As California racetracks struggled into their second month of the 2010-11 season, the president of a horseplayers' group that is leading a betting boycott of Santa Anita Park and Golden Gate Fields said racing officials in the state are getting the point.
"Bettors are customers and they are looking for value," said Jeff Platt, president of the San Diego, Calif.-based Horseplayers Association of North America. "And if they don't get it, they are going to go elsewhere."
Horseplayers are protesting an increase in pari-mutuel takeout rates on exotic wagers at Santa Anita and Golden Gate Fields that went into effect this year. They plan to continue the boycott until the takeout hike is rescinded or the tracks take other action to benefit players.
The California Horse Racing Board approved the rate for daily doubles and exactas going from 20.68% to 22.68%, while the rate for wagers involving three or more horses went from 20.68% to 23.68%. The action followed passage of state legislation promoted by the Thoroughbred Owners of California and the racetrack associations that specified revenue from the hike would go entirely to overnight purses.
Industry officials have maintained the current rates are in line with those in other jurisdictions for those types of wagers, and they note that the California withholding on win, place, and show wagers of 15.43% remains the lowest rate in the nation among major tracks.
The assumption was that an increase in purses would reverse a dismal decline in field sizes, which would boost handle and benefit the tracks as well as the owners, who foresaw a 25% increase in purses. In addition, optimism was high going into the Santa Anita meet with the return to a dirt main track, replacing the synthetic surface that was reviled by some handicappers.
Two months into the season, though, those trends have failed to materialize. While purses are up by $1.3 million due to the increase, field size has remained static and is even down slightly. Through Jan. 31, according to figures provided by the California Horse Racing Management Systems, all-sources wagering at Santa Anita has dipped 10.81% from last year, and Golden Gate has experienced a 9% decline. Those figures were calculated on the basis of daily averages rather than gross handle.
(Due to incorrect figures, the decline at Golden Gate was originally miscalculated at 19.92%.)
(The Blood-Horse, examining Equibase totals for the month of January only, unofficially found that Santa Anita was off by 3.1% ontrack, by 5% at California simulcast facilities, and by 15.8% at out-of-state locations, contributing to a 10.8% overall decline.)
At Santa Anita, according to the CHRIMS figures, the win pool has declined by 11.5% over last year, while the exacta and trifecta totals are off by 12.7% and 15.6%, respectively. The Golden Gate win pool is down 8.1% while exacta and trifecta betting has declined by 12.% and 14.7%, respectively.
Platt, noting that Santa Anita is off about $17.7 million overall as of Jan. 30, said California is suffering while tracks that have instituted lower takeout wagers, such as Gulfstream Park and Tampa Bay Downs, are seeing an increase in wagering in spite of a down economy.
Platt believes it proves HANA's contention that any takeout hike is bad for business. And he warns that as more and more California bettors become familiar with other tracks, it will be difficult for the tracks to get them back.
"It's not us out there calling for a boycott, but the publicity has made other bettors much more aware of the takeout rates," Platt said. "It has had an effect on California because customers are gravitating toward the tracks that have made the effort to attract them. (Bettors) are really put off by the increase, and they are moving away.
"I think something has got to happen (as handle continues to dwindle). There's either going to be a purse cut or the takeout will be rescinded."
Platt said he was encouraged when HANA representatives met with Santa Anita officials and a TOC consultant the week of Jan. 24. A second informal meeting was held at Del Mar.
"Right now I believe there are a number of people in track management that are considering going to the CHRB to ask that it rescind the takeout increase," he said. "The TOC is being very tight-lipped about this. This was a horsemen's idea, after all, not a track idea. They just went along with it. But they are businesses, and if I'm a businessman and I see that a business plan or strategy is losing money, I'm going to look for ways to turn it around."
Guy Lamothe, chief operating officer for TOC, refused to comment on the boycott. Arnold Zetcher, chairman of the TOC board of directors, could not be reached for comment.
Santa Anita has so far been able to avoid cutting purses, but that will prove costly if the handle situation doesn't improve.
CHRB vice chairman David Israel said he is unsure of how much of an impact the boycott has had, but he is concerned about conditions later this spring when the weather improves nationally and stables that are in Southern California for the winter return to tracks in Kentucky, Florida, New York, and elsewhere.
"If we lose 300 horses, I hate to think about what it's going to do to field sizes," he said.
Israel has been the target of strong criticism from HANA for saying Santa Anita and other tracks in Southern California are in competition with other major professional sports and must attract customers in the same way that the Dodgers and Lakers do in order to generate new fans for racing. His critics believe Israel is failing to recognize the importance of making the game more attractive to bettors.
"I'm not sure how big the boycott is," Israel said. "Just because they call me names doesn't mean they are completely wrong. I wrote for television for many years, so I'm used to being criticized. It doesn't bother me. But I notice it's the same three guys that write all the e-mails."
Israel said he favors the CHRB taking action to lower the takeout rate on wagers made at the track.
"A dollar spent on the track (for horsemen) is much better than one spent offtrack, and it's time we recognized that," he said. "It costs money to come to the track, and those people should get a better deal. The takeout should be lower or there should be a bonus of some kind."
Israel said the CHRB would only consider rescinding the takeout increase if the owners and tracks requested it. That has not occured, he said.
"It's not (the CHRB's) increase, it's the TOC or the tracks that made the decision," Israel said. "The legislation was approved, and we didn't really have much choice (in approving it)."
Platt said Santa Anita may have placed too much emphasis on the importance the new racing surface, estimated to cost $3 million, would have for bettors.
"It's funny, but I believe they are in a worse place now than they would have been had they left the track alone and not raised the takeout," he said.