Over the course of one year, De Francis said the increased takeout is expected to raise about $1.8 million. As stipulated by a state law passed earlier this year, every dollar from increased takeout will go into a fund that will finance the sale of bonds for track renovations. The Maryland Racing Commission will oversee the fund, and the Maryland Economic Development Corp., a state agency, will sell the bonds.
With the blessing of Gov. Parris Glendening and the state General Assembly, the Maryland Jockey Club raised the pari-mutuel takeout on races at Laurel Park, effective July 1. The takeout on Laurel races—and in 2001 at Pimlico Race Course—has gone from 17% to 18% on win, place, and show wagers; from 19% to 21% on exacta and daily double wagers; and from 25% to 25.75% on trifecta and superfecta wagers. Though the increases appear to be minimal, and the motive behind them admirable—much-needed renovations at Laurel and Pimlico—charging customers more to gamble is a bad idea, according to students of betting economics. “When you increase the takeout, people wind up with less money in their pocket,” said Maury Wolff, an economist and professional gambler from Alexandria, Va. “They bet less simply because you're taking more money out of circulation. This was a bad business decision for the overall health of the game.” The idea to hike the takeout to fund renovations came from the MJC, who president, Joe De Francis, said he did it reluctantly. The revenue generated from the plan is expected to fund about half of $60 million in improvements at the aging plants. “We are not enthused about it,” he said. “Any time a business is forced to raise prices to its customers, it's not a happy event.” The increased takeout applies only to races at Laurel and Pimlico. Takeout on out-of-state races simulcast into Maryland aren't affected. “Our corporation has put every single penny we possibly can into fixing up these facilities,” De Francis said. “We have looked under every rock and behind every tree for additional money. It's like owning a restaurant that needs a major overhaul. Part of paying for that is a very, very minor increase in menu prices.”