Officials debate takeout rates at Pa. horse tracks

Associated Press

PITTSBURGH

Although Pennsylvania’s horse racing industry is among the healthiest in the nation thanks to slot machine revenue, a group says the high percentage going to tracks and owners is keeping some out of the action.

Figures compiled in July by the Horseplayers Association of North America indicate that tracks in the commonwealth continue to have some of the highest takeout rates in the business, which is the percentage of a betting pool that a racetrack keeps to defray costs such as race purses, operational costs and taxes as well as to benefit owners.

“The player who is betting $25,000 a year at the [off-track betting parlor], a lot of them are avoiding Pennsylvania tracks like the plague,” association executive Dean Towers told the Pittsburgh Tribune-Review.

Trifecta and superfecta takeouts at Penn National outside Harrisburg are the highest among 67 North American thoroughbred tracks at 31 and 30 percent, and Parx Racing (formerly Philadelphia Park) is right behind with a 30 percent takeout on both bets, the paper said.

The Meadows Racetrack and Casino in Washington County has a 35 percent takeout on trifecta bets, the maximum allowed by state law — and, according to the association, the highest takeout of any bet at any track in the nation, harness or thoroughbred.

“I’m really depressed about this,” said longtime Meadows bettor Bob Zanakis, 56, of Canonsburg. “They are making more money on slots, [so] they should lower the [takeout].”

Pennsylvania Director of Racing Daniel Tufano calls the takeout rates are the cost of doing business at the state’s six tracks: Penn National, Parx Racing and Presque Isle in Erie for thoroughbred racing and the Meadows, Pocono Downs and Harrah’s in Chester for harness racing.

Each track submits takeout rates to the state racing commission, which can approve or deny them. Tufano said rates have stayed fairly consistent, although the Meadows raised its trifecta takeout from 29 to 35 percent two years ago. Takeout rates across the country typically vary from 15 to 25 percent, and in Pennsylvania the rate includes a state tax of between 1.5 and 2.5 percent.

“If the takeout rates get too low, the tracks will lose money on those wagers,” Meadows president Mike Jeannot said. “We’ve lowered them and watched what happens, and there’s never been any evidence that lowering the takeout increases the [betting] handle.”

The industry has flourished with the Pennsylvania Race Horse Development Fund, which benefits from 10 percent of slot machine revenue in the commonwealth — a total of $200.6 million last year. The Pennsylvania Racing Equine Industry released a study in June concluding that 8,760 jobs have been created by the industry with a total economic impact of more than $875 million from 2006 through 2009.