Power Cap

Power cap- existential handicapping

08 December 2009

Philly Park Purse Surge




$5 for a large pizza, $1.20 for a pack of smokes and less than $500 a month for a nice one bedroom. The numbers are my fondest memories of my time in Philadelphia. Cheap living in an honest working class city. At that time the racing world had an even larger chasm between New York and Philly. Philly Park was barely holding on at the bottom of the racing class ladder while NYRA was the king of the new world. Ten years later and it looks like the roles have reversed. In a huge coup that nobody has even noticed New York is now the backwater with Philly presenting the better purses and potentially the better product.

Usually I have no interest in Philly park but today (Tuesday)they have a overnight stakes that has attracted nice sprinters such as Saratoga Russell, Cherokee Country and Joey P. Top New York jocks such as Ramon Dominguez, Lezcano and Channing Hill canceled a day of leisure and headed down I-95 to ride in the $75K Valley Forge Stakes. Usually I spend Tuesday with a nice book but I followed the lead of masterclass jockey Dominguez to Philly to cap the race and have a look. One glance at the rest of the card and something hit me- Philly Purses have surpassed NYRA purses. This is quite the deal for the horsemen. You have to have rocks in your heads - or a slow NY bred- to run in New York.


So not only are Philly based owners paying less for a large pie at their local pizzeria but they are also paying less in trainer day rates while cashing in larger purses. This is a great deal for the horsemen of Bensalem Pennsylvania. If I could have made more money driving the limo in Philly than New York I never would have left Philly. In New York we pay more for less with an onerous tax burden. However the lure of New York is that we have the old world at our finger tips while making more money than anywhere else in the country. This may have been true in the past but New York along with New York racing is living on past glory. The big lure of New York is the class racing but those days are also over. With the dilapidated facility in Ozone Park, inferior purses and a corrupt regime that has presided over a 9 year slots farce the time for New York to be a backwater is upon us. People just have not realized it yet.

Purse Comparison


If you are running a PA. Bred the deal is even better:

Now, somebody who is really invested in the business can actually make more money in a single race than the total purse. Imagine a race with a $42,000 purse. The winning owner gets 60 percent, or $25,200. If the horse is a Pennsylvania-bred, the owner gets a 40 percent bonus off the winnings. Now, he has $35,280. If he's the breeder, he gets another 20 percent of that. Now, he has $42,333 on a $42,000 purse. If the owner happens to stand the stallion in Pennsylvania, he gets another 10 percent.


What is fueling this purse surge? When I lived in Philly ten years ago the purses where less than half of NYRA purses. 18K claimers ran for $6K and maiden specials for 18K. The slots in Philly have been a raging success. Philly Park's casino opened in December 2006. In the first 3 weeks, players bet $175 million on the slots. In the fiscal year ending in June 2007, they bet $1.666 billion. In the next fiscal year, they bet $5.8 billion. In the fiscal year just ended, they bet $10.9 billion. Revenue (winnings after the players are paid) was $144 million, $469 million and $825 million, respectively.

Are all of these slot players making their way to the Philly racetrack inflating handle? Surely $10.9 billion in slots handle would have a spillover effect into the racing handle? A crowded casino combined with better purses and better claiming races would surely inflate Philly Park handle to beyond what NYRA achieves. Surprisingly the wagering on Philly Park races is only a fraction of what Aqueduct handles even as the Aqueduct grandstand lies in decay and the racing is inferior. Bettors are loyal to NYRA regardless of the quality of the races. A cursory study of 3 days last week reveals that Aqueduct handled $21 million the three days they ran against Philly Park. Those same three days Philly Park handled a total of $3.6 million- a staggering chasm especially when you consider the racing at Philly might just be superior.

What we have here is a pure slot purse advantage for Philly Park. Unless bettors start patronizing Philly Park this is terrible for racing. All of the "meat and potatoes" claimers are running at Philly Park while NYRA is left with an unappetizing menu of New York breds and beaten claimers. NYRA is presenting an inferior product that will eventually disenfranchise the bettors if they haven't been chased away yet.

Few "diners" migrated to Philly Park. While the best "chefs" have been lured away to cook at Philly Park the food has not been a lure for the public. The Philly "chefs" are basically cooking for their own profit while their food is going strait to the trash without being sampled by the wagering public. Meanwhile up at Aqueduct the "chefs" are being pulled right out of the dregs of the culinary world. While the restaurant at Aqueduct remains full the food is no longer world class. It is only a matter of time before the wagering public realizes how far New York racing has fallen and they turn away from racing all together. Can Philadelphia Park progress from being anything other than a horsemen welfare venue? The key may be in luring the Preakness north and snagging the attention of the public. If a $75K overnight stakes can lure Power Cap a million dollar classic can lure the masses.

