What would you do to make California racing great again? We canvas a cross section of opinions from those involved in racing and breeding in the Golden State
/Words - John Cherwa
There is no doubt that horse racing in California is at a crossroads.
The closure of Golden Gate Fields in June signaled the possible end of full-time racing in the Northern part of the state. There is a long-shot plan to keep it alive at Pleasanton, but not everyone in the business is routing for success.
In the South, Santa Anita is still only racing three days a week and field sizes are not always impressive. Purses are not competitive with the rest of the country. The track sits on a piece of land in Arcadia that is worth at least $1 billion, so does it really make sense to run a few days a week for half the year?
So, what are the views of those deeply involved in California racing on a day-to-day basis as a way forward?
What follows is a question and answer session with prominent executives, trainers, owners and breeders. There are disagreements and obvious animosity. Although everyone interviewed has the same goal, keep racing in California alive. The solution to problems facing the most populous state in the country, might just be in here.
The answers to the questions we posed have been edited for clarity, brevity and to avoid too much repetition.
Can a one-circuit system (in the South) work?
Aidan Butler, chief executive 1ST/ Racing and Gaming: Absolutely. California is a huge betting state and it’s not just the horse population or purse disparities that separate us from other states that get additional revenue. There is a huge cost of running an operation that is an obstacle. So, putting all of the resources and effort into one area is the only way to go.
Alan Balch, executive director California Thoroughbred Trainers: It's highly doubtful, given that California is now more an "island" than at any time in at least 50 years. There's very little chance of alternate circuits (Arizona, Washington) serving as viable or sustainable racing destinations for California breeders. Successful Northern California racing was an integral and vital, if unsung, component of world-class California racing from the 1960s onward.
Bing Bush, equine attorney and owner: That’s to be determined but it’s difficult to envision that. I happened to be at Golden Gate Fields on the last day, I saw a lot of horsemen walking around in a very full grandstand, all thinking the same thing: “I wish all of these people were here during our days and then we wouldn’t be closing down.” I don’t see how Santa Anita hopes to fill that gap. It’s going to be a real challenge I hope we can meet. I’m hopeful but very concerned.
Phil D’Amato, a leading trainer at Santa Anita: I definitely think so. For me, we have the horses, we have the population. I just think we need to improve our purse infrastructure. When you get more money, people will come and owners will be more willing to put horses in the California racing system.
Greg Ferraro, chairman California Horse Racing Board: Yes, I think it can. The problem is we don’t have enough horses, plain and simple. We’ll see how they do in Northern California with the dates we awarded them. I’m hopeful for them but I’m not optimistic. I’m worried that we don’t have enough horses for two circuits. Consolidating everything in Southern California may be the only way we can survive.
Eoin Harty, trainer and president of California Thoroughbred Trainers: If certain powers have their way, we’re going to find out. Personally, I don’t think so. The whole business hinges on breeding. The largest part of the horse population in California is Cal-breds and they don’t all belong in Southern California. If they don’t have a venue to run at, what’s the point in breeding them? And if you don’t start breeding them, where does the horse population come from? The economic impact on the state is huge. If we lose that, the fall is catastrophic.
Justin Oldfield, owner/breeder and chairperson of the California Thoroughbred Breeders Assn.: I think there was a misinterpretation of what a one-circuit system means. A one-circuit system is not defined by fulltime racing in the South and summer fair racing in the North. That is not the definition of a one-circuit system. I think what people mean is a one-circuit system that includes Los Al, Santa Anita and Del Mar and does not include the fairs. The fairs garner a lot more representation from the Legislature and the fan base across the North. I don’t think there is anyone who is saying we should end racing at the Fairs. I think no one would be in favor of a one-circuit system if it means only racing at one track at any one time.
Bill Nader, president and chief executive of Thoroughbred Owners of California: A one circuit system in California would allow the resources that are generated across the whole state be targeted into one single circuit which would effectively make better use of that money and funding. The problem with a two-circuit state like we have now is that if one circuit isn’t carrying its weight, like it is now, it takes its toll on the other region.
