Tuesday, January 7, 2014

Where is Handle Going in 2014?

2013 handles are in the books. There was a decrease in racedays, a decrease in field size and flat handles.  Purses, which generally have little to do with overall handle, were also flat.

Like we've seen over the past several years, the decrease in racedays causes handle to fall. A decrease in field size causes handle to fall. The other main driver of handle - the price, or takeout - has generally been falling, because rebating has not been a bad word like it was early in the decade.

What will happen in 2014? Well, we are likely to see a further reduction in racedays. With slots revenue falling, as well as handle stagnating and foal crops receding, we aren't pulling out our pocket Kreskin to make that proclamation. Some tracks have finally concentrated on field size, like Keeneland, and made it a go-to metric, but overall (see NYRA or So Cal), short fields continue to be something this business seems to crave and cling to. I can't see that going up either.

The last metric - takeout - is probably going to be a big determinant the next year or two, and right now, this does not look pretty for customers who bet.

Lower takeout through modestly rebated handle is becoming extinct for the mid sized and smaller horseplayer. In New York and Pennsylvania, many rebated players are being shuffled into high takeout regimes, and signal fees are being increased. Right now as I type, some tracks are withholding selling their signals to smaller ADW's who rebate, with the hope that players don't care about price and will continue to play in their systems. They won't. This will not happen.

As Mike Maloney noted in this interview: "All we’re doing when we raise takeout is driving away people. The regulars are coming less often or they’re coming just as often but getting ground down. People within the game still don’t understand how destructive takeout is." I think that's true and I we'll see this hurt handles in 2014.

So to sum up: If field size continues to fall, if racedays continue to fall, and if takeout is hiked as we've seen happen the last month, (along with making it harder and harder for players to conveniently bet the game by stifling choice via resellers, via higher signal fees), it doesn't take a rocket scientist to predict handles will be lower in 2014. If all three main determinants of handle growth are negative year over year, handle can't go anywhere but down, no matter how much racing tells you otherwise.

1 comment:

Anonymous said...

Kid yourself all you want. Players in New York (who won't lie about their address) have no way to receive competitive rebates, anymore. Look at the overall handles the first week in 2014. Everybody is way off already.

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