TOC: Takeout Hike Unpopular But Necessary

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Faced with criticism and a move to decertify it as the official horsemen’s organization in California, the Thoroughbred Owners of California held a public forum at Hollywood Park June 25. The group also announced that Lou Raffetto Jr., a former Mid-Atlantic racing executive, would be taking over as president July 1.

While two of the TOC’s most vocal critics asked the majority of the questions during the Hollywood Park meeting, most of the audience of about 50 wanted to listen to what the TOC board members had to say. The board members spoke on topics ranging from California’s pari-mutuel takeout increase that raised purses to the prospect of legalizing exchange betting.

Led by TOC chairman Jack Owens, about half of the TOC’s 15-member board met with interested owners after the races. Mike Pegram, Bob Baffert, Billy Koch, Pablo Suarez, Ron Ellis, and Madeline Auerbach joined Owens, who with Pegram and Suarez addressed many of the issues facing the organization.

Pegram tackled the most controversial: raising takeout on exotic wagers to bolster purses in an attempt to increase field size. He said people want to know why the industry collectively decided to raise takeout, a move particularly unpopular with horseplayers.

“To be quite honest, it was about increasing purses,” Pegram said. “It was about California becoming competitive with other jurisdictions.”

California, Pegram noted, has to compete for horses nationally against states with purses supported by alternate gaming revenue.

“We’re talking about a program that may take three to five years,” Owens said. “We’re in this for the somewhat longer haul. It’s not something that’s going to turn around in the very short term. We’re going to have to be patient.”

Owens said that because of the purse increase, mares are being returned to California, and some in the state that have not been bred in the past few years are being bred again.

Owens and Pegram’s words did not sit well with California horseplayer Andy Asaro. He interrupted Pegram to note that pari-mutuel handle has declined in California since the takeout increase, and that field size has not increased. He strongly suggested the legislation be reversed immediately to see if handle bounces back through the rest of 2011.

“You never want to raise prices—understood,” Pegram said. “Anyone who thought that handle wasn’t going to go down would have been naïve. We will continue to look at the numbers because they concern me, and I think they concern everybody in this room. Field size is not going to increase overnight.”

Ellis asked Asaro if he owned horses, and when Asaro replied no, Ellis asked him why.

“I have no interest in owning horses,” Asaro said.

“Then we are looking at things from different sides of the fence,” said Ellis, who likened the racing industry to a triangle consisting of racetracks, horses, and horseplayers. “I can understand that you’re not happy with your side of the triangle, but I can tell you that my owners are disappearing rather quickly. They’ve got to find some way to be able to offset their expenses.

“Without you owning any horses, I think it’s very tough for you to understand our side of the fence. We all gamble, so we can understand your side of the fence.”

Owner Barbara Shuler said she almost left the forum when things got contentious.

“I’m a breeder who races,” Shuler said. “Unless you have horses, unless you have a product, you’re not going to have an industry. You’ve got to take care of the owners and the breeders.”

The TOC directors, who will hold another public forum June 26 at the satellite wagering facility at the Alameda County Fair in Pleasanton, also spoke about how California had negotiated the highest advance deposit wagering rates to the benefit of the state’s racing industry; how the TOC spent money to try to acquire Santa Anita Park and preserve it as a racetrack; and the law that legalized exchange wagering. Pegram said the TOC would not approve exchange wagering until the issues of cannibalism, corruption, and takeout rates are addressed.

Owner Jerry Jamgotchian, another major TOC critic, read from a list of questions he had for the TOC. He passed out his printed list of questions to audience members, and at the bottom of the second page, it read: “Please sign the TOC decertification petition.”

One of Jamgotchian’s questions not on the printed list was whether Raffetto is going to be TOC’s new executive director. Owens confirmed that Raffetto would be joining the TOC July 1 as its president, a position currently open.

Raffetto previously headed the National Steeplechase Association and has served as an executive at several racetracks, including Laurel Park, Pimlico Race Course, and Suffolk Downs.

Owens spoke about the possibility that California would approve Internet poker. He urged the industry to unite and put together an Internet poker site owned by horse racing interests.

“This Internet poker is coming like a freight train,” Owens said. “We were left out of the lottery and (slot machine) compacts. This has the possibility of putting significant amounts of money back into the industry. There’s a chance there that we can make a major difference, but not if we are throwing darts at each other.”