Wood writes that one of the sources said Churchill has been lobbying to derail a bill in the state legislature that's necessary for the state ownership deal to go through.

The article says that representatives of Churchill Downs did not respond to multiple voicemail and email messages seeking comment on the company's interest in Pimlico.

At this point, Wood writes, it is not clear how serious Churchill Downs's interest is or whether the company made a formal or informal offer to Pimlico or the state about buying the track. She claims that some in Annapolis have privately expressed skepticism about Churchill's motives, given that it has many more casinos than racetracks among its properties.

The piece goes on to quote Craig Fravel, Executive Vice Chairman of Stronach's 1/ST Racing and Gaming. Fravel issued a statement Wednesday that there was no pending offer from Churchill Downs to his company, which is “not in any negotiation with them. We remain committed to the contemplated transactions as negotiated,” he said.

The Banner article goes on to explain that Churchill's involvement could complicate efforts to execute the state takeover plan for Pimlico, which involves legislation that's pending in the final days of the Maryland General Assembly session.

Wood states that several lawmakers have expressed reservations about the state taking over the track and running Thoroughbred racing, along with some elements of the plan to pay for hundreds of millions of dollars in renovations.

The piece also says that a bill passed (104-34) the House of Delegates on Monday night and is facing unknown odds in the Senate.

Senate President Bill Ferguson told reporters Tuesday, “It's going to be some tough conversations here in the next few days to figure out if there is a clear path forward.”

Wood said that Ferguson would not offer a timeline for the Senate's consideration of the bill. The end of the General Assembly's annual legislative session is approaching at midnight Monday, Apr. 8.

The post Report: Churchill Downs Enters Late Bid To Purchase Pimlico appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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“It really put a bad taste in the mouths of board members,” Ferraro said.

Beforehand, Ferraro had anticipated punting a decision on the North's race dates to the following meeting, he said, adding how Belinda Stronach, chairwoman, CEO and president of 1/ST, had called him the day before to “lobby” her position.

Ultimately, however, “the two things that came out to me [from the meeting] was just how much animosity there is towards The Stronach Group in California,” Ferraro said. “And that the letter was the thing that really killed them.”

The granting to the North a 10-week meet–to run at Pleasanton from Oct. 10 to Dec. 15 at the conclusion of this summer's fair meets–heralds quite the dramatic reordering of the operational and political furniture in California racing.

“It might be the most momentous decision the board has made in its history,” said Ferraro. But now the dust has settled somewhat on last week's board's decision, what's next?

“What we have to do now is get the racetrack operators in one room, sit down with them and say, 'okay look, this is the direction we need to go. You can either go voluntarily or the board will force you.' Remember, we control the dates,” said Ferraro.

“Let's sit down and see what we can work out with the calendar for the next year or two, three, to transition to a one circuit,” Ferraro added (more on that single circuit in a bit).

When asked to discuss the situation with a 1/ST representative, company spokesperson Tiffani Steer wrote in an email, “Craig Fravel's comments at the CHRB meeting stand.”

Thoroughbred Owners of California (TOC) president and CEO Bill Nader said for him, the key takeaway from the meeting was the concretizing of important details.

“We all have something now we can measure–I think that's good for the North and it's good for the South,” said Nader. “Trying to define viability or sustainability is difficult when some of it's based on speculation.”

With the vote in, “now [the CARF] have got to go back and address the outstanding points that were raised in the meeting,” said Nader. “We're moving forward, but there's still pieces of the puzzle that need to come together.”

Golden Gate | Vassar Photography

PLANS FOR PLEASANTON

The ambitious plan outlined by the California Association of Racing Fairs (CARF) for its 26-day, 208-race season at Pleasanton presents stakeholders in the North with a set of logistical and bureaucratic hurdles to overcome between now and then, pending CHRB approval of the track's license application at its Aug. 15 meeting.

Upon such approval, the meet is scheduled to run under the auspices of Golden State Racing, a moniker given to differentiate it from CARF's stable of summer fair meets. All told, there will be eight stakes worth a combined $550,000, with some $3.6 million designated for overnight purses. CARF executive director Larry Swartzlander said that these are “not firm numbers yet.”

Among some of the undertakings at Pleasanton these next few months is the installation of some 284 additional auxiliary stalls at a projected maximum cost of $1.5 million, said Swartzlander, with the aim of facilitating around 840 horses.

There are ongoing negotiations with the operators of the golf course situated within Pleasanton's infield to determine how the two entities will coexist. CARF's plan is for no golfing during racing, to limit public use during training hours, and to allow the First Tee community program–a youth golf program–limited access to the infield.

State regulators will likely require a “Notice of Intent” for coverage under an industrial stormwater permit, to be filed before June 2, along with other environmental compliance issues to contend with.

When it comes to discretionary spending number crunching, CARF has stated it has $900,000 in cash reserves, access to a line of credit of up to $4 million from Alameda County Fairgrounds, and that it will arrange for further “lending, grants and donations” as the cost of capital requirements become clearer.

Swartzlander said that an engineer is scheduled to visit Pleasanton in July to assess the facility for a proposed turf course and to provide a cost estimate. At the board meeting, Swartzlander pinned a rough $7 million price tag to that venture.

Currently, once Golden Gate Fields closes its doors on June 9, Santa Rosa will be the only Northern California track with a turf course.

According to Ferraro, several key questions surrounding the issues of everyday operations–“who's running the show”–the agreement with the golf course operators, and that of financial viability remain unanswered, despite the additional details offered up by CARF last Thursday.

“The horse racing board is preparing them a list of questions that we want answered when they come back in August,” said Ferraro. “Staff is working on them right now.”

According to Jerome Hoban, CEO at Alameda County Fairgrounds, the next steps for Pleasanton and CARF concern installing the auxiliary stabling, negotiating a “purse schedule” with the TOC, and developing a licensing agreement “so that it's satisfactory with the CHRB.”

“We're also developing a marketing plan for this meet and beyond,” said Hoban, calling their approach “more robust” than that in place at Golden Gate Fields. “This is not a one-meet endeavour. The confidence that has to be given to the horsemen is that we have found them a home for good.”

A key obstacle that CARF must negotiate is Pleasanton's lesser name recognition compared to Golden Gate. As an example, the DRF recently reported how the New York Racing Association anticipates a 20% decline in betting revenues due to the temporary closure of Belmont Park and the comparative weakness of the Aqueduct “brand.”

It will take time for the simulcasting handle to “pick up on who Golden State Racing is,” admitted Hoban. “I do think we could have a dip in handle because of brand recognition,” he added. “But if there's any team that could turn that around, it's going to be us.”

One of the areas that the board zeroed in on for scrutiny were the possible financial costs and logistical hurdles of complying with state environmental regulations.

“We're always concerned about environmental compliance, but we're a 265-acre property that is used to dealing with these things. This is not new business to us,” said Hoban.

“I think that some of the things that Del Mar, Santa Anita and Golden Gate Fields have had to deal with, they are in a different situation with their manure management programs, with their proximity to the ocean and the bay. I think our facility is already well ahead of those facilities in regards these topics,” said Hoban.

According to owner-breeder Justin Oldfield, part of a working group that drafted CARF's plan, the most pressing thing for all California stakeholders, North and South, is to nail down an outside source of income for purses, which would take a Herculean lift in California's tough political environment.

“There are things we haven't explored thoroughly before, like historical horse racing machines,” said Oldfield. But if realizing outside purse revenues “truly is our number one challenge,” that would require a unified industry front, he added.

