CHRB Continues to Struggle with NorCal Race Dates

Although the California Horse Racing Board tabled a decision regarding the ongoing dispute over racing date assignments in Northern California, the discussion during its Sept. 28 meeting again exposed a deep rift between the industry stakeholders in the region.

The differing opinions about what is best for the Northern California circuit are numerous but not unfamiliar. The same points of contention that were brought up in front of the CHRB for years were again on display during the board's monthly meeting Thursday at Los Alamitos Race Course.

Representatives from Golden Gate Fields want to take over the old San Joaquin County Fair (Stockton) dates in September and October—which were moved to the Alameda County Fair (Pleasanton) in 2017—and cited increased handle when the circuit is at The Stronach Group racetrack. The Humboldt County Fair (Ferndale) wants to run without overlap with Golden Gate in August to capitalize on lucrative host fees. The Sonoma County Fair (Santa Rosa) would like to slightly rearrange its dates to better align with its fair and the local school year. The California Thoroughbred Trainers would like as much racing at Golden Gate and Santa Rosa as possible, because no other Northern California tracks have turf courses.

All of these positions, among others, have been voiced in recent years and were again voiced Thursday, but after nearly two hours of discussion the CHRB pushed a potential decision on the conflicts to its October meeting.

"We can try to resolve this in October," said CHRB chairman Chuck Winner. "I know it's probably a fool's wish, but that will give the stakeholders one more chance to get together and see if they can agree on some of this."

If recent history is an indicator, the possibility for the parties in Northern California to reach an agreement is slim. The Northern California racing dates for 2017 weren't decided until November of 2016 because the region's stakeholders couldn't reach a resolution on their own and in 2015 The Stronach Group's Keith Brackpool threatened to close Golden Gate if an agreement wasn't made.

While representatives from The Stronach Group made a case for their proposal with angles based on increased handle and profitability, those representing the fairs—the California Authority of Racing Fairs, and separately, the Sonoma County Fair—countered with more emotional appeals based on preserving the historical significance of the fair racing stops, as well as the value each has in its local community.

"Humboldt is famous for three historic things. One is Redwoods, another is the Victorian Village in Ferndale, and the third is its 121-year-old history of running live races every August in Humboldt County," said James Morgan, special counsel for the Humboldt County Fair. "California, to protect its coastline, has the Coastal Comission. California protects its parks with the Parks Service. California has the California Horse Racing Board—in part, in my judgment—to preserve live racing throughout California, from top to bottom.

"That includes the entire top corner of the state, which is supported by one live race meet. ... And new fans are being generated through (the fairs). ... The sole criteria for this board is not how much revenue is generated, but it's about preserving live racing throughout California."

Later in the meeting multiple CHRB members took issue with the idea that the board's mission involves doing what is best for fairs. Instead they emphasized their role was to act on behalf of racing in the state.

"Everybody is not going to get what they want and I also know our job is to protect racing," said CHRB commissioner Madeline Auerbach. "I have to tell you, taking the CARF proposal and utilizing it—I don't believe that protects racing. ... We have to deal with today's realities."

"We are a horse racing board. We're not a fair board," Winner added. "We're a horse racing board. Horse racing is a big part of fairs and fairs are a big part of horse racing. ... We have to look out for what is good for horse racing. Yes, you can make a lot of arguments that the fairs are good for horse racing. I happen to agree with them. I've not seen the evidence of it in real numbers, but I think it's anecdotally true."

Thoroughbred Owners of California president and chief executive officer Greg Avioli called for significant changes in how Northern California racing does business and said the circuit has a "broken system."

"It's important for us to discuss a broader issue, because candidly, any of the dates (proposals) that I've heard discussed today aren't going to make much of a difference," Avioli said.

Avioli said the fairs have paid out more in purses than they've generated from handle since 2015. He said the fairs overpaid $190,000 in purses in 2015, $260,000 in 2016, and are looking at an overpayment of $930,000 in 2017. He also estimated, if it is business as usual in 2018, purses will be overpaid by $1.4 million.

"This is unprecedented," Avioli said. "What we're saying is the fairs no longer pay for themselves. Why is that? One reason is the (supplemental purse) fund went away and the fund helped to cover up some problems in the system. But if you go back further and look at Bay Meadows and their closure in 2009, since then, average daily handle on fair racing has declined 31%. ... Average daily handle on Sacramento racing has declined 44%.

"Let's think about this. We've had our subsidy go away, our handle—which is the primary focus of everything—is going way down, and guess what? The costs are going up. The primary costs for the fairs is stabling."

Stabling issues are intertwined with recent dates discussions in both regions of California, but are uniquely difficult in Northern California, where the fairs have stabling capabilities at each spot. Golden Gate is where the large majority of the region's horse population is housed and where most of the horsemen live. The fairs feel they shouldn't have to pay for Golden Gate's stabling since they have available stables for horsemen, but Avioli said if stabling had to travel from location to location on the fair circuit, the region could lose hundreds of horses to other locations. The CARF plan calls to shut down Golden Gate as a training facility in 2018 during the fair dates.

"Everyone I have talked to has a level of concern that it will seriously impact long-term racing at Golden Gate if we shut down that barn for three months," Avioli said. "You're going to see hundreds of horses leave and never come back. It's going to be the end of Golden Gate, because with the numbers in the system now, if 400-500 leave, it's over.

"Golden Gate wants fairs to stable at a higher cost than they can afford. The fairs, I believe, don't want to stable at Golden Gate, and if you move where the fairs want to go, a lot of racehorse people feel it will be the end of Northern California racing. ... The (fair system) no longer works economically. ... The system is not going to continue, whether we want it to or not. Absent of the state stepping in, or the non-racing aspects of the fairs stepping in to cover the costs ... it can't go on. There's no solution."

"The system is broken. We know we can't cover the purses," responded CARF interim executive director Larry Swartzlander. "It's got to that point. It's not unique to the fairs. It's not unique to Golden Gate. Look at the entire state. ... When you look at the field size (average of) 5.6 at Humboldt—with a 175 horses on the backside—we still run a race card. Not a good one, but when you go to Southern California, with (thousands of horses) they can't run a Thursday card. So who is worse off?"

CHRB commissioner Jesse Choper expressed a path to resolution that could help the fairs pay their way, but that path would have to travel through the state legislature.

"The fairs have substantial push with the legislature," Choper said. "So one of the things that could go a long way to solving this problem is to have the fairs get a greater subsidy from the legislature. I have no idea in the world if that's possible, but it helps a lot when you have significant influence."

"If the number of legislators who contact me about race dates would do something themselves to help supplement the fairs, so we—horse racing—doesn't have to supplement the fairs, that would be a positive step," Winner said in agreement.