Horseplayer Group Battles Calif. Takeout Hike

A national horseplayer's group is hoping to head off a takeout increase of 2% to 3% for exotic wagers on California races being discussed by Thoroughbred interests and the speaker of the state Assembly.

The Horseplayers Association of North America is urging its membership to contact elected officials to protest the rate hike after language to amend a pending horse racing bill by Democratic Assembly Speaker John A. Perez of Los Angeles was circulated July 28.

According to the four-page proposal, the increase would be used to augment Thoroughbred purses, which are falling statewide in the face of declining handle. The takeout hike would be for 2% on exotic wagers involving two betting interests (such as an exacta or double), and 3% on exotic wagers involving three or more wagering interests (trifecta, superfecta, and the pick six, for example). Everyone making such wagers on California races, whether inside the state or out, would be affected.

The current California takeout rate is 20.68% on all Thoroughbred exotic wagers except for the state and county fairs, which deduct 22.02%, according to the document. Higher takeout means less is returned to bettors for winning wagers.

The current rate on win, place, and show wagers is 15.43% and 16.77% for the fairs. Those rates would not be affected by the plan.

"I hate it," said HANA president Jeff Platt when contacted July 29. He believes higher takeout will reduce the handle because people will be less likely to wager, and he points to a big downturn in handle at Los Alamitos Race Course after it received approval for a 2% takeout increase this year as an example.

"I feel it is the wrong action to take," Platt said. "They should be lowering (rates), not increasing them."

But Platt admits that he expects the bill, AB 2414, to be amended as planned. If it is signed into law, he's hoping the California Horse Racing Board will have the ultimate say on whether the hike goes into effect.

The recent extension of the takeout at Los Alamitos by unanimous vote of the board, however, leaves him concerned about where the CHRB would stand.

While discussions of the takeout increase have apparently been ongoing between Thoroughbred owners, the tracks, and Perez's office, nothing has been brought publicly to the CHRB, which has a legislative committee headed by board chairman Keith Brackpool.

Arnold Zetcher, recently elected chairman of the Thoroughbred Owners of California, said it would "be a little premature to be talking about it."

"The document is still in the formative stages," Zetcher said. "At the proper time, I'll be more than happy to talk about it."

Action would need to come quickly, however. The state Legislature adjourns for recess at the end of August, so it must be added to the current bill or another racing measure by then if the hike is to have any chance of success before a target date of Dec. 24. That is when the increase needs to be in place in order to allow enough lead time to negotiate rates with "out-of-state betting systems" for 2011, the document states.

George Wiley, an aide to Perez on horse racing concerns, noted the original bill was intended to convince the Breeders' Cup to relocate in California permanently by providing a minimum of $2 million annually for promotion of the event, which he said "would be good for the economy and good for horse racing."

"The speaker continues to be concerned about the deteriorating condition of the California horse racing industry and the impact of this on the state's economy," Wiley said in an e-mail. "(He) is additionally aware that there are conversations occurring involving the CHRB and the state's racing industry that are focusing on whether it would make sense for California to adjust its takeout to be more competitive with other states so that more revenue could be generated for owner purses, which is critical to the viability of the state's racing industry. 

"Because our industry does not have the option of supplementing its purses by other means of gaming as is the case in some other states, all options must be considered here, including adjusting the takeout. California state government has all but eliminated the license fees the state's racing industry pays to the state, and so the use of the takeout represents one of the few, if only, tools available left to help this industry."