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Questions I Would Have to NYRA, If I Had the Juice

It was announced yesterday that the New York Racing Association is raising their prices in various forms.

It appears, admission will go up around 60%, parking fees are hiked, and host fees will be raised. It's kind of a triple whammy.

If I had the juice - was some sort of political guy or newspaper reporter or had a popular insider blog - I think I would want to know a few things. 
  •  Attendance was off last season, which some found surprising, considering the money spent for a heavy marketing push for the 150th anniversary at Toga. What are the projections for attendance being off in 2014 with these price hikes? When a baseball team hikes prices, or when Toys R Us tries to increase margins, these questions are answered by bespectacled dude or dudettes who like to use Microsoft Excel. How much does NYRA think attendance will fall in 2014?
  • With fewer dollars in the wallet when a fan enters a track, along with decreased attendance, what are the projections for losses of live handle for 2014?
  • Price hikes for signal fees for ADW's will decrease handle. Rebates will go down, people will pay more. Places like California a couple of years ago didn't think this would make a difference, but anyone with a modicum of gambling economics chops knows it has an affect, and it did. What are simulcast partners saying? What are the small ADW's saying? What's your distribution network saying? All we have heard from the NYRA CEO reported on this is "They may not like it". What's the projections in 2014 for handle losses?
  • What's the plan for the negative buzz? NYRA and the state, through slots subsidies are getting piles of money placed in the coffers. It's like Christmas all year round. Taxpayers hated when companies got subsidies, while some executive was caught buying $200 bottles of wine at dinner. A guy named Joe from Queen's who is working his ass off at the fruit warehouse sees prices being raised on him, and it's not a stretch for him to feel the same way. How are they asking Joe to pay a 60% increase with all this slots money? Do they have a marketing plan to combat the negative buzz from this?
  • What do they think of Dan's comment? Will these people repeat visits or say once (or zero times) a year is enough?
The "Decline Stage of a Product" is racing's current stage. During that stage a few things are likely:
  •  During the decline phase, the firm generally has three options: Maintain the product in hopes that competitors will exit. Reduce costs and find new uses for the product. Harvest it, reducing marketing support and coasting along until no more profit can be made.
Is this where NYRA feels they are?

If the answer is yes, then why are they raising all these prices? A business, or anyone at that stage would likely be lowering prices and fire-saleing to get people in the door instead.

I'm just a dumb bettor with a blog. But those are a few questions I would have.

Enjoy your day everyone.


Comments

SaratogaSpa said…
It is my belief that for many people the admission price will be deducted from their "betting money" they have to spend at the track that day. This reduces churn, thus reducing handle and very possibly a net loss to the track.

I have no statistics on this , just a laymans view. What's your take on this?
Pull the Pocket said…
Hi Spa,

I guess it depends on elasticities and all that funky stuff. If a $3 or whatever increase in admission results in people playing $3 less per capita for the days races, and we see a loss in attendance, off track handle will fall and revenue will fall. It would be a failure.

People spend about $35 in betting at the track for the day. If this increase in cost to play results in them still spending $35, I guess they're okay to raise revenues by "$250,000" or whatever they are thinking.

It's not an easy question, in my opinion. If it was easy, then every business would increase their admission and user costs with impunity. The world doesn't work that way.

Handle losses will come from signal fee changes and loss of rebating. We know that group IS price sensitive. NYRA will feel that over time. If not this year, then in years to come. IMO.

PTP
Anonymous said…
Time for a boycott?

Still haven't lowered takeout since receiving slot money.
Pacingguy said…
While I don't like it, I don't think the increase at the Spa is that big a deal. If you are staying up there with jacked up lodging fees, is that $3 going to mean much to you? I don't think so, it's the advantage of being a boutique meet.

Now, Belmont Park is another story. This is your run of the mill meet. I think the increase will have more of a negative impact because these are people looking for something to do on the weekend. When you consider all the expenses, including tolls, the increase may be enough to have you stay home instead of going to the track.
SaratogaSpa said…
PTP:
Thanks for the feedback, the more I think about this the more I feel it could be a net loss, especially at Belmont Park. Times are different and people are more "price point sensitive" than ever before. Ask any Restaurant owner about how resistant the public is to a hike in menu items-Flay even talked about it at today's meeting. Interesting to see where this ends up.