[Kasept]

Originally Posted by philcski

My opinion and my opinion only, however the below confirms the ability to increase takeout was based solely on the addition of the September meet- (not lies/myths)- diluting the on-track average to below the dividing line set by Kentucky law (clearly to separate CD/KEE from KD/Ellis/Turfway.)

Here's the thing... they can maintain purse levels without doing anything different, but it might have a negative impact on their stock price. Their 'corporate spin' is it's to protect the purse account but in reality that's a pittance relative to their total revenues. They did $1.2 billion in revenue in 2015, their net income was $65.5 million... a 2-3% increase in takeout for just Derby weekend nets them a cool ~$7 million without doing anything, thus increasing their net profits by 10% and theoretically their stock price the same. Their takeout was (and still is) reasonable because the state law says so, not because CHDN is a bunch of great guys.

There's also no reason they can't get Instant Racing set up at Trackside. The religious nuts have given up the fight in Kentucky so there is no potential legal battle looming. In addition, the neighboring states are not really offering similar condition books- Indiana Downs, for example, has raised it's product significantly but currently runs about 50% of their races for Indiana breds and several other low conditioned claiming races a week, which leaves maybe 5-10 crossover races a week- the same dynamic as NYRA versus Parx or Monmouth.

I love Churchill Downs as a venue and wagering option. The takeout difference is not going to prevent me from betting on their product when I like what they're offering. But this is just another misstep by a company more concerned with the bottom line than putting out a great racing product.

September meet was also a response to need on the circuit due to the inability of Turfway to maintain the season at a level befitting the time of year. As discussed with Coach, they certainly made a tactical error assuming that gaming was coming and didn't want to utilize Instant Racing. (I haven't asked if they'll revisit that.) Regarding the revenue side of things, anyone would expect - demand even - that a publicly traded company attempt to maximize their profit opportunities. Except it seems when it comes to CDI.