Takeout hike has bettors fuming
This is supposed to be the most anticipated time of the year for racing fans.
Derby Week! Yippee.
So why is everybody so grouchy?
Well, not everybody, but a segment of the betting public is calling for a boycott of Churchill Downs in general and on Kentucky Oaks and Derby days next Friday and Saturday in particular, and I don’t blame them.
The Churchill spring meet begins tonight with one of its popular “Downs After Dark” night programs, and when it does, bettors will be subjected to higher takeout rates on their winning wagers.
The corporation that runs Churchill Downs, Churchill Downs Incorporated, rebuilt the grandstand and clubhouse into a massive luxury cruise liner monstrosity that now dwarfs the venerable twin spires in anticipation of casino legislation that still has not passed in Kentucky.
That hasn’t stopped CDI from acting much more like a casino company than a racetrack operator, and, in fact, CDI also owns Fair Grounds in New Orleans and Calder in Florida, tracks that serve as slot machine emporiums.
CDI has been criticized for letting conditions on the racetrack side at Fair Grounds and Calder to decline, while the casino side thrives. (Sound familiar, Aqueduct patrons?)
At Churchill Downs, the track just erected a $12 million 170-foot tall ultra hi-definition video board on the backstretch, primarily so that the thousands cramming the infield next weekend can actually, you know, watch the race.
CDI also spent about $14.5 million to renovate the grandstand near the quarter-pole, an area that I imagine is pretty much unused except on Derby weekend.
This sounds like racetrack improvement, but, really, the corporation is simply enhancing its mega-cash cow, the Derby. If you plan on paying attention to racing there any other time, guess what . . . CDI will be gouging a little bit more out of your winnings.
Specifically, CDI will raise takeout to the maximum levels allowable by state law, which means win-place-show winnings will be skimmed at 17.5 percent, up from 16, and the takeout on exotic bet winnings will increase from 19 to 22 percent.
Making this development all the more galling is that CDI ran a 12-day meet last September for the first time ever, and the low live on-track handle at that short meet was enough to bring the average handle for the year to a level that would allow the takeout increase.
CDI told the Louisville Courier-Journal and Daily Racing Form that the takeout hike was necessary to maintain current purse levels, which theoretically would prevent shrinking field sizes due to horsemen taking their stock elsewhere.
What CDI risks is an increasingly disengaged betting public.
Horseplayers Association of North America, which bills itself as a grassroots advocacy organization for racing bettors, has consistently argued in favor of lower takeout and cites studies that show that lower takeout generates increased betting handle and churn, or re-investment of winnings.
It would seem that increased handle would be in the racetrack’s best interests, but CDI is a corporation beholden to shareholders first, and the future doesn’t look good for racing fans. CDI’s recently released annual financial report showed that for the first time ever, CDI’s revenue from casinos was greater than from racing in 2013.
In the meantime, events at Fair Grounds this week reinforce the notion that CDI wouldn’t mind of the racing side died on the vine.
Conditions there have deteriorated to a point where the Louisiana State Racing Commission has put CDI’s license renewal on hold. A decision is pending next week.
Need more proof? CDI bought Hollywood Park in 1999, and sold it to a land developer when the track underperformed. Now, that historic track is closed and will be converted to a mall or some damn thing.
Besides the takeout issue, there could be more fallout this week from the undercover video that People for the Ethical Treatment of Animals is using to bolster claims that racehorses are mistreated.
Anybody believe PETA isn’t going to make its presence felt in Louisville next week?
We’ll see if outrage over the takeout hike and calls for a boycott, mostly on social media, will have a noticeable impact.
Perhaps if enough bettors speak with their wallets, that will be a language that CDI understands.