Thursday, August 16, 2012

Ohio & New York Better Wake Up Fast

The battle from government and racetracks for slot machines has heated up dramatically the last year. Ontario, as most know, is going to lose $345 million of revenues starting next March. In New York, it looks fairly bleak as Alan details on his blog:
  •  At this particular one, conducted by the Saratoga Institute on Racing and Gaming Law, industry types defended the tracks' share of racino revenue against the drumbeat of criticism from the Cuomo administration that has been starting to build; most recently a report from Comptroller Tom DiNapoli (which I have not seen) which states that the money has not resulted in increases in attendance or handle.  

This is a stark reminder to everyone that the world we live in is not the world of late 1990. Then, if you build it they will come, ruled. Meaning if you stuff every buck into purses, people will come and we'll have slots for a long time for purses, with pretty much impunity.

Now, for whatever reason, the powers that be are looking at ROI with this spend, and their own books and pet projects that they can spend money on. They want racetrack money, and they can make a good case for it.

Hmm, handle is down and foals are down (it doesn't matter that NY has had a bump, with their rake reduction and promo since last year; overall numbers suck). They're saying: Why are we giving you any money?

This is why (I know, I'm a broken record) places like New York (and Ohio who is just getting slots) have to spend a hunk - a large hunk - of cash earmarked for purses and profits on the game, and they have to do it now. Horsemen and tracks have to wake up.
  • Lower takeout = more handle.
  • Promote your ass off with giveaways, cheaper meals, bonus days, on-track rewards, and whatever else they can think of, because that will equal higher attendance.
If you show a growth in handle and a growth in attendance, then the State has a tough time using it against you. They still might use everything else, because they want more money, but at least you have a fighting shot if you can show increased numbers, on and off track.

New York should start a 15% (or lower if they can) takeout pick 5 right now. They should go to 15% and 19% juice on WPS and exotics (or lower), right now. That would only put them about where the rake is at Keeneland and Churchill, so don't tell me that can't be done when you get millions from slot machines and those two Kentucky tracks don't.

Ohio should do the same.

It doesn't matter if this should've been done ten years ago in every single place that got slots. That's in the past.

If these states don't do something right now, say goodbye to slot machines. Take that to the bank.


1 comment:

Anonymous said...

Very true,they have to show they can increase handle.Two ways to do this long term,lower takeout and free "Basic" PPs. Time is ticking....