Probably few Manhattan racing fans bother to read the financial pages of their newspapers. But if they had bothered last week, they would have come across a long and indigestible report which nonetheless contained some basic facts-of-life lessons for that mainstay of the turf—the $2 bettor.
Some of the information was interesting or useful: New York horse players had a daily per capita betting average of $87.09 last year—their highest in 11 years. The $2 bettor saw 33% of all post-time favorites win 496 of the 1,496 flat races contested—and yet if he had bet on each favorite from April 2 to November 15 he would have come home a loser of nearly $300 (or 10% of his investments).
But most of the information was full of frightening overtones, for this report by the State Racing Commission to the New York Secretary of State made it perfectly clear that unless legislative action lends a helping hand in 1957 the entire structure of New York racing is in danger of a general collapse within the next few years.
New York racegoers have inherited a proud racing tradition. They have put up with frightful conditions for years while watching with a jealous eye the competitive progress being made in the neighboring state of New Jersey. And still the state of New York, which pulls in more tax revenue from racing than from any other single enterprise ($45 million in 1956), persists in blindly ignoring the advances made by racing in other states and at the same time selfishly denies the $2 bettor the fairer break he receives in every one of the other 23 states which legalize pari-mutuel betting.
January 7, 1957
If this sounds like undue criticism of state government, let's take a closer look at the facts. In general, the system of taxation on racing in this country is set up so that the total tax varies between 10% and 16%. In New York the total tax is 15%—as it also is in racing-minded Florida. In Massachusetts it is 14%, in California and New Jersey it is 13%. However, in all states the total tax is split at least two ways—and it is in this vital split that New York racegoers get the worst break of all. Of the 15¢ that comes out of every dollar wagered on a New York track 11¢ tumbles into the state coffers in Albany and only 4¢ is retained by the track (only in upstate Saratoga is the split 10-5 instead of 11-4). In Florida the tracks receive 7% of the total takeout—or, in other words, 3¢ more on every dollar than is retained by New York's tracks and precisely enough to assure the annual winter visitor to Tropical Park, Hialeah and Gulfstream that he can expect to discover costly expansions and new facilities year after year.
In New York no such possibility now exists. Even with the formation of the Greater New York Association and the final approval last week for the construction of a multimillion-dollar track at Aqueduct, racing in the state must remain static until tax revisions are made in Albany. For, while a track in New York can operate—and has done so—without loss on its stingy 4% take, there will never be enough money left over even to start thinking about maintaining a program of steady improvements on a group of antiquated establishments that were all built over 50 years ago.
The fans who support racing are being asked to give too much while getting nothing in return. Last year the 24 states which have legalized pari-mutuel betting contributed the staggering sum of $165 million in tax revenues. Thoroughbred racing in New York contributed more than a quarter of that sum—very close to the sum of its two closest competitors—California and New Jersey. But if the state of New York doesn't increase the track's takeout to 5% while reducing its own cut to 10% at the coming legislative session, it may well be striking a mortal blow at the heart of Thoroughbred racing.
The situation is desperate.