Doug O’Neill, a mainstay trainer in California and two-time Kentucky Derby winning trainer: No. The track surface needs a breather throughout the year. I think with training and racing it needs some maintenance to bounce back. I think it’s really important to have some time between meets and that’s where it helps to be racing at a different circuit or track.
Josh Rubinstein, president and chief operating officer at Del Mar: Yes. Nationally the foal crop is about half of what it was 30 years ago so that has affected every state. California simply doesn’t have the horse population to operate two year-round circuits.
Is contraction the best way to stabilize the market?
Butler: We believe contraction is the best way to stabilize the market. There is only a certain amount of purse money and a certain amount of population. Despite the hardship of the people at Golden Gate, concentrating all our efforts in the South is the only way to keep the state going.
Balch: The unplanned and devastating contraction announced by Santa Anita ownership, without consultation or notice to any of its interdependent partners in California racing, is the single most destabilizing event in California racing history since World War II. Given the contraction of the North American foal crop, particularly since 2008, all track owners and horsemen working together with the regulator and Legislature might have been able to develop a model where it could have been a stabilizing influence.
Bush: I think it will turn it into chaos unless we can turn it into something more attractive than it is today. If we can’t make California racing more attractive, I don’t see how contracting can help it.
D’Amato: As it stands now, it’s looking to be inevitable unless we find another revenue source. You would like to have two circuits. It definitely gives owners more options for varying caliber of horses. But if it has to be, it has to be. We need just one additional revenue source to help get these purses up and allow California to sustain. If we don’t get that, consolidating into one racing circuit is probably the only option that we would still have.
Ferraro: The best way to stabilize the market here is to increase the purses. That’s our problem and the reason we are short of horses is because we can’t compete purse-wise. We don’t have any way of supplementing purses like Kentucky does with Historical Horse Racing. If we had purses that were more competitive with the rest of the country, most of our horse shortage problems would go away.
Harty: I don’t believe so. I believe expansion is the way to save the market. You’ve seen what happened through contraction, small field sizes, people aren’t betting on us, which hurts our handle which just compounds the problem. We need to expand and plan to expand. Hopefully it’s not too late, but without some sort of addition to our purse fund where we can make it more lucrative for people to come to California, we’ve got nothing.
Oldfield: No. Contraction assumes there is a consolidation of not only the tracks but a consolidation of the horsemen and trainers and the employees. The assumption that trainers and owners would go South was probably false and unwisely made. Look at the trainers who have moved South, it hasn’t been a resounding success. To assume that if you close the North that it means a shift to the South is a pretty naive thing to consider.
Nader: It might be the only way to stabilize the market. Now if the North is able to hit its targets and meet the criteria we’ve agreed to then there is no need for contraction. If the North can’t hit their targets, I don’t think we’ll have any recourse but to contract to stabilize the market and secure Southern California and make sure the state of California is still relevant, healthy and has a future.
O’Neill: For us to grow, we need to build on what we have and not shrink what we had. I think the whole industry has done a really good job of being a safer, more transparent sport. And to see tracks closing is not what the whole plan was, or at least I hope it wasn’t. I think the way the sport is going, we should be growing and building and not closing and shrinking.
How do you compete with no supplemental revenue streams?
Butler: You just have to try and be innovative, offer a product that people still want to bet, and continue to try and concentrate on a single circuit and there should be enough wagering dollars in state to keep the product moving forward.
Balch: Clearly, you don't, unless you develop alternate sources of supplementing purses, for example major corporate sponsorship, or otherwise. You need sources that could only be developed by all track owners and horsemen working together with regulators and legislators in serious strategic planning. Fifty percent of track revenues formerly came from non-wagering sources at the track. The nearly complete abandonment of marketing efforts for on-track business has cost all tracks in terms of profit and compromised California racing's future.