“I don't know of a single person on our horsemen's working group or anywhere else that would disagree with that,” Oldfield said.

As for horsemen and women in the North, the mood at Golden Gate Fields since the vote has equated to one big “sigh of relief,” said trainer Blaine Wright.

“I think people are really going to do their darndest to make this a go, keep the horses supplied and make this a reality for us,” said Wright. “I've already had some phone calls from [former owners] who haven't been supporting Golden Gate saying that, 'hey, we're planning on claiming a horse or two for you up there, help make a go of it.' And that's awesome.”

Del Mar | Horsephotos

PURSE CUTS

What the CHRB's decision last Thursday doesn't do is remove the tough economics, especially in the South.

Multi-million purse deficits are fed by shrinking handle totals–wagering on California racing was down by around 5% in the first two months of 2024. At the heart of these equations are field sizes.

During the first 35 days of racing during Santa Anita's current meet (317 races), field sizes averaged out to 7.02 runners. At a comparable stage last year (after 31 days of racing and 282 individual races), the average field size was 7.54 runners. That said, the average field size at a comparable stage in 2022 (after 37 days racing and 328 races) was 6.90.

Interestingly, the 25% purse cuts at Golden Gate appear to have helped claw back a substantial amount of the track's $3.1 million purse deficit. According to data reviewed by the TDN, Golden Gate had recouped over $1.2 million of its purse account over-payment by the middle of March.

Nader said the next step is to come to a decision about purses for Santa Anita's remaining Spring meet by the beginning of April, in time for the next condition book.

A decision about Del Mar's purses will come out “shortly thereafter,” said Nader. “They're anxious to put out their schedule for the summer,” he added.

One notable impact from Golden Gate's closure is the schism that has opened up between interests in the North and South. Earlier this year, three Northern TOC members resigned in protest to what they saw as the organization's Southern-centric approach to the problem. These feelings clearly persist.

“What's the future of the TOC? I think they've lost some credibility,” said Tom Clark, the owner and manager of Rancho San Miguel, a mainstay of the state's breeding industry. “I think we need to strongly examine how the organization's currently structured, and what their mandate is.”

“We're doing all we can to give them comfort that we're here, that we're a resource, and that we accept and hear their views,” said Nader, when asked about the organization's approach to mending bridges.

“That doesn't mean we always agree,” said Nader. “But in the end, we have to land on what's best for California going forward. And we can't isolate this to a specific region, whether it's North or South. It's got to be a big-picture outlook of longer-term vision.

“And that's why getting actual data to accurately assess the benchmarks CARF put forward in its draft license application could be a good thing in the end,” Nader added. “Northern California is asking for a chance and the TOC is saying any business plan needs to be viable and sustainable. This is where we can find alignment.”

However, “if the numbers come out [at Pleasanton's meet] and it's far below expectations or below expectations, you'd need to find a way to pivot to meet the backup model,” Nader said.

What would that back-up model look like? “The backup would be to use the different assets in Southern California, meaning Los Alamitos, Santa Anita and Del Mar,” said Nader.

While stakeholders have raised questions over the years about 1/ST's financial commitment to its Californian assets–in particular, deferred maintenance at Santa Anita and Golden Gate's backsides–the company has still made and promised several costly investments in recent years.

This includes a new Tapeta training track, new turf chute at Santa Anita, and in state-of-the-art diagnostic imaging technologies. Earlier this year, 1/ST announced the California Crown at Santa Anita, revamping the card on G1 Awesome Again S. day, in homage to the Pegasus World Cup.

With that in mind, how seriously does Nader take Fravel's threat to sell Santa Anita?

“The key thing I think was when Fravel said Belinda is still very keen to continue racing there, and she's turned down many offers before,” said Nader.

“The one thing you'd say, the transparency of putting the industry on notice, in some regard, that's a good thing,” Nader added. “I'd rather have them say it than not say it and sell it in the middle of the night.”

THE BREEDERS

Conspicuous in their absence at the last CHRB meeting was a representative from Los Alamitos.

When asked if 1/ST's letter had any bearing on his nonattendance, Los Alamitos vice president Jack Liebau said, “at the board, I think there was a perception that a threat was being made, and I don't think it was well received. Los Alamitos and 'Doc' [Ed] Allred [Los Alamitos owner] perceived of that threat and decided it would not be a party to it.”

In recent months as discussions circulated on a consolidated circuit in the South, Liebau has discussed a possible legislative fix to expand the menu of Thoroughbred races offered at Los Alamitos. Currently outside of their scheduled Thoroughbred meets, Los Alamitos is limited to staging Thoroughbred races capped at 4 1/2 furlongs and at a $5,000 claiming price.

This proposal had followed the passing of key legislation last September, which means that when Golden Gate Fields no longer operates after June this year, proceeds from simulcast wagering in the Northern half of the state will be funneled south when the North doesn't conduct any live racing.

The idea of a legislative fix to expand the menu of Thoroughbred races on offer at Los Alamitos has been put on the “back-burner,” said Liebau. But he also stressed how Los Alamitos was never an active advocate but rather a “passive observer” of efforts like the proposed legislation.

“Doctor Allred has always said that Los Al would do whatever it can do to improve racing and to accommodate all the different interests. But when you get down to it, Los Al is really something of a bystander. It's happy to help, but certainly doesn't view itself as pushing that legislation,” said Liebau.

In discussions with various California stakeholders, the firm stance the CHRB took on Northern dates prompted several breeders holding off on breeding plans until the last moment to press the trigger.

“It was very important that we had something positive to announce to basically keep giving people a reason to breed,” said California Thoroughbred Breeders Association president, Doug Burge, who added that total reports of mares bred won't arrive until the fall.

Clark said he was unaware of such a trend. “It's not like people called me up, saying 'oh boy, with the vote last week, I guess I'm going ahead to breed,'” he said.

However, “one breeder I know, his mare had just foaled and he had to make a decision. He said, 'Yeah, now I feel a lot better about going ahead and breeding again,'” Clark added.

And what of Ferraro's idea for a single circuit in the state? That would look like year-round racing with meets North and South, but no over-lap with one-other, he said.

“Long-term, I think it's the only way California racing can survive,” said Ferraro. “We simply don't have enough horses or enough fan support to continue with this two-circuit racing.”

When asked about this proposition, Liebau voiced his reservations. “It's very difficult to react to a comment made by the chairman of the board, but I think the time passed on that long ago,” said Liebau.

The finances involved with keeping facilities operational in today's economic climate are massive, said Liebau. Indeed, Santa Anita has apparently incurred operating losses of more than $31 million over the last five years. Interestingly, during the latest CHRB meeting, Fravel offered up the company's books for the state regulator to examine.

“Frank Stronach always thought you needed to run year-round and every day because it's very difficult to keep a track like Santa Anita going if it's shut down half the year,” said Liebau.

As for Pleasanton, Liebau pointed to a couple potential positives.

One is that large purses don't necessarily correlate to larger fields. That, “and I suspect the horses in the North have more starts than horses in the South,” Liebau said, adding however that he hasn't crunched those numbers.

“The people in the North deserve to be given the chance to succeed or fail,” said Liebau. “But they have a long difficult road ahead of them.”

The post Following CHRB Race Dates Decision, What’s Next For California? appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Rainy afternoon on Cape Cod and I had a few minutes to kill, so flipped the channel to TVG for a quick flutter. I selected the filly Just Like Magic, approaching the gate at 7-5 as the recipient of a $10 win wager in the 3rd race Oaklawn (3/28).

She charged up the rail and won. Final odds were 3-5. WTF. Sorry for the crudeness.

