Graded Stakes Bring in the Dollars for Several Reasons, but it's Still Basic Betting Economics

There was an enlightening late night chat (eastern time zone late night) on the twitter that I caught this morning by Crunk and professor of economics Caroline Betts.

They were talking about racing quality and handle, or maybe more apt, stakes racing and handle, versus non stakes races. About 10% of the handle in Thoroughbred racing comes from 1% of the races. Now, these include the Triple Crown races and Breeders Cup, but it's still significant.

Interestingly enough, in harness racing this does not occur in any huge way. Case in point, last week at the Meadowlands two ten type claiming trotting races were held with amateur harness drivers. The handles for these races were around $300,000 each. Over at Yonkers, where the best of the best were competing in the Levy series, handle was around $70,000 per race. One of the Levy divisions did do $88,000, and that was the leg with Wiggleitjiggle It (proving that yes, returning superstars do draw eyeballs).

Thoroughbred stakes are interesting for a bunch of reasons. Horses are shipping from everywhere, usually, and there are plenty of angles to play; horses are shortening up or stretching out; horses are switching surfaces; there's often a horse or two off a long layoff; a horse who broke a maiden willingly who looks like a star, etc.

Graded stakes, for the most part, are an extremely interesting puzzle, and that puzzle can yield chaos and prices.

It's not the purse dollars - a short field, chalk allowance race for an $80,000 purse will not bring in a lot of handle, while a cheap claimer with a deep field and an $8,000 purse can and does. In fact, Ms. Betts' work (and previous work) showed purse money to be betting inelastic. It's more about what that purse money attracts to make the affair bettable.

In harness stakes racing the puzzle is the exact opposite of Thoroughbred racing. Most of the Levy divisions were an easy to decipher race (we see this at times in the Breeders' Crown), while the amateur races were a head scratcher.

There's a lot of factors that go into driving handle. For example, the NYRA brand is so strong that 9 cheap races can outhandle a card with five graded stakes at a place like Parx, or a lesser known track. But as a rule, the more interesting and deep the race, the more handle it will bring in. Stakes races have that, more often than not.