2009 Thoroughbred Handle - At Different Takeout Levels
March 10, 2010
Will Cummings in his comprehensive report for racing titled "Analysis of the Data and Fundamental Economics Behind Recent Trends in the Thoroughbred Racing Industry" said this: "the industry’s frequently-touted “churn factor” of 7" when referring to churn rates (i.e. the amount bet as a multiple of original dollars). This is no secret as we have all heard racing speak of that churn rate innumerable times.
So, that got us thinking. If the industry itself gives us the rate customers churn, we can pretty easily calculate what handle would be at differing takeout levels. And that is what we did for 2009:
This does not use the Thalheimer model, or any other behavioral model for takeout. For example, clearly at 40% takeout, almost every player will tell you that the board will have zero value and there is no way handle would be as high as $6.7 billion. However, using a churn factor that racing itself has trumpeted and extrapolating it at different takeout levels, this is a list that we found very eye-opening.