Racing will never engage the next generation of punters with 15-27% takeout and NO fixed odds, when they can bet on sports with a 4% vig and wagers that are fixed.

In the UK, an extremely sophisticated betting market, exchange wagering in its 20-year history now handles 85% of wagers, plus or minus.

Further exacerbating the industry's vulnerability is the contents of this article. My takeaway from this article is that Stronach and his friends:

• Own racetracks
• Own offshore betting hubs for friends
• From these hubs, friends receive substantial discounts to wager into onshore pools
• And we can assume the friends are getting late, direct access to track pools… and perhaps entering the pool after the start

Now the late betting is speculation on my part. It feels like it happens. And from the first four bullets, it seems suspiciously like that might be happening.

This insider activity stinks to high heaven, not just regular heaven.

This beautiful sport is bucking these horrific headwinds of scandal and a less-than-competitive product. Yet racing will always have tremendous potential.

But what is the point of one laboring all night on PPs to arrive at a horse that one feels should be 6-5 or 7-5, only to see that selection drop to 3-5 at the quarter pole?

My introduction to racing was with Win Elliot, the Schaefer Circle of Sports, and Fred Capossella. Old timers can place an era on those names. My first Racing Form cost me 50 cents; what are they now, $10? I can make an informed wager on the Red Sox without that surcharge.

Sadly I am not sure that I'm going to ever see the industry make any real progress making horse racing as competitive and accessible as other wagering products.

Thanks for reading.

The post Letter to the Editor: CAW ‘Activity Stinks to High Heaven’ appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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In a proposal to the state regulator, the California Association of Racing Fairs (CARF) outlined a 10-week meeting this year that would run from Oct. 19 to Dec. 15 at Pleasanton.

If the CHRB affords those dates to the north, 1/ST Racing and Gaming executive vice-chairman, Craig Fravel, warned of several consequences, including purse cuts at Santa Anita, reevaluation of planned investment projects at Santa Anita, and the “analysis of alternate uses” for Santa Anita and San Luis Rey.

“While this is understandably disconcerting to owners, trainers, and workers in the North the ultimate survival of the full ecosystem is at risk,” wrote Fravel.

On Wednesday, CARF issued a statement saying that while they did not have a great deal of time to put a plan together, “we did have an incredible depth of experience.”

“We brought together the best and the brightest of our sport. Our commitment was to develop a horse racing plan that is modern, enhances the economic and social health of the community, is safe for the horses and jockeys, fun for our fans and generates excitement in Northern California,” wrote Larry Swartzlander, CARF executive director, justifying the North's plan in several bullet points, including how “Alameda provides a financially sound location.”

“We anticipate more dynamic racing fields–higher purses and betting opportunities that enhance the fun,” wrote Swartzlander. “At the same time, we have adhered closely to ideas offered by experts as we continue focusing on the health of our horses and jockeys.”

In Tuesday's letter to the CHRB, Fravel questioned one of the potential logistical hurdles standing in the way of CARF's proposal: A golf course that operates on the Pleasanton infield.

“There is clearly a contractual issue with the golf operator that is not disclosed in the materials and extremely vague language regarding protocols that will be implemented,” wrote Fravel.

In a prior letter to CHRB chair, Greg Ferraro, members of the California Thoroughbred Trainers (CTT) and the Jockey's Guild urged the board to support year-round racing in the North, arguing that issues with the infield golf course had already been addressed.

“Active play and access to the golf course will continue to be strictly prohibited during racing hours as has been done in the past,” the letter states.

“Horse racing and the golf course are both important to the community. It does no good to permanently close the golf course only to anger the community. Horse, rider, and personnel safety remains the single greatest priority; however, we firmly believe both can coexist–as has been successfully done for over 40 years,” the letter adds.

“Nets surrounding the golf course provide cover, and since they have been put in place, there have been no accidents. In addition, Alameda County Fair will actively manage and limit play and course activities during training to areas of the course that pose little risk to balls being hit on to the track. For example, these managed activities will include supervised youth programs like the First Tee,” the letter states.

In a brief call Wednesday with owner-breeder Justin Oldfield–part of a working group geared around cultivating the plan–he said that CARF has put forward a proposal that meets all the CHRB's required conditions.

“Tomorrow, it's absolutely imperative that the CHRB weigh in and award us dates based on the merits of that plan,” he said.

“We have a lawful and tested racing association that's going to manage the meet. We have financing that's been put up as seed money that shows the strength of the 13 member fairs within CARF,” said Oldfield.

“People want to stay here,” Oldfield added. “There are families. Businesses. There's an agricultural component to this. Three-quarters of the horses in the North are Cal-Bred. Look, those horses aren't going to go south.”

Outspoken owner-breeder Tom Bachman said Wednesday that 1/ST's letter to the CHRB comes after too many cuts to the industry by the company and too little investment.

“They should be trying to make the pie bigger rather than trying to take a bigger piece of a shrinking pie,” said Bachman. “They do the opposite of what they should be doing.”

As for potential purse cuts at Santa Anita, earlier this week the California Thoroughbred Breeders Association (CTBA) announced how purse bonuses paid to California-breds that win maiden races would be sliced when Santa Anita's spring meet begins on Apr. 19, as first reported by the DRF.

The bonuses–which are being cut from $17,500 to $15,000–are paid to maiden winners in open company or state-bred races at races at 4 1/2 furlongs or more.

The post CARF Issues Statement After 1/ST Ultimatum on NorCal Racing Dates appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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The story was first reported by John Cherwa in the Los Angeles Times.

With 1/ST set to close Golden Gate Fields on June 9, the future of Northern California racing is very much up in the air. Hoping to save racing in that part of the state, Pleasanton, a fair track, will ask the CHRB to approve a 10-week meeting that would run from Oct. 19 to Dec. 15.

If those dates are approved, it may complicate Santa Anita's efforts to reallocate revenue from simulcasting that is currently split between the northern and southern tracks. 1/ST is backing legislation that would reallocate simulcast money from Northern California to Southern California in the event that racing ceases to exist in the northern portion of the state. Santa Anita believes it needs the extra simulcast money to make racing viable in its part of the state.

Additionally, Santa Anita is hoping that with Golden Gate shutting down, many horsemen from that area will relocate to Santa Anita. If that happens, Santa Anita management believes it can add a fourth day to its weekly racing schedule and will be able to card races with bigger fields.

On Tuesday, Craig Fravel, the executive vice-chairman of 1/ST Racing and Gaming, sent a three-page letter to the CHRB, urging the Board not allocate the extra dates being sought by tracks that are members of the California Authority of Racing Fairs (CARF).

Fravel contended that if racing is approved at the CARF tracks “an analysis of alternatives for Santa Anita and San Luis Rey (training center) will be undertaken in short order. As noted, the current financial model and required capital expense make no sense and the consolidation of operations as discussed last year and at the January Board meeting is the only alternative that has been presented.”

Fravel also wrote that over the last five years Santa Anita has incurred operating losses in excess of $31 million while investing over $32 million in capital projects.

“The current model is simply unsustainable,” Fravel wrote.

Fravel also contended that the proposals being floated by the CARF tracks “is lacking in so much detail that it is difficult to understand what has been done over the last eight months and even more difficult to understand how the Board can be asked to put the entire thoroughbred industry in the state at risk by allocating dates on the basis of speculation.”

Fravel also said that allocating dates to the CARF tracks will lead to immediate purse cuts at Santa Anita and planned capital projects will be re-evaluated.

