A New Beginning for California Racing?
Date Posted: 1/25/2002 8:56:52 AM
Last Updated: 1/27/2002 4:12:45 PM

Jim McAlpine, Magna Entertainment CEO, said XPress Bet service would be available Jan. 26.
by Jack Shinar

Is it a new beginning, or more of the same?

The California Horse Racing Board has granted licenses to two companies to offer account wagering effective immediately, and betting will begin. But the licenses are time-sensitive, and some deals with horsemen remain in limbo.

"We have a history of white knights approved by past boards whose enactment promised to rescue racing," said CHRB chairman Alan Landsburg, who cited Sunday racing, superfectas, and simulcasting as potential saviors that failed to turn around horse racing's decline in popularity. "I want to be assured that what we are enacting is a rebirth and not last rites."

The TV Games Network and Magna Entertainment's XpressBet will launch a new era in California racing following licensing approval Jan. 24 that allows them to conduct advance deposit wagering, as it is called in the Golden State.

But there's no possibility, at least for the short term, that some of the state's best racing -- from Magna-owned Santa Anita Park, Golden Gate Fields, or Bay Meadows -- will enjoy widespread home television distribution, or that California bettors might have the luxury of betting any track without the need of multiple accounts.

Before a packed meeting room of more than 200 in Monrovia, Calif., and following four hours of lively debate, the CHRB by a 5-2 split approved Magna's XpressBet application. Landsburg and board member William Bianco dissented.

The license is for two years, though XpressBet has only a one-year agreement with the Thoroughbred Owners of California. That contract, which stipulates the percentage guaranteed horsemen from account wagering, was signed just before the start of the morning meeting.

To prevent "cannibalization" of the existing handle, the agreement gives horse owners the same or bigger share of each dollar wagered to win, place, or show than if it had been bet on track, TOC president John Van de Kamp said.

XpressBet and the TOC will need to negotiate a new contract once the current one expires Nov. 15, Van de Kamp told the board. "We think this is a great opportunity for California horsemen," he said.

TVG, by unanimous vote, was awarded a one-year account wagering authorization, in the words of board member John Harris, "to keep TVG on an equal footing" with XpressBet.

Bettors can wager on out-of-state races through TVG, but the only in-state track currently available is Los Alamitos, which offers mostly Quarter Horse racing. TVG does have contracts with Del Mar, Hollywood Park, Oak Tree at Santa Anita, and Fairplex Park, all of which are dark for live racing.

XpressBet account-holders will be able to wager on racing from Santa Anita, Golden Gate, and Cal Expo, all of which are currently open for live racing in California, and tracks from other states.

"We need an agreement with horsemen before we can send our signal to anyone," Hollywood Park president Rick Baedecker told the board. Hollywood Park begins its 2002 meet in late April.

The board deferred a decision on the application of Youbet.com because it lacked contractual agreements with the racetracks and TOC. The online betting company is expected to resubmit an application in February. A fourth applicant, Autotote Enterprises, withdrew its application because it was unable to negotiate with any of the state's Thoroughbred tracks, all of which are either owned by Magna or have exclusivity arrangements with TVG.

Landsburg had urged fellow board members to wait until the applicants showed how racing would really benefit from account wagering. He spoke out strongly for more television distribution to "create new heroes."

TVG and XpressBet will take completely different paths to the account wagering market. XpressBet, expected to launch Jan. 26 with wagering on Santa Anita, Golden Gate, and Gulfstream Park via the Internet, has 27,000 active account holders from Call-a-Bet, a Pennsylvania-based telephone betting service Magna acquired in April as part of its purchase of The Meadows harness track.

Compared to TVG, though, Magna's initial television audience is minuscule. Magna has about 3,000 satellite subscribers in North America left over from The Racing Network, which closed up shop in 2001. The network broadcasted races from numerous tracks but didn't have a dedicated wagering system.

"That's about 1,000 less than they drew on track at Santa Anita last Wednesday," Gary Biszantz, chairman of the Thoroughbred Owners and Breeders Association, said of Magna's audience.

Santa Anita does have a one-hour cable TV show on FOX Sports West in Southern California.

TVG can be seen by 750,000 subscribers to the DISH Network in California, and about three million people nationwide. TVG has started signing up digital cable systems to operate its interactive wagering program, using a remote control to place bets, TVG president Mark Wilson said.

Adelphia Communications, with 100,000 customers in the west Los Angeles area, announced the addition of TVG Jan. 23.

Related Story: Statements From Account Wagering License Applicants

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