Canterbury Park's Cautionary Handle Tale

Canterbury Park - the small Minnesota track that lowered takeout last year, only to raise it this season - concluded their meet recently. The numbers, year over year, are in: Thoroughbred handle was up 2.6%, and handle per betting interest was down 1.8%.

Last year, with the takeout decrease, handle was up 5%, and handle per betting interest was up 10%. 

Racetrack handle analysis (which tends to be pretty rudimentary) will conclude what it wants to conclude regarding the above. And, quite honestly, since reported racetrack handle numbers are where lines of best fit go to die (and people use cognitive bias to analyze these numbers), I completely understand that. But, we'll try and take a deeper dive.

Using some comparative analysis, regional tracks had a very good year. This season, Prairie Meadows was up 21.2% and Arlington up 11.3% per entry. Last year the weather in the midwest made it hard to race on the turf at two of the three regionals, and barns were nowhere near as plentiful. In 2016, these tracks were down 16% and 10% respectively.

So, last year, Canterbury's handle - up 10% - outperformed their regional friends.

This season - again comparatively - Canterbury Park did not rebound like their regional counterparts did, and vastly underperformed.

We can probably conclude with some certitude that a majority of the "new" money that entered the Canterbury pools in 2016 did not return. Anecdotally (which is never a good thing I suppose), I do know personally of about $400,000 in meet handle that this year was zero dollars.

When we factor in signal fees and SMF's the landscape gets even muddier. I don't think we can go a lot further.

What did we learn? Not much that we didn't already know, I guess. The marketing buzz of a takeout decrease, along with the churn gained from a takeout decrease, helped handles, at least some in 2016. And hurt it some in 2017.

Revenue was certainly up year over year - probably apples to apples several hundred thousand dollars - which I am certain is important to a public company being yelled at by a BOD. There's that.

But, for a racetrack who gets $6M earmarked for marketing from an $81M war chest of gaming money that's mandated to be spent to "grow handle", isn't using a few hundred thousand dollars a year to do exactly that fulfilling the mandate?

One conclusion that's easy to make, in my view, is that horse racing makes decisions on where they are, not where they want to be. Canterbury appeared to have momentum on their side in 2016, and for whatever reason, despite a perfect weather season with good field size, the momentum stalled. That, I think, isn't good for anyone who cares about the long term health of the game.

Have a nice Monday everyone.