Pennsylvania Tracks Pull Back Curtain–a bit–on Takeout Rates

The Pennsylvania Horse Racing Commission (PHRC) on Tuesday voted to grant Thoroughbred racing dates for 2025 that will feature 150 programs at Parx, 105 at Penn National, and 76 at Presque Isle Downs.

Prior to the vote on the dates, however, executives from each track were asked to do something rarely required by racing commissions in this country: Principals from each venue were requested to explain the rationale behind the 2025 takeout rates that accompanied each licensee's dates request.

Takeout rates, the per-bet pricing structure that tracks and states impose upon wagers, are the bane of horseplayers because they are akin to a tax on betting. But takeout rates also provide the financial backbone the sport derives from the pari-mutuel process, because the money generated that way goes, in part, to pay for purses and to keep tracks operational and regulated.

Yet price-conscious horseplayers for decades have lamented not only how high some of the takeouts have risen, but also how notoriously difficult it is to find comprehensive lists of those rates so that bettors can either comparison-shop, or, at the very least, know how much money will be removed from the pools prior to the calculation of winning prices.

Pat Cummings, an industry expert whose advocacy for more transparent takeout rates has been featured in TDN on numerous occasions over the years, wrote in 2020 that horseplayers have long been frustrated at how “a single source of updated takeout rates for bets across all tracks was unavailable, and [how] sourcing the exact rates was nearly impossible.”

When TDN touched base with Cummings via email Tuesday to see if that situation had improved, Cummings wrote back that, lamentably, there is still “not a single source for the industry which keeps up with this information routinely.”

Against that backdrop, even though the explanations at the Nov. 26 PHRC meeting amounted to only brief remarks required before a vote on licensure, they provided a welcome trickle of information for horseplayers who are used to being kept in the dark about how tracks come up with their takeouts.

This is what Pennsylvania's track operators had to say about their rates for 2025, listed in the order that each made their presentations. (Bear in mind that the commission had asked the executives in advance to prepare their remarks, so no one was caught unaware of this discussion).

Eric Johnston, director of racing operations at Penn National, where takeout rates for 2025 will be 17% win-place-show; 20% exactas, doubles, Jackpot Pick 6 and Jackpot Pentafecta; 31% trifectas, twin trifectas; 30% superfectas and Pick 6; 25% Pick 3, 4 and 5.

“Ours are comparable with those around the country. The one thing that you do see is a little high is the trifecta wagers, which come in at 31%. And in the grand scheme of things, it doesn't seem like it's that outrageous when you consider the history of racing over the years in Pennsylvania,” which, Johnston added, has transitioned from an era of robust on-track betting to being more simulcast-wager driven.

“The business has changed. Of the live wagering, what's bet on the Penn National card every day is less than 10% of the total handle. So this money, these takeout rates, are one of the things that keep us out there. There's a lot of simulcast sites, a lot of computer wagerers who bet on us because of those rates. If we start cutting those, we will become less valuable.

“We're certainly not getting rich off what [is being bet] there, but it's all part of the bigger story. I mean, the business has changed. The higher takeouts are along with the pools that have the highest payout, so it's not as noticeable. But it's not something that, you, know, it's not worth losing our outlets to lower those rates.”

Matthew Ennis, the director of racing at Presque Isle, where takeout rates for 2025 will be 17% win-place-show; 20% exactas, doubles; 25% trifectas, superfectas; 23% Pick 3 and 4; 15% Pick 5.

“Just looking at everything competitively, where we stand, compared to my parent company at Churchill Downs [Incorporated], I do feel that Presque Isle Downs has in place a takeout structure on our wagering options that serves the dual purpose of attracting the pari-mutuel dollar and generating the revenue needed to guarantee quality race cards and field sizes.

“I don't feel as if our wagering structure is out of line in any manner. It's very competitive. We look at providing takeout options that are appealing to players in relation to takeouts on wagering menus offered by other tracks. And although I felt that our takeout rates do not tell the whole story of how players choose to wager their dollars, having the player-friendly takeout structure is beneficial in our process of generating larger handles at Presque Isle…

“Of course, I have the protocol to follow with my corporate team at Churchill Downs, and abide by the ranges that they give.”

Joe Wilson, chief operating officer at Parx, where takeout rates for 2025 will be 17% win-place-show; 20% exactas, doubles; 25% trifectas, superfectas, Pick 3, 4 and 6; 15% Pick 5.

“Up until close to five years ago, our takeouts were 17% on win/pace/show; 20% exactas, doubles; 26% on 'pick' bets, and 30% on tris and supers.

“Jan. 1, 2020, we reduced our takeout to 17%, 20% and 25%. So the tris and supers went from 30% to 25%; the 'pick' bets went from 26% to 25%. And a couple of years ago we added our Philly Big Five, and that's at 15%.

“And it's amazing to me to where I still see people commenting on social media that Parx should lower their takeout, when in fact we lowered takeout five years ago.

“Our blend [of takeout rates] right now is at 19.8%, [compared to neighboring Maryland tracks] at 21.25%. So we're [approximately] 1.5 points lower than Maryland. We're even with Delaware, and we're even with Monmouth Park. So we are as competitive as anybody in the area.

“The other thing, if you were to lower your takeout too much–remember our signal goes out worldwide–and if you were to have a drastically reduced takeout, [importers] basically aren't going to promote your signal, because it's not [financially] in their best interest.”