JC / Railbird

Handle

Betting on Pharoah

American Pharoah parades before the 2015 Haskell

Amanda Duckworth on the American Pharoah effect:

[Monmouth Park] also posted an all-sources handle of $20 million, which is a non-Breeders’ Cup record. The Haskell alone brought in a record $6.54 million, shattering the mark of $4.4 million bet on the 2010 edition. To anyone who questioned why the track bumped the purse of the race from $1 million to $1.75 million, that is your answer. American Pharoah brings in people, betting dollars and a great deal of mainstream exposure. That’s a pretty great trifecta for the sport.

NYRA wants to see that kind of action on the Travers Stakes, and is trying to lure the colt’s connections with a promise to raise the Travers purse to $1.6 million, up from $1.25 million, if American Pharoah follows his Haskell win with a Saratoga appearance. Owner Ahmed Zayat wants to go. “My preference would be to run [next] at Saratoga,” Zayat told Bob Ehalt. “If it’s up to me, it would be the Travers,” he said to Ron Mitchell. “I have made my desires known to my trainer. He knows what I want.” Trainer Bob Baffert says that’s the case, and that Zayat is deferring a decision on the Triple Crown winner’s next race to him. “[T]his is true and accurate statement,” Zayat confirmed with a tweet.

Baffert’s not committing for now: “It’s way too early to say anything.”

This is an interesting little dilemma for owner, trainer, and Coolmore, who will stand the big horse at stud. Sid Fernando’s been dissecting the conflict and incentives via his Twitter stream, discussing the almost-certain “kicker” for winning the Travers (essentially a performance bonus), built into the breeding rights deal Zayat and Coolmore negotiated.

In the scramble for American Pharoah’s next start, the Travers seems to have moved ahead of the Pennsylvania Derby, which is the race I thought he’d point to next, given the likely purse boost, appearance fees for owner and trainer, and Baffert’s lack of interest in running the colt against older horses before the Breeders’ Cup Classic. Parx racing director Sam Elliott has been working hard to sell his race, traveling to Churchill Downs, Santa Anita, and Monmouth Park in pursuit, but Zayat has said “No Penn Derby” and ruled out the Pacific Classic as well — “zero shot!! Timing doesn’t work.” Elliott was at the Haskell on Sunday — I hope he didn’t get the Pennsylvania Derby news on Twitter too.

Mike Pegram, a long-time owner with Baffert, was blunt about the where-next question. “They’ll go where the money is,” he told Ed Zieralski. The Travers’ historic significance plus the added money makes a sweet exacta.

Odds and ends: American Pharoah was given a Beyer speed figure of 109 for the Haskell … Upstart will point to the Travers after running third to the Triple Crown winner on Sunday in his first start since finishing last in the Kentucky Derby. “I was miserably impressed,” trainer Rick Violette said of the Haskell winner … Monmouth reported attendance of 60,983 for Sunday’s race, a figure Chris Rossi calls into question by comparing per-attendee handle for the Haskell since 2000 (chart here, if you follow him on Twitter). This year’s $48.58 is the lowest average in that period, beating the previous low of $65.35 set in 2009. In 2014, the average was $70.29 … you can definitely rule out a possibility that probably hadn’t even occurred to you: The Eclipse Stakes winner Golden Horn will not meet American Pharoah in the Breeders’ Cup. “It’s a complete no-no, on dirt certainly,” said owner Anthony Oppenheimer.

Saratoga babies: The spreadsheet of 2015 juvenile race starters and winners has been updated through second week results (XLS).

Competing

This post has been corrected. Please see the note at the end.

Plainridge Park’s new slots and video gaming parlor took in $6,154,626.38 during its first week of operation, or more than $703 for each of the 1,250 machines per day. Even considering opening week excitement and whatever pent-up local demand there might have been, that’s an impressive haul.

More than $6 million — that’s an incredible number … Plainridge is showing it can certainly compete with the existing casinos,” New England casino market expert Clyde Barrow tells the Boston Globe.

The nine percent of those revenues designated for the Race Horse Development Fund totaled $553,916.37; that’s $138,479 for harness racing, which takes place at Plainridge. I was going to insert a sentence or two here noting how much Plainridge handled on live racing during the same period, and maybe try to draw a conclusion from the slots-RHDF-handle numbers, but tracking down harness handle figures turns out to make Thoroughbred racing look like a transparent, open industry. (Harness friends, any tips?)

So, let’s use 2014 numbers, taken from the racing office’s annual report (PDF): Last year, the track handled a total of $1,108,715 on-track on 82 race days, or $13,521 per card, and handled another $6,576,620 on its simulcast feed, for an average of $93,724 per card. Pull the Pocket does a bit of estimation/comparison:

Let’s say Plainridge does $100,000 in handle per card. At a low signal fee, let’s set revenue at 5% of that handle, which would mean the track and purses would drive $5,000 per card in revenue.

