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2020 California Handle, Purses in Numbers
After a pandemic-stricken year in which ADW revenues hammered California industry coffers, the first month of 2021 brought with it a flurry of budgetary and purse account developments in response. First came the announcement from the Thoroughbred Owners of California (TOC) that they had reached an agreement with TVG, the Del Mar Thoroughbred Club, The […]

After a pandemic-stricken year in which ADW revenues hammered California industry coffers, the first month of 2021 brought with it a flurry of budgetary and purse account developments in response. First came the announcement from the Thoroughbred Owners of California (TOC) that they had reached an agreement with TVG, the Del Mar Thoroughbred Club, The Stronach Group's 1/ST Racing, and NYRA to inject some $15 million into the purse fund over the course of two years. In response, a subsidiary of the gaming corporation Churchill Downs, Inc. (CDI) filed a federal lawsuit against TOC, asking a judge to rule that TOC is precluded from using a state law to force CDI into either accepting lower rates, abandoning its just-signed agreement with Santa Anita Park, or else entering into arbitration to settle the dispute. Litigation aside, what are the numbers underpinning some of these decisions? At the beginning of the year, TDN asked TOC to put together a handle and purse comparison of the years 2018, 2019, and 2020–a more complete picture to the numbers the organization supplied in October of last year. In summary, the data tells this broad story: A 30.3% decrease in races last year (compared to 2018) constituted a 15.7% decrease in all-source handle, and a 22.3% decrease in overall purses. The numbers also tell another tale, one with potential implications for the Golden State's racing product. That's because the lone major wagering growth area concerned California residents betting on non-California races, while out-of-state wagering on California races also took a sizeable hit. How much of that trend, however, was due to a COVID-shredded racing calendar last year in California? To see the numbers in full, click here. Main data points: Handle To get a representative comparison of what impacts the unprecedented swing toward ADW wagering had last year, we've primarily compared 2020 numbers to those of 2018 (2019, of course, being the year that Santa Anita was embroiled in its welfare crisis). With a 30.3% decrease in races last year, as compared to 2018, there was a 15.7% decrease in all-source handle, and a 22.3% decrease in overall purses. Out-of-state wagering on California races decreased by 18.6%, from $1.34 billion to $1.09 billion. Handle from all-source wagering within California decreased by 12.9% percent, from $1.43 billion to $1.25 billion. When it comes to betting revenues from within California, the most noticeable growth area concerned wagering on out-of-state races. Looking at wagering within California on California races, handle from wagering at brick-and-mortar facilities dropped 36.5%, while handle from ADW platforms rose 5.2%. Looking at wagering within California on non-California races, handle from wagering at brick-and-mortar facilities dropped 24.1%, but handle from ADW platforms rose 36.7%. Purses When it comes to wagering in California on California races, purses generated through brick-and-mortar wagering decreased 78.5%, while purses generated through ADW platforms increased 31.6%. What's more, total purse generation in this area decreased 47%, from $50.6 million in 2018 to $26.5 million last year. When it comes to wagering in California on non-California races, purses generated through brick-and-mortar wagering decreased 85.4%, while purses generated through ADW platforms increased 96.4%. What's more, total purse generation in this area increased 10%, from $29.3 million in 2018 to $32.8 million last year. When it comes to out-of-state wagering on California races, purses generated through commingled exports decreased 22.2%. Per-race figures All-source, per-race handle increased significantly from $785,692 in 2018 to $951,306 last year. The per-race purse yield, however, increased only very slightly from $35,531 in 2018 to $39,657 last year. But again, zeroing in on which races are most attractive to California bettors, the baseline numbers raise questions. Combining wagering from both within and outside of California on California races, the per-race handle grew 4% from $576,366 in 2018 to $599,669 last year. Compare this to nationwide figures (using numbers from Equibase), however, and per-race handle grew 28% from $307,875 in 2018 to $394,412 last year. Back to California, when it comes to the purse retention rate, as compared to 2018, the overall percentage of money taken from handle for purses dropped from 4.52% to 4.17%–what constituted a nearly 8% drop. Analysis TDN asked Thoroughbred Idea Foundation (TIF) executive director Patrick Cummings to weigh on the numbers and provide some critical analysis on what these numbers mean in terms of industry sustainability. P.C: “Greg Avioli's point in your recent interview was spot-on–without detail on the composition of handle and customers, horsemen are at a distinct disadvantage when it comes to understanding how the betting business is being managed. In California, that is of even greater concern given that wagering is the only source of prize money. “A track could say, 'look, handle was flat,' or 'handle was up slightly, we did well' and everyone feels good about that. But if the high-volume rebate shop players increased their handle, a function of sweeteners to rebates and the like, and mainstream customers saw their effective takeout rise and reduced overall participation, there is little reason to be positive with a total handle figure either staying flat or being up slightly. Horsemen need more insight to the quality of handle, not just raw quantity. “There are some signs, nationwide, that high-volume play, that which comes from customers betting nearly $100 million a year or more, sharply increased in the second half of 2020. We are awaiting some additional data to flesh that out more, but if this trend holds, and mind you it has been shifting in this direction strongly over the last 15 years, it is a terribly bearish indicator for the sport, and specifically for horsemen and purses. And that doesn't even factor the tremendous competition racing faces from legalized sports betting. “When the biggest customers in our pools are given added financial incentives to increase play, on top of the significant technological advantages they already receive, being able to dump massive bets in at the last second and know exactly what odds they are getting, the mainstream customer will only take the hits for so long before abandoning racing altogether. Our estimates, published in July, showed that the high-volume rebate shop players have increased their handle by an inflation-adjusted 115% over the last 15 years while all other customers, anyone betting less than tens of millions annually, have seen their handle drop by more than 60%, adjusted for inflation. “And don't forget, the biggest racetrack owners also own most of the ADWs, the majority of tote companies and even some of the high-volume betting shops. “The deck is stacked highly in favor of the status quo.”  
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