A request for an additional 1% takeout hike to help pay for facility improvements at Alameda County Fair, the heir apparent to the closing Bay Meadows, hit a wall of opposition before the California Horse Racing Board May 20.
The California Authority of Racing Fairs withdrew its request before board members, a majority of whom questioned taxing bettors an estimated $1.25 million annually for an unspecified plan, took a vote.
After listening to their objections to the idea, Rod Blonien, a Sacramento lobbyist representing the Alameda fairgrounds in Pleasanton, told the board: "I can count. Why don't we wait a month and come back (to the next CHRB meeting) and answer the questions you have raised then?"
Christopher Korby, executive director of CARF, said afterward that he is "very disappointed in the inaction of the board. We felt we were doing something for the good of the industry."
Korby hopes to get the additional takeout authorization in place before the 14-week summer fair racing season begins at Alameda June 25. That would allow CARF to include the additional takeout in negotiations with out-of-state satellite providers and other venders in 2008. The proceeds, which would come from wagers placed on fair races, would be used to bond debt service for track improvements, Korby told the board.
Blonien, based on initial discussions with Alameda County, said that the cost of the expansion project would probably be in the $20 million range.
The CHRB's next meeting is June 19 at Golden Gate Fields.
The takeout legislation, signed into law last year, is designed specifically for maintenance and facility improvements at racing fairs. The takeout increase, if approved, would be in effect indefinitely. The other county fairs that make up CARF -- Fresno, Humboldt, San Joaquin, San Mateo, Solano, and Sonoma -- have agreed to defer any of their needs until after Alameda upgraded, Korby explained.
Initially, that would include improvements and expansion of the Alameda fairgrounds' backstretch and replacement of its dirt track with a synthetic one. Officials envision a three-year process to make Alameda a viable replacement for Bay Meadows, which is to be demolished for redevelopment after 74 years as a major Northern California track.
Current takeout rates at the county fair meets average just over 20%, according to figures provided by CHRB staff. Total takeout from the fairs in 2007 was just under $25.5 million. The additional deduction, based on the 2007 wagering total, would bring the takeout to an estimated $26.7 million.
Commissioners questioned the lack of specifics for accomplishing CARF's goal. They were also concerned that once approved, the money would be placed in an "Inclosure Facilities Improvement Account" fund governed by the California Department of Food and Agriculture. A committee appointed by the DFA would make decisions on the use of the money. Commissioners wondered if the funds would go to Alameda at all, or if instead other fair facility projects would get the money.
"I'm not sure this is the most effective way to get this done," said Richard Shapiro, the board chairman, calling it "a piecemeal approach." He noted that fans were being asked to pay for the track upgrades that the industry was aware it was going to need for years because of the impending demise of Bay Meadows.
John Harris, the board's vice chairman, added that the increase in takeout could also result in less money being wagered. He noted that fair meet racing revenue is in decline. "If something isn't selling well and you raise the price, it usually doesn't work," he said.
Korby responded that this was a way to "accelerate" the necessary changes in the face of the Bay Meadows' closure by establishing a funding stream for improvements.
"I don't think we disagree," Shapiro retorted. "But where is the comprehensive business plan that will result from this? We tax people more and I certainly agree that it's needed (for the project). But where is this money going?"
He also questioned how raising takeout for a fund that winds up with another agency would work in practice. "Once the money is escrowed, it's out of our hands," he said.
Harris added, "These types of funds are famous for never getting spent."
In other action, the board reluctantly approved separate two-week meets for Solano County Fair at Vallejo July 9-21 and Sonoma County Fair at Santa Rosa July 23-Aug. 4. Members were clearly unhappy that county fairs at the two sites had chosen to drop a "Wine Country Racing" experiment after just one year. In 2007, struggling Solano transferred one of its two weeks to Sonoma, which has a one-mile track and an inner turf course.
The arrangement, though, was dropped after one year due to mixed results. The decision was made by the Sonoma fair board, which was concerned about the additional week of racing when there was no fair in progress and the effect it was having on the turf course, according to Tawny Tesconi, the fair manager. Interestingly, Solano, which cut its 2008 fair activity back to only one week, July 9-13, will have no fair going during the second week of its race meet.
The CHRB also approved a 43-day summer fair meet for Del Mar July 16-Sept. 3, with the proviso that the application would be amended if an account wagering agreement with TVG could be changed. The board is encouraging the continuation of an experiment that allows any licensed ADW providers in the state to accept wagers on all California races.
The experiment began at the beginning of the year and resulted in a 41% increase in computer/phone wagering at Santa Anita this season. Del Mar, which has been an exclusive track with TVG, is waiting to hear from the ADW company on a proposal to extend the arrangement, which is set to end at the conclusion of the current Hollywood Park stand.
"It's been very productive and the fans seem to like it," Shapriro said.
The board also gave final approval to a rule change providing that horses entered after a lay-off of at least 180 days can be declared ineligible to be claimed provided that they are competing at a claiming price equal to or greater than the level they were at before being sidelined.