Table of Contents • Introduction: Current Issues • Section I: Daily Racing Schedule • Section II: Wagering Menu • Section III: Takeout • Section IV: Annual Racing Schedule • Section V: Stakes Realignment • Section VI: Marketing • Section VII: Internet & Mobile Enhancements • Section VIII: Handicapping Contests • Section IX: Facilities Upgrades • Section X: Five Year Plan • Section XI: Contact Information • Appendices
Introduction:Current Issues Return to Table of Contents Go To Next Section
Current Issues • Declining wagering handle. • Declining on-track attendance. • Stagnant field size. • Lower quality of racing. • Negative reputation within the horseplayer community. • Less than ideal time to market of new technological enhancements.
Strategy – Resolving Current Issues • Modifying the daily post times and wagering menu. • Modifying the takeout structure. • Reducing the number of race days coupled with a realignment of the annual racing calendar. • Modifying the positioning and purse levels of existing stakes races and creating new stakes races. • Creating incentives for new fans to come to the track and more importantly to make current horseplayers feel appreciated. • Embracing new technology and implementing it in the appropriate manner.
Section I: Daily Racing Schedule Return to Table of Contents Go To Next Section Go To Previous Section
Post Times • Move the normal first post to 2:00 pm for February through October. • Move the normal first post to 1:00 pm for November (due to end of daylight savings time). • Move the twilight first post to 5:00 pm. • Run 9 races per day. • Run a race every 22 minutes. • Exceptions to the above are Preakness and Maryland Million Day. Return to Previous Page
Preakness Post Times and Wagering Menu • Race numbers highlighted in orange are dirt races and in green are turf races. • Race names highlighted in blue are for males, in pink are for females and in both • are either depending on potential field size.
MD Million Post Times and Wagering Menu • Race numbers highlighted in orange are dirt races and in green are turf races. • Race names highlighted in blue are for males and in pink are for females.
Strategy - Post Times • Moving the normal first post to 2:00 pm will attract more handle from the Midwest and West Coast. • Moving the twilight first post to 5:00 pm will increase on track attendance and attract more handle from the Midwest and West Coast. • Running a race every 22 minutes will reduce the total time from the first race to the last race to just under 3 hours and be more in line with the four major sports in the United States. • NFL Average is 3:05 • MLB Average is 2:51 • NHL Average is 2:19 • NBA Average is 2:18
Strategy – Twilight Racing • Twilight racing will be conducted on Friday’s in June and July. • After the last race a free concert will be held. • This strategy has been successful at both Del Mar and Hollywood Park. • Will be the opportunity to draw in new young fans. • Will also be the opportunity to draw more regular fans that can not attend the races during the day due to work engagements.
Laurel Turf Course • The turf course at Laurel is 142 feet wide, roughly double the width of an average American turf course. • The turf course can currently accommodate six total layouts and two simultaneous layouts. • Each of the layouts can handle up to 14 horse fields.
Strategy – Laurel Turf Course • Eliminate the six total layouts and two simultaneous layouts. • Increase the maximum field size to 18 horses for route races. • Increase the maximum field size to 16 horses for sprint races. • Move the rail out as necessary to avoid wear and tear but also to maintain the field sizes above. • Card at least four turf races per day, but strive for five or six if there is adequate demand. Return to Previous Page
Benefits – Laurel Turf Course • The larger field sizes will lead to higher average payouts on all wager types. • The higher average payouts will lead to increased handle. • The increased handle will lead to higher purses. • The higher purses will lead to increased quality of runners. • The increased quality of runners will lead to further increased handle. • The further increased handle will lead to even higher purses.
Benefits – Laurel Turf Course (cont.) • This may sound like a fantasy, but… • The horseplayers around the country have a plethora of tracks to choose from and most will flock to the tracks with the highest quality fields and the largest fields. • In conjunction with the strategy presented in the next section this fantasy can and will become a reality in the next few years.
