Takeout Rates Discussed

Published: September 27, 2016 11:34 am EDT

On Tuesday morning, executives from racetracks across North America talked takeout.

The panel discussion, ‘The Measurable Impact of Lower Takeout on Business,’ was part of this year's International Simulcast Conference in New Orleans.

"We dropped takeout in 2012 and we saw immediate success," said C.J Johnson, the live racing manager for Kentucky Downs. "The field size at almost 11 horses per field, and the takeout did it.

"You have to market the takeout and inform players. We lowered the Pick 5 takeout to 14 per cent and we had huge success."

The experience at Kentucky Downs is not the same everywhere. At Canterbury Park, in Minnesota, lowered takeout hasn't yet had the desired effect.

"We dropped our takeout to 15 per cent and exotic takeout to 18 per cent," said Andrew Offerman, the director of racing operations for Canterbury Park.

"We viewed this as an opportunity to grow our handle. What we learned was although we got fantastic PR out of it, we were down 1 or 2 per cent on-track and up 10 per cent off-track. Overall our revenue went down by 20 per cent. It was very disappointing."

"The big thing was that our on-track market decreased," said Offerman. "That was a surprise and a disappointment. We're reducing takeout, but bets that are popular are low churn bets."

"For us it's more about picking and choosing the pools that will have the high churn," said Klaus Ebner, the manager of simulcast and track relations at the Woodbine Entertainment Group.

Woodbine has lowered its takeout on Thoroughbred win/place/show bets.

"We (also) introduced rolling doubles with a 15 per cent takeout (on Woodbine Thoroughbreds). For our customer base, they really appreciated it."

Frank Hopf, the senior director of racing operations at Sam Houston Race Park, said that his track is focused on multi-leg wagers.

"We've gone very low at 12 per cent on multi-leg bets," he said. "Our Pick 3 has always been at 12 per cent. We decided to do a 12 per cent across-the-board on these bets. It's been good. We've been pleased with the multi-leg bets."

Johnson, who has seen good results at Kentucky Downs, believes that tracks should stick to lowering takeout.

"It's a long term investment," said Johnson. "You may not be where you want to be right now. I think it'll pay off – definitely."