Rebates to wagering customers have become so widespread that the California Horse Racing Board is preparing to rescind its rule against the practice. Not wanting to hurt business in an extremely down economy, the board moved Feb. 26 to initiate the relaxation of its longstanding anti-rebate stance and go with the the current wagering flow.
Commissioners, meeting at Santa Anita, unanimously approved a motion by Jerry Moss that opens a 45-day comment period for the public to respond to the idea of taking its rebate rule, passed in 1996, off the books. The board took the action after it was revealed that the state's licensed advance deposit wagering companies have been using "rewards programs" to attract customers.
CHRB staff had proposed extending its prohibition on rebates specifically to ADW providers. But the board agreed with the argument of Jack Liebau, president of Hollywood Park and also a director of the ADW company Youbet.com, who spoke against it.
"Rebating is here and everyone is doing it," he said. "I don't think the California Horse Racing Board should take any action that will discourage people from betting on California races. I can't believe you'd do that."
Drew Couto, president of the Thoroughbred Owners of California, said he was informed by CHRB officials that the rebate rule has not been enforced "so we have kind of ignored it."
The owners' group has the power to cut off racing signals to off-track facilities that rebate to customers betting on California races or offer rebates to state residents.
The original rule was passed to prevent Nevada racebooks from using rebates. To comply with the regulation, racetracks and simulcast organizations modified their agreements with off-track betting facilities to prohibit the practice.
In recent years, though, the statement prohibiting rebates in simulcast agreements had been dropped, according to CHRB staff.
In 2004, the TOC challenged Magna Entertainment's ADW company XpressBet over a rebate program. But since the beginning of the winter meets at Golden Gate Fields and Santa Anita in December, the company has been offering a 2% credit in a "VIP Rewards" program. The credit applies to wagers on MEC tracks Gulfstream Park, Laurel Park, and The Meadows harness facilty in Pennsylvania, as well as Golden Gate and Santa Anita.
TVG, Youbet.com, and Twinspires, the other ADW providers licensed in the state, also offer rewards programs of varying degrees.
Craig Fravel, representing Del Mar, said that conditions have changed for racing in the past five years, when one of the main concerns was whether on-track handle would be hurt.
"It has no application," Fravel said of the current rule. "Everybody ignored it."
Moss, in making the motion to rescind the rebate rule, said he was opposed "to anything that stands in the way of business."
Commissioner David Israel said that everyone, including the tracks themselves, will offer rebates to big bettors, known as "whales."
"If you bet substantial amounts at Santa Anita today, and the wagers are being tracked, you can get rebates," Israel said.
In other action, the board elected John Harris as chairman for the remainder of 2009. Harris, the longest-tenured board member, has been acting as interim chairman since Richard Shapiro resigned from the board in December. Israel replaces Harris as vice chairman.
Harris, who has been on the board since 2000, preceded Shapiro as chairman in 2004.
The board initiated a 45-day public comment period on a rule amendment that will allow Thoroughbreds to compete in races unshod. The practice is being allowed on California's synthetic tracks under an executive order. The rule to make it official is expected to return for action at the CHRB's April meeting.
It also approved for public comment a possible rule change that would allow an owner to run a claimed horse in another state following a 60-day waiting period. The current jail rule is for 60 days after the close of a meeting in which the horse was claimed.