Harty: We can’t. I don’t see how it’s sustainable. It’s hard enough to attract horses to California in the first place. The level of racing is very competitive. There is a lot more bang for your buck somewhere else.
Nader: We need to find ancillary revenue so we are more competitive with other states that enjoy that advantage. That’s where California needs to be applauded for what it has achieved over the past 10 years without the benefit of a secondary income stream and still remains relevant on a national stage.
Oldfield: I couldn’t agree more that we need other revenue streams for the funding of purses. For horse racing to survive long term, both in the North and the South, we need outside sources of income, whether that’s Historical Horse Racing machines or some other mechanism. If the North were to go, it slows the bleeding but doesn’t stop it. I think the North is in a better position to survive without outside sources of income because of what it costs to raise a horse and race a horse in the North because we’re really not that far off the purse structure we have for the fair meets. Those machines are the lifeblood, not just to purses, but to keep racing in California alive.
O’Neill: It’s a little tricky with the Stronach business model because they own the ADW and the race track. In an ideal world there would be separation there and you would have the people or company that owns the race track try and do everything they can to get people to come out and have a great time, Concessions would be booming and ideally you would build on getting some on-track betting.
Rubinstein: We have to close the purse gap that is widening from states that have subsidies that are supporting the purses. That is the one thing we can do here, increase purses, that would give California a shot in the arm.
What one thing can be done that would make a difference?
Butler: Obviously, getting another source of gaming revenue would make a huge difference in the state. For quite a while we were competitive from a purse perspective, but it’s become more and more difficult to find another source of gaming revenue.
Balch: Immediately convene the leadership of all tracks, labor, agriculture, owners, and trainers’ groups, for no-holds-barred strategic planning, to include ways and means of communicating with California's legislative leadership, to understand and save the massive economic impact on this industry in California. It almost certainly cannot be saved without government assistance and stimulus.
D’Amato: We’ve got the weather and great training facilities. Santa Anita just added a synthetic training track to handle all weather situations. Del Mar is perennially a great racing circuit. So, to me, we just need bigger purses. We’re pretty much the model for what HISA based its safety structure on. California to me is on the forefront of all those things with the exception of bigger purses. If we get money, people will come.
Ferraro: If we can come up with something like Historical Horse Racing our worries would not be over but would be decreased.
Oldfield: I don’t think there is a single person I’ve talked to, North or South, who doesn’t agree those machines are absolutely necessary. I think that should be a rallying cry from every stakeholder in the North to every stakeholder in the South, from the horsemen to the trainers, we need to get behind. Why aren't we rallying around this instead of sitting in CHRB (California Horse Racing Board) meetings arguing about dates? Why are we not working collectively on a strategy to get these machines? If there is one thing this industry needs right now is unity and the industry needs to unify behind that.
O’Neill: We need to rebrand to really celebrate the men and women who work alongside horses for a living. It’s just so important to get that mindset back that people are actually working and it’s not computers and gadgets that are doing all the work and that humans are actually getting their hands dirty. These are really a bunch of amazing men and women who have chosen to work alongside horses for a living and hopefully we never lose the hands-on approach that is so important. Our sport provides a lot of jobs and housing for thousands of people and that’s really important.
What is California racing doing better than anyone else?
Butler: If you look at the safety record for one and the operational performance without supplemental revenue we can be pretty proud of ourselves to where we are now. California has shown it can operate on a globally high level of safety and quality without having lots of cash coming in to help things. We should be pretty proud of that.
Balch: Very little if anything beyond what it's not responsible for: enormous potential markets, great weather year-around, and unrivaled facilities, mainly Del Mar, given the deterioration of Santa Anita and the demise of Golden Gate.
D’Amato: I think in terms of how Santa Anita and Del Mar take care of their owners, I think they go above and beyond in our racing jurisdiction. I think it’s a little bit tougher in other states. For what we have to offer, we try to roll out the red carpet for our owners and offer a really nice place to run your horses.
