The Ideal of a Racino

re: The Ideal of a Racino

Ted — Wed, 19 Nov 2008 01:40:18 GMT

Thanks, Carl, I appreciate it. I have no doubt that my calculations could be off, however I very much took into account what the machines give back. By definition, slot "win per unit per day" already calculates the money returned to the player. Slot machine win is calculated by the amount of coin into the machine less the money paid out less hand paid jackpots (any gaming textbook will have this definition). Therefore a machine that "wins" $300 wins that amount for the casino. That's why I used win per day as my starting point rather than total revenue.

Richard - In my opinion, when licenses are given to horse race tracks precisely because they are gaming destinations and the only way the venue even can have slots is to provide racing dates, then there needs to be more equity for the racing program. In return, yes, the racing program needs to be more compelling. However to call it expense bloated when you're dealing with equine athletes that need constant care provided by trainers, grooms, riders and others is a bit unfair. It's not a machine driven industry and these aren't automatons.

I appreciate the reading, the responses and the discussion.

re: The Ideal of a Racino

carl — Tue, 18 Nov 2008 17:06:39 GMT

Your Maryland numbers are grossly misstated:

You say that "the state will get about 67% of the take." You fail to distinguish between the take on the entire slots pool and the take on the slots revenue, after winnings are distributed to the slots players. In actuality, the state gets 8% of the overall take, i.e. the entire slots pool. 87% of the entire slots pool is distributed to the slots players as winnings. Of the remaining 13% (often termed "revenues"), the state takes 67%, or about 8% (approximate)of the total slots pool, which is then devoted to state government purposes, such as schools, purse monies, breeding programs, track improvements, and various social programs tied to gaming. The remaining 4% (approximate) of the entire slots pool goes to the slots parlor's ownership. The state's overall take in MD is similar to Nevada: 8% of the entire pool.

Thus, your numbers analysis of MD is completely wrong. Based on your hypothetical $109,500,000 a year figure, the correct breakdown in MD is that about $95,265,000 is distributed to the slots players as winnings, with $8,760,000 going to the state, and $4,380,000 going to the parlor owner.

Citation: the Baltimore Sun breakdown (end of the article):

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re: The Ideal of a Racino

Richard R — Tue, 18 Nov 2008 16:59:28 GMT

Slot-machine revenue is provided by the general population and the proceeds should be used accordingly. When horse racing interests in any state think that they deserve a share of the proceeds to perpetuate their expense-bloated model of gambling entertainment it exposes the true worth of the game that they are presenting.

re: The Ideal of a Racino

Cangamble — Tue, 18 Nov 2008 16:19:40 GMT

In Ontario, the approximate split for profits from slots is the following:

Track 10%

Horsemen 10%

Town approx. 3.5%

Government (OLG) 76.5%

A track like Woodbine is flourishing under that arrangement.

But Fort Erie is having problems and may close.

Small communities do reach a saturation level where expansion becomes futile, and in Fort Erie's case infatuation for slots died down a bit, competition sprung up, the border security issue with lineups cost them, and the difference between CDN and US dollar also affected them.

Slots also cuts into racing profits (cannibalism), as it takes the gamblers who don't want to think much out of the track and puts them in front of a slots machine.

I do think that 15% to the track and 15% to purses makes a lot of sense and is a very workable plan.