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Maryland Racing Plan

Maryland Racing Plan

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Maryland Racing Plan

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  1. Maryland Racing Plan

  2. 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

  3. Introduction:Current Issues Return to Table of Contents Go To Next Section

  4. 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.

  5. 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.

  6. Section I: Daily Racing Schedule Return to Table of Contents Go To Next Section Go To Previous Section

  7. Post Times

  8. 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

  9. Normal Post Times and Wagering Menu – Feb. to Oct.

  10. Normal Post Times and Wagering Menu – Nov.

  11. Twilight Post Times and Wagering Menu

  12. 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.

  13. 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.

  14. 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

  15. 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.

  16. Laurel Turf Course

  17. 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.

  18. 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

  19. 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.

  20. 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.

  21. Section II:Wagering Menu Return to Table of Contents Go To Next Section Go To Previous Section

  22. Wagering Menu Current Wagering Menu Proposed Wagering Menu Return to Previous Page

  23. 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

  24. 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.

  25. 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.

  26. “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

  27. 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.

  28. Section III:Takeout Return to Table of Contents Go To Next Section Go To Previous Section

  29. The Effect of Takeout on Handle

  30. 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.

  31. 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.

  32. Takeout Example #1 – Laurel Pick 4

  33. 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.

  34. 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.

  35. Takeout Example #2 – Tampa Bay Pick 4

  36. 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.

  37. 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.

  38. Takeout Modifications

  39. 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

  40. 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.

  41. 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.

  42. Section IV:Annual Racing Schedule Return to Table of Contents Go To Next Section Go To Previous Section

  43. 2011 Maryland Racing Calendar

  44. 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.

  45. 2011 Maryland Racing Calendar – Revised

  46. 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.

  47. 2012 Maryland Racing Calendar – Proposed Return to Previous Page

  48. Section V:Stakes Realignment Return to Table of Contents Go To Next Section Go To Previous Section

  49. Goals – Stakes Realignment • Increase field size of stakes races. • Raise the quality (grades) of the stakes races. • Maximize wagering handle. • Maximize on track attendance.

  50. 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