Updated on 09/16/2011 7:41AM

An appalling idea on every level


NEW YORK - Magna Entertain-ment is taking all the fun out of seeing who will come up with the worst idea of the year in Thoroughbred racing. A mere three weeks into 2002, Magna is floating a proposal that seems certain to remain No. 1 on the charts for the remainder of the season.

As reported earlier this week in Daily Racing Form, Magna is trying to convince California racing officials to increase takeout rates in order to fund eight rich new races next year at Santa Anita and Gulfstream, two Magna-owned tracks. Bettors would pay an additional 1 percent on multiple and exotic wagers throughout the year so that $3 million could be disbursed on a single day next winter to the owners of California- and Florida-breds.

This concept is so thoroughly offensive on so many levels that it is difficult to believe that anyone at Magna gave it much thought. It is equally shocking that the breeding organizations and regulatory bodies that would need to approve it have not rejected it out of hand. Only horseplayers, who have been raging about it in Internet discussion groups and in letters to DRF, seem to have grasped how appalling this idea truly is.

There is never a good reason to raise takeout, and it is never a profitable idea. It has been proven beyond debate that takeout increases depress handle, discourage new business, and drive existing players from the game altogether. If you want to stimulate an economy, as even the government figures out from time to time, you lower rather than raise taxes.

Raising takeout as an emergency measure is still undesirable, but at least somewhat understandable. If the track is falling apart and existing purses cannot sustain the racing, a takeout increase might have to be considered as a last resort. But this is not the case with Magna's proposal. It is instead a direct levy on customers to pay the entire cost of a fanciful program for which there is absolutely no need or desire in the marketplace.

Magna's proposed "Sunshine Million" races might or might not be a fun thing, but they certainly are not necessary. They are a second attempt at the "Team Racing" idea that Magna tried last winter with disastrous results, when six of the eight races were scrapped. The idea may have merit as an addition to the racing calendar, but suggesting that the players pay extra for it would ensure a hostile public reception and eventual failure.

When John Gaines thought up the Breeders' Cup 20 years ago, he didn't propose that takeout be raised nationally to pay for it. The breeders themselves put up the initial money through foal and stallion nominations, and now the popular series generates additional sustaining revenue through wagering on the Cup races. Nor have the various popular new statebred days (Cal Cup, New York Showcase, Maryland Million, Texas Champions), somewhat similar to the Magna series, been funded by takeout increases.

That makes it discouraging that no industry organizations have yet stepped up to denounce the Magna proposal. Officials of California and Florida breeding organizations seem concerned only that the Sunshine Million purses don't detract from their existing statebred purse accounts. Is there not a single breeder willing to look beyond self-interest and say that if this idea is a good one, it should pay for itself instead of being funded by picking the customers' pockets?

The Magna proposal is disturbing not only on its face but also for what it might suggest about the organization's repeated calls to deregulate the sport. Deregulation is an academically sound concept, but hardly desirable if all it really means in practice is giving racetrack owners the unfettered right to raise prices to consumers in order to fund questionable projects.

Magna takes a lot of unfair heat in the industry simply by challenging the status quo. At its best, Magna has been the loyal opposition to racing's power structure and forced needed debate and reconsideration on key issues. In this case, however, it has struck an astoundingly tone-deaf note that can only fuel its opponents' criticisms and alienate its customers.