The post 1/ST Racing Says It May Sell Or Close Santa Anita appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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CAW players constitute a small group of mostly anonymous, high-volume gamblers with an outsized impact on the betting markets–including in California–due to their use of sophisticated wagering technologies and the inducements offered to them in the form of attractive rates and rebates not available to the average punter.

At the time, CAW play was the main source of handle growth in California, which by extension “is contributing the lowest percentage for purses” and thereby presenting “a serious, long-term concern for California and its horsemen,” wrote Cummings.

Cummings's detailed study appears prescient. Since then, several reports have illustrated the extent of California's purse account woes.

To explain the recent 25% purse cuts at Golden Gate Fields, the Thoroughbred Owners of California (TOC) said the track's purse account was over $3 million in the red. Purse cuts at Santa Anita stem from a near $4-million purse account overpayment. During the January California Horse Racing Board (CHRB) meeting, it was explained that Del Mar's purse account was overpaid by $2.1 million.

Pat Cummings | The Jockey Club

A complicated set of factors determine purse revenues. Field sizes, for example, are arguably the biggest architects of how much is wagered on an individual race. But CAW play has grown exponentially as a percentage of overall handle in recent years, giving it a key role in the sport's future in California. Why?

Unlike other states where purses are supplemented from alternative gaming like slot machines and casinos, California is reliant solely on betting to generate purse revenues. In other words, California more than any other major jurisdiction needs to thoughtfully manage its betting revenues–including from CAW–if it's to remain a healthy enterprise long into the future.

The problem with CAW–like so many aspects of the sport–is that it has long been shrouded in ambiguity.

To help peel back this opaque curtain, the TDN sought answers to some basic questions about how leaders in the Golden State manage such an influential part of the industry:

What CAW-related information is shared between whom? What oversight mechanisms are in place? If the state's horsemen and women feel they aren't getting a fair deal, can they leverage what they see as a better one? And where do state regulators fit into the scheme?

What is CAW?

In short, CAW players–frequently registered in offshore tax havens–use sophisticated digital tools and teams of staff to spot exploitable deficiencies in the betting pools, and to scour reams of betting and past performance data to identify winning opportunities at high rates of success.

Even individually, they can bet huge. Indeed, last year the Financial Times estimated that just two individual CAW players each wager “on the order of $1bn a year” on State-side racing alone.

In the U.S., CAW players largely wager through a handful of CAW agents' betting platforms, which in many ways act as glorified ADWs.

The biggest in terms of handle is the Elite Turf Club, majority owned by The Stronach Group (TSG), which also owns the Santa Anita and Golden Gate Fields racetracks in California. The New York Racing Association (NYRA) also owns a portion of Elite Turf Club.

Other key CAW platforms include Racing and Gaming Services (RGS), and Velocity, owned by Churchill Downs.

The bettors who aren't privy to the same rates and rebates as these deep-pocketed gamblers (more on this in a bit) argue that CAW players are driving the average gamblers away from the sport in droves, to the point where it's killing the betting markets and hurting purse revenues. Indeed, if CAW players become too big a percentage of the pools, their impacts become magnified and they essentially “cannibalize” the markets.

TOC president Bill Nader has pinned this tipping point at about 25% of the betting pools. Cummings's June 2023 report found that back then, CAW play in California often surpassed that benchmark.

CAW proponents counter that these well-capitalized gamblers provide vital liquidity and efficiency to the betting pools. Without them, these proponents argue, the sport would be significantly poorer, and that by sheer volume of play, they help prop-up purse accounts.

Indeed, the loss of just one major CAW player could hit a track's handle hard. This also means, however, that the biggest individual CAW players have historically been able to wield no inconsiderable leverage to negotiate their terms of play.

 What Portion of CAW Play Goes to Purses?

To understand what part of the betting dollar goes to purses, there are two terms of note: Host fees and Takeout rates.

“Takeout” is the percentage sliced out of every dollar wagered. This pie is divvied up various ways, including a portion funneled into the purse account. Bets wagered on-track direct the largest slice back into the purse account. Bets wagered through ADW and CAW platforms direct the smallest amounts.

Takeout varies on several things like the host track state and bet type. But takeout is determined by track management and regulators and is non-negotiable. A general rule of thumb is an average 20% blended takeout rate across the different pools.

For CAW play, when the term “rates” are mentioned, what is meant are host fees, and these are negotiable.

Host fees are what any wagering outlet pays to track operators for the contractual right to import a simulcast signal. A wagering outlet could be another racetrack, an ADW platform (like FanDuel) or a CAW platform (like Elite Turf Club).

   TDN spoke with several track and industry executives about the state of CAW play today. These experts said that CAW host fees for the premium tracks typically vary between 6% and 8%.

After breeders' premiums and other minor deductions have been removed, host fees are roughly split 50/50 between the track and the purse account in California.

Therefore, if Santa Anita beamed its signal to a location at a host fee rate of 6%, roughly 3% of the total amount handled on that signal at that location will flow back into Santa Anita's purse account.

Primary Oversight of Agreements

Before the beginning of each meet in California, the tracks present the TOC with a list of individual host fees charged to each location that receives its simulcast signal. For that track's meet to go ahead, the TOC must first sign this document, said Scott Daruty, president of both TSG's Monarch Content Management and of the Elite Turf Club.

“Before the Santa Anita meet opens, we give them a list of every location and price that Santa Anita is sold for,” said Daruty. “They [the TOC] either approve it or they don't.”

The list includes host fees the track charges CAW betting platforms. If the host fee of an individual CAW player deviates from that afforded an overall CAW platform, that too would have to be divulged, said Daruty.

“If there was an individual deal [between a single CAW player and the track], that would have to be disclosed to the TOC,” said Daruty.

Scott Daruty | Horsephotos

TOC president Bill Nader said that he has signed all such agreements since joining the organization in October of 2022.

Nader said he was unable to disclose what the host fees that CAW players receive. All host fees are private (not just for CAW players). But Nader described the negotiation of these fees as a “moving target as to how you get this right and how you get it right across all customer segments.”

Where Do Rebates Come From?

The way Nader and other experts explain it, the amount CAW players are “rebated” can be broadly calculated with this simple equation:

Rebate = Takeout minus Host Fee (plus any other associated minor fees). The smaller the host fee, typically the bigger the rebate.

Let's use the 20% blended takeout rate among the pools. And let's say the host fee (plus other associated fees) that the CAW player pays comes to 5%. The rebated discount for the CAW players, therefore, could be a maximum 15% on every dollar wagered (though more on this in the next section).

It's also important to note that bets with higher takeout rates leave the door open to potentially higher rebates. The seemingly counter-intuitive goal is that this leads to higher overall handle.

Several experts said the most successful CAW players can consistently win at an average rate of around 92%. At that rate, for example, a 15% rebate would see the player enjoy a 7% profit margin. According to Daruty, a 92% win-rate isn't typical.

“That's someone really hitting it out the park,” he said.

The bigger the rebate CAW players receive, therefore, the greater their overall profit. And the greater their overall profit, the more they're likely to wager. As one expert put it, “it's like a high-yield investment account.”

Indeed, former Australian bookmaker Tom Waterhouse recently said he was considering investing venture capital funds into horseracing-focused professional betting syndicates that receive these huge rebates.

“[Gambling] is a three trillion-dollar industry, and most people lose. The edge is against you,” said Waterhouse. “But there are a few groups globally that are able to find an edge.”

These rebates are usually returned daily–typically the following morning, said Scott Finley, former NYRA director of simulcasting with a long career in the pari-mutuel betting industry.