8 comments:

The_Knight_Sky said...

Never mind that.
So you drive a limo? ;-)

But seriously... an interesting piece and at least you laid in on the line about that "dilapidated" facility. On Monday however there were $5,000 non-winners in 6 months on the Philly card. And $7,500n1y also that's definitely a cut below what The Big A offers at this time. So I'm not quite sold that the quality is all that superior in Philly.

My main gripe here is that every racing facility which is blessed with slots revenue should be lowering their takeouts to 10 to 12% in all the pools.

The fact that Philadelphia Park continues to rob the public at some of the highest rates in the nation does not bode well for its future once the novelty is gone and the slots revenue dries up.
What then ?

Horse Racing had a wonderful chance to regain the wagering clientele. But it's clearly being squandered away on a daily basis.

Power Cap said...

Good point about the takeout. A track like Philly Park that has generous slot purses, an improved class of races should be growing market share int he parimutuel market. Yet they remain far far behind NYRA in handle.

What has Philly done to increase market share? The truth is that they have done absolutely nothing to lure horseplayers into following their track. Philly has a window of opportunity here to surge past NYRA. They have the horses, the purses and the momentum. The perfect compliment to this threesome would be the horseplayers. Lowering takeout could be the catalyst that starts the migration of horseplayers away from beleaguered NYRA to slot rich Pennsylvania.

It is almost a tragedy that Philly is not seizing the moment with a low takeout, their handle remains a pity and their takeout is among the highest in the land (30% on trifectas). If Philly lowered takeout I would move my tack in a flash away from NYRA.

Robert Pandolfo said...

The handle on trifectas at Philadelphia and at all PA. tracks is absurd, 30 to 35%. All of the tracks, including the 3 harness tracks, are doing very well with slots but still haven't lowered takeout rates. You have to wonder what's going on, these tracks should be putting pressure on the Politicians to lower takeout.

Linda P. said...

PowerCap,

Has the new Parx casino opened yet?

Thanks,

scorptraduh

Steve Zorn said...

And to make things worse, the next condition book at Aqueduct qill drop purses by another 7%My stable has three NY-breds, so we might as well stay here with them a bit longer, but my nice VA-bred 2yo is headed to Gulfstream, and Philly looks inviting for next year.

And 30% takeout is absurd. A few years of that and they'll throw away everything they've gained from the slots.

Power Cap said...

According to their website Parx Casino should have a grand opening today 09DEC09. If I was into contests I would have one in conjunction with the opening of the new casino at Philly Park. The winner is the first person to find a reference to horse racing on the Philly Parx website.

Steve Munday said...

PowerCap,
This is a damn good analysis of the problem slots unwittingly created--industry wide. Failing tracks used slots to keep from going out of business & states used the $$ to get easy non-tax rev. Flush w/ slots $$, minor league tracks could not only survive, but compete w/ more established circuits. With the pool of bettors shrinking, once thriving tracks now need slots to compete w/the Philly Parks of the world.

This slot machine arms race results in more tracks and horse races than horseplayers can support (through wagering). This is happened to the MD Jockey Club after WV and DE got slots and is happening in KY as well.

Couldn't agree more w/ The Knight Sky that slots rev would be better used toward lowering takeout - the single greatest thing the industry could do to increase handle & create new players.

But takeout is essentially "fixed" industry wide. If Philly Park dramatically dropped their takeout to say 10%, other tracks would immediately cut Philly Park's simulcast signal. Tracknet wouldn't allow Philly Park to be bet via the internet either.

The last thing they want is competition over takeout.

Power Cap said...

It is too bad takeout has not been lowered at one or more of these slots venues. Steve Munday highlights the hidden industry reasons behind the lack of action on takeout- it really is a shame that this opportunity will pass with no action on takeout.

Steve Zorn is correct about the purse drop after new years at Aqueduct. Take a look at the new condition book when you get a chance. I haven't seen purses this low at NYRA since the 1990's. For example a NY bred MSW is down to 39K. The 25K strait claimers that run for a $36K purse at PHA will run for $20K at AQU. The purse drops are across the board. Most every class is down a few thousand in purse money at Aqueduct in the new condition book.

What effect did the OTB crafted takeout increase at NYRA have on wagering? What about the OTB bankruptcy? Most of the local money wagered on Aqueduct never even gets to NYRA and is held/pilfered by the state run-bankrupt OTB. Without slots people actually have to watch/wager on Aqueduct to fund the purses.