California Racing Gets Some Encouragement

Spokesman for governor's office tells industry reps to think big for solutions.

Struggling as it never has before with dwindling revenue and many other problems, the California horse racing industry landed on the steps of the State Capitol in Sacramento March 4 looking for some answers. And surprisingly, racing seemed to get a warm reception.

New California Horse Racing Board chairman Keith Brackpool convened the first meeting of the agency's "Legislative, Legal and Regulations Committee" on the fourth floor of the Capitol building, challenging industry representatives to come up with a fresh approach to issues.

"We'd like to have specific ideas ... that have a reasonable chance of making it through the Legislature," Brackpool said, sitting alongside board member Jesse Choper and executive director Kirk Breed.

"We all know that racing needs some fixes," added Brackpool, who was named to the board by Gov. Arnold Schwarzenegger in September and chaired his first CHRB meeting last month. "Let's do what we can do in this session to start to move the ball forward."

There were legislative aides and analysts in attendance, including a couple of staff members from the Senate's Governmental Organization Committee, where horse racing laws originate.

Michael Prosio, chief deputy legal secretary to Schwarzenegger, echoed Brackpool's opening comments, telling the gathering to "think big here."

"The governor has been a big advocate of the horse racing industry," Prosio said. "He would like a package of proposals or a single proposal that can help get this industry thriving. There are some opportunities this year to really move the ball forward."

He said Schwarzenegger is looking for "groundbreaking legislation" designed to pull the sport out of its doldrums.

"You want to be creative," Prosio added. "Let's think big here. The governor really wants to make something happen."

Representatives from the major racing associations each spoke briefly, with Santa Anita's Ron Charles suggesting it was time to give betting exchanges, including head-to-head wagering and betting on races in progress, legislative consideration.

"This is one example of ways to open up racing to new exciting types of wagering," Charles said.

Stephen Burn -- representing Betfair, the British online wagering company that owns TVG -- talked about the feasibility of getting American punters, who have been raised on the Pari-Mutuel system, to adapt to exchange betting. He also suggested that if successful, exchange wagering could provide more favorable financial returns for horsemen than they currently receive through advance deposit wagering.

"We want to be used as a tool" for improving racing's fortunes while getting exchange betting into the mainstream, Burn said.

"We've got to change the game for the public, and this may be a way to do it," said Del Mar's Craig Fravel.

Fravel urged revisiting the "Instant Racing" video betting game, which was withdrawn due to resistance in the past from the state's tribal casino monopoly because of its similarities with slot machines. But rather than using a quasi-slot machine, Fravel suggested making Instant Racing part of legal ADW betting platforms.

He also suggested legislation that could allow the tribal casinos to add "mini-satellite" facilities to take horse racing wagers without having to reopen negotiations on their existing operating compacts.

Hollywood Park's Jack Liebau said that current law is too "restrictive" on who can wager through ADW and suggested a bill that would allow people to wager from terminals such as those in place for the state lottery at liquor stores and other public areas.

Oak Tree Racing Association's Sherwood Chillingworth went a step further, suggesting that sales of a lottery-style ticket on a specific race could also be popular with the general public, though it might encounter resistance from the state lottery itself. Liebau said a lottery-style ticket such as the "Irish Sweepstakes" could also gain acceptance.

Marsha Naify, who chairs the Thoroughbred Owners of California board, said current rules for establishing "mini-satellite" locations need to be relaxed to allow for more facilities, especially in urban areas. The board has indicated a willingness to move to smaller locations such as sports bars and card clubs to support the off-track buildings at county fair ground sites that were established more than 20 years ago.

But current law protects existing satellite facilities from encroachment of another betting parlor within a 20-mile radius unless the restriction is waived. Naify said the distance needs to be reduced, if not eliminated altogether.

Brackpool said he would schedule another meeting in about 30 days to go over some of the proposals in greater detail. He seemed especially keen on the betting exchange ideas, suggesting a further meeting between the tracks and Betfair. He also said the industry should be encouraged by the support of the governor's office.

"I don't think you've seen this kind of commitment before," Brackpool said. "Let's push a little bit and see what we can do."