Yet another track that is dead to me
 

Add Churchill to the list, raising takeout to max allowed in the state.

They dont care

I'm sure they don't. That is readily apparent.

I think they care, about what publicly traded companies care most about, which is maximizing profits.

Obviously not what we care about, or whats best for the sport. If they could charge 50% without losing money they would.

Why should tracks really care about long term players? I think thats archaic thinking and they know it.

This isnt about horseplayers or purses. It is about playing their hand to try to advance slots in KY. They didnt like the legislators recent ADW tax decision. They have seen a decade pass with no movement on casinos. Keeneland is putting in instant racing which CDI wont do. So they will simply try to make the racing scene as miserable as possible and return to Frankfort for a "fix".

Remember CDI is doing quite well despite the racetrack issues.

If Churchill was the only track in the country to bet on, I would agree with you. There are plenty of other tracks that deserve our money with lower takeout. What makes CD product so great that I HAVE to bet on them. PASS.

Not in favor of raising takeout on my highest handle track by any means, but they did have the lowest blended takeout in the country. 17.5% and 22% still puts them in the top quartile.

HAVE YOU SEEN the way they have also run CRC. Is this a good sign? Over the last few yrs they have closed the 3rd floor, then the 4th floor , then the 5th floor where the turf club was, and then half the 2nd floor. Pretty soon they will just need a broom closet to hold the handful of fans they have not burnt off.

CDI and Louisiana horsemen butted heads yesterday in a Louisiana legislative committee meeting. When questioned as to why FG's infield screen remains unfixed, CDI's representatives essentially said why bother when nobody goes to the track.

http://www.nola.com/horseracing/inde...e_meeting.html

Tooz isn't winning any Academy awards for that seen:zz:

I think you're close to the mark on this. They know it will hurt the racing, and don't care. If it demonstrably hurts the racing and forces the issue on casinos, so much the better for them. And someday they will wholly get out of racing once their slots are on every CDI property. Stranger things have happened in the business world.

The "jumbotron" is an eyesore and has ruined the overall scenery of that once great track.

The CEO is such a tightwad that he refuses to get his teeth whitened. I guess he made a decision that he will not take care of his teeth until he makes over 20 million a year like the other robber bar...err CEOs.

Yes, it's a shame. The top floor outdoor balcony at Calder was always my favorite place to watch a race live. Great view!

You now have to navigate through a maze to try and find a teller or even a self-service machine.

I understand that. It is just frustrating to see the "raise handle, increase revenue" argument. It never works.

Yep that outdoor 4th floor was a great spot and also gone

Steve,

You have been a voice of reason and passion amongst those in the racing industry for years. Eventually however, the time comes when a solid stance needs to be taken to send a message into the sport's leaders and their board rooms.

The Churchill Downs take-out rate increase boils down to a question of what is more important, [a] or [b] :

[a] The visibility and importance of the Kentucky Derby to the health of the game.

[b] Keeping the remaining players in the game (outside of racino/casino subsidies) engaged by providing the best possible rates on take-outs.

At this point, there are no longer any sacred cows in the sport that cannot be sacrificed for the long-term survival. If the Kentucky Derby were to continue without any audience ([a] over [b]), the event would not matter. Conversely, if the bettors continued to support events with lower takeouts ([b] over [a]), other major racing events can and will emerge.

Following this second path, perhaps the Triple Crown, a salute to an era gone-by, will be seen as what it is : a collection of three random races at three random racing associations. To underscore the point, why should California not include a triple crown race? Or Florida? Or Arkansas? If the Breeder's Cup can be called upon for a rotation, why not the Triple Crown itself.

My point is simple. With these increased rates, I will pass the Derby - first time in decades. I will pass on all CDI events - period. There comes a point when I need to think about my pocketbook first and send the message with my $100.00-worth of Derby wagers.

Now, to your role : Please push the envelope on this issue with your radio show and your connections. It is time that these continued rake issues gain more visibilility - and challenges - from the market.

Sincerely, Scott

No, I agree. Might work for this quarter, when Derby money is accounted for, but the long term result is their top line revenues will not change for the positive. I agree with Chuck... it's political maneuvering to say "hey, look how bad we're doing! Our handle is down at the levels of Turfway!" to get the slots, which everyone in this state agrees we need except the ultra conservative bible beaters which hold back any sentiment of progress in this place.