Section II:Wagering Menu Return to Table of Contents Go To Next Section Go To Previous Section
Wagering Menu Current Wagering Menu Proposed Wagering Menu Return to Previous Page
Strategy – Minimum Wagering Amounts • Set the minimum wager amounts on WPS, Exacta, Super High Five and Daily Double to $0.50. • Keep the minimum wager amounts on Trifecta, Pick 3, Pick 4 and Pick 5 at $0.50. • Keep the minimum wager amount on the Superfecta at $0.10. • Set the minimum wager amount on the Pick 8 to $0.05. Return to Previous Page
Strategy – Wager Types • Offer the vertical wager types based on minimum field size listed in the chart at the beginning of this section in order to avoid small pool size and cannibalization. • Offer the Super High Five on the last race of the day as long as the field size meets the minimum requirements. • Offer Rolling Daily Doubles and Pick 3’s. • Add the new “Jackpot 8” to the daily wagering menu.
Strategy – “Jackpot 8” Addition • Will be offered on the last eight races of the day. • $0.05 minimum wager amount. • First wager type in the country to offer a $0.05 minimum. • First wager type in the country with a single digit takeout of 8%. • Players must select the winner in each of the 8 races, this is not a Place Pick 8. • Payout of 75% to tickets with all 8 winners selected and 25% to tickets with 7 winners selected. • If there are no perfect tickets than 75% of the pool will be carried over to the next day and 25% will be paid to the tickets with the most correct winners selected.
“Jackpot 8” vs. $2.00 Pick 6 • The chart compares the degree of difficulty of selecting the correct combination in the “Jackpot 8” against the $2.00 Pick 6. • At Laurel it would be 1.5x harder to win the “Jackpot 8” versus a $2.00 Pick 6. • At Pimlico it would be 1.7x harder to win the “Jackpot 8” versus a $2.00 Pick 6. • Retama currently has the largest average field size in the country. Laurel Pimlico Retama
Benefits – “Jackpot 8” • Lowest minimum wager amount in the country. • Lowest takeout rate in the country. • Will generate more carryovers than the Pick 6 due to the higher degree of difficulty. • Would appeal to all levels of horseplayers. • Novice players: low base wager amount with potentially large payout, similar to lottery or slot machines. • Experienced players: low takeout with the potential for carryovers on a regular basis which will produce large pools in a short amount of time.
Section III:Takeout Return to Table of Contents Go To Next Section Go To Previous Section
Takeout vs. Handle • Economic studies have proven that increasing takeout (or taxes) results in lower wagering handle (or revenue). • Three recent examples follow illustrating this correlation, two with increased takeout and one with decreased takeout.
Takeout Example #1 – Laurel Pick 4 • The takeout % for the Pick 4 at Laurel was: • 2006 = 14% • 2007 = 10% • 2008 = 14% • 2009 = 25.75% • 2010 = 25.75% • The data used for this example is the Pick 4 pools at the August meets from 2006 to 2010.
Takeout Example #1 – Laurel Pick 4 • From 2006 to 2010: • Takeout increased from 14% to 25.75%. • The average Pick 4 pool decreased 53%. • The average takeout dollars generated decreased 13%. • The one year takeout was lowered handle increased 16%. • Simple conclusions: • Higher takeout resulted in decreased handle. • Higher takeout lowered profits generated for the racetrack. • Higher takeout is, therefore, a lose-lose situation.
Takeout Example #2 – Tampa Bay Pick 4 • The takeout % for the Pick 4 at Tampa Bay was: • 2008 = 20% • 2009 = 20% • 2010 = 19% • 2011 = 18% • The data used for this example is the late Pick 4 for the first two weeks of February from 2008 to 2011.
