Calif. Legislators Hear Racing's Issues

Small crowds, slots and rebate shops; those woes top the list. Horse racing representatives were given the opportunity June 8 to tell a California Senate Governmental Organization sub-committee what's troubling the sport and they had plenty to say.

California Horse Racing Board chairman John Harris, Magna Entertainment president Jim McAlpine as well as Rick Baedeker, president of Hollywood Park, and Craig Fravel, executive vice president at Del Mar, were among those who addressed the committee, which is chaired by Senator Edward Vincent of Inglewood. Vincent is a horse owner and supporter of racing.

Harris noted the recent excitement over Smarty Jones' Triple Crown quest that drew more than 120,000 to Belmont Park on June 5 for the Belmont Stakes, "a welcome sign of hope for a troubled industry.

"Like some aging star, racing can rally for the occasional big day, but on a normal day we have serious problems," he said.

Harris noted that in California the situation is a far different picture than Belmont's record crowd, particularly on weekdays when northern tracks attract 2,000 people and the southern ones less than 5,000. He said free admission and parking would be a good start, at least on a trial basis.

Among his suggestions to improve the economics of the game is to work with Native American tribes to develop compacts for gaming that would allow them to place slot machines "into racetracks and fairs, and share the income with the horse industry."

The introduction of slots at racetracks -- an increasingly important issue in California -- has the support of Baedeker, who is helping drive a ballot initiative that could end the tribal monopoly over the machines in the state.

"We need to enjoy the same monopoly that the Indian casinos have," Baedeker said, referring to slot machines. "Between Indian gaming and the lottery, there's $8 billion to $9 billion a year that exists in the gaming marketplace that didn't exist a few years ago."

Baedeker also responded to suggestions from committee members that better marketing would solve racing's on-track attendance woes.

"I wish it were that simple," Baedeker said, "because I suggest to you that if this was just a question of marketing, we could bring in a couple of the top experts in the field and our problems would be solved."

The worst of the workers' compensation insurance crisis on California backstretches, which had nearly paralyzed the sport for more than two years, has apparently been alleviated with the signing of legislation that authorizes an additional 0.5% takeout from the pari-mutuel's exotic wagering handle.

While glad the problem was solved, Fravel noted that it took 2 1/2 years. He said that is often the problem with a sport so heavily regulated.

"Our industry is frequently in agreement with what needs to be done, much more so than we are generally credited with," he said. "We need the ability to be more flexible in the marketplace. Most businesses can make a critical decision ... we can't and that's a huge disadvantage for us."

Another persistent problem facing racing is rebate shops. McAlpine and Harris agreed that action is needed, but McAlpine said California should be considering rebating to top customers while Harris advocated disallowing the off-shore companies engaging in such activity access to California races.

McAlpine said track operators should optimize the race-going experience for patrons and realize that they "aren't in competition with the racetrack down the street."

"Rather, it's the sports team," he said. "It's the entertainment venues. It's the Indian casinos."

McAlpine called for racing to think about the potential for tapping into the worldwide racing market, which he estimated at worth $85 billion.

"We think that some tremendous steps can be taken to help the world of horseracing in the future," he said. "Racing has been known as the sport of kings. We need to make it the game of the common man and woman."

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