“In some cases, they might be done weekly,” Finley added. “But the general idea is, the quicker you front that money back to the CAW players, they're just going to churn that money and bet more. Remember, there's no credit betting allowed anywhere in the U.S. These are all true advanced deposit wagering accounts.”

The TOC, said Daruty, is not privy to the rebate rates that CAW players receive.

“I'm not sure the TOC has ever made that request,” said Daruty, when asked why this information isn't shared with the organization. “But if they were to make that request, I think our response would be to politely deny it.”

When asked why the TOC hasn't asked Elite for rebate data, Nader said that he can get a “very good idea of what the gross rebate would be” by looking at the takeout on the different bet types. “I can work that out,” he said.

What's in it for Elite?

All of which begs the question: What's in it for a CAW platform like the Elite Turf Club?

According to Finley, CAW platforms typically retain between 0.5% and 1.25% as a commission from the amount their players wager.

“It's all based on individual contracts between the [CAW platform] and their player teams,” Finley explained, about how these commissions are negotiated.

As an idea of what kind of number this commission might generate, Elite Turf Club handled over $180 million on Santa Anita's races during 2022, according to the CHRB's statistical opersion reports. At Del Mar during 2022, Elite handled just over $146 million.

Daruty said he was not at liberty to comment on the Elite Turf Club's commission rate.

When asked how, between the host fee and the CAW commission, it appeared that TSG was essentially double-dipping, Daruty said the company's tracks and Elite Turf Club performed two separate functions.

“It's only double-dipping if you're getting paid twice for doing the same thing. This isn't double-dipping because it's two completely different services. In fact, I think it's to the horsemen's benefit that we're operating Elite because they're getting more visibility and more knowledge,” said Daruty.

“If it was a third-party operator, they might not be getting that, but they'd still be paying the same fee,” Daruty added.

Individual Deals with the Tracks

At last year's Global Symposium on Racing in Arizona, Cummings raised the issue of individual players and their representatives negotiating directly with the tracks to receive favorable host fee rates. Some of these deals were negotiated years ago.

“There is undoubtedly a concern when one or two of the biggest players in the sport go door to door across this country and ask a track operator for a discount. Not a rebate–a discount on the host fee,” said Cummings.

John Woodford, chief executive of GWG Group, a Las Vegas-based LLC that provides domestic and international services to CAW players, said that while GWG does not have any such “bespoke” deals for its individual players, such agreements are unsurprising given the amounts sometimes wagered.

“It's the same for other industries,” explained Woodford, “if you're a significant contributor or participant.”

Last year, the Financial Times reported that just two individual CAW players that wager through the Elite Turf Club–Elite 17 and Elite 2–had significantly increased their wagering on California horse racing over the past 15 years.

Since that story came out, the CHRB stopped publishing wagering data showing individual CAW accounts–which it had done since 2008–and now pools these numbers together under the CAW platform. In fairness to the CHRB, however, no other jurisdiction publicly discloses this individual information either.

In this vacuum of individual player data, however, it begs the question: Are any CAW players still privy to favorable deals directly negotiated with California racetracks? Several sources consulted for this story said that at least one player still enjoys such a deal.

Nader declined to answer the question directly, but said that discussions with the tracks are ongoing, and that over the past year, the TOC had successfully negotiated better rates for its constituents. “Everything is a work in progress,” he said.

TOC Leverage?

If the TOC believes the horsemen and women don't receive a fair deal in these negotiations, it can refuse to sign the document authorizing tracks to send out their signals, essentially causing a simulcasting blackout. Nader calls this threat the “nuclear option.”

When asked if during his time the TOC has considered using this option during CAW negotiations, Nader responded that it should be used only as a “last resort.”

“You never really want to do that. If there's a complete breakdown, perhaps. But it should never come to that,” said Nader.

The TOC has deployed this “nuclear option” before in contentious simulcasting disputes. Back in 2008, the TOC withheld Hollywood Park's signal over multiple weeks to increase the amount ADWs were contributing to the purse account.

Bill Nader | HKIR

The move–which reportedly cost Hollywood Park some $500,000 a day in lost revenues–was deeply unpopular with both the ADW platforms and the tracks.

“It didn't make me the most popular guy in racing to the effect I got death threats against me and my family,” said then TOC president Drew Couto, who explained that during the simulcasting blackout, TVG repeatedly shared on-air his personal and home telephone numbers.

“They encouraged their disgruntled viewers to call and let their disappointment be known,” said Couto. “It also led to several death threats being called into the offices. The TOC had to close down for a few days while we addressed the security issues.”

But the TOC's hard-line stance in 2008 ultimately led to a better rate for the state's horsemen and women.

“They came around because we cut off the signal,” said Couto. “You have to have a strong board that says, 'we will weather the storm. But at the end of that, we will come out with better rates.' And those better rates will help us put on a better product. And that better product will hopefully appeal to players who want to bet eight-horse fields rather than four-horse fields.”

Couto said the Interstate Horseracing Act of 1978 gives the TOC the authority to dictate rates and fees.

“The TOC has used that structure in the past to set the rates, to set access, to determine who has access, and to control the use of our product,” said Couto. “It's not the racetrack's product.”

When asked about this authority apparently afforded the TOC through the Act, Nader stressed the ecosystem nature of the industry.

“I would see it more as a 50-50 partnership between the tracks and the horsemen, especially in a state where there's no other purse-enhancing supplements. That's how the tracks get paid as well,” Nader said.

“I think what makes this sport so uniquely spectacular is the competition on the track and the competition on the Tote,” Nader added. “For us, it's more finding the right balance across all segments.”

CHRB'S Role

The TOC isn't the only guardrail to ensure that CAW fee agreements are drafted with horse racing's long-term interests front and center.

While the CHRB does not routinely see those documents, “The CHRB has full legal authority to review any agreement if that were to become warranted,” wrote CHRB spokesperson Mike Marten in written responses to several questions.

The CHRB, wrote Marten, has not yet exercised that legal authority.

In response to questions concerning betting integrity, Marten wrote that, “We understand that Monarch pays special attention to CAW companies (i.e. Elite and RGS) whereby each of the CAW players undergoes repeated, extensive background checks every six months.”

Marten added that the Thoroughbred Racing and Protective Bureau–a subsidiary of the Thoroughbred Racing Associations of North America–has “performed a thorough investigation of many wagering sites, including Elite and RGS, as part of its service to the racing associations.”

The CHRB, Marten wrote, “also has access to those reports if warranted.” And he added how, “sparked by concerns about the individual locations/operators,” the CHRB “some years ago” obtained an unspecified number of these TRPB reports from its client racetracks.

The review resolved any concerns, “so no was action taken,” he added.

Conflicts of Interest?

Eagle-eyed observers of California's racing product and betting markets might have noticed the ownership makeup of recent GII San Pasqual S. winner, Newgrange.

Since at least September of 2022, Newgrange has been owned by a group that includes Little Red Feather, Rockingham Ranch and David Bernsen.

Bernsen is the founder of GWG Group. One part of Bernsen's role at the GWG Group has been to represent individual CAW players in their negotiations with the tracks, but Woodford said that Bernsen hasn't run or managed the company for the past couple of years, and is now focused on industry initiatives “outside of the CAW sector,” including racehorse ownership.  Little Red Feather's managing partner is TOC chairman, Gary Fenton. Bernsen and Fenton, therefore, appear to sit on opposite sides of the CAW table. Does their ownership connection in Newgrange rise to a conflict of interest on the part of the TOC chairman?

