During its monthly meeting on June 20 at Cal Expo in Sacramento, California, the California Horse Racing Board reluctantly approved a division agreement that would fund the CHRB before the governing body’s fiscal year begins in July 1.
These changes increased legal costs for California’s fairground tracks for thoroughbreds and night tracks that primarily race quarter horses and standardbreds. In contrast, the management expense ratio for Santa Anita Park And Del Marmajor thoroughbred tracks in the state, now cost less than the previous model — although the two tracks still pay the majority of the costs needed to support the CHRB’s $18.2 million budget.
Regulatory agency funding action is necessary when industry stakeholders cannot agree on an equitable allocation of costs that the CHRB believes meets regulatory requirements. Meetings between racetracks and CHRB commissioners had been going on for weeks before Thursday’s meeting, with little middle ground to be found.
The approved funding allocation does not place as much of a burden on Santa Anita and Del Mar, the state’s highest revenue-generating tracks, but it is not as favorable to them as allocations based on race dates or handles. Los Alamitos Race Coursetakes place for the majority of the year with lower-level Quarter Horse and Thoroughbred meetings with some shorter afternoons of higher quality Thoroughbred meetings, arguing for a phased approach period in which tracks other than Santa Anita Park and Del Mar would contribute to a higher percentage of overhead costs.
Most agree that racetracks should be responsible for their direct costs of operating a race in order to fund testing, stewarding veterinarians, stewards and other positions needed necessary for CHRB operations. Indirect costs, the largest portion of the CHRB budget, have largely been the subject of debate.
“We believe you should pay for what you use,” said Eric Sindler, general counsel for The Stronach Group, which operates Santa Anita Park as 1/ST Racing. Paying for what you use is a radical concept.”
Some track representatives argue that significant cost increases for the mixed breed evening shows at Los Alamitos and the Standardbred meet at Watch And Wager would be detrimental to the already established tracks. fragile in California with little money to spare.
Purses were overpaid at many California racetracks, leading to purse cuts. Unlike other top racing states, California doesn’t have games to increase profits and purses.
Although the CHRB said it needed to change the funding mechanism based on a legal interpretation of state law, commissioners Wendy Mitchell and Damascus Castellanos pointed out that the need to change the funding model had been established. came to the forefront not long after CHRB decided not to change direction. money simulcast from Northern California to Southern California after 1/ST Racing announced its closure Golden Gate Fields in Northern California.
“This is a situation where people don’t like the decisions that have been made. We didn’t do what people wanted us to do (in) previous meetings and I think to be honest this is a punishment,” Mitchell said in his final meeting before his expected departure from the CHRB board. “And that’s disappointing. … If (the approved appropriation) is where we’re headed because it’s the best compromise we can come to, I guess I’ll agree with that. … I think the timing is questionable.”
According to a spreadsheet produced by CHRB, Del Mar’s fee is expected to be approximately $4.68 million, compared with $5.35 million under the previous funding method. Their reduced tolls will be offset by higher tolls on other routes in the state.
