CHRB Tables Capitol's Harness License Application
by Jack Shinar
Date Posted: 1/22/2004 8:06:09 PM
Last Updated: 1/24/2004 8:40:27 PM

The California Horse Racing Board tabled Capitol Racing's harness meet application to conduct its upcoming Sacramento meet Thursday because the association has not paid "impact fees" to compensate Los Alamitos Race Course for overlapping dates when Capitol extended its meeting several years ago.

In May, the CHRB ordered Capitol Racing to pay Los Alamitos, which formerly raced harness horses but switched to full-time Quarter Horse racing when the harness owners moved to Sacramento's Cal Expo, for a loss of simulcasting handle. Both the Quarter Horse and harness meets run on competing nights.

However, during a four-hour, 15-minute meeting in Arcadia Thursday, it became apparent the two sides were far apart. The impasse threatens to disrupt a harness meet that is scheduled to begin March 5. The board put the matter over until its Feb. 19 meeting, CHRB commissioner Alan Landsburg telling the combatants he hoped they could resolve their differences "before we raise the hammer and nail harness racing in California.

"Is there a way to address this issue to allow us to go forward," he asked. "I don't want to see us end an industry, but that is what we are about to do," Landsburg said.

Chairman John Harris, in his first meeting leading the board, quipped, "We'd like to get this resolved and move on to the Middle East or something that would be easier."

Using a formula based on the CHRB order, Los Alamitos contends Capitol owes it as much as $3.3 million and should continue paying impact fees in the future for damage done to the Quarter Horsemen's mutuel handle by the overlapping dates. Capitol believes that the figure is more like $250,000.

Attorney Rod Blonien told the board, "An administrative law judge has already decided this. Our horsemen have waited too long. We want you to enforce your order and put conditions on (Capitol's) license (guaranteeing payment)."

Attorneys and officers from the two racing associations, as well as attorneys for the horse owners of each group, sparred at length before the board. On two occassions, representatives left the meeting to see if they could resolve their differences and report back to the board.

David Neumeister, representing the California Harness Racing Association, finally asked the CHRB to mediate the dispute, even though Capitol has a lawsuit pending in Sacramento County Superior Court alleging the state racing regulator had overstepped its authority by issuing the order in the first place. He and Capitol owner Steve Biery expressed a willingness to drop the legal action.

"If you deny our license based on whether Capitol pays Los Alamitos $3.3 million, you'll be putting us out of business," Neumeister said during a vigorous defense of the harness track's position. "Our horsemen will scatter. If they get a whiff of an idea that we will have to cut purses in order to pay Los Alamitos $3.3 million, that's the end of harness racing in California."

Los Alamitos owner Dr. Edward Allred and attorneys for the track, after initially resisting the idea, agreed to allow the CHRB to resolve the issue. However, it was dropped when neither side could agree on what issues they wanted the CHRB to arbitrate.

A hearing on a motion from the state Attorney General to dismiss Capitol's lawsuit because of failure to file in a timely manner is to be heard prior to next month's CHRB meeting.

CHRB senior management auditor John Reagan recommended that the board not approve the license application without compliance by Capitol Racing.

In another matter, staff reported that account wagering handle in the state grew to more than $315 million in 2003, a 78% increase over 2002, when $177 million was wagered from home accounts in its first year.

Commissioner Roger Licht reported on progress made by the Ad Hoc Security Committee, which is comprised of CHRB commissioners, investigators, and staff members, representatives of the major horsemen's organizations,
racetrack management, veterinarians, and individual owners and trainers. The full committee has met twice in the 30 days and its various subcommittees and working groups have been busy reviewing aspects of security in the stable area, medication rules and practices, and a proposal to install surveillance cameras in shedrows.

Licht said one immediate result of this review has been a reprioritizing of the duties of CHRB investigators, who along with additional racetrack security personnel are now much more visible, spending more time in the stable area enforcing medication-related rules, making unannounced visits to barns, and paying closer attention to horses entered to run in races that day, especially horses receiving authorized race-day medication.

"There is not complete agreement (on whether licensees actually are breaking medication rules) but there is 100 percent agreement on the perception (of rule violations)," explained Licht. "This was cause enough for us to motivate our forces and deal with the perception. We're trying to turn around the backside itself. People are coming forward and working with us to alleviate the perception."

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