Here's the Unvarnished 2014 Horse Racing Handle Story

As we all know, handle will be down this year - by what amount we are not yet sure - and there have been plenty of reasons given. Some tracks like to pull out every excuse in the book when their handle goes down (it's not our fault), or up (it was our brilliant management) and some tell the truth, but usually it's an array of scattered reasons which are difficult to decipher.

Let's take a quick trip around the racing globe for a summary.

Kentucky: Churchill Downs has been terrible; we all followed that story. Keeneland also had a down year (nowhere near as bad as Churchill on a day by day basis, but down). Ellis Park, well, they were up. The star of the show in Kentucky has been Kentucky Downs, with another big year.

So Cal: This year is one of big transition in So Cal. Instead of going to lower handle places like the Cal Fairs and Hollywood, stalwarts like Santa Anita and Del Mar (and the higher handle Los Al) have been given more racedates. So, it will be a little like comparing apples to grapefruits. Handle in the Golden State, although nowhere near good, should be fine because of the new track mix.

New York: New York had about the best thing they could've hoped for: A Triple Crown try. That generated millions in handle on Belmont Day, because people always follow a TC horse. Lately, bad weather and poor fields have really hurt. Yesterday, for example, according to @LDMcpherson on the twitter, about $1,000,000 was bet into the pick 6, versus $90k last year on this day, and handle was up only $260,000 for the day.  Despite the weather, New York looks like it may be having issues beyond that and should be watched closely.

Florida:  Like So Cal, there has been a sea change in the state, with more racedates going to the branded signal at Gulfstream. As well, instead of Calder we're seeing "Gulfstream Park West" with lower rakes and a better signal. Apples to grapefruits, but I expect they will have a good year.

Canada: Woodbine had a terrible April, but stormed back nicely and they should have a decent year. Canadian harness racing - as an aside - has been doing better. Despite a large decrease in racedays post slots, handle is up overall and has increased nicely (over 15%) on a per race basis.

Breeders' Cup: BC handle was up slightly in 2014 versus last year, with a good set of races when compared to 2013. 

As for other tracks, it's the usual mixed bag. Indiana Downs had a decent year, tracks like Mountaineer are struggling for horses. Suffolk Downs is no more, there is no racing in Virginia as well. In Ohio, with glorious slots, something positive will likely occur, but really, the state is not on the player's radar yet in any meaningful way. I never know what to make of Louisiana, but Delta Downs sure tries hard, and we'll see if CDI improves Fair Grounds. Who knows. 

Regarding 2014 handle, everyone likes a bumper sticker reason; maybe that is societal I don't know. But to do that is folly. Handle did not go up at Keeneland because of "dirt" - an argument can be made that field size went down because of dirt, in fact. Handle did not go down at Churchill because of  "small foal crops" that have an effect on all tracks, not just them. The "economy" or "offshore gambling" or a hundred other reasons held up as poster boys over the years really never held water, and don't hold water now.

I'll take a shot at what's happened thus far.

1) The number of races have fallen - Although this does not work one to one, percentage by percentage (e.g. a 5% drop in races does not mean a 5% drop in handle), this is clearly a factor. If McDonald's cuts stores, same store sales - barring any other changes - will fall by some amount, more than likely. It does not have to be this way - with some direction - but in the current state of racing it does.

2) The game has gotten more expensive - Sure the handle tanked at Churchill after the rake hike, but that tanking does not generally have to do with the price (price hikes are a slow burn on handles), more to do with people fed up with price hikes and not being respected as a customer. Regardless, the game has gotten more expensive to play and takeout matters. It's just math. When the price of a bet goes up, bankrolls gets degraded quicker, en masse - the walk of shame to the ATM can only happen so many times before you keep right on walking through the exit. Less money to bet, fewer happy customers and less churn. Things like high rake jackpot bets only adds to this. For a parallel think of the decade golf has had. $500 clubs, an hour drive for a six hour round, gas prices up, working harder for your money, more taxes to pay: Fewer golfers.

3) Crappy races - I had a chat with an every day player on Tuesday. He said he ran a filter to find races to bet (he runs this each day) and out of all the cards on Tuesday, his filter told him to bet a grand total of zero races. I've heard this from more than one player. Short fields at higher takeout is no way to attract bettors.

4) Signal fees and protecting signals - I used to bet Finger Lakes, now I can't even find it to bet. I don't know how many ADW's are being shut out from signals - some tracks have asked larger entities to distribute their signal for them "to get a better price" - and that usually means a signal is stifled. In addition, some tracks are pricing themselves too high, and this is causing players to look elsewhere.  "Source Market Fees" (you will hear more about this in the coming year because more horsemen groups want to do them) are an absolute scourge for the betting customer, and additions of those in 2014 to NY and PA certainly have not helped handles. There's only one pie and cutting it up so the non-betting side of it has more results in fewer dollars bet.

5) Whales and big players - There are rumors that a few larger players have passed on, that some computer groups have left the game, and so on. The latter, if true, probably has more to do with #4 above.

Racing has done some things good: Like allocating more dates to tracks where there's handle, like So Cal and Florida have done. If everything was equal and static, that in itself should've caused handle to rise in 2014. However, it was pulled down by good old fashioned elastic betting factors like rises in the price of a bet, fewer number of races, more fees, and a lower number of bettable races. 

That in a nutshell, is my view on handle, so far, in 2014. It's a slow burn and it probably will continue for the forseeable future.