Takeout Example #2 – Tampa Bay Pick 4 • From 2009 to 2011: • Takeout was reduced from 20% to 18%. • The average Pick 4 pool increased by 97%. • The average takeout dollars generated increased by 77%. • Simple conclusion: • Lower takeout resulted in increased handle. • Lower takeout generated more profit for the racetrack. • Lower takeout is, therefore, a win-win situation.
Takeout Example #3 – California Increased Takeout % • Takeout rates were increased at Los Alamitos in 2010. • Halfway through 2010 the handle was down 27%. • California increased takeout rates for exactas and daily doubles from 20% to 22.68% and for all other exotic wagers from 20% to 23.68% at the end of 2010. • Total handle per race at the 2011 Santa Anita meet decreased by 11.6%. • Total average daily handle at the 2011 Hollywood Park meet decreased by 2.4%, although without the new reduced takeout P5 which added over $200k per day to the totals the decrease would have been 4.5%. • California recently decided to pursue lower takeout rates due to the drop in handle at all meets since the above changes were implemented.
Strategy - Takeout % • Current is the current takeout rate for Maryland tracks. • Lowest is the lowest takeout rate in the country. • Proposed is the proposed takeout rate for Maryland tracks. • The goal is to lower takeout rates across the board in order to have the lowest or be equal to the lowest rates in the country for each wager type. • A drastic reduction will likely stimulate increased handle quicker than an incremental reduction and will put Maryland at the forefront of takeout reduction. Return to Previous Page
Takeout Reform • The opportunity to reform takeout to reasonable levels is now. • Other tracks/states have been or will be lowering takeout on some or all of their wagers. • Rather than following the lead of others why not create a positive image within the industry by not just lowering takeout marginally on a few wager types but instead lowering it radically on all wager types. • A 2% reduction in takeout at Tampa Bay Downs nearly doubled the Pick 4 pools in two years, imagine what an 8% to 15% reduction would do to all of the pools at Laurel, Pimlico and Timonium.
Wagering Menu & Takeout Re-evaluation • Review the pool sizes of each wager type one year after the aforementioned modifications have been made. • If pool sizes have increased no changes need to be made. • If pool sizes have been stagnant or decreased on a certain wager type then that wager type may need to be eliminated from the wagering menu.
Section IV:Annual Racing Schedule Return to Table of Contents Go To Next Section Go To Previous Section
Maryland Racing Dates • The 2011 racing dates span nearly the entire calendar year with the only break coming in the summer. • Higher attendance is more likely in the summer when the weather is warmer and people take more time off work and/or go out more often. • No summer racing results in underutilization of the turf course at Laurel. • The current horse population does not support year round racing as it did in the past. • To coincide with other major sports it would make more sense to have a defined “season” rather than a year round schedule.
Maryland Racing Dates - Revised • The revised racing dates implement the “season” mentality. • No racing after Thanksgiving weekend through early February, essentially establishing a two month “offseason.” • The revised racing dates are placed to most effectively utilize the facilities at both Laurel and Pimlico. • Three day race weeks in the winter and late fall when there is no turf racing. • Four day race weeks in the spring, summer and early fall when there is turf racing. • No racing in Maryland from the last week of July through most of August to avoid competing with Saratoga and Del Mar. • Still allows sharing of the horse population with Colonial Downs. • Also provides a mid year break for horses in Maryland should the trainers choose not to ship to Colonial Downs or other Mid-Atlantic tracks.
2012 Maryland Racing Calendar – Proposed Return to Previous Page
Section V:Stakes Realignment Return to Table of Contents Go To Next Section Go To Previous Section
Goals – Stakes Realignment • Increase field size of stakes races. • Raise the quality (grades) of the stakes races. • Maximize wagering handle. • Maximize on track attendance.
Stakes Divisions • 2YO Turf • 3UP Sprint • 3UP F&M Sprint • 3UP Turf Sprint • 3UP Dirt Mile • 3UP Turf Mile • 3UP Turf Mile (F&M) • 3UP Classic • 3UP Marathon • Maryland Stakes