Scott,

Appreciate the passionate response to the situation but as Chuck laid out, this isn't the usual takeout case scenario. There's a much bigger backdrop to this regarding Churchill's long term interests in Louisville specifically and their unhappiness with the gaming atmosphere. They are a corporate entity that has made many successful business decisions that has resulted in a substantially enhanced value for their shareholders and that's their appropriate mission.

The state of Kentucky has failed repeatedly to deliver on their promise of an enhanced gaming opportunity for Churchill, Ellis, KY Downs, etc., and this is Churchill's message to Frankfort. It isn't dissimilar to how they demonstrated to the state and city they could take or leave Breeders' Cups when officials fully expected them to bid and host in 2010/11.

Frankly, they should be frustrated. Steve Beshear got himself elected on the platform of expanded gaming in 2007 and then could not harness the political power needed to beat out of state casino interest muppet David Williams. Meanwhile, even Ohio, which seemed utterly opposed to any gaming expansion was able to leapfrog Kentucky.

This increase sadly puts Churchill on a par with industry averages when they were below which is too bad. As with any 'price increase', as a consumer we have options to shop elsewhere. Beef prices have hit all time highs. Are we going to stop eating it altogether? Eat it less? The choice is ours/yours.

As we saw today with Santa Anita bringing back the rolling doubles, we can get messages across and get the desired response. Not only are the rolling doubles back, but they are retaining the lower 18% take. Churchill believes they need to do this to achieve longer term goals. They are fully aware of how it was sure to be received. Remember that there's been as many additions of lower take bets like the P5's of late as there have been assorted increases like this one.

The problem with Churchill's angle here is Steve Williams et al don't give a **** about takeout or what it means, in fact if you talk about takeout he probably would ask for Chinese. "Out of state casino muppet" is exactly what he is. He lives in a town of less than 700 people located more than 2 hours from the nearest proposed casino site. His constituents struggle for food and lodging, perhaps he should work on luring some jobs to the area? A damn hypocrite, just like Sheldon Adelson and his phony Restore the Wire Act bill and all the rest of the "conservative" party these days, preaching small government this and that and freedoms of the people. Freedoms my ass. If I want to pull a slot machine or play poker tonight I should be able to without having to drive 70 miles up I-75 to Cincinnati.

Frankfort knows what takeout is and how handle works considering the regularity with which they reach into racing's pocket including yesterday's .5% ADW fee. Part of a larger strategy to enhance the case for slots/table games.

Sounds like a great strategy to me. Let's screw our customers so we can get slots, then we don't need our customers. How can anybody think that is ok if you like racing?

They've established that their interest in racing is largely limited to their biggest event(s). They want to maximize the Downs as an entertainment venue.

Who says that anyone is supportive of how they operate?

When you're put out by the corporate sensibility running CDI, the horsemen's position when they exercise their options and tracks run by someone that clearly loves the game and spends his own money, I'm not sure what you have left..

When you say you don't blame them, I took at as support. Sorry if that is wrong, but that is how it read to me.

Frankly, I'm sick of hearing about the need for enhanced gaming! We've all heard the arguments for it, and how it helps the sport, and it is all complete bullcrap. All it does is allow the sport to continue without fixing any of the real problems. I, for one, hope they NEVER get slots.

I said I don't blame them for being frustrated with Frankfort and nearly a decade of inactivity. Try approaching this from a practical standpoint where you're in this business in KY watching as Iowa, Indiana, Pennsylvania and now even Ohio syphon off your horse population with their gaming-enhanced purses. What are you supposed to do? If you say, what does Keeneland do, note that Churchill doesn't have a horse sales business to underwrite their racing program. It's not a defense for raising takeout. It's an explanation of the environment in which the decision was made.

I do understand why they want slots. I'm from Maryland, grew up on Maryland racing, so I know what happens when all the neighboring states have slots. It sucks. But I also know slots are nothing but a short term cure and getting them does nothing to help horseplayers, absolutely nothing.

Not only don't they help horseplayers, they generally make things worse.

You have a bigger voice than I do but thats been my argument for a long while.

Very bad this crutch they are using.

Steve,

Thank you for the intelligent discourse and responses in this thread. Obviously, this discussion could descend into an ugly discussion and the community here at Derby Trail has kept the conversation on point.

