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The H/P Ratio
As a follow-up to the previous post about purses across the country May 22, here are some of last Saturday's all-sources handle figures for some of those tracks. The final column is a metric I'm calling the "H/P Ratio" -- the amount of handle generated per purse dollar by each track:
(I haven't included CDI-owned tracks such as Arlington, Calder and Churchill because they do not release handle totals. If anyone has the spare time to do a pool-by-pool add-up off the results charts, I'll add them to the table.)
[Update: AP, CD and CRC have been added thanks to commenter Phil, who tallied up Saturday's pools. The Arlington figure is a little misleading because $300k of the $549k in purses came in two stakes races, making it an atypical Saturday there.]
Perhaps the most important thing to note is that the first five tracks on the list are at tracks without slot machines while the bottom five are all racino/slots facilities, where casino revenues subsidize purses. "Subsidize" is probably too weak a word, since the gross handle barely exceeds purses at facilities such as Prairie Meadows and Presque Isle, suggesting that over 90 percent of their purses are being supported by means other than handle commissions on their own races.
The H/P ratio does not fully reflect the economics of funding purses. Tracks receive the majority of commissions on bets placed by their patrons on other tracks. (If someone at Presque Isle bets on Hollywood, Hollywood gets roughly only 4 percent while Presque Isle takes around 14 percent, which is cut up among the track, purses, breeders, government, etc.) It would take a spreadsheet roughly the size of Rhode Island to detail the literally thousands of handle sources and splits on any day of racing.
What the H/P ratio does tell us is how "popular" each signal is with the national betting public relative to purse size. The high H/P's of Belmont and Hollywood speak to brand loyalty and customer familiarity with those circuits despite relatively undistinguished cards last Saturday. Those cards still outhandled Monmouth's gaudy opening-day card, though the point should not be lost that the excitement generated by the Monmouth "Elite Meet" experiment led to massive year-over-year gains.
Very roughly speaking, the national H/P ratio is right around $11: Last year in North America, $1.1 billion in purses generated $12.3 billion in parimutuel handle. This does not, however, mean that 9 percent of handle goes to purses: On the bulk of interstate simulcasting, it's closer to 2 percent. So an increasing share of those purses clearly is coming from racino "subsidies."
Just for fun, here are the H/P Ratios for some recent major days in American racing:
Hey Steve, Did anyone notice on Monday, Belmont had 1000 less people but doubled Monmouth's handle? George in Tampa
Howdy, post-Memorial Day wallet hangovers! Chittenango, N.Y. is a small, scenic town @ 10 miles from Syracuse. While vacationing in the Finger Lakes area on Saturday, we stopped in at their local OTB, which is housed in a friendly roughhouse restaurant/bar on Route 13. Mistake. The only thing missing from this dank, real life Moe’s (The Simpsons) was Moe. The Driver ordered a club soda & She-Moe served her tonic water (iron oxide content 65%). The N.A. beer had been energetically brewed in Flat Tire PA. And because the NYRA signal earlier in the afternoon had inexplicably vanished, all of the OTB TV screens in the empty back room area were dark. A couple of deserted card tables (literally) offered cheaply reproduced racing line-ups (visible only because of the sunlight filtering in through an unwashed rear window). Time to go see what’s doin’ in Fayetteville… So if you’re going up to Saratoga from the western PA area this summer - planning a north-by-northeast, unhurried scenic drive – find another town en route with an OTB that has a little more to offer, in case there’s something running you like, but can’t get to the track on time. Recommended: Take Route 14 up to Watkins Glen - but just before getting there, make a right hand turn at Montour Falls, go up into the beautiful foothills on Route 224 & proceed to Route 13. Continue through Ithaca & beyond, driving along one of the last unspoiled American scenic highways & the charming small towns of Newfield, Truxton, De Ruyter & Cazenovia. Eventually, you’ll run into Interstate 90 going east to Albany, on your way to Saratoga. Got home & checked out the weekend Monmouth handles. Then noticed that trainer Pat Farro had won Race 3 at Belmont on the 29th. The purse for this maiden claiming race only offered $18,000. New trend? With better New York horses being shipped to Monmouth for the higher purses, conversely, the established Monmouth trainers (with, generally, the lesser-talent steeds) are now shipping to & winning the once-prohibitively competitive Belmont races. Doesn’t this transform - at least for the time being - Belmont into the old Monmouth Park?
