built for comfort

I’ve followed with interest the Canterbury Park takeout experiment.  Anytime a track lowers or raises their takeout, it seems the industry uses the single bottom line results as a bellwether to see which way the takeout wind is blowing.  From the beginning it seemed that the verdict was going to be “mixed”.  Even Caterbury officials themselves expressed disappointment with the size of the handle increases mid-way through the meet.  The meet ended this past weekend with a modest 5% increase in total handle and the local paper up in Minnesota basically painted the experiment as a “miss”.

I want to dig a little deeper below the surface for some context.  First, Canterbury Park historically is one of the worst performing handle tracks on a per race basis.  Out of tracks that conducted 500 or more Thoroughbred races in 2015, only Belterra and Prairie Meadows handled less per race.  Tracks like Presque Isle, Thistledown and Mahoning Valley handle more on a per race basis and conduct around the same number of races as Canterbury.  It is very hard to climb out of this basement.

I don’t point this out to disparage.  I point this out because it’s easy to forget what exactly it is we’re talking about here.  What Canterbury handled in 545 Thoroughbred races this summer is roughly the equivalent of what NYRA can handle on 20 races in one weekend.  Tracks at Canterbury’s level are not going to increase handle 40% (the goal of this experiement according to the Star Tribune article) in one meet by simply decreasing their takeout.  A track at Canterbury’s level is more likely to close before that happens, ask Suffolk Downs (which handled more on a per race basis when they were running full meets).

Second, let’s dig in to the particulars of this meet versus 2015.  I’m only going to look at Thoroughbred handle.  Canterbury is a mixed meet with about 120 Quarter Horse races that handle less than half per race of what the Thoroughbreds do.  I’m just not interested in digging into handle on races the public has pretty much ignored.  Yes, the weather was awful as 43 races were switched to the main after being scheduled for turf.  In 2015, that number was 17.  Field size was of course way down.  There were exactly 200 less betting interests over 4 less races versus 2015.  This yielded an increase of 9.8% (+$851) per betting interest in 2016.  They would have to run an additional 27 races or 3 full race days at their current field size to close the betting interest gap.  So they had some bad luck.

But bad luck manifests itself in doubly bad ways.  Consider the following.  Canterbury conducted 280 races of 7 betting interests or fewer.  In 2015 that number was 244.  Canterbury conducted 265 races of 8 betting interests or more.  In 2015, that number was 305.  That has a significant effect on handle as seen in the chart below.

Third, let’s take a look at some of their regional competitors.  Prairie Meadows was down 16% and 15.1% per race.  Remington is currently down 35.7% and 19.5% per race.  Arlington is down 10.2% and 1.3% per race through their meet.  Hawthorne is down 38.3% but up 4.5% per race this year before their fall meet gets underway.  For small tracks, the tracks the size of Canterbury, the above numbers are the new normal.  The big tracks are carrying the industry water when it comes to handle, they are also sucking up all the race dates too.

With this context in mind, I think it’s fair to say Canterbury had a pretty good meet handle wise considering the circumstances.  Yes, they were up 10% in 2015 versus 2014, so these 2016 handle numbers can seem like a disappointment but I submit that if they stick with it, there’s room for this to grow.  Places like Tampa Bay and Kentucky Downs didn’t increase 40% overnight.  They stuck with it for awhile and are now some of the biggest signals on a per race basis out there.

So how can Canterbury get to that level?  Here’s four suggestions.

-Either ditch the Quarter Horses entirely or schedule them accordingly.  Thursday is Canterbury’s biggest handle day.  Don’t card Quarter Horses on that day.

-Adding to the betting menu doesn’t do much when existing pools are insufficient.  The new Pick 5 handled $440K total for the meet.  That’s okay but it hurt the Pick 4 which was down 2% versus 2015.  All the crazy super high 5 bets didn’t handle $100K.  Don’t add without first getting to reasonable pool goals.  When consistently hitting a $100k/race pool goal, then think about adding to the menu.  

-Don’t give up races.  It would be easy to say that Canterbury should card the number of races that the horse population can support.  This is one of the traps the smaller tracks are falling into and this phenomenon is leaking into B tracks like Arlington and Monmouth.  They gave up a ton of races and now they have nowhere to go but down.  Make it a goal to increase the number of races.  This is the only way the horses will show up.

-The successes at smaller tracks like Indiana Downs and Emerald Downs are due to scheduling.  Emerald is often the only signal in town at certain times of the day.  Indiana has owned Tuesday.  A small track like Canterbury can probably move their Sunday to a Monday or Tuesday and reap significant handle gains.  Is that enough to offset the losses from Sunday attendance?  I don’t know but I do know the small tracks that are making gains are not running both Saturday and Sunday during the day against the major signals.