Southern California tracks will be forced to reduce prize money through 2024, continuing a trend that began last spring, amid a decline in handle that has created ongoing purse overpayments at Del Mar and Santa Anita, according to a letter track officials sent to the California Horse Racing Board earlier this month. The two-page letter, accompanied by 12 pages of supporting data and charts, presents a grim short-term financial outlook for Thoroughbred racing in California at a time when Golden Gate Fields in Northern California is scheduled to close in June, leaving that circuit without a primary racetrack. The financial crisis threatens the sport over time unless racing is concentrated in Southern California, legislation is passed to expand eligibility for horses racing at the night Thoroughbred meeting at Los Alamitos, and the distribution of revenue from simulcasting and account wagering in Northern California is redirected to Southern California when no racing is held in the north, the letter said. The letter to the racing board said that earlier this month representatives of Del Mar, Los Alamitos, and Santa Anita told the Thoroughbred Owners of California’s board of directors that purses will be reduced later this year “if an enhanced revenue structure is not introduced in the immediate future.” The letter added that “if the South is not financially viable, it is difficult to see a future for any form of racing or breeding in the state.” :: Access morning workout reports straight from the tracks and get an edge with DRF Clocker Reports There are immediate concerns surrounding purse overpayments at Santa Anita and Del Mar. Santa Anita, which began its current winter-spring meeting on Dec. 26, reduced its stakes program by $2.275 million for the current season compared to the 2022-23 meeting. Overnight purses were cut slightly. Last spring, Santa Anita cut purses for its two-month meeting from mid-April to mid-June. The letter to the racing board stated that Santa Anita has overpaid purses by $4 million, a figure expected to increase in coming months. According to supporting documents that accompanied the letter, Del Mar has a purse overpayment of $2.1 million. For its meeting last fall, Del Mar reduced purses for stakes by $400,000, to $2.05 million, and reduced overnight purses by 7.6 percent to 12.8 percent. According to figures provided by the racing board, betting on Thoroughbred racing in California declined 5 percent last year, from $1.528 billion in 2022 to $1.458 billion in 2023. Some financial relief could take effect later this year. Last September, California Gov. Gavin Newsom signed legislation that will allocate revenue generated from simulcasting in Northern California to tracks in Southern California when no tracks are operating in the north. When a track is operating in Northern California, the revenue would remain in that part of the state for purses and for the tracks. In the letter to the racing board, officials said the added revenue from Northern California simulcasting would be used by tracks and horsemen in Southern California to offset annual regulatory contributions to the racing board and the national Horseracing Integrity and Safety Authority. Currently, a portion of handle that would go to the tracks for operational costs, or to owners for purses, is earmarked to fund budgets for regulatory agencies. The letter was written in advance of Thursday’s California Horse Racing Board meeting in Sacramento at which racing dates for the final four months of 2024 in Northern California will be discussed and possibly finalized. Officials said in the letter they would like to present “a plan that creates suitable and sustainable opportunities” to the racing board for “2024, 2025, and beyond.” Currently, racing dates have been assigned to Golden Gate Fields through June, and for the Northern California fair circuit from mid-June to early September and for a two-week period in October. No racing dates have been assigned for the final weeks of September or from mid-October through the end of the year. :: Bet the races with a $200 First Deposit Match + FREE All Access PPs! Join DRF Bets. The letter recommends that the racing industry support proposed legislation that would allow for an expansion of Thoroughbred racing at the year-round night meeting of Quarter Horses and lower-level Thoroughbreds at Los Alamitos. Currently, the track’s night meeting can offer races for Thoroughbreds for claiming values of $5,000 or less restricted to the distance of 4 1/2 furlongs. Racing officials in Southern California said allowing longer races at higher claiming values could lure stables from Northern California to Los Alamitos. In documents supporting the letter, officials also recommend lowering the minimum claiming levels at Del Mar and Santa Anita below the current $10,000 level to offer more opportunities for stables currently based in Northern California. The looming closure of Golden Gate Fields has caused widespread concern that racing in the state will lose owners and breeders who have focused on racing on that circuit. The letter does not offer suggestions for replacing Golden Gate Fields, and states that finding a suitable venue for year-round racing and training in Northern California will be difficult and costly. Representatives of the California Authority of Racing Fairs were invited to speak at the TOC board meeting earlier this month, but did not appear, the letter stated. CARF officials have worked in the last six months to find suitable alternative locations for racing following the closure of Golden Gate Fields, but have not made any such announcements. Last Friday, three Northern California-based members of the TOC’s board of directors – Lindsay LaRoche, Ed Moger Jr., and Johnny Taboada – resigned in protest of the TOC’s position to not pursue a replacement venue for Golden Gate Fields. The resignations leave the TOC’s board of directors without any Northern California-based members. In their resignation letter, LaRoche, Moger, and Taboada wrote that TOC’s board of directors is “not working to represent the entire state of California.” The letter officials sent to the racing board, dated Jan. 5, was co-authored by William Nader, the president and chief executive officer of the Thoroughbred Owners of California; Ed Allred, the owner of Los Alamitos; Aidan Butler, the chief executive officer of 1/ST Racing, the parent company of Santa Anita and Golden Gate Fields; and Josh Rubinstein, the president of Del Mar. The issue surrounding purses in California is complicated by the absence of a secondary revenue source, such as a casino or slot machines, that tracks in many other states have used to greatly enhance purses or stay in business. :: Get Daily Racing Form Past Performances – the exclusive home of Beyer Speed Figures “The current California purse structure is unsustainable, and, moreover, uncompetitive with other states from across the country that benefit from alternative gaming revenue,” the letter stated. A 2022 California ballot measure that would have allowed sports betting at racetracks was soundly defeated by voters. Native American tribes operate casinos throughout California, and are so strong politically that the development of casinos at racetracks is considered nearly impossible. The purse cuts in California have occurred at a time when tracks such as Churchill Downs and Oaklawn Park are running maiden races and allowance races worth far more than some stakes at Southern California tracks. :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.