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Off-track betting, properly set up, can give racing the chance to accomplish all of these things. France is a good example. In that country 92% of all wagering is on racing at the five major tracks in the Paris area. Of this amount 89.7% is bet off track. Yet this does not place even the smallest tracks far from Paris in jeopardy, nor the industry as a whole in a compromising position, since the receipts from off-track betting subsidize and support the entire sport. Adequately provided for by this arrangement are the aforementioned items, as well as an impressive purse structure that approximates—or surpasses—the best in this country. The recent French Oaks had a gross purse of $280,000. Last week's U.S. equivalent, the Coaching Club American Oaks at Belmont Park, grossed only $130,000. In France, largely because a generous 10.45%, of all off-track money is given back to the industry, an owner has a 50-50 chance to break even.
Australia accomplishes the same thing in a slightly different manner. All profits from off-track betting, after taxes and operational expenses have been met, are returned to the racecourses, large and small, with a specific percentage allotted for purses, jockey schools, etc. The industry receives about 3% of the money wagered off the track.
For instance, through a sophisticated electronic message system, a one-day country meeting at Kilmore, near Melbourne, with an attendance of only 4,000, handles $50,000 in on-track bets and another $450,000 off track. The only way such small tracks as Kilmore can exist is through participation in OTB.
In England, on the other hand, off-track betting is not entirely harnessed to do the most good. Bookmaking is legal and accounts for a large proportion of the action. This money is not included in the pari-mutuel scheme and only a very small portion of it is returned to the tracks and horsemen. The result, in recent years, is that a number of racecourses have gone bankrupt and the prize money at tracks still operating is spread entirely too thin.
State legislatures in the U.S. are looking to New York as a model for an OTB operation. Though it has been hampered from the beginning by difficult labor negotiations, lack of computer systems, untrained personnel and insufficient facilities (last week New York City opened the 12th of its expected 70 betting shops), the city's trial balloon is somehow in flight. But Howard Samuels' announcements of daily increases in off-track handle notwithstanding, he still faces the stark reality of a $1 million annual payroll to be met in executive salaries alone and somewhere in the neighborhood of a $5 million deficit in capital expenses. By Samuels' own admission these expenses are about double those of France (7% vs. 3.3%). The very efficiency of the French system means more for the four partners involved and indicates that an improvement is both necessary and possible here at home.
There is no question that the principle of off-track betting is sound. I know OTB ultimately will be a great success. Gambling is a part of human nature. The real question is what must be done to protect the economic health of American racing as it moves into an immensely complex electronic world? In the first place I think that any state having off-track betting must guarantee the property rights of the horsemen involved in putting on the show. This is to say that the off-track takeout designated for both horsemen and tracks should be basically the same as those from on-track betting revenues, at least until such a time as the off-track betting handle reaches such proportions that a scaling down of this ratio is fair. I am not thinking in terms of increased purse money alone, but funds as well for the vital fringe benefits I have mentioned.
As off-track betting expands, I would certainly endorse certain forms of what we might call "exotic" betting (i.e., tierc�, perfecta, etc.), which could quite easily withstand increased takeouts. The tierc�, the most popular form of French betting, requires the player to pick the first three runners in order and is particularly designed for a three-franc (60�) wager. In this country the tierc� could be easily reduced to $1.00, or even to a 50� bet.
There has been much speculation on operating separate mutuel pools on out-of-state tracks during the off season in New York. This plan is dangerous since two can play the game. If New York takes bets on a neighboring state, the reverse could be true. This, in itself, is only fair if horsemen in both those communities have their rights respected. Personally, I believe everybody should stay and play in his own backyard. I welcome the opportunity to bet on such races as the Kentucky Derby and the Preakness, but I find it unconscionable that the racecourses involved and the horsemen at those distant meetings are not properly compensated. (In England the Race Horse Owners Association is demanding the television industry pay performers' fees to owners whose horses appear in televised races.)
Finally, for the prosperity of the sport, all interests must pull together. There must be a common effort among tracks, large and small, just as there must be between thoroughbred and standardbred people. Wagering on major tracks through the operation of OTB offices should not be at the expense of the smaller tracks in the immediate area. Rather, those horsemen and track operators, dependent upon local population for their very survival, should be protected—if not at least partially subsidized—by off-track betting revenue so as to insure that today's minor track will not become tomorrow's closed-down track.
OTB can contribute immeasurably to better racing but must not be permitted to undermine the sport in any fashion. This is racing's biggest choice. If each state will move carefully into this new world with full recognition of not only its responsibility to its constituents and local treasury but also to the hundreds of thousands of people in the racing business who are staging the largest paid-spectator sport in the U.S., then, and only then, will the game be secure.