View Full Version : Lets Talk About California

06-15-2011, 06:36 PM
Lets Talk about California

A commentary:

The representative horsemen’s group was given a huge responsibility by Congress when they were designated to have approval rights over contracts and pricing. The Interstate Horse racing Act (IHA) directive was a departure from tradition that previous the Association and the State Regulators would be sufficient for these matters.

I believe the intention was to protect the rights of horsemen, and that is a good thing. It was not intended the rights of horsemen would conflict with the rights of other members of the industry. The experience is clear today that the act has created unintended consequences in California.

The Thoroughbred Owners of California (TOC) is the group representing the horsemen in California and they (IMO) have taken positions that are not consistent with the intent and spirit of the IHA.

Horsemen have never had it better in California as far as purses are concerned. 30 years ago if you claimed a horse it would take three wins to “get out” your investment. Today, you can run a 10k claimer at Los Alamitos for a 20k purse, and” get out” with one win. Del Mar is next up on the racing calendar and they will have the highest purse structure in history for horsemen.

We hear from the TOC that horsemen are losing money, so they have to have a higher take out from the customers because customers are leaving us. They say the high take out will give us higher field size and attract more horses and customers.


The results are in. Santa Anita and California with the raise in take out was down $120 million plus in handle with no increase in field size. Hollywood Park will be down also in handle and the largest bright spot is in handle for the customer inspired “Players pick- 5” at a lowered take out of 14% and .50 per bet. Customers seemed to get the message lost on the controlling racing managers.

The message we get from the TOC is that customers are supposed to subsidize the owners’ medication-inflated veterinary bills for unsound horses they over paid for. Further, we are expected to fund overvalued stakes with small fields of questionable quality, and five horse fields on the early part of the card, where each entrant will get a check. No other jurisdiction races their horses less often than California.

Costs are too high in California for the smaller stables to compete, and they can not beat the wealthy owners horses, so they drift to parts where they are more welcome. No one is examining costs and it is easier to pass the costs on to the customer.

Horsemen and customers have a lot in common. When a man buys a horse he is GAMBLING that the horse will win purse money. When a customer bets on that horse he is GAMBLING that the horse will win purse money. Owning a horse or betting on them is a GAMBLE. There are NO entitlements for customers and there should be none for horsemen.

The concept of value is important when betting. The same applies when bidding and breeding as well. Owners need to curb their enthusiasm for horses incapable of expectations to start a reasonable amount of times . Those owners who pay excessive prices for ego-gratification have no standing to call for purse increases that chase fans away that are expected to fund the purses for them. Owners who dispose of horses who can no longer pay their way without a program in place to protect them, receive no kudos here.

The TOC has fashioned their members as “Stakeholders” ,I guess that is because horse owners invest $4 billion annually to compete for $1.4 billion in purses, according to the late Jess Jackson and others, while ignoring the $15 Billion that horseplayers “invest”. I assure you that if the racetrack went out of business today, the stakeholder horsemen would move on to the next racetrack offering a purse to run for, just like the customers.

A further message that comes from the TOC leadership that gives the impression that the TOC does not understand their charter or responsibility for the big picture, written or not. With authority, goes responsibility for all that the authority controls, not just the TOC membership alone. All interests must be served for a healthy industry.

Purses up, Handle down may be O.K. for the TOC membership, but is hurting those who are responsible for shareholders, marketing, putting on an attractive race card and putting butts in seats.. TOC leadership leaves that detail to others. Handle is down because customers have options, and they do not like the product offered at the price.

Purses up, Handle down is not sustainable. The good news is myopic leadership that puts self interest above the constituents and brothers rarely survive long term.

P.S The new “ Interstate Horse Racing Improvement Act” (IHIA) hearings will be heard soon.

Roger Way