CHRB Frustrated Again by MI Developments
by Jack Shinar
Date Posted: 7/22/2010 8:51:53 PM
Last Updated: 7/26/2010 1:22:09 PM

Thoroughbred racing in California remained uncertain about the future following a state horse racing board meeting July 22 at Del Mar in which major track owner MI Developments refused once again to provide a glimpse of its plans.

Apparently concerned with what California Horse Racing Board Chairman Keith Brackpool called a "confidentially issue," officials for MID, which owns Santa Anita Park, Golden Gate Fields, and the advance deposit wagering firm XpressBet, allowed to pass a July 1 deadline to present a comprehensive business plan to the board. MID assumed control of the racing assets in April as part of a court-approved reorganization of its bankrupt subsidiary, Magna Entertainment Corp.

State laws governing horseracing require that no entity can own more than one business unless the board waives that restriction "in the best interest" of the sport. MEC had operated for several years under such a waiver, but the current board, led by Brackpool, has insisted on knowing what the new owners have planned for the future.

There was no mistaking the frustration of Brackpool and most of those attending the meeting at Del Mar's Surfside simulcast wagering center. Brackpool said he put MID's request for confidentiality "in the dog ate my homework category."

He said the board's insistence on a business plan wasn't "fanciful" but the result of serious concerns within the industry about subjects such as racing dates, the lease with Oak Tree Racing Association, and Santa Anita's much derided Pro-Ride main track, which lost a number of dates last season when it failed to drain properly.

Brackpool said he wondered if MID was intentionally misleading the board to avoid presenting a plan. 

"If you aren't going to send it (the report), let's not pretend any more that this is a confidentiality issue," he told George Haines, president of Santa Anita.

Board member Bo Derek noted this was the third successive meeting in which promised answers from MID have not been forthcoming.

Added Guy Lamothe, representing the Thoroughbred Owners of California, "What we really need in California is stablility. We need to know that our anchor track (Santa Anita) is still going to be here. We aren't getting that signal (from MID). We have owners flooding out of California. Nothing we're hearing today is bringing them back."

Haines admitted the requested business plan was not complete. But he did divulge that MID would begin renovation work on the main track July 26. Santa Anita is currently closed to training while Southern California racing proceeds at Del Mar. Hollywood Park is handling training hours for those horsemen not stabled in San Diego County.

John Sadler, president of the California Thoroughbred Trainers, said Haines' remark was the first he had heard of a commitment from the new track owners regarding the main track. MID chairman Frank Stronach told the CHRB at a meeting last month he was not planning to replace the surface for at least another season.

"We are very concerned," Sadler said. "If they had a plan (for renovation), we weren't privy to it. We need a better plan than 'we hope it doesn't rain.' "

Sadler also deplored the condition of Santa Anita's backstretch. Haines said that planned renovation work is proceeding.

Left with few options, the board approved a motion by Brackpool extending MID's existing waiver to operate Santa Anita, Golden Gate, and XpressBet until Dec. 26. The extension came with caveats, however. MID was given until Sept. 1 "to prepare and submit to the board a comprehensive plan setting forth its intended business practices and procedures" under single ownership.

To entice MID's cooperation, the motion provides that the document "will be deemed exempt from disclosure under the (California) Public Records Act" and the state's evidence code.

After learning that renewal of Santa Anita's lease with Oak Tree for the upcoming fall season had not been executed yet--in spite of Stronach's go-ahead given at last month's meeting--Brackpool made his motion contingent on MID completing the agreement with Oak Tree by July 23 at 3 p.m.

Oak Tree, which has leased Santa Anita every fall since 1969, had its agreement abruptly voided after MID took over management at Santa Anita. But Stronach relented for the 2010 season at the conclusion of a contentious discussion before the CHRB June 22.

Frank Demarco, counsel for Santa Anita, told the board the Oak Tree lease could not go forward until MID was assured it would continue to own the track. With the waiver extended, Haines said after the meeting the lease would be executed.

Haines also said the track renovation work would concentrate on the area around the finish line where the biggest problems with drainage occured during the winter/spring meet.

In other action, the CHRB extended a 2% increase in takeout at Los Alamitos Race Course through the end of the year. The board originally improved the hike Jan. 15 on a temporary basis.

Richard English, representing Los Alamitos, told the board, "This increase in takeout is vital to our operation."

English said the increased takeout has helped the track deal with a downturn in hande of about 16% from 2009, which he blamed on smaller field sizes and a reduction in the number or races offered.

Bettors Barry Meadow of TR Publishing and Jeff Platt of Horseplayers Association of North America disagreed with that assessment, blaming the dip in wagering directly on the takeout hike.

According to English, the takeout hike raised the Quarter Horse track's deduction to 16.62% on conventional win, place, and show wagers, and 22% on exotics.

Questioned later, however, a CHRB offical said the actual takeout rates at Los Alamitos are currently 17.63% for conventional wagers and 22.88% on exotics.

"I don't see how you can raise prices in these economic conditions," Meadow said. "If anything, you should be cutting the takeout, not increasing it."



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