If they race three cards a week, that’s $15,000 in revenue.

$15,000 from racing, $567,000 from slots.

His conclusion: There’s no point to doing the work of growing handle when there’s so little payoff compared to the casino money. Plainridge is booked for 105 cards this year. Assuming they average about the same per card as last year, they’ll handle almost $10 million, while paying out approximately $4 million in purses (estimate based on averaged recent daily purse levels; in 2014, Plainridge paid $2.6 million in purses). There’s not much incentive to push casino patrons into betting on the local racing product either: The track’s portion of daily live handle runs roughly $1400 per card on-track, or about the gross on two slot machines.

1:35 PM Correction: This post was originally published using only the on-track handle total for 2014, which led to an incorrect conclusion re: daily revenue. This was because I did not include simulcasting handle, listed as “Export Simulcast” in the annual report. The post has been revised to include that figure, and the new and/or altered text is indicated in bold above.

Pricing

Tom LaMarra on simulcasting fees and Churchill’s recent takeout hike:

I’m no math whiz, so correct me if I’m wrong. In the case of Churchill, if its host fee remains the same, a rebate shop and its customers get to keep the extra 3 percentage points when the exacta takeout goes from 19% to 22%.

If you operate a rebate shop or are a large importer of simulcast signals, higher takeout is money. That may explain why racetracks, rebate shops, and [ADWs] don’t complain about 30% trifecta rakes: If they pay the sender 3% for the signal, there’s 27 cents per dollar to play with before taxes.

Matt Hegarty on how those cents might get shared:

If simulcast rates do not go up at the same rate as the takeouts, then some players may not feel the full impact of the hikes. Many account-wagering operations, including Churchill’s mammoth twinspires.com and an offshore site the company bought several years ago, offer rebates to players, and some sites may elect to forgo the additional revenue to increase the rebates to their players on the Churchill signal. Many rebated players, including those who use automated systems employing algorithms to determine their wagers, are highly sensitive to takeout rates.

Hong Kong Handle

In a column about a software glitch, an extraordinary figure:

We can’t wait for commingling to occur and not just because it will give Hong Kong’s finest taxi drivers the chance to dictate who starts favourite in the Prix de l’Arc de Triomphe and Golden Slipper. The weight of Hong Kong money will leave punters in betting shops around the world scratching their heads and redefine the term market mover. Just for perspective, the accidental HK$30 million was a lot in any language (US$3.8 million) and enough to buy a 30-second commercial during the Super Bowl. But it was also less than 2.5 per cent of the total turnover at Sha Tin yesterday, which reached a solid HK$1.3 billion …

Or about $171 million in American dollars.

For a little perspective: Total handle on the 2012 Kentucky Derby was $133 million, total two-day handle on the 2012 Breeders’ Cup $144 million.

7/11/13 Addendum: Hong Kong handle rises 9%, hits a record high of $93.8 billion ($12.1 billion) in its most recent season, outhandling the US.

Hollywood Beckons

Santa Anita meet’s closed on Sunday and its numbers don’t tell a happy story*. David Milch’s racetrack drama probably won’t either, but the “Luck” preview released by HBO on Monday generates a good kind of excitement:

As a setting for storytelling, you couldn’t ask for anything more,” said Milch.

The horses used in filming “Luck” were some of the first to test the restored dirt track at Santa Anita last December, the same surface on which 19 horses were fatally injured during the meet. With an additional fatality on the training track and six on the turf course, the total number of fatalities came to 26 (as estimated here). Santa Anita is funding a safety study: “We hope that data will be important to us and something that we can apply.” That is to be hoped! It was a real pleasure to watch Santa Anita for three years and rarely worry about seeing a horse go down. After this meet, I can’t say that — and I’m not alone.

How’s this for ugly? Fatality numbers were almost all that was up at Santa Anita. While attendance held steady, handle declined. The track announced a 9% decrease in average daily handle, but the raw CHRIMS data, available through CalRacing, showed a 20.7% decline in gross handle over the previous year, from $589 million (PDF) to $467 million (PDF). Adjusting for eight fewer days, and a decline of 9.7% in the number of races carded, the Blood-Horse found average daily handle was down 11.6%. Pull the Pocket has an interesting theory on why Blood-Horse, which originally reported the 9% decline straight, revisited the handle numbers so thoroughly and quickly.

As long as I’m linking bad news, here’s more: The national HBPA officially opposes the proposed RCI ban on raceday medications. Apparently, a five-year phase-out isn’t long enough. “Blah. Blah. Blah,” says Ray Paulick. Exactly.

*Not a happy story, unless you’re a horseman or owner, in which case, hooray! Total purses were up 5.1% for the Santa Anita meet.

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