the good fight.

As horseplayer activist Andy Asaro reminds industry A-listers in his daily e-mails: ”We never quit.”

Whales Feel Entitled

One reason professional horseplayers are generally able to make a living is because they are able to exploit inexperience, lack of skills and motivation, and underfunding among recreational players.

I have no objection to that providing the playing field is level for all – as it once was in racing and still is in honest casino games. Neither do I object to casinos “comping” high-rollers, which is more a marketing tool than a subsidy.

The presence of big players at the tables stimulates more action from less affluent customers and helps to attract new ones. This is not the case in racing. If anything, racing’s whales are less visible whales as are the amount of rebates they receive. In my view, this discourages smaller-bankroll bettors and drives recreational players away from game altogether.

In response to a prior Players Up blog piece mentioning rebate subsidies to big bankroll bettors, several comments were posted by a former NTRA Players Panel member.

His observations were informative and, while some were accurate, they nevertheless showed a level of contempt for those forced to play without rebates, opining instead that everyday players bet unrealistic amounts or change their state of residence. The following remarks should be viewed in their original context:
“... I haven’t seen any studies that show that rebates make you a smarter bettor but clearly smart bettors get rebates. ...”
“... You don’t have to be a huge bettor to get rebates. But wouldn’t you agree that a person who reduces their cost of betting by getting a rebate is certainly smarter than one who doesn’t? ...”
“... Rebating, in and of itself, does not give a bettor an advantage. Being a smarter bettor gives one the advantage. Being a smarter bettor with rebates just increases the possibility of making a profit.”
'... Racing needs “dumb money” in the pools so the smart bettors can continue to prosper. If that doesn’t happen the effective takeout rate will not be low enough to keep the whales around. “'
“… the vast majority of players ... have neither the skill nor the knowledge to recognize overlays.”
“... The vast majority of players lose year in and year out. Do you need more evidence than that?”
“... Losers at the track need to be victims so that they can believe that it is the big bad rebates that prevent them from winning and not the fact that they lack the skills and know how. ...”

Recreational bettors are not only under fire from incompetent or corrupt government officials, greedy horsemen, and self-preserving racetrack management, but also from predatory gamblers benefitting from the rebate status quo.

Horseplayers will take an edge they can, which is what gives definition to the term parimutuel wagering. But Beware the Pied Piper unconcerned with fairness and balance for all.