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The Smaller Horsemen are the Next Target

Reading Charlie Hayward's commentary today, "Good News in American Racing This Fall", there was this comment Charlie highlighted:

"Now the content provider gets 3-5% depending on the track while the simulcast site gets 15-17%, the blended takeout being 20%. Why shouldn’t it be 10-10%. In fact if a site doesn’t provide live racing why not 15-5% to the content side. The fact is the larger tracks have been subsidizing the smaller tracks by this split of the simulcast money"

Many of these tracks - small thoroughbred and small harness tracks - depend on simulcast dollars for their purses. If their track is racing live at 20% rake, then offer a new signal from a popular track like Gulfstream, they lose live handle at 20%, so they need some sort of comparable split to realize revenue.

A likely response from local horsemen is to kill the signal all together. What that does is hurt customers.

There is only one pie. More money for Stronach's slice means less money for local horsemen at some tracks.

Yes, the business wants lasix removed and it does make some sense, but that won't effect the big guys as much as the little guys. Yes, despite resellers making the bulk of revenues in other businesses, racing wants to change it up. The big guys want more, but make no mistake, the little guy will pay. The horse racing business is nationwide with hundreds of racetracks, supporting thousands of feed men, farriers, tack shops, vets and everything else. There's more to horse racing than five or six big tracks with with $30 million statues, or chandeliers. When the pie gets shuffled to the conglomerates, there are losers on the other side.

Comments

Anonymous said…
Horse racing (foolishly) believes shuffling the deck chairs will fix it. If they spent as much time trying to grow the business than they do arguing how to split it up, they would have fewer problems to solve.
Fred Mertz said…
Of course, these signal price increases contribute to shrinking the pie as well by reducing available rebates for price sensitive players who will wind up playing less and maybe find a new game to gamble on.
I wonder what Monarch's ADW arm (Xpressbet) pays for signals, probably the same as what racetracks pay, maybe less, because of their clout?, meaning tracks and horsemen get a small cut on all bets made at Xpressbet, no matter if the track is A, B, or C material.
Anonymous said…
I know how the little guys can compete with the big guys.cut their takeout in half.
Sure would be interesting to see how the horse players would react and who would get hurt.