Both Nader and Fenton said it doesn't. Nevertheless, Fenton said that he has recused himself from all CAW-related matters before the TOC since April of 2023 to avoid the appearance of any conflict of interest.

“Incidental co-ownership of a horse isn't considered a conflict by the TOC, but I made sure Bill and members of the board were aware. Still, due to the sensitive nature of simulcast rates, and out of an abundance of caution, when a matter connected with David [Bernsen] came up for the first time, I recused myself. Virtually all owners who serve on industry boards face similar instances,” wrote Fenton, in a statement.

Several experts interviewed for this story described TSG's ownership of both Elite Turf Club and two of the state's racetracks as a dynamic that does indeed rise to that level.

Daruty, however, refuted any conflict-of-interest accusations, and pointed to the historical ownership relationship between tracks and wagering outlets.

Though the nature of these “betting platforms” has evolved over the years–from on-track Tote windows to off-track-betting hubs to ADWs–the racetracks have always been part of the ownership mix, he said.

Daruty added, “This is just one more example of that.”

The post Computer Assisted Wagering: 101 for California Stakeholders appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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It is his work with the MTROA that has received the most attention of late as the Authority recently issued a plan that would completely overhaul Maryland racing. Pimlico will be rebuilt and when that is done, racing will cease at Laurel. The Stronach Group will turn the tracks over to the state, which will become the new operator, but will maintain the rights to the GI Preakness S. and the GII Black-Eyed Susan S. A new training center will be built.

This is the evolution of a 2020 plan which called for the rebuilding of both Laurel and Pimlico. A total of $375 million was put together for that project, which eventually stalled because of a number of factors. Those same funds will be used to for a new Pimlico.

“Pimlico became the hub property for this project, and working with the Maryland Stadium Authority and other experts that we worked with over the past six months, we have a plan to go forward and it is within range of the cost of the bonds that were initially authorized by the Maryland General Assembly,” Foreman said. “So that's the genesis of this project going forward. It's a mountain of work that's been done in the last six months. But now the rubber hits the road.”

It is still not clear what the agreement means, which allows The Stronach Group to retain the rights to the Preakness and Black-Eyed Susan. Major questions remain, like, how will the revenue from those two days of racing be divided up?

“There's a framework for an agreement that is now being negotiated between the state and Stronach,” Foreman said. “It's estimated that agreement will be finalized within the next 30 to 60 days. It's critical that the agreement be finalized because we have started the legislative session. Legislative leadership and the governor are going to be very interested in the outcome of those negotiations. But I think both sides are confident that they will come to a final written agreement because the ink is not dry on this deal and there are still matters to be negotiated. But the framework is that because Stronach owned the rights to the Preakness, they will license the event to the state of Maryland and the state of Maryland will, as a not-for-profit, run the Preakness. The division of revenues is being negotiated. It will be a fair agreement to both sides.”

As far as his work with HISA/HIWU goes, Foreman admits that there have been problems, particularly when it comes to trainers receiving hefty fines and suspensions for infractions that may be the result of environmental contamination. He says work is being done to make a fair system.

“I've never seen an intentional administration of a cocaine or a methamphetamine to a horse, and there wouldn't be a reason to do it,” he said. “The industry pre-HISA did a very good job of handling these cases. This was something that was not broken and needed to be fixed. And somehow in the new system it got broken. Fortunately, it's being fixed under new rule changes that we're waiting for the Federal Trade Commission to approve that will give HIWU the discretion to determine that it is more likely than not that the positive was a case of contamination or inadvertent exposure, as we like to call it, and not an intentional administration. The penalties have been substantially reduced per this rule change that's coming.”

This week's look at a Coolmore sire focused on champion 2-year-old Corniche (Quality Road). He was undefeated as a juvenile with wins the GI American Pharoah S. and the GI Breeders' Cup Juvenile. He was purchased for $1.5 million at the 2021 Ocala April Sale by a team that included TDN Writers' Room regular Zoe Cadman, who recalled how she was blown away the first time she saw the horse. Standing for $25,000, Corniche's first foals are arriving this week.

Elsewhere on the podcast, which is also sponsored by WinStar Farm, the Pennsylvania Horse Breeders Association,1/ST Racing, West Point Thoroughbreds and XBTV.com, the team of Randy Moss, Cadman and Bill Finley looked back at the impressive maiden win at Gulfstream by 'TDN Rising Star' Conquest Warrior (City of Light) who overcame a ton of trouble to post the victory. A $1 million Keeneland September purchase, he's one to keep an eye on as the road to the GI Kentucky Derby progresses.

The team was united in its praise of Churchill Downs for raising the purse of the Derby from $3 million to $5 million, while also calling on the two other Triple Crown tracks to match Churchill's move. Cadman also brought up the point that the GI Kentucky Oaks goes for $1.25 million and is deserving of a substantial purse hike.

To watch the Writers' Room podcast video, click here. To listen to an audio version, click here.

The post Alan Foreman Joins TDN Writers’ Room Podcast appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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The rule of thumb is that proceeds from wagers made in the “northern zone” stay in Northern California to pay for purses and operational expenses, while the proceeds from wagers made in the “southern zone” stay in Southern California for the same purposes.

California Governor Gavin Newsom has until October 14 to sign or veto AB 1074, introduced by Assemblymember Juan Alanis (R-Modesto). The bill passed a concurrence vote in the state Assembly Thursday, after being passed off the Senate floor by unanimous vote the day prior.

“The swift passage of AB 1074 in the Senate and Assembly with consensus backing of the racing industry provides the short-term answers that we desperately needed and the framework for the future,” wrote Thoroughbred Owners of California (TOC) president and CEO, Bill Nader, in a statement Thursday. “This was critically important to our constituents to know that Golden Gate Fields is still in play to June of next year.”

The Stronach Group (TSG), which owns and operates Golden Gate Fields, announced in July that it was closing the Bay Area facility at the end of December with the goal of increasing field size and adding another day of racing a week at Santa Anita.

If TSG applies for dates to operate a live meet at Golden Gate during the first half of 2024, such a proposal would first need approval by the California Horse Racing Board (CHRB). The next CHRB meeting is scheduled for Sept. 21.

In terms of simulcasting proceeds, the state is broken into three main geographical zones–the “Southern,” “Central” and “Northern” zones.

Largely speaking, the south and central zones are rolled into one big “southern zone,” roughly spanning the northern tip of San Luis Obispo County down to the Mexico border. The “northern zone” consists of the remaining counties in the state.

The monies generated from simulcasting wagering are used for a variety of operational expenses besides purses, including payments to the California Horse Racing Board (CHRB) and the Horseracing Integrity and Safety Authority (HISA), the backstretch retirement fund and workers' compensation.

According to a legislative analysis of the bill, Golden Gate Fields handled over $524 million in 2022, which generated approximately $25 million in track commissions and purse funds.

The bill states that, “notwithstanding any other law, if the board does not license a thoroughbred race meet to be conducted by a racing association at a racetrack located in the cities of Berkeley and Albany after July 1, 2024, a thoroughbred racing association, or racing fair, in the southern or central zone licensed by the board to conduct a thoroughbred race meet or fair meet shall, during racing weeks not allocated by the board for a race meet in the northern zone, be deemed to be operating in the northern zone for the purpose of conducting all permissible forms of wagering in the northern zone pursuant to this chapter and making and receiving required distributions from those wagers in accordance with this chapter.”

Initially, various stakeholders in Northern California–including representatives of the California Authority of Racing Fairs (CARF) —had voiced reservations about altering the system by which simulcast wagering proceeds are allocated.

