Keeneland is lucky. It has more people stumbling off tour buses to tailgate, and attend its live racing than any track in North America. Those folks don’t know what the takeout is; or, for that matter, they probably don’t even know the definition of “takeout.”
Most wagering, however, is done off-track, and those who are regular players of the races at one of the world’s most beautiful tracks do know what takeout is.
That is why feathers were ruffled recently when Keeneland announced it was raising most of its takeout rates starting with its October meet.
The takeout on straight wagers will rise from 16 to 17.5 percent and most exotic wagers will see an increase from 19 to 22 percent.
The Pick 5 handle will decrease from 19 to 15 percent.
State law permits tracks in Kentucky to raise takeout rates to the maximum allowable rates when the daily on-track handle falls below an average of $1.2 million per day.
All tracks in Kentucky now fall below that threshold, Churchill Downs raising its takeout rates in 2014.
Of course there are major differences between Keeneland and the state’s other three Thoroughbred tracks: Churchill, Turfway and Ellis Park.
For one thing, Keeneland is also a sales company, in 2016 listing cumulative gross receipts at its January, September and November auctions of more than $520 million.
Secondly, Keeneland is a not-for-profit entity, having been set up as such by its founders so the track would always exist for the betterment of the industry.
Not-for-profit is not the same – by a long stretch – as non-profit. Keeneland simply doesn’t pay dividends.
Keeneland always billed itself as “racing as it was meant to be,” meaning about horses and about horsemen. A place where you can walk through the barn area, where the paddock and saddling areas allow you to get close to the horses, where the finish line is in front of the grandstand, not the clubhouse.
As reported in a previous TDN story, Keeneland vice president of racing and sales Bob Elliston said, “I think at the end of the day when the handicappers see the quality of racing we put on, (and) have a great experience when they come to the track, and know how we’re spending those monies back to promote the sport at the very highest level, I believe that they’re going to continue to support our racing.”
Keeneland has always been synonymous with top-class racing, its purse structure among the best in the country. Which is why all-sources handle at the track in 2016 was $285 million over 33 days of racing, third most in the track’s storied history.
As far as promoting the industry, that is another area in which Keeneland has consistently been a leader. But let’s face it, that activity is more to attract new owners to purchase horses at auction than to entice them to attend and/or wager on the races.
(Credit where credit is due: Every new owner Keeneland encourages to and gets to purchase a horse helps the entire industry.)
That being said, Keeneland’s decision to raise its takeout rates, simply because it can, comes across as the rich getting richer. But not only that, it is doing so on the backs of the people who support it the most: the bettors.
And at a time when it is seemingly impossible to attract new players to wager on horse racing, it makes even less sense for one of the industry’s true leaders to penalize those who loyally support it.
As for the customer experience that Elliston mentions, I visited the track twice this spring and on both occasions found the food service to be of considerably lower quality since the track bought out its longtime concessionaire, Turf Catering.
In its release, Elliston said, “I hope the wagering public understands that this is going to our purses to keep us competitive, it’s not going into our pockets.”
Keeneland is a top-tier track and has always been competitive with such racing jurisdictions as New York, California and Arkansas.
Are you trying to convince me it won’t continue to be competitive unless it skims a few more percentage points from the accounts of its supporters?
Perhaps Elliston should consider that had the state’s racing executives and lobbyists been better at their jobs, the state would have had, at the very least, slot machines, and at the other end of the spectrum, full-fledged casinos, more than 20 years ago.
Racing’s share of that revenue – for decades — might have allowed the state’s premier track to not have to stoop to holding up its customers.
Plus, this year, Keeneland entered into an agreement with The Red Mile to install “Historic Racing” machines at the harness track’s facility in Lexington. What has become of those revenues? Were they not targeted to help increase purses, too? If so, are those revenues not enough, in their own right, to keep pace with other track purse accounts without an increase in the takeout?
Keeneland’s web site notes that, “From its inception in 1936, Keeneland’s founders, led by respected horsemen Hal Price Headley and Major Louis Beard, intended it to be a special place — one that symbolizes the best in Thoroughbred racing. Today, Keeneland continues to be guided by that original mission, taking a leadership role in the industry to improve safety, promote integrity and preserve racing’s storied history.”
Today Keeneland is not a leader, but merely the latest racetrack to insult its loyal patrons by taking more from their wagers.
As Keeneland notes, Hal Price Headley is a hallowed name to those of us who love the track. He must be turning over in his grave.