California racing has declined dramatically in the past 20 years and it needs to stop looking for easy answers, said Richard Shapiro, chairman of the state's horse racing board, during a dinner attended by about 150 breeders Sept. 22.
Confronted by the potential loss of Hollywood Park and Bay Meadows Race Course to redevelopment and fruitlessly pouring its legislative efforts into acquiring slot machines, the state's racing industry needs instead to develop a workable business plan and execute it, Shapiro said.
"We have some very real challenges ahead of us and we are a long shot to hold our position nationally unless we band together and reinvent ourselves," he said. "Basketball did it. NASCAR did it. What's to stop us?"
Appointed to the commission in 2004, Shapiro has directly confronted nearly every segment of racing during his brief tenure. His comments before the California Thoroughbred Breeders' Association at Harris Ranch in Coalinga hit on most of his major concerns and were well received by the influential group, who gave him a prolonged standing ovation afterward.
"Let's stop talking about quick fixes and Band-aids. Enough with slot machines and instant racing," Shapiro said. "We keep wanting an instant fix. There isn't one. We need to adopt a new attitude of investment, building and creation."
Shapiro said account deposit wagering and simulcasting needs restructuring.
"I am not against simulcasting and ADW but I don't like how we're using it," he said. "It makes no sense to me that the tracks, the horse owners and the breeders do not make the lion's share of these revenues. We expected new fans, new bettors and that didn't happen. Let's at least take back what is ours and sell it at a price we can afford."
What is happening, Shapiro said, is racing is fast becoming a studio sport where fans bet from their couches.
"There has to be a better model that helps us build the industry and keep our racing venues in business. We are using ADW all wrong. We should have wagering machines all over the state, in places where people cannot go to the track."
To encourage attendance, he said winning returns should be larger on-track. Shapiro suggested that the industry fight the offshore betting companies by lowering take-out and offering rebates.
"We are getting the hell kicked out of us from off shore. We won't be able to regulate them, so let's put them out of business. Lower the takeout, bite the bullet and drive them away."
The state would have to help, he added, and "everyone would have to give up some of what they get and it will be difficult. But just imagine what would happen if California, as an experiment for one month, lowered the take-out to 12%. Wouldn't everyone bet here? Isn't that how WalMart became WalMart?"
Shapiro suggested California needs to adopt fewer racing dates and overhaul its schedule, which he has proposed to the CHRB, and put more money into marketing and promotion.
"We have to get people to our tracks – we cannot simply rely on the Internet and simulcasting," he said. "We need to put our product in front of people where they want to see it, when they want to see it, and we need to take care of those that will come to our playgrounds. Our facilities need to be updated, our fans need to be treated better and we can't put a lousy product in front of them."
He called on all segments of racing to pull together to form a united front in order to get legislative relief for such issues as the encroachment of Indian gaming.
Shapiro drew the biggest response from the crowd when he said, "We have to stop making fools of ourselves in Sacramento. We need to seek relief and that relief has to be reinvested in our foundation. Racetracks pay over $40 million in license fees, and claiming and horse sales tax are another $6 million. Why not try to get that money back in the game as a start? Put that money to purses and breeding incentives. Let the tribes pay our license fees!"