In 2021, will handle take on a new meaning?
The pandemic placed more focus than ever on the need to grow handle to help the industry sustain itself.
by Brett Sturman
If this past year has taught us anything as far as racing goes, it’s that it’s more pertinent than ever that tracks grow handle and become less dependent on subsidized sources to fund race purses.
I’ve long held the belief that given the opportunity to do so, governments and gaming companies would take any event possible as a reason to reduce or eliminate altogether their involvement in harness racing. This year, we’ve seen throughout North America the logistical issues that occur when harness racing operations are tied to the stability of other entities, such as the closing of a related casino.
In a direct reference to handle to sustain racing operations, thoroughbred track Penn National Race Course – whose casino is currently closed due to state restrictions in Pennsylvania – announced that they would continue horse racing through January so long as minimum handle requirements were met. For the company to break even, the estimated nightly handle to be reached is about $1.4 million.
Going by recent historical handle, Penn National shouldn’t have much trouble meeting that number. But what if similar requirements were put into place in our industry?
In addition to the thoroughbred track, Penn National Gaming owns properties tied to harness tracks that include Freehold, Dayton, Plainridge and The Meadows. Handle at these tracks is relatively small, and a review of daily purses compared to daily handle these and most other harness tracks would show a wide disparity. And, Penn National Gaming is a company whose stock price has skyrocketed this year to boot. If a company in their position is applying pressure to one of its properties to produce handle in order to race, what does that say for tracks tied to lesser stable companies or governments operating under massive deficits?
Whatever the future holds, the need to take handle seriously and grow it this upcoming year should be self-evident. To that end, what wagering trends can be observed from this year that can be applied going forward?
Helpfully, the United States Trotting Association’s annual economic indicators for 2020 have been segregated neatly between pre-shutdown of racing and the resumption of racing. At the start of the year through March 22, the handle on a per-race average basis was down 7 per cent when compared to the same time period in 2019. Similarly, amounts wagered overall was down 5 per cent year-over-year in the same period. However, June 1 onwards shows a totally different picture. In the final seven months of this year compared to last, the per-race average was up 20 per cent. This results in a 27 per cent swing from how racing was faring on a per-race average basis pre-shutdown and after it. Similarly, total handle overall went from being down 5 per cent year over year to up 5 per cent, another double-digit 10 per cent swing.
The difference on a per-race average basis is easily explainable. While this metric was up 20 per cent post-shutdown, the amount of race days was almost down that exact same amount. So, generally speaking, one could surmise that there is a total pool of money available to be wagered on harness racing and as fewer races were conducted, the money for wagering was diverted to the tracks that were able to conduct races. For example, Scioto Downs was able to benefit in part by being one of the first tracks to resume racing once Ohio got the go-ahead before other states did, and record amounts of handle went there (massively surpassing their prior year’s per race average), as opposed to handle being spread out more evenly had the normal slate of tracks had been running.
More interestingly, and I would say is a positive takeaway, is the 10 per cent turnaround in the second half of the year when compared to how racing was doing in the first part of the year compared to 2019. This is harder to pinpoint where the improvement came from, but it’s something that racing can build on, nonetheless. Whether the increase is attributed to an overall surge in online wagering — including sports betting — which was a huge boon this year, or the fact that there’s now a forced dynamic from on-track to wagering from home, perhaps there’s potential for the trend to continue, but racing still needs to do its part.
To expand the pie itself, racing must listen to its customers. Takeout rates are still almost as high as ever at most places, and wagering menus increasingly feature the most unfriendly and counterproductive types of jackpot bets.
Take the Meadowlands from last Saturday. The track which is responsible for an overwhelming plurality of handle in the U.S., took in $3.7 million the day after Christmas. This might sound good, but when put into perspective that $3 million around this time of year is normal, had nearly all of the racing stage to itself, carded 15 races (which took nearly six hours by the way), and still couldn’t reach $4 million is a bit underwhelming. By comparison, Santa Anita racetrack on that same day under similar circumstances handled $23 million, one of the highest in that track’s history. The lesson is that it’s not going to be enough to simply shift handle from one track to the other, but rather tracks need to incentivize so that total handle overall can grow.
It becomes redundant to continuously talk about takeout, but it’s a driving factor in what handle could potentially be. Handle explodes when there are carryover pools, which is no different than an effective reduction in takeout percentage. Tuesday night, Pompano Park handled nearly $200,000 into a pick-5 (non-jackpot) carryover of $20,000 from the night before. That sequence came within one race of a double-carryover, which had that happened might have been cause for a $1 million pool next out.
Heading into this weekend, the Meadowlands finds itself in a similar position with a pick-5 carryover of $47,000 from last Saturday. They have “guaranteed” the pick-5 pool to be $150,000, but the upcoming pool is going to hit that amount at least two or three times over. The point in all this being is that there’s still an appetite to grow harness racing handle but it needs to be in environments that are advantageous – or at least not larcenous – to those playing it.
The reality is that handle may still may not be of paramount concern for many in the industry, but it should be. In 2021, handle might not just be a statistic but rather a means as to if racing and go on.