Unanimity Sought on California Legislation

Unanimity Sought on California Legislation
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Keith Brackpool, chairman of the California Horse Racing Board, called for unanimity from the racing industry in developing proposed legislation for 2010. During a meeting of the CHRB Legislative, Legal and Regulations Committee April 14 at Santa Anita, Brackpool asked for progress reports on efforts to develop a major racing bill, and he had little patience for those who opposed a united front.

During the first part of the meeting, industry representatives updated the committee, which consists of Brackpool and CHRB member Jesse Choper, on ideas that had been floated at the initial committee meeting March 4. The office of California Gov. Arnold Schwarzenegger has encouraged the industry to bring forward an innovative bill this year to help racing, but has asked that it be a bill the entire industry supports.

Brackpool urged people to discuss ideas that would bring increased revenue and increased stability to existing revenue streams.

Ideas under discussion for such an omnibus bill include betting exchanges, unmanned automated teller machines in places easily accessible for the state’s population, Instant Racing machines like those in Arkansas, and sports betting. Proponents of each idea gave the committee a progress report on them.

John Hindman of Betfair/TVG more fully explained the concept of betting exchanges, such as are currently allowed in England. Exchanges allow players to offer their own price, and Hindman likened them to the "eBay of Thoroughbred gambling." He said that Betfair has found in England that exchanges attract players who are not already gambling on horse racing.

"The type of player is far younger and more affluent than TVG’s customer," said Hindman. "Because exchanges offer win only and 75% of tote wagering is on exotic wagers, it would be complementary."

Choper asked Hindman to provide better demographic data comparing Betfair customers to tote customers in other parts of the world. Brackpool suggested that to assuage concerns from other industry factions on possible cannibalization, Betfair should offer some "concrete assurances."

Several people at the meeting alluded to the looming competition from the lucrative Monmouth Park meeting. Craig Fravel of Del Mar was a somewhat reluctant deputy of many industry leaders when he suggested that a temporary influx of money to purses, perhaps from Indian gaming, might be possible.

"It doesn’t hurt to let people know the competitive environment we’re in," said Fravel. "The tracks that are doing well have slots."

In California, only tribal casinos are allowed to have slot machines. Though the racing industry has tried to get slots in the state, that does not appear a possibility.

The second part of the committee meeting focused on pending horse racing legislation, and Northern California industry representatives came in for some criticism for opposing ongoing bills 

One of the current bills, Senate Bill 1439, would reduce the restriction between satellite wagering facilities from 20 to 15 miles. It was reported at the meeting to have passed out of the California Senate Governmental Organization Committee on an 8-0 vote. Opposition came from the California Association of Racing Fairs and the San Mateo County Event Center, a satellite facility.

Chris Korby, executive director of CARF, said at the committee meeting that CARF is "actively discussing accommodations that both sides can make." When Brackpool asked him why CARF opposes legislation that helps horse racing, Korby responded, "The concern is the harmful economic impact with competing satellite facilities."

Also to a question by Brackpool, Korby said that CARF feels satellite facilities need an increased commission that should come from an increased takeout.

"So you think we should increase taxes in a recession?" Brackpool asked.

Korby replied that it would not be a tax and recommended an increase of one-half to one percent.

"I’m more concerned that you’re continuing this public opposition when we should be speaking with one voice," said Brackpool. "This is not being part of a team and moving forward. I think it sends a very poor message to the legislature."

Chris Carpenter, the general manager of the San Mateo County Event Center, said that his group preferred to grow the industry by "strategically selecting" new satellite locations. He noted that San Mateo has already sent an application for one to the CHRB.

"You’re certainly making it very difficult for the industry to grow," Brackpool told him. "You’re not giving your consent; you’re selling your consent."

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