Ferraro: The quality of the racing surface and our effort for safety and soundness. HISA basically copied our rules. So our health and safety rules are better than anyone.
Harty: I think we have better venues than anyone else. There is not a prettier race track than Santa Anita. Del Mar offers the summer vacation package.
Oldfield: The one thing I can say about California racing is we’ve got a great fan base. California as a whole is an agricultural state, the largest in the country. The economic driver of the equine industry in California is largely horse racing. People tend to forget about the agricultural component to that, it’s huge. We would be dead without our Cal-breds, which also produces jobs and livelihoods for many people and in many cases provides an economy for smaller communities in California.
O’Neill: We are so blessed we can train day in and day out throughout the year and I think you have a lot fitter horse that comes from California than a lot of the country. That’s the one thing that no company or no family can screw up. We have the best weather in the world.
Is this too far down the road to fix?
Butler: We don’t think so. If we can find additional sources of revenue that’s going to really, really help. You get the purses, you have a far better chance of getting the horses. There is much more to the ecosystem when you’ve got the purses. We, as a company, want to make it as good as we can for trainers. We think of them as our customers and we want them to be successful. We’ve just got to try.
Balch: If you say you can't, you're already done. If you say you'll try, you've at least begun. No one person or one entity can do anything of true impact alone. It takes the entire interdependent industry together.
Ferraro: I hope not. I think the next year will tell. We’ll see how Northern California does. If they succeed that will be a positive thing. If not, then we will have some worries. If Santa Anita and Del Mar can keep a decent racing program going that would help. If we end up with six-horse fields and two days or racing instead of three, that’s going to be a terrible turn.
Oldfield: Absolutely not. You go to the fairs and they are packed. There is an appetite for horse racing in California. We’ve just got to do a better job of figuring out how to market that. You can’t determine whether what happened at Golden Gate over the last couple of years or 10 years is indicative because they did not market the place. They had a tree that covered up their sign and it wasn't until it was in the press that the racetrack was closing down that people started to show up. You can’t use that standard to see if there can be success because what was done wasn’t that good. There is an absolute appetite in California for horse racing and we need to tap into that. If the machines were to come in tomorrow, we wouldn’t be talking about if the sport will survive but what are we going to do with all this money we are bringing in.
Nader: The jury is still out. We’ve established the metrics that CARF (California Authority of Racing Fairs) and the CHRB have agreed to and it’s too early to tell because we don’t have any data to pass judgment. It’s on the brink. As the North has stated on many occasions, “Give us a chance.” But I do think the chance comes with the obligation that the industry has to come together and make the call. It can’t be something like the North would be able to go forward with proving its worth in the final quarter of 2024 because the balance is too delicate with no secondary income in the state and the fact that both circuits are linked to each other to create a sustainable future.
O’Neill: Absolutely, not. I think it can be reversed in a positive way very quickly. I would love to see us turn someplace like Santa Anita into an equestrian center. If you could bring in that equestrian label, I think it has a better brand and reputation. And you would have a bigger pool of horse lovers and I think we have plenty of room here to do just that. If I hit the lottery and was president of Santa Anita for a couple years, my approach would be to focus on jobs and housing. I’d put new dormitories here, which gives you a bigger pool of horse lovers here who would work alongside horses for a living. I’d turn the back parking lot into an equestrian center or at least a mini-version of one.
Rubinstein: Absolutely not. California is a state with over 40 million people. We have loyal fans and a rich history of thoroughbred racing at the highest level. We have California people betting on the races, we have California owners at the sales. I talk to many high-level people and they all agree that California is essential to the long-term success of the industry.
How much time is left?
Butler: We’re not really looking at it in that way. We’re just looking to see what we can do at the moment to improve racing and the ecosystem around the track that involves the trainers and owners. We need to find that fine line where we can get everything we need to be done here.
Balch: Absent serious strategic brainstorming, less every day.
Bush: The question hinges on the success of Santa Anita. I think that question could best be answered by Belinda Stronach.
