On the Derby Trail forum there was a neat post about long ago in horse racing land.
In 1947 Mayor (of New York) William O'Dwyer jacked the takeout from 10% to 15%, then it went
to 20%, just because I guess. Less than a decade later, after seeing a "surprising handle drop", New York's tracks "were struggling to survive."
In another snip from the newspaper, Jersey tried increasing the takeout 2% to raise a projected five million dollars. Handle per week fell from over $10 million to around $7 million. It never materialized.
Here we are almost seventy years later. Churchill Downs increased the takeout to "raise more money for purses". Two years ago California raised rakes to "raise more money".
California's revenues fell by about $50 million.
Churchill's handle this meet is down over $20 million, and will likely be in the red in terms of revenues from takeout within two weeks.
Horse racing is not complicated. Instead of repeating what failed seventy years ago, try learning something from it.
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1 comment:
In July, 1974 the NY politicians decided to squeeze more juice out of the OTB lemon by instituting a new 5% surtax on all winning payoffs. The city expected a $30 million windfall to come their way--NOT.
OTB handle dropped 4.5 million the first week, resulting in a 190K loss to the city, 106K loss to the state and a 177K loss to the tracks.
The big winners were the bookmakers.
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