Canterbury Takeout Reduction Yielding Mixed Results

Despite an increase of 4% in on-track handle and 7% in out-of-state handle, Canterbury Park Vice President of Racing Operations Eric Halstrom admitted he's not satisfied with the results of an experiment to slash the takeout at the current meet.

“We had really high hopes for this and right now we just aren't there yet,” he said. “Frankly, we're not up as much as we had hoped.”

Canterbury cut its takeout for the current meet to a blended rate of 16.5%, the lowest rate in the country. The takeout on win, place and show bets was reduced to 15% and the “exotic” bets take was set at 18%. The numbers represent a 20% reduction over 2015 takeout levels.

The main problem with the results after roughly one third of the meet has been concluded is that the takeout reduction has cost Canterbury money. The increase in wagering has not been enough to offset the loss in revenue that is the result of the lower takeout.

Yet, Halstrom isn't anywhere near ready to label the experiment a failure. Not only is it too early in the meet to make any final conclusions, but he says the primary culprit has been bad weather and short fields.

“There are drastic swings that affect how the numbers play out over the course of a year and things even out over time concerning weather and field size, variables that affect handle,” he said. “One of the things we have definitely found is that it doesn't matter what the takeout is if you have bad weather and short fields. People will not bet on those races and early in our meet we had a lot of those kind of races.”

The weather has settled down in Minnesota and Canterbury's field size has increased as a result. Halstrom said the signs have been encouraging over the last few weeks as weather has been less of a factor.

“We have had some really great days that we couldn't have had without this reduction and the notoriety that it gave us,” Halstrom said. “That gives you confidence. Then you'll have a couple of days when you're off the turf and it kills you, and you're in a situation where there's no takeout in America that would help.”

Halstrom also wonders if Canterbury's numbers might be down dramatically at the meet had they not reduced the takeout. He said early indications are that some tracks in the Midwest are off significantly in handle. Another factor is one Canterbury management has no control over. With the vast majority of players playing multiple simulcasting signals every day they bet, once Canterbury puts more money in a winning bettor's pocket through a reduced takeout it has no control over what that player will do next. If a reduced takeout means a player has an extra $10, chances are that $10 won't be bet back at Canterbury but on the next race that comes along in the glut of simulcasts.

“That's definitely a factor,” Halstrom said of having to compete with so many options in the simulcasting market. “One of the reasons I believed this was the right thing to do is that we are putting more money into the hands of our customers. We know it's not all going to come back to Canterbury. lf a customer takes the extra money he made on one of our races because of the lower take and bets it some place else then we have done a service for the industry, but maybe not so much for us. If you could ever get to point where a large group of tracks, or even a handful, have a uniformly low takeout and that becomes an enclosed group of tracks for the player to play, then it would be far easier to judge how well this works.”

Halstrom is eager to see how the numbers play when the track closes Sept. 17. He remains optimistic but says he's the idea is still to “hit one out of the park,” not exactly what they've been getting with a small increase in handle.