Ferraro: Sometimes it feels like we have a couple of days. I think we’ll know by the end of this year how bad a shape we’re in.
Oldfield: I think we still have time because we have the ability to do something we haven’t had in years and that’s chart a new course in the North. The North is not going to be the savior of the South but we have the ability to demonstrate that things can work and we can do things better and we can set those examples for other parts of the state. The future of racing is publicly held companies. What does that mean for Santa Anita? I don’t know. As a horseman in California, I absolutely want to see Santa Anita flourish, but I don’t know how that intersection of public and private could work to keep Santa Anita alive.
Nader: It would be advantageous if you could start with a clean slate and start over, but that’s not going to happen because of the complexities in the state and the way things are done. The key would be to get the secondary income stream and then chip away at the building blocks underneath to create a better structure. But you need that big change at the top.
Rubinstein: We have time and we’re focused on what we need to stay competitive with purses. I do think it’s important for us to stop and take a breath and look at the new dynamic without Golden Gate Fields. Losing Golden Gate changed the dynamic significantly.
What are the optimistic signs you see out there?
Butler: We’ve had numerous conversations with the TOC (Thoroughbred Owners of California) and they seem extremely supportive and seem to understand exactly what needs to be done in California. We are a little bit disappointed in the organizations that really don’t seem to grasp the amount of investment we continue to make to operate racing in California.
Balch: There simply aren't any. Even Santa Anita's decision to make a multi-million dollar “investment” in a synthetic training track was made in a vacuum, without considering other potentially more important and lasting changes. Other commitments made at the time for California breeding stimulus and major backstretch improvements, have been ignored.
D’Amato: I see my owners continue to buy horses from all over, not only inside the country but outside of the country, and continue to funnel them into California. We still have that going for us despite the disparity of purse money with Kentucky, Arkansas and New York. But as things start to go in opposite directions that window could change.
Ferraro: The loyalty of the horsemen here, and that Kentucky and the others are beginning to realize that they need California for them to be successful as well. Enthusiasm from trainers who want to make it work, that’s the best thing we have going for us.
Harty: The only optimistic signs are rumblings and rumors that the attorney general is looking into and searching for ways we can shore up our purse accounts. I was optimistic seeing the CHRB offering Northern California a lifeline. They are very, very small victories. We’re in a huge urban market. If Southern California can’t make a go of it, who can?
Oldfield: The one thing that is very optimistic is when Golden Gate announced it was going to close, there was this idea that everyone would scatter to the wind. But ultimately the horsemen in Northern California united more and better than I’ve ever seen. That alone was very optimistic and heartwarming. That gave me a level of hope about this industry.
Nader: It’s a huge state with so much importance nationally. We’ve got tremendous bandwidth as far as our buying power and our betting power not just in California but across the country. We’re over 20% of the national handle. The race tracks are so beautiful, the climate is great. The number of races that are carded on the turf that can actually run on the turf is high. It’s very conducive to horse players because of its reliability.
O’Neill: Closing day at Santa Anita you had 11 races on Saturday and 12 on Sunday. That’s optimistic. There was a record handle this year at the Kentucky Derby. That’s an optimistic sign.
Rubinstein: The progress of safety and that the Breeders’ Cup will be in California three straight years. The community, here at Del Mar, supports racing and the business leaders know how important racing is to the local community. On the racing side, Del Mar’s product has been as good as anyone’s over the last two years.
Can breeding in the state be sustainable with fewer Cal-bred races?
Butler: The breeders have been absolutely brilliant considering the circumstances. We’ve got to continue to offer a wide variety of Cal-bred races so we can give them a reason to continue their operations. The breeders have been working with us and understand what needs to be done and to try and get this fixed.
Balch: The issue is incentivizing breeding in California, wherever the Cal-breds run, whether in restricted or open company. California-bred thoroughbreds comprise the critical population of horses running at all California tracks, in all races except unrestricted graded stakes. California racing simply cannot be sustained without those horses filling races, especially overnights, since handle on overnights is what funds stakes purses.
