Financial Challenges and Purse Reductions at Southern California Race Tracks

Southern California racetracks have notified the California Horse Racing Board about the need for purse reductions and regulatory changes. This notification comes in response to a decline in betting revenues, resulting in ongoing purse overpayments at Del Mar and Santa Anita. A detailed letter, along with supporting data, outlined the financial challenges facing Thoroughbred racing in the state.

Del Mar currently faces a $2.1 million purse overpayment, while Santa Anita has exceeded its purse budget by $4 million. Santa Anita has already reduced its stakes program and purses for the current season. Likewise, Del Mar made similar cuts last fall.

The financial situation is exacerbated by the impending closure of Golden Gate Fields, which will leave Northern California without a major racetrack. The letter suggests focusing on racing in Southern California, changing legislation to include more horses at Los Alamitos' night meetings, and redistributing Northern California simulcasting revenues to the South when no races are held in the North.

The letter emphasizes the need for an improved revenue structure to maintain the viability of racing in Southern California. Without financial stability in the South, the future of racing and breeding throughout California is uncertain. Some relief may come from recent legislation allowing revenue from Northern California simulcasting to be allocated to Southern California tracks when no races are conducted in the north.

The California Horse Racing Board will discuss these issues, including racing dates for the latter part of 2024 in Northern California, in their upcoming meeting. The letter also proposes supporting legislation for expanded Thoroughbred racing at Los Alamitos and lowering the minimum claiming levels at Del Mar and Santa Anita.

The closure of Golden Gate Fields has raised concerns about losing owners and breeders focused on that circuit. The California Authority of Racing Fairs has been exploring alternative locations for racing after the closure, but no announcements have been made.

The situation is complicated by the absence of secondary revenue sources, such as casinos, which are politically challenging to develop in California due to the strength of Native American tribes operating casinos. This financial predicament has led to purse cuts in California at a time when other states are offering higher purses due to alternative gaming revenues.