When Eric Halstrom first proposed his big idea to Randy Sampson, the Canterbury Park president needed a little convincing. On the surface, it sounded like a radical concept: by reducing the amount of money the Shakopee track took from each wager, it could potentially entice horseplayers to bet thousands more each day.
Sampson’s initial response was something less than positive.
“I said, ‘You’ve got to be kidding me,’ ’’ he recalled last week. “Why would we do that? It’s crazy. But then we started doing the math and talking through it, and you could see the upside.’’
They will launch their grand experiment Friday, when Canterbury begins its 69-day season. Sampson and Halstrom, Canterbury’s vice president of racing operations, determined the track could reduce its takeout — the amount withheld from each wagering dollar for purses, track expenses and profits — to the lowest level of any track in the country with minimal financial risk. Already, the move has paid major dividends, raising Canterbury’s national profile and drawing praise from horseplayers who barely noticed it in the past.
Canterbury has lowered takeout from 17 percent to 15 percent on win, place and show bets. The rate also dropped from 23 percent to 18 percent on most exotic wagers such as exactas and trifectas. That could cost Canterbury as much as $300,000, but Halstrom said relatively modest increases in handle would make up for that — and he believes the move could double the track’s handle within a year or two.
Serious horseplayers have long criticized the sport for high takeout rates, and Canterbury’s reduction has been the talk of the industry. Charles Davis, a professional gambler from Seattle, said he has long admired Canterbury but has rarely bet on its races. That will change this summer, and he’s betting many others will join him.
“I think Canterbury will make more money even in this first year, and I think it will grow exponentially from there,’’ Davis said. “And for the rest of the industry, if a little track from Minnesota can do it, they really have no excuses left.’’
Potential for growth
Canterbury is in the fifth year of its 10-year purse-enhancement agreement with the Shakopee Mdewakanton Sioux Community, which has fueled a 91 percent increase in purses since 2010. With purses of $14.2 million this season, the quality of racing continues to improve, and the track continues to attract some of the largest and liveliest crowds in the country.
Its handle, though, still lags behind other Midwestern tracks. An average of $587,571 per day was wagered on Canterbury’s races last summer. Halstrom believes there is potential for major growth, but he knew it would take a bold move to grab the attention of the big-money horseplayers who generate most of the wagering dollars.
Over the winter, Halstrom talked to scores of those players and found almost none who bet on Canterbury’s races. Even at Canterbury, Minnesotans who bet $1,000 or more per day were wagering exclusively on races simulcast from other tracks, because Canterbury’s takeout rates and relatively small wagering pools didn’t offer a good enough return.
“The way to grow our business quickly is to make new customers,’’ Halstrom said. “And it became clear that if we were going to steal market share, we were going to have to make people see us differently. Takeout is such a hot-button issue. We felt like [a reduction] could really make us stand out from the crowd.’’
National horseplayers’ groups have long argued that high takeout rates make horse racing a poor value when compared to other forms of gambling. By returning more money to bettors, the theory goes, those bettors will wager more money. That leads to more money in the wagering pools, which stimulates even more betting.
Canterbury will be the first track in the country to test that hypothesis over a full season. The Horseplayers Association of North America is asking its members to bet Canterbury’s races, and the takeout reduction vaulted the track from No. 29 to No. 6 in its annual rankings of American tracks — ahead of elite facilities such as Belmont Park, Churchill Downs and Santa Anita.
Bruce Meyer of Prior Lake, a three-time Canterbury handicapping champion, said low-stakes players probably won’t notice the 2 percent increase in payout on a win bet. But it makes a big difference, he said, to the 5 to 10 percent of gamblers who account for 80 to 90 percent of the handle.
“Those are the people who drive the game,’’ Meyer said. “Usually, Canterbury isn’t discussed nationally at all. This year, there are serious people taking a look at it. There’s way more buzz than I can ever remember.’’
Meyer believes Canterbury’s handle could increase by as much as 20 to 50 percent this summer. Sampson said a 30 percent increase in handle bet at out-of-state locations and a 5 percent rise in on-track wagering would keep the track’s revenues steady.
Canterbury also will show its races in high-definition video this season, something only 10 tracks in the country are doing. That is expected to give its races a more prominent place on the TV screens at other tracks and wagering centers, which also could draw new players.
Though Sampson is hopeful the $75 million purse-enhancement agreement will be extended beyond 2022, there are no guarantees. To secure Canterbury’s future, he said, the track must generate more revenue from racing — and just like the horseplayers, Canterbury officials are betting the takeout reduction will yield big rewards.
“We want to get our handle to $1.2 million [per day] in a short amount of time, and the dollars are there for that to happen,’’ Halstrom said. “We haven’t given people a lot of reason to get away from what they’ve bet on for the last two decades. Now we have.”