As you know , betting take-outs vary from Race Track to Race Track. The take-out numbers are determined by State Legislators and are somwwhat baffling and inconsistent. As a Professional Handicapper, I want the best deal possible. I believe onerous take-outs are the primary reason for Racing's decline, year after year. For example, Yesterday I made a simple statisical analysis of take-out at the major tracks running on Sunday. CD has the lowest take-out of all major tracks. Their WPS bets take out is 16%. Bel has the same figure, 16%. However, in all other betting catergories,. CD has the most favorable take out at 19%, including all Exotic wagers! The take out for the following Exotic wagers at the listed tracks is shoking: AP - 25%, Bel - 26%; Crc - 27% My first LOVE is Casino action. I play only Craps and Blackjack. By playing these Table Games properly, where the House edge is only 1 or 2%, you have a decent shot of winning serious money! With the Racing Industry take outs so high, very few Horse Players can show a profit at the end of the Year! I have one final concern. Why do major Race Tracks persist in charging Gate and Parking Fees? Also, their Food and Drink costs are way out of line. The average racing fan cannot tolerate these excessive and unnecessary costs. Live Race Track attendance and over all mutuel handle will continue to decline until State Legislators and Race Track Management lower their brutual take out and on-site price structure.
... I love New York racing also but we need new blood to keep this game going and Monmouth is giving it a AAA try. Lets all support this effort as this effort can only help all racing long term.
Quality Road heart of champion Musket Man heart of a pea. George in Tampa
Quality Road looked good indeed in the Met Mile. 133:11!!!! But the two within 3 lengths have never broken 106 on the Beyer Scale. Did 2nd and 3rd break through, or was the track just ridiculously fast and QR ran a measured 112 or so? Seems fair to ask while wondering why TP would say QR's next one might be at SAR. As a prep for the BC? The 5 race year is so 2010.
Hello Utah.. I'll stop with the abstract stuff. My point in my 1st comment was the horse, jockey and connections figured/entered in the race because of the new purse structure, otherwise none of them would have been in the race.And did win at 40-1. The purse valued made an all around difference in their participation. It was worth the trouble. In today's , Sunday's last race at MP, because of the purse structure, you have Bravo as jock instead of a five or ten pound bug boys riding as in past on his mount today. The purse gets you a jockey 2 seconds better than most versus using a 10 pounds off bug boy if the purse was half of what it is. And Bravo would not be in race. Regards
When all is said and done, New York racing is still the joint.
Evan: The Monmouth model is a one-year deal because of supplements from the Atlantic City Casinos and other supplements, however, as noted in an earlier blog post: Even if the purses can't be kept at this year's levels (which are unrealistic except for maybe the NYRA tracks with slots), it does show a very important blueprint that shows what could be done if states and tracks worked together with horsemen in the future, something I have noted myself here previously. One thing if it were me at Philly Park I would be pushing for would be to have a three-state circuit with Delaware Park and Monmouth Park that I think would benefit everyone and assure big fields year-round. My thinking (slightly revised from prior views on this) would be for a five-day, Thursday through Monday week with minimal overlap that would go something like this: Philadelphia Park would basically be the mid-Atlantic version of Aqueduct, running from the Friday and Saturday of the Breeders' Cup in early November through Derby day the following spring. As part of this, the Cotillion could be repositioned to where it is the primary eastern prep for the Kentucky Oaks while the Pennsylvania Derby can be the last big-money race of the year on dirt for three year olds. Delaware Park would race two meets: One beginning the Friday after the Derby and running through July 4, the other beginning the Saturday after Labor Day and running through the Sunday or Monday of the week before the Breeders' Cup (or overlapping with Philly Park and running abbrivated programs on the Friday and Saturday of Breeders' Cup weekend). Monmouth Park would be the summer track, running from just after July 4 (perhaps starting around July 4 and overlapping the end of what would be the spring meet at Delaware) and running through Labor Day. If the days can be reduced to around 40, especially if the casino supplement continues or slots do come to the New Jersey tracks, then Monmouth may be able to sustain a purse structure reasonably close to the $1 million a day structure that this meet is aiming for. Penn National would also be a player in this, since as I would do it, Penn would eliminate winter racing (allowing for bigger fields at Philly Park) and run from April through November (only overlapping with Philly during up to the Derby and during and after the Breeders' Cup), which would give those with Pennsylvania Breds a chance to race in state-bred company during the summer (on dirt and turn and in addition to Presque Isle). If New Jersey bred races are a concern with a lack of Monmouth dates, Atlantic City, which has to race six days a year anyway in order to be able to simulcast could outside of the meets noted run a limited number of days with all races on such programs for New Jersey Breds so that horsemen with Jersey Breds would have a chance to run such. In addition, arrangements could be put in place where Delaware and Philly Park could run some races for Jersey Breds as part of their meets to compensate for the lack of racing in New Jersey caused by this circuit. To me, this might be the best way to create a three-state circuit that I think can benefit everyone with big fields and better quality racing that can bring in bettors (if opening day at Monmouth is any indication) and create a buzz, especially if there are true "seasons" in racing once again.
Dogs, you lost me with the Delaware thing. The last race thing is also lost on me. They are running for big cake at Mth, all jocks will take as many mounts as they can. Tomorrow's finale has Prado and America's most overrated rider, Slo-Slo Gomez...