D’Amato: Near the end of the Santa Anita meeting, there were 20 horses entered in both the 2-year-old Cal-bred girl and boy races. That’s a really good sign the California breeding industry is still going in the right direction. I don’t think we can survive as a circuit in California without a very strong Cal-bred program.
Ferraro: No, it can’t be. They have to be able to produce a certain number of horses to be viable. If there is not enough racing, there is not enough calling for those horses. Otherwise, you can’t sustain the breeding industry.
Oldfield: The awarding of dates by the CHRB, stabilized the breeding industry. A lot of people didn’t know if they were going to breed at all in California. When those dates were awarded it gave people hope to continue and breed. I don’t think racing in the state can be sustainable without Cal-breds. Most of the horses that run in the North are Cal-breds. If you look at the races that card the most horses, those are Cal-bred races. If Cal-bred races were to go away, it would have a devastating impact on racing and the horse population.
Nader: Yeah, I think it just has to be managed well. You just have to be smart and understand. The number of foals in California was 3,800 in 2003 as there are 1,300 today. There has been plenty of contraction and if there would be more it would be unfortunate. But in the end, if it’s managed correctly while still maintaining the quality of Cal-breds, I think we would be OK.
O’Neill: No. That part of California racing needs to be tweaked and fixed . I don’t know where they come up with the money to invest in the programs. It’s working on the negative as it is. If I had a genie and one wish it would be to have a guy like Paul Reddam to run the track. You would see an instant turnaround. He has that kind of business mindset that people would be tripping over each other to get into the track. There are people like that who just don’t fail. The Rick Carusos of the world, and if they do, they don’t fail long. I would love for a guy like Paul Reddam to own a track like this for a year or two and see what would happen.
What is the most important issue to address?
Butler: It’s really improving the purses which will allow us to improve the inventory, which improves the betting.
Balch: Saving, incentivizing, and stimulating California breeding. All you have to do is compare the behavior and commitment from New York, New Jersey, and Kentucky to racing. It demonstrates the critical importance of governmental action in a state-regulated industry like ours. Sadly, that regulatory/legislative constituency in California, which was once the hallmark of attention and education by California tracks, owners/trainers, labor, farms, agriculture, etc., was largely and effectively abandoned once California track ownership began evolving in the late 1990s.
Bush: Purses, perspective and the image of horse racing with our younger generation. We need to figure out how to get influencers involved. And get them to understand how much love goes into the care of these horses by people who have a passion and a bond with those animals.
Ferraro: The size of our purses. All of our problems stem from that one thing. The purses aren’t high enough so we don’t have enough horses, so we can’t run enough races. The public recognizes when you have a good race card, they come out. But when you have a lot of ordinary race cards, like we’ve suffered this year, they just won’t show.
Harty: The purses and the breeding. If better minds than I, like the California breeding industry, can get together with other Western states, so instead of it just being Cal-breds, New Mexico-breds, Arizona-breds, Washington-breds, Oregon-breds. They do that in other states, so it’s not a new idea, but it would help incentivize racing in California.
Oldfield: Most important issue is an outside source of income to address the purses. It’s something that everyone can unite behind . Not a single stakeholder would disagree with that. It would put California on a level playing field with other states.
Nader: I’ll speak on behalf of the horse player who looks to California racing and recognizes what it brings to the betting population. We have to make sure the product hits the brand and reputation from the expectation of horse players, the competitiveness, the field sizes and meet the expectations of horse players. We have to maintain our standards and make sure our purses and field sizes respect the great reputation of California.
O’Neill: The horseman moral is just about as low as I’ve seen it. I think we need to boost that up and what would boost it up is knowing that something is in the works that indicates we’re trying to build on-track business and on-track handle.
Rubinstein: We’ve obviously been on a very good run with safety and we can never be complacent with that. Business side we need to secure supplemental revenue sources.