CARF executive director, Larry Swartzlander, told the TDN last weekend that the legislative amendment was drafted by CARF in agreement with TSG, on the proviso that Golden Gate Fields remains open for racing an extra six months.

Next year's racing calendar in Northern California is, of course, still to be decided. Last weekend, Swartzlander floated a plan that if Golden Gate Fields remains open until mid-2024, Santa Rosa would stage a Thoroughbred meet from mid-October–when the Fresno fair meet ends–until the end of the year.

The 2025 Northern California Thoroughbred racing calendar, Swartzlander added, could still hinge around a permanent base at Cal Expo. Such a plan would apparently require reaching an agreement with California's harness racing industry, which only last year extended its lease of operations of the Cal Expo Harness racetrack until May 2030.

Swartzlander also suggested the permanent bases of any extended 2025 Thoroughbred racing calendar in the north could be split between Cal Expo and Santa Rosa.

“Negotiations are continuing,” Swartzlander had told the TDN. “We'll work with them [WatchandWager Cal Expo] to come up with a solution. Whether we end up with a 50-50 split between Cal Expo and Santa Rosa, or whether we end up relocating Harness to another track, there's several options.”

The post Legislation Leaves Door Wide Open For Extended Golden Gate Operations appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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The farm is a lynchpin of the state's breeding industry, housing as it does such workhorses of the California breeding shed as Sir Prancealot (Ire) (Tamayuz {GB}), Danzing Candy (Twirling Candy) and Mo Forza (Uncle Mo).

But Clark harbors a grim prediction for the future of the state breeding industry if racing in Northern California is reduced to just the short summer fair meets.

“I think the foal crop could easily be halved from where we are now if there is no [sustained] racing in Northern California,” said Clark, estimating that such a precipitous drop could happen as quickly as within two years. “There would be nowhere to go with these horses,” he said.

The number of California-born foals fell from 3664 in 2005 to 1309 in 2021–a drop of some 65%. The number of mares bred in the state between 2005 and last year fell by a comparable percentage.

“Our farm breeds about one in every six mares in the state of California,” Clark said. “We had 137 foals born there this year. And when you look at where these horses end up, about half of them end up in Northern California.”

Tom Clark | Jill Williams

Many of Clark's clients, he said, are from the north of the state. “Conversations I've had with them, most of them don't see an opportunity to move south like The Stronach Group thinks could happen.”

Part of the reason why, said Clark, is that some prefer the ease of seeing their horses routinely train and race. In other words, Los Angeles County would be a step too far for those closer to the Oregon border. But by far the primary reason, he added, is one of economics.

“The cost of moving the horses and the day-to-day cost to maintain those cheaper style horses, the economics just don't work,” he said. “It's not just the day money. It's the significant increase they'll see in vet bills and so on. The numbers just don't pencil out.”

At the moment, breeding plans at Rancho San Miguel remain pretty stable for next year. But in Clark's mind, he is already sifting through the economic rubble of a state racing circuit heavily slanted to the south, leading to a devastating economic “ripple effect” across the entire state.

“We have over 50 people who live on our farm, employees and their families. Many of those have been with us for over 20 years. They're totally dedicated to taking care of horses. And they will just have no place to go. But it's not just our farm–there are many other farms that take just as good of care of their horses as we do,” Clark said.

“Then you've got to take into consideration farriers, veterinarians, feed companies, hay providers, the transportation guys,” he said. “All of them will be impacted by this massive shrinkage of the breeding business.”

The California horse racing industry is estimated to directly contribute over $4.5 billion to the state's economy, and over 77,700 jobs.

Adding fuel to the urgency of maintaining a racing circuit in Northern California far beyond the summer fair meets, said Clark, are the glaring question marks hanging over the future of Arizona's Turf Paradise racetrack–which typically operates a meet from November to May–along with a shrinking racing calendar in Washington State.

These are venues that have historically provided an outlet for the sorts of horses ill-suited to the conditions of California racing. With Golden Gate closing, breeders more than ever need a year-round circuit in the north, said Clark. Even if The Stronach Group (TSG)'s proposed four-day race-week at Santa Anita materializes, that still wouldn't be enough to sustain the breed in California, he said.

Long-time owner-breeder Nick Alexander agrees. He has a broodmare band of about 35, he said, including the dam of Cal-bred Horse of the Year, Lieutenant Dan (Grazen).

“Out of that same mare, most of the horses she's produced are Golden Gate horses,” said Alexander. “You have to have an outlet for all ranges of horses. You cannot run horses at Santa Anita that should be running for $5,000, and the trainer can't be charging $120 day-money for them. It doesn't compute.”

Alexander, who has raced at the Bay Area facility for roughly 40 years, lamented the track's imminent closure for a likely exodus of talent from the state. “The people in the north are terrified, and once they're dispersed, they're not returning,” he said. “Once the toothpaste's out the tube, you can't put it back.”

More broadly, Alexander described his sense of frustration about the manner in which the closure has been handled, and a feeling that the facility so integral to the state industry has been sacrificed for purely “commercial” reasons. “They just don't deserve to own a facility that is so important to our industry, important to fans, important to everybody,” he said. “It just breaks my heart.”

California Thoroughbred Breeding Association

“If Northern California can provide a calendar that can protect our breeders and continue to create the current demand that we have for Cal-breds, that's what we want,” said California Thoroughbred Breeding Association (CTBA) president Doug Burge.

Doug Burge (right) with Harris Auerbach | Fasig-Tipton

Burge added, however, that the CTBA had not yet taken a firm position on any of the matters currently facing the breeding industry from Golden Gate's closure, and might refrain from doing so, even when the board meets later this week.

“We have constituents in the north and the south, and there are too many moving pieces right now. You have to look at the economics, see what's best for the breeders, what's best for the owners, what's best for racing,” said Burge.

At the same time, Burge emphasized the pivotal role of Cal-breds to field sizes. “When I started in the mid-'90s, Cal-breds were a nice compliment to racing,” he said. “Now they're a necessity.”

This is borne out by the data. During Santa Anita's recently concluded six-month meet, Cal-breds made up about 37% of all individual starts, according to DRF chart data, and Cal-bred races constituted more than 20% of the overall races.

According to California Horse Racing Board (CHRB) chairman Greg Ferraro, about 35% of the foals bred in California race at Golden Gate.

“If we did anything at all to discourage or reduce the number of foals born, everyone understands it would be a major issue,” said Burge.

When asked, Burge said that he had not crunched the numbers to identify how much further the foal crop in the state could shrink before breeding becomes an unsustainable economic model.

Last month, TSG announced a planned $500,000 investment into the state breeding industry to help compensate for the closure of Golden Gate Fields.

“With these renovations and the commitment to California-bred racing, I see the opportunities for Cal-breds greatly increasing and providing more value for those horses because of it. I'm going to breed more mares to take advantage of it. This is going to benefit the entire industry in the state,” prominent California breeder Terry Lovingier is quoted as saying in a TSG press release at that time.

Lovingier is also the CTBA chairperson.

According to Burge, the CTBA board is “looking at some creative uses of the funds to support the breeders,” though he added that he was unable to publicly share any details while they're still being ironed out.

Burge said TSG's breeder investment is currently a “one-time” offer, though added the idea of making it a repeat investment was “under discussion.”

When asked the same question, a TSG spokesperson wrote in a statement that the company is currently meeting with all industry stakeholders “as we work to shore up and improve California racing through our consolidation of operations” in the south.

