Hialeah takeout plan sure to backfire

February 26, 1993|By Bill Finley | Bill Finley,New York Daily News

HALLANDALE, Fla. -- It is hard to imagine that anything could spoil Hialeah, perhaps the most magnificent racetrack man and nature have ever combined to create. If a racetrack can be a sanctuary, this is it, a place whose beauty is so overwhelming that it makes it easy to forget all the troubles of a losing day.

Only this year will be different. Hialeah owner John Brunetti will do the unimaginable; he will make Hialeah the worst place on earth to play horses.

Hialeah opens April 1, April Fools' Day for South Florida bettors. Brunetti plans to institute what is believed to be the highest takeout structure in the history of U.S. thoroughbred racing. The take on win, place and show bets will be 23.1 percent and there will be a 28 percent take on all other wagers. Winning money -- never easy at the track -- will be impossible at Hialeah.

It doesn't matter anymore how pretty and nice the old track is. There is nothing nice about being ripped off.

"This will be a lose-lose situation," said one local bettor, who estimates he bets between $3,000 and $4,000 a day. "You'll have no chance. There isn't a player in the world who can win with that kind of takeout, and we won't put up with it. Most of the big bettors are saying they just won't show up."

Brunetti was allowed to restructure his track's takeout when Florida's pari-mutuel laws expired last July 1. No new laws have been passed since and anarchy is the rule in the state with no rules.

Along with the expiration of racing regulations, tracks lost tax breaks from the state. In Hialeah's case, the state did not take its normal percentage of the first $300,000 bet, which amounts to about $10,000 a day.

To make up for the losses, Florida pari-mutuel facilities have passed the cost on to their fans in the form of higher takeouts. Some have responded reasonably. Calder and Gulfstream kept the 18.1 percent take on straight bets, but raised the takeout on all other bets from 23 to 24 percent. No one was happy, but the pain was minimal.

Tampa Bay Downs, which handles less than the tracks on Florida's east coast, was hit the worst by the state. It had a tax exemption on the first $500,000 bet, which can be more than the total handle. Tampa Bay also passed the cost on to its fans, now taking 20 percent from all straight bets and 28 percent on exotics.

Tampa Bay general manager Stephen Baker already has seen what Brunetti is about to see. The high takeout is breaking his fans and business is a disaster; the handle is off 20 percent.

"Imagine if you want to play in an all-night poker game," said Baker, who also said that Tampa Bay could not have afforded to open without the increases. "There are four of you and you have $100 each. Well, if the house takes $28 every time the cards are dealt, that poker game is going to be over pretty quickly. Our regular fans are very upset about this and they're starting to go elsewhere. This could be a disaster for us. I'm afraid we may price ourselves right out of the market."

No one is about to pat Tampa Bay Downs on the back for increasing its takeout, but the situation there did seem dire and the track may not have had a choice. Gulfstream Park has shown that a more modest increase will suffice for the major Florida tracks.

So what then is Hialeah's problem?

"People are saying I'm crazy, off-the-wall and that this will never work," Brunetti said. "If there's another solution, please come forward with it. We have the least productive racing days and our handle is smaller than Gulfstream's. If we did nothing to enhance income, we'd be faced with financial disaster."

It appears that Brunetti is trying to make a major impact in the simulcast market. He has solicited tracks with enticing offers to cut the percentage Hialeah takes from off-track bets, which he can easily do after increasing his total takeout. This is nothing less than selling out his own fans to make a few extra bucks.

In at least one case, the plan may be backfiring. Hialeah-to-Meadowlands simulcasts would be a natural, but the New Jersey Sports and Exposition Authority is balking because it is not sure it wants to subject its patrons to such punishment.

"It [the proposed Hialeah takeout] is a major stumbling block at this point and Hialeah is aware of that," said Chris McErlean, the Meadowlands' director of marketing and simulcasting. "There is also a philosophical difference here. We have legislation to change our own takeout, and after our boasting and bragging about our intentions to lower it, it would really detract from what we are trying to do here if we were to bring in a track with such an abnormally high takeout rate."

The irony is that no one will be hurt by Brunetti's foolishness worse than Brunetti himself. It's not going to work. Opening day is still more than a month away and he already has chased away his big bettors. In time, the small bettors will be broke and fade away, as well. He stands to destroy a track he has worked feverishly to keep alive. Hialeah and its fans deserve so much better.

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