Expanded Fairs Offered as Option for California Racing

California fairs offer a realistic option for horse racing’s future at a time when two major racetracks in the state are facing redevelopment and other privately held venues are pressured by stockholders, officials said.

California fairs offer a realistic option for horse racing’s future at a time when two major racetracks in the state are facing redevelopment and other privately held venues are pressured by stockholders for greater revenue returns amid escalating property values.

Industry leaders brought that message to the California Board of Food and Agriculture Aug. 29 during a meeting at Cal Expo in Sacramento. Racing, they said, has funded the fairs for many years. Now, the industry wants to strengthen its ties to public fair facilities and to agriculture.

The board called the meeting, which lasted 5 1/2 hours, in order to look into why the horse industry is considered recreation and not part of state’s agricultural product. No action was taken, though board president Al Montna said he found the disconnect between horses and agriculture “unconscionable.”

“Hopefully, we’ll come back in September with a strong recommendation to bring horse racing back into agriculture,” Montna said.

Racing industry officials pointed to Del Mar’s successful merger of public fairgrounds facilities with a private track operating team, the Del Mar Thoroughbred Club. Del Mar, which operates on state-owned land in north San Diego County under the jurisdiction of the 22nd Agricultural District, is among the most successful tracks in the nation, averaging close to 17,000 fans a day. About $600 million will be wagered during its current 43-day meet.

“Del Mar is a model for what the future of California racing looks like,” said Drew Couto, president of the Thoroughbred Owners of California. “The future can be very bright, particularly with the association to agriculture and public facilities.”

Couto applauded the conversion to synthetic racing surfaces at the state’s major racing venues, noting that Southern California is the first circuit in the nation that will race entirely on synthetic main tracks. He noted that about 7,000 Thoroughbreds started in California in 2006--down 27% in the past 10 years--but the safety factor could help the industry rebound as well as attract interest from out-of-state horsemen.

Racing has wasted too much time fighting Indian tribes for alternative gaming rights when there’s no reason to believe that’s the answer to the industry’s ills, Couto said. Instead, it needs to be strengthening its ties to public facilities and fixing its wagering model, especially account wagering.

“For the past three years, our association has been trying to cultivate a relationship with the tribes,” Couto said. “The competitive tension with tribes comes from land developers who own racetracks saying they have to have alternative gaming in order to compete. It’s not about saving racing.”

Publicly held fairgrounds facilities can provide a stable haven for racing, said Christopher Korby, executive director of the California Authority of Racing Fairs.

“Fairs are already part of the DNA of California racing,” Korby said. “We have an ag-based industry on the brink of crisis due to macro-economic forces outside its control. We need sound public policy that recognizes this inter-relationship.”

There are nine publicly held facilities operating in the state, seven in the north and two in the south, including Del Mar. Organized horse racing in the state began at fairs in the mid-1850s.

“We propose a model for the future of California racing that is at once practical, realistic, and familiar,” Korby said. “We propose that racing facilities at fairs, which are publicly owned, expand and improve to fill the industry’s needs as privately owned, commercial racetracks are developed for purposes other than racing.”

In Northern California, racing is struggling with the likely closure of Bay Meadows in 2008. Bay Meadows, which would be redeveloped, annually hosts about 120 days of racing.

Rick Pickering, chief executive officer of nearby Alameda County Fair in Pleasanton, sees his venue as the most likely option in the Bay Area, but it would require $20 million to $30 million to make a full conversion. More likely, the fair track would initially expand its training facility to fill the void left by the San Mateo track’s closure. But investment needed for a makeover that includes a new turf course and synthetic track is two to three years away, he said.

Pointing to a picture of the Del Mar grandstand, he said: “It wouldn’t look like this. Del Mar talks about averaging more than 16,000 people a day. The average attendance at Bay Meadows and Golden Gate Fields is more like 1,500 to 1,600 a day.”

Said Norb Bartosik, general manager at Cal Expo: “As a model for the future, the public/private partnership works. Cal Expo is trying to take steps in that direction. But we tend to believe that the first movements need to be in the Bay Area.”

In Southern California, the redevelopment cloud hangs over Hollywood Park. The Los Angeles County Fair at Fairplex has discussed its potential as a replacement, but it, too, would need two to three years to make the necessary conversion.

Doug Burge, executive director of the California Thoroughbred Breeders’ Association, said the same real estate market demand exerting so much pressure on the privately held tracks is also taking a toll on the state’s 300 breeding farms. Some, such as the famous Golden Eagle Farm, are selling off much of their property and drastically cutting the size of their operations, or are closing, he said.

The annual Thoroughbred foal crop of 3,700 continues to rank third in the nation while accounting for 11% of the national foal count, Burge said.

“We’re seeing a significant reduction in the size of our foal crops,” he said. “Overall, this is not a great time for breeding horses in California. What we’re experiencing is that states that were never a threat to us are now, due to having alternative gaming, attracting our horses and our horsemen.”