Responding to what track owner Dr. Ed Allred called "a desperate situation" at the state's simulcast wagering locations, the California Horse Racing Board agreed to hike takeout on Quarter Horse wagers at Los Alamitos Racecourse by 2% on Jan. 15.
Allred told the board during its meeting at Santa Anita Park that roughly half of the projected increase in revenue as the result of the increased takeout would go to the struggling simulcast network. The other 1% would belong to horsemen and the racing association. The board approved the rate increase by a 6-1 vote with commissioner Keith Brackpool in opposition.
Satellite facilities have lost ground in recent years in California due to the increasing popularity of home betting through advance deposit wagering.
CHRB staff calculated the 2009 Quarter Horse takeout rate at 16.09% for win, place and show wagers, and 21.53% for exotic wagers. It projected that the additional 2% withholding would net an increase of $955,338 on win, place and show bets, and $2,847,429 on exotic wagers.
Allred said he was forced to seek the increase because a number of satellite facililites were threatening to close their doors on the night Quarter Horse industry due to the decline in wagering.
"We absolutely have to do something to increase the amount of money to (satellite facilities)," he said. But Allred added, that as a horseplayer, he would be opposed to the action.
“This request is totally alien to my way of thinking,” he said, “but I don’t know what else to do. This is a desperate situation.”
The increase was opposed by Jeff Platt, president of the Horseplayers Association of North America. Industry representatives supported the action.
Under legislation passed in 2009 to allow such hikes in takeout, satellite facilities would receive an additional 1% on the first $50,000 handled per day, provided they accept all available signals from the Quarter Horse racing association. The remainder of the additional revenue would be split between the horsemen's organization at Los Alamitos and the racing association, according to track representative Rod Blonien.
It was not clear when the increase would take effect. It will remain in place until Sept. 8, closing day of the Del Mar Thoroughbred meet. Allred pledged to keep the board informed of how the takeout increase was affecting overall handle.
That was Platt's main objection. He told the board that staff projections of revenue increases were "flawed."
"It assumes handle will remain the same," Platt explained. "It will not. Every study done shows that as you push up takeout, handle goes down."
Platt said his group, HANA, has more than 1,500 members who wager more than $65 million annually, and that a primary issue on which tracks they bet on is the takeout rate. He noted that California has maintained the lowest win, place and show takeout in the country.
Afterward, he said his membership "would not take it (the takeout increase) well." He said that while he understood the reason for the action, the decreasing handle problems tracks are experiencing are their own fault.
"If they were doing a better job of satisfying what customers want, they wouldn't be in this situation," Platt said. "It's just a shame."