Churchill Downs Boycott Could Provide Wakeup Call as Execs Stuff Their Pockets

Written by:
Alejandro Botticelli
Published on:
Apr/24/2014
Churchill Downs Boycott Could Provide Wakeup Call as Execs Stuff Their Pockets

While it may not scare the masses away from next week’s Kentucky Derby, a call to boycott Churchill Downs could prove effective thereafter.

PlayersBoycott.org is just one of the sites calling for the action in light of recent takeout increases with a massive increase in executive compensation.  Other industry blogs and handicapping websites are now pushing for the same.

The Courier-Journal featured a report earlier this month that incensed horseplayers.

Churchill Downs spokesman John Asher told the Courier-Jornal that, without the change in how much is taken from each bet, spring purses would have been cut, including the likely cancellation of some stakes races.

"If Churchill Downs is to present a competitive racing product, purses must be strong enough to keep current stables in the state and attract new stables and horses to the Kentucky racing circuit," Asher said.

Wagers on Win, Place, and Show were raised from 16% takeout to 17.5% takeout. On exotic wagers, the takeout increased from 19% to 22%.

So Churchill Downs needs an increased take in order to survive?

Not so fast.

According to Morningstar, Key Executive Compensation at CHDN jumped from $8.20 million in 2012 to $27.92 million in 2013.

From PlayersBoycott.org:

On the one hand Key Executives at CHDN are telling the press Churchill expects to raise another $8 million for purses while suggesting the only available option is to make Horseplayers pay for it with a takeout increase.

However, it seems these same Key Executives at CHDN who decided to hit you with a takeout increase also had their compensation increased by over double what they say the takeout hike will raise.

Forget for a second that takeout increases don't work and that The California Takeout Increase actually resulted in smaller purses not bigger purses.

Similar boycotts have proven effective in past years, specifically the California case cited above.

It wasjJust over three years ago a boycott of Santa Anita proved quite successful and by “successful” we mean that the dramatic declines supported the notion that horseplayers could be pushed only so far.

From ESPN.com at the time:

When Santa Anita opened Sunday, the numbers were not pretty. They bet $11,707,276 on the first day of the 2010-2011 meet, a 21.5 percent decline from the previous year and the lowest opening-day handle since 1992. Yet, there were some excuses -- primarily a blizzard in the East Coast that shut down a lot of simulcasting outlets -- enough excuses to conclude that the dismal handle figure was perhaps an aberration. The following day, $5,529,285 was bet on the Santa Anita card, but there was nothing to compare it to. There was not a comparable Monday, second-day-of-the-meet card in 2009.

But on the third day of the meet, there was a perfect apples-to-apples comparison, a Wednesday card in 2010 versus the same sort of Wednesday card a year earlier. The results were almost exactly the same as they were on opening day. Again, Santa Anita got slaughtered. They bet just $4,038,175, a $1,578,842 decline from 2009. That's a 28.1 percent drop off from a year earlier and less than Tampa Bay Downs handled on the same day.

There can be only one reason why Santa Anita has gotten off to such a wretched start -- the takeout increase. It looks like horseplayers actually can be pushed too far.

People who bet on horses are notorious for failing to react when those who control racetracks and racing commissions fleece them, ESPN.com suggested.

Not on this occasion. 

It was a horseplayers advocacy group called the Horseplayers Association of North America that drummed up support for the boycott and they won.  They appear to be the same group behind this recent effort as it relates to Churchill Downs as the original Santa Anita boycott site now redirects to the Churchill Downs initiative.

In California, it was the California Horse Racing Board – not the track’s owner – that made the ill-fated decision to increase takeout percentages.

Frank Stronach owns both Santa Anita and Gulfstream.  At the time of the Santa Anita boycott, Stronach instituted a record-low 15 percent takeout on the Pick Five and a player-friendly 10-cent Pick Six at Gulfstream Park.

Churchill Downs Incorporated (CDI), which owns the Churchill Downs track, is behind this latest controversial takeout increase, not the state of Kentucky, and this is likely to infuriate horseplayers even more.  One could argue in the matter of Santa Anita a case against not wanting to punish Stronach.

As for Churchill Downs, we are already starting to see grassroots support from big name horse handicappers the likes of Mike Dempsey, proprietor of TurfNSport.com, and many are sure to follow.

He tweeted Thursday:

Subscribers. I will not be capping @ChurchillDowns except for Oaks & Derby Day due to take hike. Aqu/Bel & player friendly tracks only.

The May 3 Kentucky Derby held at Churchill Downs is the 2nd single most wagered on single day sporting event in North America, but it also attracts those outside the typical horse betting arena, most of whom will not even notice a takeout increase let alone have any knowledge of some boycott.  This is akin to how folks who don’t even watch a single NFL game all season are suddenly compelled to place a wager on the Super Bowl.

After the Derby, mostly only hardcore horse bettors will remain….and the majority of them we suspect will be made well aware of the boycott.  

- Alejandro Botticelli, Gambling911.com

 

 

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