Total handle, including the Oaks and Derby Days, are off $31.9 million.
As noted when the takeout increase was enacted - and the fact that Oaks and Derby Days will skew any numbers - it was the rest of the meet that mattered, via a hike in rates was sure to be detrimental to handle. This was a fairly common opinion in horse racing land at the time, shared by many:
Blind man can see Churchill wants more money on Derby day and doesn't care if the rest of the meet collapses.Similarly, after the Derby, Tom LaMarra in the Bloodhorse wrote:
— Pullthepocket (@Pullthepocket) April 10, 2014
"The six-day Derby week total handle of $253.8 million dropped almost 2% from $258.5 million last year. HANA said it believes there were a number of bettors who didn't wager into the pools, and that the true test will come as the regular spring meet progresses through its June 29 conclusion."
What we are seeing when one weeds out the Oaks and Derby is nothing short of devastation:
Total handle year over year is down $30.6 million or 27%. Per race handle is down 22.5%.
They are precariously close to becoming negative in terms of revenue for the meet, despite the big "EBITDA" gains made on Derby Day that they trumpeted.
The current narrative that the field size loss (about three quarters of a horse per race) has been the culprit for the handle losses is a red herring. The elasticity (academically studied in 1998) for field size losses is only -0.6. But the data doesn't jive either.
On June 1st Churchill Downs had 68 entries. In 2013, same day, they had 66.
The handle was down $1,023,641 or 21.2%.
Last Monday there were 78 entries versus 77. Handle was off almost one million dollars.
Not to mention, tracks like Belmont have lost a similar amount of horses this year, yet handle remains fairly strong. Last year, in fact, Belmont lost a third of a horse per race, and handle was up 2.42%.
Horseplayers, for whatever reason that floats your boat, are saying no to Churchill Downs, and are doing it in spades. This should not be surprising. They raised a price on a product that was not very appealing, making it even less appealing to the general public, and discerning horseplayers. No multi-million dollar big board, an excellent race caller like Larry Collmus, or all the bells and whistles in a world can fix that.
They've got serious issues in Louisville, Kentucky. Racedates will likely be cut precipitously for next year, and the horsemen - who are reticent to do that at anytime - will likely have to go along with it. That's what happens when you concentrate on corporate "EBITDA" for a big day and forget about the people who pay for purses the other 364 days: Your betting customers.