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Tuesday, June 23, 2009

Share Some of that Slot Money with the Bettors

In an editorial in the Philadelphia Daily News concerning the current revenue from the VLTs, the writer is wondering why the vast majority of slot money is going to horse racing while the state is having to curtail social programs. Fortunately, the editorial recognizes the horse racing industry is important to the state, but suggests when the state decides to add table games (they will), that the legislature revisit the percentage that goes to racing; others are not so generous in their comments and would like to cut racing out totally from slot revenues.

The horsemen in all states have certainly gone through some lean times. I remember $2,500 claimers racing for a $1,200 purse at Pocono Downs but now with slot revenue the bottom level $5,000 claimers are racing for $4,400 purses. Those that have endured through the dark days are deservedly reaping the rewards for persevering.

While the horsemen in racino states are enjoying a renaissance, maybe it is time for the horsemen to fight for the bettors by working to get the takeout reduced by offering a small part of their share of the slot revenue to make up for a reduction in the takeout. The Pennsylvania product is not bettable; the heavy hitters refuse to wager into pools with a 35% takeout on trifectas and superfectas. As a result, so little of the purse money comes from actual wagering. It is a known fact that lower takeouts result in more money being wagered churned so what is lost by cutting the takeout is made up by volume. By conceding a small portion of the slot proceeds, the product can become more bettable, handles will increase, and more people will show up at the track.

Why should horsemen in particular lead the charge? Horsemen have the most to lose. Harrahs has made it known they would love to get rid of racing at Chester if they could; the profits from slots are basically financing racing and racing is contributing little to its own upkeep. Fortunately, Harrahs needs racing in order to offer slots, for now. Most racinos have the same love-hate relationship with racing. Unless racing gets more fans showing up and getting the handle growing the time may come when Harrahs and others get their wish. We need to make racing relevant again. Offering new wagering options and lowering the takeout is a significant part of the solution.

No one likes giving up money but if the horsemen want a long future for themselves and their children, it is necessary to race for a little less now and have a place to race in a few years. Having asked the states for assistance to preserve racing, perhaps it is time for racing to ask the states to help the bettors. Giving up a small portion of the slot money to cover part of the takeout is a good start. Harness racing's survival may depend on it.

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