Updated on 02/07/2018 4:54PM

Keeneland rolls back some takeout increases for spring meet


Keeneland Racecourse in Lexington, Ky., will restore lower takeout rates for many of its wagers during the track’s upcoming spring meet, three months after drawing the ire of the horseplaying community for raising the takeout rates on nearly all of its bets for last October’s fall meet, the track announced on Wednesday.

The decision to roll back the takeout increases on win, place, show, and exacta wagers is a striking reversal for Keeneland, which had defended the higher takeout rates last year as a means to bolster its purses, even as horseplayers took to social media to castigate the track and urge players to boycott the fall meet. Total wagering at Keeneland’s fall meet fell 8.7 percent compared with fall wagering in 2016.

“Keeneland’s goals are mission-oriented, and we continually review, measure, and listen to our customers across all business lines to ensure our operations promote the health and vibrancy of the horse industry,” Bob Elliston, Keeneland’s vice president of racing and sales, said in a release.

Takeout rates on win, place, and show wagers will be reduced from 17.5 percent to 16 percent, the rate that preceded the increase. Takeout on exactas will be reduced from 22 percent to 19.5 percent, half a percentage point higher than the rate prior to the increase. All other takeouts on exotic wagers, such as the trifecta, superfecta, pick three, and pick four, will remain 22 percent, while the takeout on the pick five will remain at 15 percent. The takeout on the pick five was lowered last year with the takeout increases.

As when Keeneland raised its takeout rates, bettors took to social media immediately after the announcement Wednesday. They voiced their approval of the lower rates, with some claiming victory due to last year’s boycott. Keeneland’s reputation as a fan-friendly venue was significantly tarnished by the decision, with players complaining that the racetrack had betrayed one of its core constituencies.

In an interview, Elliston said that Keeneland talked with horseplayers following last year’s fall meet and decided that it would designate the win, place, show and exacta pools for rollbacks because the takeout rates for those pools were higher than competitors’ rates in the same pools. Elliston also said that those bets generally produce the highest rates of churn, or won money that is bet back into the pools.

“If you look specifically at win-place-show pools and the exacta pool, that is a total of 57 percent of our wagering,” Elliston said. “We were out of step there, and we needed to do something about that.”

Keeneland officials had defended the takeout hike as a means to increase revenue so that it could continue to raise purses at its two annual meets, as it has every year since 2012. Despite the drop in handle last fall, purses were up 3.3 percent.

Revenue from Keeneland’s auction business went into a free fall in 2008 after the collapse of the stock market and the subsequent tightening of credit markets, dropping from a high of $815.3 million in 2007 to a low of $381.6 million in 2010. Total sales in 2017 were $538.7 million, up 2.8 percent compared with total sales in 2016.

Elliston said that Keeneland will notify simulcast outlets about the new takeout rates in the coming weeks, and that the host fee rates paid by the outlets will decline at the same rate as the takeout reductions. When Keeneland raised its takeout rates, it split the extra revenue from the increases with host sites. Most host sites that award rebates to their biggest customers then increased the size of the awards so that rebated players did not play against the full increase in the takeout rates.