“From timing, to financial considerations, to real conversations about the state of our sport, we appreciate the California Horse Racing Board's comments last week about open and transparent dialogue and plan to continue along that path though this transition,” the spokesperson added.

TSG representatives have repeatedly suggested that the $30 million-plus suite of investments earmarked for Santa Anita and San Luis Rey Downs are couched upon proceeds from simulcasting wagering conducted in the north being funneled to the southern racing circuit-what would appear facilitated through legislative change.

What is the CTB's position on those potential legislative efforts? “We haven't seen that legislation. We hear about it. We talk about it. We understand it. But we haven't taken any position whatsoever,” responded Burge.

As a glimmer of encouragement, Burge pointed to last week's CTBA Northern California Yearling Sale, which boasted year-over-year result increases, for an average of $9,260 and median price of $5,500. The average sales price for yearlings this year was 11.6 percent higher than last year.

“Everybody going into it thought it would be all doom and gloom,” said Burge. “And it turned out to be one of the best sales we've had in ten years.”

Adrian Gonzalez | Fasig-Tipton

Key California breeder Adrian Gonzalez–a ubiquitous presence on the California sales scene–is a self-described “glass-half-full” kind of guy. But he admits that news of Golden Gate's closure has knocked his confidence in the California breeding industry's long-term future.

“This is the first time that I have felt that this is not going the way we're used to,” said Gonzalez. He explained how the announced closure of the Bay Area facility has much wider ramifications for the industry than had been the case when the likes of Bay Meadows and Hollywood Park were shuttered.

Gonzalez's Checkmate Farm–a 66-acre ranch in Parkfield, California–houses between 50 and 60 mares right now, about half of them for his clients, the other half his own. And Gonzalez said that breeding plans for next year remain “pretty consistent.”

But with many of his clients stemming from the north, Gonzalez said he fears for a scenario where racing in the north is restricted to just the short summer fair meets.

For one, many of Gonzalez's clients either cannot compete on the Southern California circuit, or simply do not want to, he said.

But he also worries that TSG's plans to expand racing at Santa Anita to a four-day race-week won't provide enough opportunity to prevent the breeding industry contracting even further. And with shrinkage comes consolidation, he said.

“We need all of these farms [in California] supported. We just can't consolidate down to three or farms in the state,” Gonzales said, adding that the problem is compounded by a shortage of horse owners.

“I just don't believe that you're going to be able to keep all of the same owners and expect them to race in a different [location down south],” he said. “While they're still on the same circuit, they're 300 miles away.”

Kevin Dickson is farm manager for Barton Thoroughbreds, the 200-acre family-owned breeding behemoth in California's Santa Ynez Valley.

Kevin Dickson with Kate Penner | Fasig-Tipton

Dickson's sentiments ranged from concerns about the financial realities of the sport in California to recognition that the Barton operation is perhaps better insulated than others from these economic headwinds.

“California used to be such a strong market. We're just hanging on by a thread. And losing another track is devastating to not just breeders but all players,” said Dickson. “We can't afford it.”

Could the Barton operation continue in its current approach if Northern California racing shrunk to just the summer fair meets? “The short answer is yes, we can. The long answer is, I don't know,” said Dickson, emphasizing the difference in the north-south markets.

“Despite some of the rumors and things that are being said about things like blended meets down south, anybody I've spoken to–and that's having just completed a sale in the northern market–the people up north, they're not buying it,” he said.

Indeed, Dickson described a “lesser presence” at the recent CTBA Northern Sale than is typically the case. “My big buyer over the last three years was an absentee,” he said. “That hurt a little.”

At the same time, Dickson emphasized the Barton family's ongoing commitment to the state breeding industry, including a recent addition to the stallion ranks, Shaaz (Uncle Mo), a $1.1 million 2-year-old sale purchase. “He's a stunning individual and we're going to put a lot of mares to him,” said Dickson.

“They are fully committed to California. And they are going to continue to feed this West Coast industry with product,” said Dickson, of the Barton family. “We're breeding almost 200 of our own mares annually. And they're fully committed to breeding mares, putting out babies.”

When it comes to firm commitments into the future, Clark raised concerns about TSG's recent financial pledges. He singled out a submission by the California Thoroughbred Trainers (CTT) before last week's CHRB race dates committee meeting which details the company's multiple promises since 2005 to upgrade the Santa Anita backstretch.

“The fact is nearly 20 years ago, The Stronach Group promised a $20 million [plus] investment in the backside, and they never followed through,” said Clark. “So, what's to make them follow-through on the promises this time?”

But Clark also concedes that the problems facing the state's racing industry are much deeper rooted than the current tumult over Golden Gate's closure, calling the development “just a symptom of a much bigger issue” of overall affordability.

Nick Alexander (center) | Benoit

“We're not even keeping up with inflation,” Clark said, in reference to the state's purse offerings outside of Del Mar. At the same time, he estimated that the cost of breeding a foal in California and getting it to the yearling sales has grown to approximately $25,000.

As the consequences from Golden Gate's closure continue to be grappled with, Alexander stressed the importance of keeping Golden Gate open for as long as possible to provide horsemen the time needed to make seismic decisions that will impact their personal and professional futures. Indeed, at last week's race dates committee meeting, TSG floated the idea of pushing back the closure by six months.

At the same time, Alexander urged industry stakeholders to push back against any legislation that would funnel simulcasting proceeds from north to south. Such legislation, he added, could prove a death knell to any viable year-round circuit in the north. If such legislation is passed, said Alexander, “then the politicians ought to be thrown out of office.”

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The company, which operates Pimlico Race Course, has confirmed to the TDN that it is giving strong consideration to moving the date of the GI Preakness S. so that it is run four weeks after the GI Kentucky Derby.

“We have discussed it internally and believe it's in the best interests of horses and horse safety to move the race four weeks after the Kentucky Derby,” said Aidan Butler, Chief Executive Officer of 1/ST Racing & Gaming. “This would give horses more time to recover between races to be able to run in the Preakness. Horse safety is more important than tradition. NYRA is aware and considering how this would impact the Belmont. Stay tuned.”

Butler said there would be no further comment at this time.

Should the date of the Preakness get changed, the next move will be up to NYRA, which hosts the GI Belmont. If the Preakness is moved to four weeks after the Derby that would mean that, unless NYRA also shifts the date of the Belmont, the Belmont would be run just one week after the Preakness. That may be exactly what happens.

“NYRA has concerns about fundamental changes to the structure of the Triple Crown. We have no plans to move the date of the Belmont Stakes,” said NYRA spokesperson Pat McKenna.

The current structure of the Triple Crown works far better for the Belmont than it does for the Preakness. With five weeks between the Derby and Belmont, a number of trainers pass the Preakness and go next in the Belmont.

Traditionally, the Triple Crown is run over a five-week period, with two weeks between the Derby and the Preakness and three weeks between the Preakness and the Belmont. While that may be a long-standing tradition, it has clearly become an impediment to drawing horses to the Preakness because modern trainers are very reluctant to run their horses back within two weeks. In 2022, Kentucky Derby winner Rich Strike (Keen Ice) skipped the Preakness and waited for the Belmont. This year, Kentucky Derby winner Mage (Good Magic) was the only horse from the Derby to run back in the Preakness.

These developments have led to added support for changing the spacing of the races. Just last month, Tom Rooney, the president and CEO of the National Thoroughbred Racing Association, penned an editorial calling for the races be spread further apart. “The time has come in Thoroughbred racing for our own change, to modernize the timeline of the Triple Crown,” he wrote.

The post 1/ST Racing Considering Moving Date of the Preakness; NYRA Not on Board with Move appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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