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Wednesday, August 1, 2012

Twelve Dollars

Winners Bayonne is off to a slow start, handling roughly $200,000 a day on weekends; approximately 50% of the anticipated handle.  It is too soon to panic as attendance and handle is continuing to go up each day but it is disappointing.  The culprit?  Apparently tolls on the bridge from Staten Island which at $12.00 is a hindrance to those gamblers.  A shuttle bus to bring people over to Bayonne from New York is being worked on and would be a wise move.  Once that is done, I suspect the anticipated targets will be hit.

Twelve dollars sounds like a lot of money doesn't it?  It is keeping people from Staten Island away from Bayonne to bet and quite honestly, would keep me home as well.  We recognize the barriers a $12 toll may have regarding people coming to play the races but some tracks refuse to accept the fact high take out rates are a barrier to getting people to play their races.  One example of this is The Meadows outside of Pittsburgh, PA where they charge an outrageous 35% take out on their trifectas.

 Let's look at a simplified example using the old methodology of calculating takeout as for this illustration, it is sufficient.  What we have is a total trifecta pool of $5,000 which considering the amount of the take out, is not unrealistic.  The 9-8-7 trifecta comes in with only $20 wagered on it. 

35% Take Out
27% Takeout 
Gross Handle
Amount Wagered on 9-8-7
Gross - Winning Wagers
Take Out Amount
Net Pool
Pay Off Per $1

The difference in the pay off in this hypothetical trifeca between 35% and a relatively reasonable 27% (when compared to 35%) is $19.92 per dollar wagered on the winning wagered; almost $20. 

So a person makes a conscious decision the $12 to cross a bridge to go to a track or an off-track wagering facility is too much as regardless of how they may do on a particular day; they need to subtract $12 from their net profit/loss for the day which makes no sense to them.  Well, in our Meadows example, if the person hits the fictional trifecta described above, we are making them pay a $20 toll for playing the race.  A $20 toll which may be the difference between winning or losing on a particular day.  Granted, a bridge toll is a 'hard' expense while the takeout is a 'soft' expense, but regardless, it is an impediment for a person wagering on horses because it makes it harder for them to come out ahead each time they come to the track.  At a certain point, the gambler is going to make a conscious decision, the losses are too much to keep on playing.  They either are going to go away or play a different game.

Yes, there are purses, salaries, and other expenses to be paid, so take out will always be here and quite honestly, it will always be more than a casino game, but pricing the product more realistically would be a wise decision.  After all, that 'soft' expense always gets factored in at the end of day when the gambler looks to see if they were a winner or a loser.  The fewer losing days means the gambler plays longer.  A lower 'soft' expense means fewer players tapped out.  A lower 'soft' expense keeps a customer.

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