Earlier in this thread in our first exchange, you mentioned that CDI has an obligation to its shareholders. You are absolutely correct and have succinctly stated CDI's number one problem as a corporate entity. Horse racing and gaming is their vehicle to render shareholder value, their mission. Having doubled their share price in the last three years, you could argue that CDI has been successful.

Our problem is that the sport itself is not their underlying mission. This is what creates the tension between horse enthusiasts and the actual product on offer by CDI. Your messages explain that they are raising takeout in order to potentially force the gaming discussion within the state. In the near-term, this helps neither racing nor the shareholders, but the longer term view is being taken with the shareholder in mind.

One could argue that CDI is holding excessive capacity : excessive real estate holdings and conducting an excessive number of races. These holdings are often gambles on favorable gaming legislation rather than offering a managed horse racing business model.

Is CDI managing their capacity and product effectively? Should they be forced to unlock the embedded value of these holdings either through facility/real estate sales or increasing demand (by decreasing supply). Running the September meeting created further dillution of their overall product and provides a platform to argue about overall supply.

Arguing that CDI is under the gun in Kentucky due to gaming in neighboring states provides an unnecessary free pass to the management team. Clearly, this has not impacted their share price escalation.

As a shareholder that was handed a take-out rate as the solution to business problems on the horizon, I would question why the company would not create a 25-30% across the board rake on all bets if that is indeed the correct business solution.

Ultimately, Keeneland understands its business - horse sales and boutique meetings - and the variables involved in those models. Rather than playing for gaming revenue, the Keeneland company gives the impression of a better managed horse racing entity within the rules that bound Kentucky.

This brings us back to my opening comment where I have decided not to wager on their centerpiece event this year. There are plenty of three year old events during the year, many likely better positioned in the summer months.

As we learned from Wall Street, Lehmans and Bear Stearns were allowed to fail - perhaps horse racing has reached the point where some major players must be allowed to fail as opposed to being propped up from the horse player.

Sincerely, Scott

CDI and NYRA make Frank Stronach look like the Jesus Christ of major track owners/operators.

Aside from a few big days, CD racing is not all that in any event. They have killed CRC and are doing the same to FG.

CDI's interest in slots in KY isnt chiefly to enhance its Churchill downs racing program, it wants them to add to its bottom line period. What makes Churchill Downs (the track) different than virtually every other racetrack that might gets slots is they also have a wildly profitable property as well (Derby/Oaks weekend). While there is little doubt that CDI even remotely "cares" about its racetrack businesses as they have demonstrated, the facts are as Steve outlined, the casino companies and their lobbyists in surrounding states have KY's legislature in their pockets and CDI is obviously willing to maneuver to counter that in anyway possible with racing and its players an afterthought. I'm pretty sure that if Casino's were to be ok'ed in KY that CDI still has a large interest in Ellis's cut as part of the deal with Geary as well.

I read this weekend that because of the addition of the September meet and the avg on track handle dipping below 1.2 million not only can CD raise takeout but also now qualifies to pay a lower pari-mutual tax of 1.5% as opposed of the old rate of 3.5% on bets made in the state. So essentially it seems like they have raised rates while at the same time getting a 2% tax break.

They dont care about racing period. They have invested in racing properties only as a potential leading to racinos/casinos. I expect that once Duchossois passes and there isnt a change from the current chances for a casino in IL that AP will be on the market soon. If Calder isnt profitable from a casino standpoint, they will be on the block as well. If twinspires doesnt remain profitable enough they will dump that too though that is unlikely to happen.

Let's face it horsemen are higher on CDI's list than horse players simply because they are forced to be contractually and via the Wire act. But make no mistake they will throw us under the bus as quickly as they are able to. Like I've said before I dont blame anyone for not betting on their signal. Just don't kid yourself into believing it matters to them.

It's been a nice equity to own and they have a responsibility to do what is fundamentally in the best interest of share holders. While a issue for race fans and gamblers and the the entirety of the sport, it means zero to the share holders. Doomed

Racing has no one to blame for the situation you have outlined, anyone could have seen this coming way before the first slot machine was installed.

Reading all the information it sounds like a sound business decision, if track revenue really is meaningless and this is just a means to an end who cares about track takeout related dynamics. They want slots and if thats the bottom line then cant blame them.

Sucks though to be an actual player who bets real money.

Why should someone do that?

