The biggest complaint I hear about horse racing is the takeout is high, making it too hard to win. It’s a charge that is right and wrong.
All gambling games have a takeout, though it might carry a different name. Sports betting has a 10 percent vig that only the losing side pays. Table games and slot machines have a hold percentage, usually in single digits.
Horse race takeout is necessarily higher to pay all of the expenses down the business food chain. However, a big advantage in betting on horse racing is that a skilled horseplayer can improve his odds at the expense of those who bet more randomly.
Racetracks have struggled mightily with finding the right takeout rates to not only attract the most gambling dollars but to also pay their bills. To stimulate more betting, tracks are trying different methods.
For example, California takeout was increased significantly to generate more purse money for horsemen. The idea was to increase field size, thereby making the gambling product more attractive to core bettors. The jury is very much out on this one.
Other tracks reduce takeout hoping to increase handle, then make the necessary changes. Believe me, 99.9 percent of horseplayers like this strategy better.
The latest tracks to reduce takeout are Tampa Bay Downs and Turfway Park. Tampa Bay is ranked the third-best track to bet on by Horseplayers Association of North America (HANA), and Turfway is eighth. Turfway’s ranking will improve with the lowering of its pick 4 takeout to 14 percent from 22 percent.
Common sense dictates that if fewer people are buying your product, as in horse racing, you are better off lowering the price. That apparently is a hard concept to sell to many racing executives.
There is also a movement afoot to introduce exchange wagering in the United States to increase handle. That is peer-to-peer wagering and allows for betting on horses to lose. One problem I have with exchange wagering is this is akin to legal Wall Street insider trading.
Fans already feel horse racing is an insider game. Some of the commentary on TVG and HRTV doesn’t dispel that notion, either. In a sport in need of greater transparency, marketing a tool useful to insiders might not be a good long-term strategy for public perception.
I would rather see a lower takeout on straight betting — win, place and show — than introducing exchange wagering. More straight betting would increase churn and handle, which is a conservative, safer approach.
Richard Eng’s horse racing column is published Friday in the Las Vegas Review-Journal. He can be reached at email@example.com. Follow him on Twitter: @richeng4propick.