HALLANDALE BEACH, Florida, February 26, 2013—The news emanating from the Golden State this year has been so bad on so many levels that I can’t even begin to count the ways. Alas, since I am paid to try, let’s concentrate on this for now.

According to a Daily Racing Form report last week, the takeout rate on the popular and successful Players Pick 5 could rise sharply at the Betfair Hollywood Park April 25 unless the track and the Thoroughbred Owners of California can reach an agreement on revenue distribution.

Jack Liebau, the fan-friendly Hollywood Park president indicated that without such an agreement, the promotional 14 percent takeout rate could rise to the standard exotic takeout scale of 23.65, a tax increase of 59.19 percent.

While Liebau did not break down figures specifically, he stated a majority of the 14 percent goes toward purses and that the track receives a nominal share. He was quoted to say that he is “hoping there will be a fairer arrangement in respect to the spread.”

Lou Raffetto, president of the Thoroughbred Owners of California, told DRF in the same story that he’s “confident we will work it out… based on our discussions we’ll come to some sort of agreement.”

Of course, it’s expected and acceptable that the two sides in a negotiation should play their cards out of public view, but two things would seem apparent just looking at those numbers.

At 14 percent, the track very likely is being under-compensated at best if it’s indeed the case that the major share of the split is going to purses. Even as a horseplayer with a vested interest in takeout, I admit there’s not much wiggle room at that rate.

Raffetto’s statement seems an admission that there probably is some inequity because of the special rate and, of course, the slice of the pie cut by the state of California exacerbates this revenue issue because it further reduces the amount that goes to the track and horsemen.

Everyone with an interest in Thoroughbred racing understands the problem and is trying to be fair-minded. But when looking at past performances, certain patterns emerge.

First, low takeout promotional wagers, from Tampa to Los Angeles, are an unqualified success when handle is the measure. Churn notwithstanding, low takeout bets are among handle leaders wherever they’re offered, a tribute to their popularity.

Of greater significance might be that because of the wager’s complexity and higher-cost nature, the amount of work that bettors put into handicapping the wager has resulted in increased handle on individual races within a given sequence; and a trickling more into sequential sub-sets--Pick 5 into Pick 4 into Pick 3, etc.

Low-cost wagers that allow handicappers to win a lot for a little if they consistently outwork their parimutuel opponents are the greatest gift ever given horseplayers. Horseplayers, also known as customers.

Without customers, of course, all those fancy pedigrees, the horse sales, well-heeled owners and bloodstock commissions--the good living made by even the most middling of practitioners--would fail to exist.

All industry factions know this and all factions either pay homage or lip service to the plight of these customers. Now to delve a little further into the PPs.

As everyone has known for some time, Hollywood Park is thisclose to closing its gates forever. And anyone who has paid attention has come to learn that Mr. Liebau seems to understand the economics and politics of takeout and the dire consequences when takeout rates are abused. But already on the brink, his track needs more revenue.

There are two places from which this revenue can flow; one is from the purse account, the second is from the customer’s pocket. The fairest answer probably is--as much as it pains this horseplayer to say so—that it will need to come from both. Everyone takes a haircut.

This sounds great except for this: Of all the groups; from powerless customers to successful but hurting tracks to owners whose pockets only run so deep to horse trainers with a finite amount of sweat equity left to give in their 365/24/7 lives, it is horsemen whose sense of entitlement will bring this whole thing down.

A look at the PPs of the TOC and its horsemen indicates that for some, purses and commissions can never be high enough. Prove to them and colleagues everywhere that, when adjusted for inflation, national handle is half of what it was less than a decade ago, they won’t care, their sense of entitlement beyond all reason.

Build it and the suckers will come worked 50 years ago. But the suckers have been bled dry and the numbers of those that have stopped coming are growing by the day. And the cure for this is what, higher taxes?

To increase takeout almost 60 percent on a wager that in a measurable way has helped stem the tide of decline inevitably will prove to be the end of California racing as the sport’s history has known it. A takeout increase at this point in time is not just bad business; it’s gluttonous insanity.

For grassroots horseplayers, this will not stand. Keep giving horseplayers the economic equivalent of a raised middle finger and reap the ill wind of boycott.

And who knows, maybe this will be the final straw for remaining players to join their brethren who’ve already moved on for the action available in a casino, sports book or card room, where the rake is much, much lower.

So, tell us, are you feeling lucky?