[brock]

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Law Gives CA Tracks More Takeout Flexibility

25% TAKE OUT ON A HORSE BET.
California Thoroughbred racetracks, subject to regulatory approval, could increase pari-mutuel takeout—return less money to bettors—and change how the revenue is distributed under legislation signed into law Oct. 23 by Republican Gov. Arnold Schwarzenegger.
The measure was sponsored by Democratic Sen. Dean Florez, who said it will allow the horse racing industry to “increase its competitiveness” with other states whose racetracks benefit from alternative gaming, and “create a funding mechanism for the industry to invest in infrastructure.”
California law establishes takeout, the amount removed from pari-mutuel pools before bettors are paid. The current rates are 15.43% for win, place, and show wagers, and 20.18% for all other wagers, including the pick six.
Takeout rates could be changed before; the new law allows “the industry greater flexibility to make adjustments to the distribution,” Florez said.
“Even with a small increase in the takeout rate, California racing would still rank among the five lowest takeout structures in the country,” Florez said in an analysis of the legislation. “Any proposed redirection of distributions would be focused on an agreed-upon strategy for stabilizing industry operations. In the end, this bill is about self-reliance, reinvesting in California for growth, and protecting jobs for the future.”
“Traditional takeout, allocation, and distribution formulas are no longer able to sustain ongoing operations. As the value of racing operations declines, track ownership is struggling to maximize shareholders’ return on the investment, and tempted by alternative uses of the property that yield higher returns. As a consequence, the racing industry is suffering unprecedented instability and capital flight.”
Revenue provided to the California Horse Racing Board won’t change if takeout increases.
Some California track officials told Daily Racing Form they don't intend to increase takeout at a time when the industry is struggling to increase pari-mutuel handle.
The analysis said that according to the Assembly Appropriations Committee, “to the extent that this makes it easier for racing associations to increase the amount of the takeout, it would reduce the amount of money provided to winning bettors, and thus the amount of taxable income reported as gambling winnings by those bettors.”
A fiscal analysis states more than $4 billion is wagered in California each year on horse racing. Thus, a 5% hike in takeout rates would produce $200 million in revenue “that would be redirected toward the industry rather than provided to bettors as winnings," the analysis states.
The analysis didn’t discuss a scenario in which pari-mutuel handle could fall because of the increase in takeout.
The analysis indicates the measure had the support of Del Mar, Golden Gate Fields, Fairplex Park, Oak Tree Racing Association, Santa Anita Park, and the Thoroughbred Owners of California.

[topgame85]

mother fcks they are burying the industry LOWER TAKEOUT DON'T INCREASE IT!!!!!!!!!!!!!

[cobra_king]

I especially like the line "increase its competitiveness". Brilliant!

These clowns will never learn.

[tblues2005]

Thanks for the article. I don't like it at all that they are going to try to take out more.

[shantystar]

only taking part in contest here as new mod reload sent me special invitation,iwill join the party.

[Reload]

Stick to betting the races offshore guys. At least get the rebates offered by books - it's your only real chance.

If the states learned, they would lower takeouts and get more action overall.

[3PtShooter]

yes

[DogPlayer]

Sorry but what is the maximum rebate allowed in California for tracks?

Even if it is limited... California law wont be limiting otb's in other states... higher takeouts almost always means more rebate ...

This is a sweet idea (for the professional).... look at it this way... Here is a current scenario...

Player X has 200k dollars a week in handle (on average) he is currently receiving a rebate of 7% on tier one bets (wps), 9% on tier 2 bets (ex, qn, dbl,), and 15% on tier 3 bets (tri, super, pick)

Player X receives approx 10% rebate overall assuming he bets evenly in all bet types... or 20k dollars a week... player X also breaks even overall on his betting and so at the end of the year when he files W-2g forms he pays no taxes on his wins because his loosing bets are write offs...

Also keep in mind... Player X pays no taxes on his rebate funds....

Now the track decides to increase the takeout to 25% across the board allowing the track to now pay player X 13% across the board... and player X increases his non-taxed rebate funds per week to 26k dollars... increasing his yearly income by 312k dollars (tax free)

There are 2 sides to every story... don't complain just yet...



The positive for the tracks is that because he is now making 312k more per year Player X will most likely be increasing his bet amount's and bringing more "handle" to the tracks

[floridagolfer]

They just don't get it. Then they'll complain when the expected dollars don't materialize and they'll come up with another idiotic scheme.

Higher takeout = less wagering activity, not more.

[Richkas]

no

[Richkas]

There is so much money in the pools you wont even notice any extra takeout.

[floridagolfer]

Originally Posted by Richkas

There is so much money in the pools you wont even notice any extra takeout.

For Breeders' Cup weekend, you're right. For the other 363 days of the year, however, this doesn't help anyone in California.

[pokernut9999]

Always do.