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-- A transcript of last year's address to the Legg Mason Capital Management Group by Steven Crist

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A transcript of last year's address to the Legg Mason Capital Management Group by Steven Crist

jeff
8/21/2008
9:52:02 PM

A transcript of last year's address to the Legg Mason Capital Management Group by Steven Crist:
http://www.leggmason.com/thoughtleaderforum/2007/conference/crist.html

Worth the read. IMHO he makes several valid points.

-jp

.

dvlander
8/22/2008
6:34:33 PM

Jeff, great article and educational as well.

In your opinion, is the 3% that the ADWs pay the right number? It seems like if that was just a bit more, maybe there would be less freezing out from the tracks. Perhaps they'd be more willing to open up their signals to all ADW's.

Then again, their history indicates they are not that smart. The 20% takeout is way too much and the government is the entity in here that can most afford to give some back. In my opinion, there should not be any takeout tax at all. This is government double-taxation at it's worst.

You get taxed on the takeout and you pay income taxes if you actually show a profit.

Enough ranting.

Dale

Acorn54
8/23/2008
4:26:53 AM

i always got the feeling from the powers that be as far as gambling on horses is concerned a certain sense of arrogance. the attitude seems to be on their part that it is just a game not to be taken seriously,with no conccrn about the fairness of how the game is run.

jeff
8/23/2008
2:26:24 PM

--quote:

"Jeff, great article and educational as well.

In your opinion, is the 3% that the ADWs pay the right number? It seems like if that was just a bit more, maybe there would be less freezing out from the tracks. Perhaps they'd be more willing to open up their signals to all ADW's.

Then again, their history indicates they are not that smart. The 20% takeout is way too much and the government is the entity in here that can most afford to give some back. In my opinion, there should not be any takeout tax at all. This is government double-taxation at it's worst.

You get taxed on the takeout and you pay income taxes if you actually show a profit.

Enough ranting.

Dale"

--end quote

Dale, 3 pct is a number that was negotiated at a time when on track handle was king and off track simulcast handle was looked at as an afterthought. I don't think industry decision makers had the foresight to envision changes coming to the game... how on track handle and attendance would dry up and off track handle would explode.

I have no way of knowing whether or not 3 pct is a workable number for all parties involved.

But I do know that markets are price sensitive. Parimutuel markets are no exception. High takeout eventually translates to low handle. Low takeout eventually translates to increased handle.

revenue = (takeout pct) x (handle)

Somewhere between high and low takeout there exists an optimum pricing point - one that produces max revenue for tracks, horsemen, and governments.

The thoroughbred racing industry has paid to have several studies done for the purpose of determining optimum pricing of takeouts. Every study that I am aware of has suggested that optimum pricing exists somewhere in the neighborhood of 10-11 percent.

IMHO, if 3 pct is an unworkable rate - then the industry can and should renegotiate that number so that it works for all parties involved: Tracks, Horsemen, and ADWs.

But in my opinion it is far more important that the industry wake the F up and realize that current takeout levels are nowhere close to competitive with other forms of gambling with which racing must now compete. It's long past time for the industry to put a mechanism in place where takeouts can be periodically adjusted... with the goal being to reach the point of optimum pricing and max revenue for all parties concerned.

If that could be accomplished it would mean:

1. Increased handle.

2. Profits for racetracks.

3. Increased purse money distributed to horsemen.

4. Increased total revenue for government.

5. Lower takeout for players.

It would be a win for all parties involved... and it's one of the goals I want to see H.A.N.A. working towards.

Ok... stepping down off the soapbox now. < G >

-jp

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Acorn54
8/23/2008
4:38:42 PM

does anyone know the takeout in ireland or england?
i think it is 3.5 percent
anyway i see that bris allows racing on european races on a daily basis. does anyone know if takeout is lower betting on these races than betting on american races over the bris website for american bettors? i'd be interested to know as it would seem much easier to beat the races if takeout was only at 3.5 percent, and i would seriously consider focusing on the european runners.

JCapper Message Board

General Discussion -- A transcript of last year's address to the Legg Mason Capital Management Group by Steven Crist

General Discussion
-- A transcript of last year's address to the Legg Mason Capital Management Group by Steven Crist