Increasing takeout is not the answer. Every study out there concludes that the optimum takeout (the takeout where tracks and horsemen make the most most money bottom line) is maximum 14%, and probably even lower as most studies indicate.
Why? It is a matter of horseplayers lasting. The same concept is true of slots. Slot operators have found that they make more money (the public loses more money) at 8% over 16% takeouts. If a slot player has a hundred bucks to , and they only last say 2 hours on average, they go home more discouraged than if they last 4 hours. The longer they last, the more likely they are to believe the game is beatable too. What happens is that when they are discouraged, they are less likely to come back so quickly. On the other hand, the more they come back, the more likely they are to focus more of their expendable entertainment money on slots, and the more likely they are to expose friends, family and even coworkers to their hobby. This is true of horse racing too.
California already has some of the best takeouts in horse racing. But they are not promoting this fact very well. Promote it. In fact, drop takeout on WPS to 15% and tell everyone. Drop takeout on exotics by a half a point to a point too, and promote it.
Secondly, California needs a statewide ADW to capture a bigger percentage of the bets made by Californians. But do it right. Offer rebates. Attract back the Californians that are betting offshore. Get the money back into your pools. Promote the ADW. Get people at the track to sign up. Again, rebating will attract these players too.
Third, sell your signals to whoever wants them. Horseplayers with accounts at ADWs that don't have California content, don't play California. On line horseplayers generally play where their money is.
Fourth, more tracks to bet on at tracks. Give horseplayers their choice back. If takeouts are lower, players will bet more, and show up more often.
High signal fees also hurt California. There is a trend out there now to increase these. What is happening is that price sensitive rebate players are shifting to tracks that charge lower fees. This is a reality. Dropping these fees would most likely increase the bottom line as well.
Follow the advice above, and purses will go up substantially.
On the other hand, you can increase takeout, thinking you are putting your finger in a dike. If that happens, California will continue to see negative growth.