Updated on 04/19/2016 1:37PM

Canterbury will have lowest blended takeout in 2016


Canterbury Park announced Tuesday plans to lower pari-mutuel takeout to North America’s lowest level for its 2016 race meet, which starts May 20.

According to Eric Halstrom, vice president of racing operations at Canterbury, the Shakopee, Minn., track’s blended takeout in 2016 will be 16.5 percent, while win-place-show wagers will have a takeout of just 15 percent, also the lowest rate in North America. The takeout on all exotic wagers will be 18 percent.

In 2015, Canterbury had a blended takeout rate of 20.4 percent and a win-place-show takeout of 17 percent. Takeout on all exotic bets save the pick four, which is up to 2016’s standard 18 percent exotic rake after being dropped to 14 percent last year, also have been reduced from 2015 levels.

Canterbury is making a bet that lowering takeout will in the end boost revenue generated through betting, a position long held by many prominent voices in racing but rarely put into practice by racetracks. Tracks fear the amount of revenue lost in takeout reductions won’t be offset by an accompanying increase in gross handle, though studies have shown that the churn produced by returning more money to bettors increases gross handle.

Canterbury hopes that will happen, too, but Halstrom said the track believes it can also create new Canterbury players by offering them a better price. Canterbury’s betting handle is unusually skewed toward on-track patrons, relative to the rest of the country, and on-track bets accounted for an average of about $190,000 of Canterbury’s average daily handle of a little more than $600,000 during the 2015 meet. Live wagering typically accounts for only 10 percent of total handle at most racetracks.

“Handle here is up 100 percent since 2010, but the piece we haven’t conquered yet is the export market. We still have the ability to double our handle,” Halstrom said. “I do think we’ll come out ahead because we’ve started at a low base in a real-dollar sense.”

Canterbury’s position also diverges from many venues because they have a strong working relationship with the local horsemen’s group. Horsemen often oppose takeout reductions, fearing lost handle will lead to purse declines, but Canterbury, Halstrom said, has guaranteed horsemen they’ll pay purses equal to the 2015 level.

“The horsemen were all for this, but I’m not sure every state has that situation,” said Halstrom.

Halstrom said Canterbury and its purse account each get from eight to 10 percent of every bet made on-track; that percentage drops to about 2 percent each for bets placed out of state on Canterbury races. It’s that area Canterbury hopes to drive with its low-handle pitch.

“We have not been a part of everybody’s simulcast day, and we’re fine with admitting we weren’t on everyone’s radar, but this is a way to increase our visibility,” Halstrom said. “When you go from zero to a new player, that’s a big thing. We’re taking a gamble here, but we’re not opposed to taking some risk."