With a mid-June deadline approaching, California racetracks and horsemen’s organizations have yet to finalize a budget for the California Horse Racing Board’s 2024-2025 fiscal year, an obligation that could affect the viability of smaller tracks, the racing board was told on Thursday. The fiscal year begins on July 1 and a financial formula must be finalized by the racing board at its next meeting on June 20 in Sacramento. At its Thursday meeting, the racing board heard lengthy discussions from officials throughout the state before urging the parties to reach a resolution in coming weeks. “We’ll look forward to some reasonable conclusion next month,” racing board chairman Greg Ferraro said at the end of the discussion. The racing board has a projected budget of $18.2 million for the upcoming fiscal year, which covers approximately $8 million in direct costs for salaries of stewards and veterinarians employed by the racing board who work at racetracks, as well as drug testing conducted at the University of California-Davis, according to racing board executive director Scott Chaney. :: DRF's Preakness Headquarters: Contenders, latest news, and more The remaining $10 million, referred to as indirect costs, covers salaries for approximately 50 racing board employees, and the annual operation of the racing board, Chaney said. The racing board’s budget is funded by the sport and not through state government, Chaney said. Despite recent meetings, officials are at an impasse on a funding mechanism, the racing board was told, with debate largely focused on whether funding should be derived from a percentage of handle generated by each track or by the number of racing dates that must be covered. Much of the discussion has focused on financing indirect costs, officials said. “The indirect costs have to be somehow related to handle or race days,” Ferraro told a room of executives. “That’s for you guys to decide.” Chaney said that a funding formula based on handle “would be vastly different than race days.” “Handle would put most of the burden on Southern California,” he explained. “A race day approach would be an even allocation across the state. Northern California has as many race days as Southern California. “It costs the CHRB the same to conduct racing at Ferndale as Del Mar,” he said in reference to the tiny Humboldt County Fair in the far north of the state and the prestigious track near San Diego. Funding has become a greater concern with the looming closure of Golden Gate Fields in Northern California on June 9, the sport’s flagship track in that portion of the state. The loss of Golden Gate Fields will put a greater burden on other tracks in the state to contribute to the budget, including the Golden State Racing organization that plans to operate a fall meeting beginning in October at the Alameda County Fair in Pleasanton to replace racing dates previous conducted at Golden Gate Fields. Chaney said Golden Gate Fields contributed approximately 12 percent to the board’s budget in the past. “If somebody doesn’t pay, someone [else] has to,” he said. “If they go up so high that someone has to walk away, that cost has to be borne by somebody else. :: Get ready for the Preakness with DRF past performances, picks, and betting strategies! “This is not a fun topic, but one we have to solve” in coming weeks. Officials with the Watch and Wager harness meeting in Sacramento and the Sonoma County Fair in Santa Rosa said an increase in funding obligations would have a crippling effect on their businesses. Chris Schick, of Watch and Wager, said a massive increase in budget obligations could lead his organizations to reduce racing dates. A representative of the Sonoma County Fair said such an increase could lead to the cessation of racing at the Northern California venue, and added that the venue currently does not profit from its racing business. Complicating matters, handle throughout the state at all tracks showed a decline of 17 percent in April compared to 2023, from $254.4 million last year to $211.5 million this year, according to racing board data. There were three fewer programs in April compared to the same period in 2023. For the year, handle at California tracks was down 7 percent through April, from $932.9 million in 2023 to $863.1 million. The figures include betting at Thoroughbreds tracks as well as the harness meeting in Sacramento and the Quarter Horse and lower-level Thoroughbred meeting at Los Alamitos. California tracks have no alternative forms of gaming to generate revenue, such as casinos or slot machines, which are common at tracks in other states. Josh Rubinstein, the president of Del Mar, called for a more equitable contribution from venues throughout the state to fund the racing board’s budget. “This is a complex issue,” he told the board, expressing concern about a decline in handle. “Currently, southern Thoroughbred tracks are paying over 80 percent of regulatory costs in the state. We understand the timing of this may not be convenient for some, but we are a highly regulated industry.” No representatives of Santa Anita spoke at the meeting. The racing board may be forced to take an active role in the negotiations. Bill Nader, president of the Thoroughbred Owners of California, told the racing board he was skeptical whether a statewide agreement can be reached before the board’s next meeting. :: Get Preakness Betting Strategies for exclusive wagering insights, contender analysis, and more “Trying to find something agreeable to all is the difficult part,” he said. He said negotiations will focus on indirect costs. “I would forewarn that I’m not sure we can get there, but we will try,” Nader said. “It’s going to be difficult. Every participant in the industry at some level is struggling. We have to accept and assume those costs. “Financial standings are not great, but we have to come to a decision. I’m not sure that when we come to you in June we’ll be holding hands together.” :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.