09/14/2016 3:39PM

Meadowlands takeout cut to 15 percent for all wagers


Every bet offered at the upcoming all-turf Thoroughbred meet at the Meadowlands at New Jersey will have a 15 percent takeout, the operator of the meet announced on Wednesday.

The 15 percent takeout will equal the lowest blended takeout in the country, currently also offered in Massachusetts at Suffolk Downs, which held six live racing days this year. Last year, takeout at the 14-day Monmouth-at-Meadowlands meet was 17 percent for win, place, and show; 19 percent for exactas and daily doubles; 25 percent for pick threes, trifectas, and superfectas; and 15 percent for pick fours and pick fives.

Dennis Drazin, an advisor to the horsemen-owned company that operates Monmouth Park, said that the reduction is being viewed as an “experiment” and was undertaken in response to horseplayer-led calls for widespread reductions in the takeout rate. The takeout is the amount of money withdrawn from the pool before payoffs are calculated, and it is used to fund racetrack operations and purse payments.

“Everybody keeps talking about reducing takeout to a fairer number,” Drazin said. “We began talking about this last year and we think it makes sense to do it now to see what we come up with.”

The Meadowlands meet, which starts on Sept. 28 and runs through Oct. 19, will be the fourth held by Monmouth at the track. The meet has largely been viewed as successful, in large part because the turf races held at the track have attracted large fields. Last year, average field size at the meet was 9.9 horses per race, well above the overall national average field size of 7.85 horses per race in 2015.

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Handle has also grown significantly every year at the meet, according to Monmouth, which said handle was up 19 percent in 2015 compared with the 2014 meet. Handle during the 2014 meet was up 25 percent when compared with the 2013 meet, Monmouth said.

Lower takeouts are favored by horseplayers because they boost payoff prices. Most racing economists also believe that lower takeouts increase churn, the amount of money won that is re-bet into racing pools. However, hard data on the precise effect of takeout reductions has been difficult to compile, although the consensus view is that takeout reductions have a positive impact on the amount of money bet on a track’s races.

Many tracks and horsemen have been reluctant to embrace takeout reductions because it is unclear if the reductions lead to a higher or lower amount of revenue for operations and purses. In addition, because simulcast sites retain the difference between the amount of money they pay for a signal and the takeout, tracks often imperil the reach of their simulcast signals because some sites simply elect to refuse to offer the races to their customers at the lower revenue number.

In addition, account-wagering operators that offer large rebates to players are often forced to reduce the size of the rebate on tracks with lower takeouts, which can often lead to the players avoiding the signal, even if the impact is only to create a market in which there is parity between all players in the pools.

Drazin said that no simulcast sites have raised concerns about the reduction yet. “My understanding is that since we have a short meet that the sites are not going to raise any problems,” Drazin said. “That might not be the case with a 71-day meet like we have at Monmouth, but for now we aren’t getting any negative reactions.”

However, one official who negotiates a large number of simulcast signals said that he would have no comment on the decision until he could discuss the takeout reduction with the tracks in his network. The official requested to speak anonymously because he learned about the decision from a reporter.

Several tracks have reduced takeout recently in the hopes of realizing revenue gains, or, at the very least, increased visibility from the reductions. Kentucky Downs, which holds a short all-turf meet that attracts very large fields, has sharply increased its handle over the past three years with low takeouts. However, at Canterbury Park in Minnesota, the track’s chief executive, Randy Sampson, said earlier this summer that a decision to slash the track’s takeout rates for this year’s meet “has not generated the increase in wagering volume we anticipated.”