Oaklawn Handle

[Silver Charm]

They are KILLING it and it has to be killing a lot of other Tracks they are closed. New York is a very difficult situation but some of these other Governors are brain dead.

Handle on the 11-race card from all sources Saturday was a record $19 million, eclipsing Oaklawn\'s all-time mark of $16.9 million reached on the Oaklawn Stakes Day program April 11. Both cards were conducted spectator-free ontrack due to the coronavirus pandemic. 

[Dana666]

Late pick 5 pool was 1.3 million! What\'s Gulfstream\'s Pick 6 going to be tomorrow? 5 or 10 million? More? I\'m surprised the sports talk radio stations don\'t mention racing. All they ever say is there are no live sporting events except pro wrestling! I want to yell at the radio.

[BitPlayer]

I am curious how Oaklawn\'s bottom line looks.  Take away the on-track handle (where the track does not have to share the takeout with an ADW), and I wonder whether the net revenue from horse racing is actually better.

Of course, the big loss is the casino money.  In general, I think the racino companies are not really interested in running races if they cannot open the casino.  In Louisiana, they have even resisted having horses stabled on the backside.

In California, It is the local health authorities (with PETA input) that have shut down racing, not the governor.  Los Alamitos is still running.

Maryland and Kentucky are the states that have surprised me. Stronach seemed to want to continue running at Laurel, and they had enough suction to get the Pimlico renovation funded, but they got shut down.  In Kentucky, I cannot tell  whether Churchill and Keeneland are really anxious to run without fans.

Once Oaklawn shuts down, where will those horses go?

[Dana666]

good question!

[Silver Charm]

Help me out here but if you have a $20M handle and an average 82.5% take out that\'s $3.5M! If purses even on a Big Day like yesterday where there were two Big Stakes total $1.5M. That\'s a net of $2.0M. Am I correct

Attendance is zero you said. 20,000 fans at $5 per is lost. Boxes are bought for a season. So you\'re out a $100,000 but your payroll was Zero. No mutual clerks, security, popcorn guy etc etc. There is cost for the PLant bit everyone is eating that and they aren\'t open. Rumor is CD is working on Mid May. Governor is a YAP. Racing is important there. Let\'s see

[BB]

Silver Charm Wrote:
-------------------------------------------------------
> Help me out here but if you have a $20M handle and
> an average 82.5% take out that\'s $3.5M! If purses
> even on a Big Day like yesterday where there were
> two Big Stakes total $1.5M. That\'s a net of $2.0M.
> Am I correct
>

In a word, no. Even if you figure an average rake of 20%, most of that is from out-of-state ADWs, so they get their points (no idea what the signal fees are or if they\'ve been able to boost them due to being one of the few games in town). Then the Caesar of Arkansas gets his beak moistened by another few points. So, after carve-outs, you\'re down to maybe $2 to $2.4MM, and a net of $500-$700K. Which is why they will close up shop after the Arky Derby, and probably stay closed until the casinos reopen. Just my back-of-the-envelope. Happy to hear other takes.

[albatross]

By saying 82.5% you mean they keep 17.5% IF the handle was on track where I would guess they handled maybe 200-300k tops and maybe more in state or some Track owned OTB. The way I thought it works is the rest is the sale of the product, signal to the market at maybe 5-8%. I would like to know what they’re getting for the signal now vs. any other time prior. Huge Demand with little supply, but I can’t imagine it’s over 10%, that makes up 95% of that 20mm. If anyone knows or if this is wrong please advise.

[albatross]

I agree with you and didn’t see your post prior to mine.

[BB]

No problem, \'Tross. I think your take is better, as it\'s closer to how the pie gets cut up.

[Silver Charm]

Guys both of you seem like you have a good handle and this. So I\'m asking if not all take out is the same are the payoffs since it sounds like there is only ~7% take out for off tracks bets. There is no other cut since there isnt anyone on track wagering. Where am I going wrong?

[albatross]

The payouts are always the same but the bet taker keeps the takeout and pays OP for the product

[BB]

Adding on to Albatross\'s reply ...

Silver, as Alby notes, the takeout is the takeout (except for Canada, which has a monopoly system and takes a surcharge from Canadian bettors holding winning tickets at US tracks, similar to how NYCOTB used to work).

The \"host track\" (in this case, Oaklawn) charges a \"signal fee\" for all the action that comes in from Twin Spires, NYRA, etc (the non-Arky entities that probably account for 95% of Oaklawn\'s handle). Those entities take the bets, pay Oaklawn their signal fee (a % of handle), pay their various taxes, and take their profit.

Oaklawn gets their \"signal fee\" % (whatever that is ... say it\'s 10% on all bets) on that 95% of handle, or, $1.9 million (10% x $20MM x 95%), plus say they get a blended 20% of the million in Arky handle. So they get $2.1 million for covering their purses and expenses.

I\'m not strong on this stuff. Happy to be corrected by anyone who knows better. Hard to know what the signal fees are, as these things are not public knowledge and are closely held. But as a general rule, the more desirable the product, the higher the signal fee.

[albatross]

Thank You better wording my thoughts. When NJ started getting full track signals roughly early 90s coming in they were all different, depending on demand. I remember Monmouth sending out as low as 3 or 4% but again a long time ago, but the Haskell Day at least double. Right now Oaklawn and GP must be getting whatever limit up is. The bet takers don’t even have to open the doors or pay tellers, all online.

[jma11473]

One thing to keep in mind as far as Oaklawn, too, is that these contracts are negotiated in advance. Oaklawn didn\'t know 90% of other tracks would be closed, so they couldn\'t negotiate with the ADWs with the stance they\'d be the only game in town.


It\'s the same reason why everyone raving about how Fonner Park must be rolling in money now that they\'re handling $3 million a Tuesday...well, with a 3% fee they keep about $90,000 of that and the places taking the bets keep the rest. Maaaaaybe it\'s 4% and they\'re keeping $120K. Sure, it\'s better than nothing but not the bonanza that it looks like on paper.

[albatross]

Very good point.