By Joe Bianca
Keeneland found itself under fire last year after raising takeout rates for its Fall meet. The company listened to its customers, however, and reversed some of the increases this February. With the track’s always-anticipated Spring Meet set to kick off Friday, TDN Associate Editor Joe Bianca talked to Keeneland Vice President of Racing and Sales Bob Elliston about that decision and what he’s looking forward to most this April at the historic Lexington oval.
TDN: Obviously, the big news recently is Keeneland bringing some takeout rates back down after raising them in the fall. Can you take me through that decision-making process, from the original increase to the rollback?
BE: Last year, when we made the decision [to raise takeout], we looked at where Keeneland’s blended takeout was and our relative pricing to other circuits in the country, and we were significantly below that. When we made the modifications, we were still in a similar range on blended takeout with the major markets we compete with. We were of the mind that the increased revenues, to put the money back into the sport, with physical improvements and fan development, we thought people would understand what we were doing. We heard a lot from our customers and the recurring theme was that blended takeout wasn’t necessarily the driver of wagering, it was takeout on specific pools. We actually did in fact grow our revenue streams, but we noticed that there were specific problems around the exacta, daily double and win/place/show pools. That was most of where the problems were and those pools made up almost 60% of our wagering. We talked to customers about, if we were able to go back to more competitive pricing for those pools, would they see that as more advantageous. So we specifically targeted exactas and win/place/show, which make up about 55% of our wagering. Those increases were the ones that really drove our customers nuts.
TDN: Were you surprised at the level of backlash from the fall decision, referring to the horseplayers’ boycott in particular?
BE: We weren’t surprised because we achieved the financial outcomes we thought we would. We forecasted a slight decline, but if you know us and know what we were doing with the additional resources, you felt better about it. There was no boycott on track and we saw a limited difference here. Customers pointed out a very valid point and that’s why we changed it. Looking just at blended takeout wasn’t the correct way to look at it.
TDN: Keeneland is widely known in the industry as a forward-thinking, customer-friendly company. Considering that, how important was it for you to demonstrate that you were listening to your customers on this?
BE: That’s absolutely the case, we do view ourselves as forward-thinking and a company that makes customer-centric decisions. Just in the last several months since Keeneland January, we’ve been going through listening sessions, sitting down with people from consignors to big buyers to sellers. We also had a focus group with 15 top handicappers and listened to them about other changes we can make, about possible changes in our wagering menu, guaranteed pools, etc. To have them respond the way they did after we made the [takeout decrease] was gratifying.
TDN: Can you expand upon what you were looking to learn from the players you talked to?
BE: Where they get their information to handicap from, their preferred vehicles [of data], how we can support that with additional elements, both on-track and on our broadcast, that go to the kind of things they were relying on.
TDN: The Spring Meet is unique from the Fall Meet in that it isn’t sandwiched within your sales season and is more of a standalone racing event. Do you operate any differently in the spring being able to focus all of your energy and resources into racing?
BE: Operationally, not really. Here at Keeneland, because this is a national meet, horses come from all over the country and it’s the same way with October. In the spring, we get some horses prepping for the Kentucky Derby and Oaks and it’s also great that our other stakes can support the Triple Crown cards. We have such a tremendous following as far as the quality of these races attracting interest. We have a national audience that’s both physically here and watching through simulcast.
TDN: What would you say you’re looking forward to most during the upcoming meet?
BE: It’s going to be tremendous. We had a record number of stall requests, which is a good indication of who wants to come race with you. We had very few stalls available on site and have some of the top outfits from all over the U.S. coming here. You look at the quality of the horses on the stall applications and we may have five or six Breeders’ Cup champions racing here in terms of how the stakes are shaping up. Our stakes coordinator has been loaded up with work getting all of that into the system because we’ve seen such tremendous enthusiasm. That coupled with the reaction from horseplayers from the takeout response that we had, all that suggests, if anyone can control the weather, we’ll have a dynamite meet.