A bill that would not only increase takeout on exotic wagers in California but also introduce “exchange wagering” to the state has drawn opposition within the racing industry.
In a release, a coalition of racetracks called for the defeat of legislation authored by Assembly Speaker John Perez “that has been amended to create a new class of online wagering in California.” The legislation, amended Aug. 20, is headed to the Senate Governmental Organization Committee the week of Aug. 23.
If the bill, which is an urgency measure and requires a two-thirds majority for passage, gets Senate support, it would go back to the Assembly for concurrence. It needs to be passed by Aug. 31, when the current legislative session technically ends, if it is to be signed into law this year.
Exchange wagering facilitates online action allowing bettors to back, for instance, a horse to lose, or allow head-to-head bets between bettors. It could even allow wagering to occur during the running of a race.
Popularized in Great Britain, the betting exchange idea is supported by the advance deposit wagering and horse racing television network TVG, which is owned by British wagering company Betfair. Exchange wagers would exist apart from the traditional pari-mutuel system.
A coalition of tracks note that exchange wagering is illegal throughout the nation. It describes it as “a system that relies on third parties to assume and pay out on wagers. There have been no committee hearings on the amendment and no chance for public comment on the proposed changes.”
“With attendance and handle declining in the racetrack industry, we cannot afford to risk purses and jobs on a hastily crafted legislative experiment that is light on specifics,” Churchill Downs Inc. chief operating officer Bill Carstanjen said. “With jobs and people’s livelihood at stake, we all need to do our homework.”
CDI has no California racetrack holdings but does operate the TwinSpires.com and Youbet.com ADW services.
“Preserving, maintaining, and growing jobs, jobs, jobs, is the only type of racetrack and Thoroughbred legislation we can support, and (the bill) does not achieve this goal,” said George Haines, president of Santa Anita Park and Golden Gate Fields, tracks that are owned by MI Developments.
“CDI, Santa Anita and Golden Gate Fields are calling upon all horse owners, trainers, and racing fans and their legislative representatives in Sacramento to vote against this bill,” the release states.
Assembly Bill 2414 would also authorize an increase in takeout on exotic wagers to enhance purses. Supported by owners, the plan has generated significance opposition from horseplayers.
"We're neutral on (betting exchanges)," said Arnold Zetcher, chairman of the Thoroughbred Owners of California. "We don't think it should get in the way of the takeout issue."
The takeout hike would be for 2% on wagers involving two betting interests (such as an exacta or daily double) and 3% on exotic wagers involving three or more wagering interests (trifecta, superfecta, pick three, and pick six, for instance). Everyone making such wagers on California races, whether inside the state or out, would be affected.
He noted that there are safeguards in place for the horsemen, that they would have to approve contracts, etc.
The current California takeout is 20.68% on all Thoroughbred exotic wagers except for the state and county fairs, which deduct 22.02%. Higher takeout means less is returned to bettors for winning wagers.
The additional takeout revenue would go to purses, which are dropping as handle has decreased.