Maybe I am missing something here, but the argument long advanced by Churchill, Keeneland, KEEP and other racing-related groups is that they need slots in Kentucky in order to save/preserve what is one of Kentucky's signature industries. By taking this action, Churchill transparently shows that it cares little about horse racing. If I were a Kentucky legislator in light of that fact, I would view Churchill as little more than a gaming company whose headquarters just happen to be in Louisville. Why should they be entitled to have slots any more than a company like Penn National, or even one of the Las Vegas-based casino companies? For that reason, I'm not sure it is a sound business/lobbying decision.

Sounds like the cheapskates at CDI need to drop a bigger bag on...uh...I mean lobby more intensely...some of the legislators in Franklin.

Guess where they are getting the money to do this "lobbying"?

CDI is not really a racing organization but a gambling venture that happens to own racetracks.

Too bad we can't organize a takeover.

A lot of people saw this coming years ago but most people thought because of the Derby they were a racing company and would always take care of racing. When I relocated to KY, Churchill Downs was by far the most horseman friendly track in the country. Every year from 2005 on they got worse and worse. The track surface budget was cut, maintenance on the backside was cut, services were cut, a lot of veteran employees were let go and clueless people hired to replace them. The most horseman unfriendly thing they ever did was buying youbet and spend virtually every non-Derby marketing dollar driving live handle to Twinspires where bets made via the ADW they only had to give us less than 50% of our on track take. (something like 3% rather than 7%)
They took away the press box and made it the mansion and made the Derby press watch on a TV or from a viewing stand with a bad view and little room. Yeah they are making a little more money but didnt exactly make any friends in the media with that move.

They put up a $12 million dollar TV screen despite their own execs being quoted last week as saying racing was in a depression and they raised the take to make up $8 million. Shareholders are a convenient excuse every time they want to cut something related to racing or raise prices. That isnt saying that they are making poor, big picture moves because it is painfully obvious that they dont intend to try to maximize any racing property outside of Oaks and Derby.

It is a bit childish for us in the industry to feel betrayed because without racing CDI doesnt have slot parlors in S Florida or New Orleans. Most people in the industry have approx zero sense of loyalty. Owners fire trainers at the drop of a hat to run to the latest juice guy. Trainers steal owners off of other trainers lying on their death beds. Most of your help would jump ship if the guy in the next barn paid $50 a week more. Fact is that casinos and slot parlors were coming whether we like it or not, whether we were on board or not. CDI is really no different than Penn National gaming, Greenwood, Harrah's or Gov Cuomo. Everyone of them wants to squeeze racing by the neck till it croaks.

Personally I have had enough. I'm going to stable at Monmouth in the late Spring, summer and into the fall and somewhere in Florida in the winter with perhaps a handful staying at the training center in S jersey as well or maybe Aqueduct. I will do the best I can for the remaining years the game has at tracks that at least make some attempt to make racing the centerpiece. Hopefully we can get 20 more years out of it.

Churchill has very few friends in the KY legislature. They are perceived (rightly) as arrogant and have made a series of moves and proclamations that have managed to piss off both parties. A few years back they threatened to move the corporate headquarters out of Louisville to Chicago over some issue they had with lawmakers. Tom Meeker made a lot of enemies in the legislature and Evans hasnt exactly endeared himself. There has been a lot of sentiment that because of CDI slots will never come to KY and while it is impossible to know for sure because the out of state casinos companies have spent a lot of lobbying money in KY, they arent any closer than they were 12 years ago.

Funny how 20 years ago, the horsemen were (logically so) opposed to slots. Then they did a 180, and wanted to hook their ship to slots, completely ignoring the longer term problems. Slots are nothing but a band aid solution.

What will be interesting? Eventually we will see expanded sports betting. And when THAT happens, it will be a sledge hammer to the industry.

The longer terms problems would have been short term problems w/o them.

How do you think racing would fare if they built a casinos right down the road from the tracks and we got nothing but competition? While the tracks seem a bit like traitors now that they have morphed into gaming companies a whole lot of them would have surely went under especially when the economy went south. We may not like the direction that many have gone in but we cant race without them either.

I think that it is naive to believe that racing could have figured out some sort effective national strategy that would have stemmed the tide against casino's. Sports betting isnt that close especially if the Supreme Court declines to hear NJ's case. Not to mention that it is already easy to set up an online sports wagering account currently. Anyone who wants to make a wager on a sporting event in this country shouldnt have any problem doing so.

While there is no doubt that the money hasnt exactly been well spent, it is difficult to make a case that w/o slots revenue we would be in a better place.