02/06/2009 12:00AM

Hitting the bad decisions superfecta


NEW YORK - Leave it to racing and the people who regulate it to start doing precisely what you shouldn't in the midst of a severe economic recession: raise prices and taxes on your customers, and make it more difficult for them to buy and use your products.

Last week in Maryland, where racing was in bad enough shape before the national economic meltdown, track officials hit a rare exacta of punishing both its most casual and its most serious customers with a pair of unfriendly moves: banning bring-your-own booze on Preakness Day and raising takeout year round on multirace wagers.

The Preakness is the one day when Maryland racing commands global attention and attracts a stadium-sized crowd, much of it from once-a-year racegoers who have a cherished tradition of picnics and parties. It's the one thing Maryland does that works fabulously. But track officials say they want to "redefine the infield experience," which appears to be corporate code for selling more of its own marked-up beer.

The parimutuel takeout on pick threes and pick fours is being raised from 14 to 25.75 percent, a whopping 84 percent tax increase. Track officials argued before the state racing commission that it wasn't really a big deal because the bets amounted to only 2 percent of total handle. No commissioner thought to ask why, if the dollars were so insignificant, you would eliminate one of the very few things that might make a bettor in Kentucky or California bet on some races from Laurel.

In California, meanwhile, regulators proudly announced that they will meet later this month to discuss "closing a loophole" that currently allows out-of-state account-wagering companies to offer promotional rebates to customers who bet on California races.

Almost every bet-taker in America, including the California tracks this prohibition would supposedly protect, offers some form of rebate or customer-reward credit - just like almost every business in America runs promotional sales or offers discounts to new and high-volume customers. Yet California regulators are strangely obsessed with this issue in a way that would make you think they have yet to understand that off-site betting exists or how it works.

Prohibiting an account-wagering company from offering a 2 percent rebate on California bets will not increase the amount of money that goes to California tracks or horsemen - it's a promotional cost borne entirely by the account-wagering company out of its share of the vigorish. A bettor in Florida or Wisconsin is not going to get on a plane to California to bet on a Santa Anita race if his current rebate is rescinded. He may just stop betting Santa Anita entirely, and everyone loses. How does this do anyone in racing any good?

What's even crazier is that the account-wagering operations that would lose revenue though this are in many cases entities owned in whole or part by the same people who own the California tracks. How does it "protect" an in-state company to prevent it from selling its products competitively out of state?

In New York, the newest policy to discourage people from playing the races is being proposed not by the tracks but by the Metropolitan Transit Authority, which has proposed eliminating almost all Long Island Railroad train service to Belmont Park. Given declining live attendance in the simulcast era, this might seem like a reasonable blue-pencil item to a bureaucrat unfamiliar with sport or the local culture and geography, but in fact it could be a fatal blow to Belmont's live business.

There simply is no other way to get there for most city residents, most of whom do not own cars and would face a maze of subway and bus connections so daunting that attendance would fall sharply when the track opens in May. Generations of New Yorkers have been indoctrinated into racing by riding the Belmont Special, and any hope of recruiting future generations would be vanquished overnight. Track and local officials are fighting the proposal, which everyone but the MTA official who proposed it agrees would ultimately cost far more in lost betting and business revenues than the cost of the trains.

"One of the target groups for creating new racing fans," said Steve Zorn, a board member of the New York Thoroughbred Horsemen's Association, at a Jan. 21 public hearing, "are the thousands of bright, energetic and relatively well-paid young professionals who come to New York from all over the world. If we want to turn them on to racing, and make lifelong fans of them, we need the Belmont Park train service."