Racing researcher Thalheimer dies at 72

LEXINGTON, Ky. – Richard Thalheimer, an economist who wrote papers analyzing the impact of takeout rates on horse-racing handle and other studies of the racing industry, died Monday in Nicholasville, Ky., of the effects of amyotrophic lateral sclerosis, or Lou Gehrig’s Disease, according to a notice from his family. Thalheimer was 72.

Thalheimer, who founded two companies that produced economic research for the racing industry, was best known for his advocacy of lower takeout rates. In the 1990s and 2000s, he produced several papers contending that takeout rates needed to be lowered significantly in order for racetracks to produce the most revenue, an argument that borrowed from supply-side economics.

Thalheimer’s papers argued for lower takeout rates on the basis of an analysis he conducted of racing handle at a now-defunct track in New Jersey in 1995. While his theories gained wide support from horseplayers because of its commonsense foundation, many racing officials were skeptical about the extent to which horseplayers would react to changes in takeout rates, and limited real-world experiments in the past two decades have not generated enough significant data to either prove or disprove Thalheimer’s theories.

Thalheimer’s initial research into takeout rates was conducted prior to the widespread adoption of full-card simulcast wagering and the advent of the Internet. Those two developments have led to wholesale changes in how takeout rates are set, in large part because of the growth of rebating. Under rebate models, horseplayers are charged different effective takeout rates based on their own handle, a development that has greatly complicated decisions to modify takeout rates for all players.

Thalheimer was born in Houston but received master’s and doctoral degrees in economics at the University of Kentucky in Lexington. He started his career in Kentucky government but went on to found Thalheimer Equine Associates and Thalheimer Research Associates, which solicited business from racing organizations and produced other research. He was an enthusiastic fan of racing and often could be found at racetracks as a paying customer.

Thalheimer was also a professor of equine administration in the College of Business and Public Administration at the University of Louisville, which established an equine program in the mid-1990s. He is survived by his wife, Sally; his children, Mark and Beth; and four grandchildren.