Steep Declines Reported in California Wagering

Wagering in California on horse racing has declined from last year by nearly $65 million through the first 5 1/2 months of the 2005 season.

In a brief report given to the California Horse Racing Board May 26 at Los Alamitos Race Course in Cypress, staff program analyst Dick Gonzalez told commissioners that the figures showed decline in all areas. But the categories that were most affected were Southern California Thoroughbreds, which were off by $39 million in handle for the period Dec. 26 through May 6 (-3.82%), and in harness racing, which dipped by $18 million (-22.18%).

"Overall these numbers are dismal," said commissioner Richard Shapiro. "We've had 315,000 less fans."

Declines were also cited in wagering for Northern California Thoroughbreds – down $7 million or 1.78% – and in Quarter Horse betting, off by $800,000 or 0.79%.

It was noted that the figures were skewed for this year by the fact they did not include handle from Kentucky Derby day. The 2004 Derby was held May 1. Board chairman John Harris also pointed to the prevalence of unusually rainy weather and its bearing on attendance and handle. Bad weather forced many races off the turf and caused short fields, he said.

"We really need to get something going to turn this around," said Harris.

Gonzalez reported that overall wagering in the state was off by 4.04%, from $1.607 billion to $1.542 billion so far this year. The all-important Southern California market dipped from $1.017 billion to $978 million. Harness wagering, showing the effects of a prolonged simulcasting dispute with nighttime rival Los Alamitos Race Course and short fields brought on by a precipitous drop in purses this winter, fell from $81.7 million in 2004 to $63.7 million so far this season.

No where was the decline felt worse than at Santa Anita Park, which suffered through a season where average daily handle fell 4.24%, including a 9.51% drop in on-track wagering. On-track attendance fell by 10.49% to an all-time low of 677,193, or less than 8,000 per day for the 85-day meet.

Ron Charles, director of California racing for track owner Magna Entertainment Corp. and recently appointed as the interim president for Santa Anita, said, "One of the reasons was to do with the inclement weather. It was difficult but we had a very good last month."

Commissioners deferred a report on procedures for how racing association simulcast coordinators verify the identity and legitimacy of out-of-state simulcast customers and if "rebating" is practiced. Harris directed the discussion to a future CHRB Pari-Mutuel Committee meeting with a follow-up report to the full board.

Rebating, which is the practice of discounting the losses of customers, is prohibited by California law. The racing signal of California races has never been cut off for that reason alone to suspected rebaters, who represent a significant portion of the racing handle.

"We need to better understand what is going on," said Shapiro. "If we decide that doing business with rebaters is in the best interests of California horse racing, then we should try to get the law changed rather than just not enforcing it.

Harris expressed concern that California bettors are at a disadvantage to those receiving rebates, and suggested that the state's wagering take is also being hurt by customers using off-shore betting shops.

The board approved changes in the Northern California fair racing schedule, as expected, eliminating the 12-day Cal Expo Thoroughbred and emerging breeds dates and making other adjustments. It also adjusted the Los Angeles County Fair meet this year, extending their season by one day to allow a closing on Sept. 26 while adding two dark days – Sept. 13 and 20. The changes reduced the meeting by one day to 16.

Licenses to conduct meetings were approved for Del Mar (July 20-Sept. 7), Solano County Fair (July 13-25) and Sonoma County Fair (July 27-Aug. 8). The latter fair, which takes place in Santa Rosa, will introduce its new $3 million turf track, which measures seven furlongs. Corey Oakley, representing the fair, said they will card about 20 races on the turf this season, including a $100,000 stakes race on Aug. 6.

Finally, the CHRB approved expenditures totaling nearly $3.5 million for service contracts for the 2005-06 fisal year, including drug testing at UC Davis ($1.3 million), steward services ($1.598 million) and veterinarian services ($494,000).

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